A NSW Government website

Carbon Farming Fundamentals

Carbon Farming Fundamentals

Carbon farming is the implementation of practices that avoid or reduce greenhouse gas emissions or sequester (store) carbon in the landscape, for example, in vegetation and soils. The Carbon Farming Community of Practice is a source of independent information about the fundamentals of carbon farming. Its aim is to build the knowledge and capability of NSW farmers to make informed decisions about carbon farming.

NSW agricultural emissions (excluding on-farm energy use and emissions from land clearing) accounted for 18% of total NSW greenhouse gas emissions in 2022. The largest proportion of agricultural emissions, 71%, were methane emissions resulting from enteric fermentation, a part of the digestive process of ruminant livestock such as sheep, cattle and goats.

Farmers can change practices to reduce their emissions. These changes may be positive for the business and the environment. Examples include improved animal management resulting in livestock gaining weight at faster rate so they can be turned off earlier, improved efficiency of nitrogen fertiliser use and installation of on-site solar panels. We acknowledge it can be challenging to reduce on-farm emissions, especially from livestock production systems, but the Carbon Farming Community of Practice is here to support farmers transition to a low emissions future and will outline pathways and resources for informed decision making.

The pros and cons of carbon farming are specific to each individual farm and farmer and depend on the landscape, business operation, risk appetite and lifestyle goals. Factors to consider when deciding on what carbon farming practices to implement include:

  • Deployment costs relative to operating benefits
  • Productivity impacts (positive and negative)
  • Consumer demand for sustainable products, now and in the future
  • Industry targets and supply chain requirements
  • Potential for carbon tariffs to be applied to Australian agricultural exports in the future
  • Social licence to operate
  • Access to “green” finance with some banks offering, e.g., lower interest rates for businesses able to demonstrate sustainability credentials
  • Potential for an additional income stream from selling carbon credits or credits from other environmental markets
  • Permanence period requirements for carbon credits generated via sequestration.
  • Legal, tax and business risks
  • Intergeneration considerations.

Watch this short video on why you should consider carbon farming and explore the Carbon Farming Community of Practice website to find out more about carbon farming.

The On-Farm Carbon Advice project is a joint initiative between the NSW Department of Primary Industries (DPI) and the Department of Climate Change, Energy, the Environment and Water (DCCEEW), funded through the Primary Industries Productivity and Abatement Program (PIPAP).

The information provided on this website is of a general nature and does not take your specific needs or circumstances into consideration. Please ensure that you review your own situation, objectives, and requirements and seek professional advice before making any business or financial decisions.