The Carbon Farming Initiative (CFI) is designed to provide incentives for farmers, land managers, indigenous land owners and landfill operators to reduce the amount of greenhouse gas that enters the atmosphere by changing their land management practices.

Drivers – Australian Clean Energy Legislation

Australia has committed to a 5% reduction in emissions from 2000 levels by 2020 under the Clean Energy Legislation. The policy:

  • Implements the Carbon Pricing Mechanism (CPM), and links the carbon price to the CFI
  • Excludes emissions from agriculture, the land sector, and the combustion of biomass, biofuels and biogas from the mechanism
  • Applies an effective carbon price to transport fuels used in rail, shipping and aviation (fuels used by motorists and in light commercial vehicles are excluded), to off-road use of transport fuels by businesses (other than in the agricultural, forestry and fishery industries)
  • Provides a refundable tax offset for conservation tillage equipment.
The main greenhouse gases related to agriculture that are targeted under the CFI are:
  • Carbon dioxide
  • Methane
  • Nitrous oxide
Carbon credits can be generated by two means:
  1. Storing carbon in vegetation and soils, for example, planting unproductive land back to trees (bio-sequestration),
  2. Reducing emissions from agriculture and land use, for example by capturing the methane generated from a piggery (emission reduction).
What are Australian Carbon Credit Units:

Under the CFI the carbon credits produced are called Australian Carbon Credit Units (ACCU’s) and will represent one tonne of carbon dioxide equivalent. In other words, for every tonne of greenhouse gas that is reduced or stored in the landscape, the project will earn an ACCU. These units will be able to be traded on domestic and international compliance and voluntary markets depending on the type of project that generated them.

Read more about the Carbon Farming Initiative or visit the Climate Change website