The Carbon Farming Initiative (CFI) has been introduced in Australia to allow landholders to generate offset credits from activities that reduce emissions or sequester carbon, including biochar application. The CFI operates under the National Carbon Offset Standard (NCOS). Public confidence in carbon offset schemes had been shaken by scams in the voluntary market, so the Australian government introduced NCOS. As a government-backed scheme, it will provide confidence to those purchasing offsets, and regulate those making claims of “carbon neutrality”.  Eligible activities that can earn offset credits include a range of land management and agricultural practices, promoted through the CFI, which commenced in December 2011. Under the CFI, building soil carbon, reforestation, and reducing livestock emissions are some of the activities that could generate carbon credits. Application of biochar to soil is listed as an eligible activity.

But before offset credits from biochar can be generated, a methodology for calculating the credits has to be accepted by the Domestic Offsets Integrity Committee. So far three methodologies for other project types have been approved: planting native trees, managing methane from manure in piggeries, and capturing landfill gas. A biochar methodology has not yet been submitted for consideration, but the new Biochar Capacity Building Fund includes support for development of an offset methodology for biochar.

The carbon offset market in Australia will receive a huge boost when the carbon tax commences later in 2012. Last November the Australian parliament passed legislation to price carbon: a national “carbon pricing mechanism” (strictly speaking, it is not a tax) will commence from 1 July 2012, under the Clean Energy Future Act. For the first three years of the scheme the carbon price will be fixed, starting at A$23 per tonne of CO2, and rising at 2.5 per cent each year. Then, from July 2015, a “cap and trade” emissions trading scheme will begin, with the price determined by the market. The scheme is comprehensive, covering all sectors except for agriculture, although the carbon price will not apply to household transport fuels, light vehicle business transport, and off-road fuel use for agriculture and forestry. The big emitters—those with emissions greater than 25kt CO2e—will be able to utilize credits generated through the Carbon Farming Initiative to meet their emissions reduction targets.

The big emitters will not actually be able to use biochar credits to meet their liabilities—they need to purchase credits from activities that count towards Australia’s emissions target under the Kyoto Protocol. However the news is not all bad: the Clean Energy Future policy also introduced the “non-Kyoto carbon fund” under which the Government will purchase credits from activities that don’t count towards Australia’s Kyoto Protocol target. If future international accounting rules change so biochar application would be counted by Australia towards its international commitments, then biochar users would be able to access the more lucrative mandatory carbon market. While the rules for a second Kyoto commitment period have now been finalized (and not much has changed where agricultural land management is concerned), policymakers have agreed to consider an overhaul to the current approaches in the longer term. Now is the time to act, to influence this decision. In the meantime, it is expected that biochar will soon be able to generate carbon credits in Australia.