1. Greenhouse gas emissions, carbon farming and case study analysis for farmers
This presentation was developed by the Australian Farm Institute and supported by funding from the Australian Government.
This presentation is about greenhouse gas emissions, carbon farming and case study analysis. It was developed by the Australian Farm Institute and supported by funding from the Australian Government.
It should only take around 30 minutes of your time.

2. Contents Section 1: The carbon cycle and greenhouse gas emissions
Section 2: Carbon policy implications for farm businesses
Section 3: Case study analysis including beef cattle, sheep and cropping enterprises
Section 4: FarmGAS Calculator upgrade and the Financial Tool.
There will be four sections aimed at providing you with a clear understanding of the carbon cycle, carbon farming activities in Australia, case study analysis on beef cattle, sheep and grains enterprises and some new developments to the Australian Farm Institutes FarmGAS Calculator website.

3. The carbon cycle Key points
Carbon dioxide (CO2) in the atmosphere exchanges continuously with plant and water
Human activities like burning fossil fuels has increased CO2 and other greenhouse gases in the atmosphere
Other major types of greenhouse gas emissions include;
Methane (CH4) – from wetlands and activities like natural gas systems and livestock
Nitrous oxide (N2O) from activities such as agriculture, fossil fuel combustion and industrial processes.
In a perfect world the carbon cycle would be in balance with carbon dioxide in the atmosphere continuously exchanging with plants and water.
However, human activities such as industrialisation and burning fossil fuels has altered this balance, with more greenhouse gases being released to the atmosphere impacting global temperatures.
Greenhouse gases such as carbon dioxide, methane and nitrous oxide absorb solar radiation and this is an important process for keeping the earth warm enough to support life. However, when there is increasing amounts of greenhouses being absorbed by radiation such as infra-red then additional heating will occur.
Carbon dioxide equivalents which can also be known by its chemical abbreviation as CO2e is the main greenhouse gas. For standardising greenhouse gases, the different types can be measured in carbon dioxide equivalents.
Methane is a greenhouse gas that comes from sources such as wetlands, natural gas systems and animals. There is 25 carbon dioxide equivalent units for every one unit of methane.
Nitrous oxide is a greenhouse gas that comes from sources such as agriculture, fossil fuel combustion and industrial processes. There is 298 carbon dioxide equivalent units for every one unit of nitrous oxide.

4. Balancing the carbon cycle
Key points
Two ways to assist with lowering greenhouse gas emissions include;
Sequestration involves long term storage of carbon dioxide and other forms of carbon in plants as they grow or by increasing soil organic matter
Mitigation strategies generate greenhouse emissions abatement by reducing or avoiding emissions such as methane (CH4) and nitrous oxide (N2O).
Sequestration and mitigation of greenhouse gases are two ways that can help with improving the balance of the carbon cycle.
Sequestration can also be known as developing carbon sinks or stores. Sequestration involves locking-up carbon dioxide and other forms of carbon in plants as they grow or by increasing soil organic matter.
Sequestration requires a permanence period which effectively removes an amount of carbon dioxide equivalent from the atmosphere. For example, scientific research internationally suggests that trees must permanently store carbon for 100 years before carbon has effectively been removed from the atmosphere.
Mitigation can also grouped with other terms including emissions avoidance and emissions reductions. Greenhouse gas mitigation involves lowering emissions output from a range emissions sources.
Environmentally sustainable practices and projects have been, and continue to be developed that provide sequestration and mitigation outcomes. Carbon farming activities and emissions reduction activities are general terms which the farm and land use sector will use when discussing these practices and projects.

5. Australian agricultural greenhouse gas emissions
Key points
Major emissions sources include;
Enteric fermentation releases methane into the atmosphere when ruminant animals such as cattle and sheep belch
Agricultural soils mainly emit nitrous oxide when converting soil nitrogen into nitrate (nitrification) and nitrogen gas (denitrification)
Savanna burning includes both methane and nitrous oxide emissions that are excessively released into the atmosphere and not able to be re-absorbed by the landscape.
Australian agricultural emissions are grouped into five sources – enteric fermentation, manure management, agricultural soils, prescribed burning of savannas and rice cultivation and field burning of agricultural residues.
Enteric fermentation is the largest emission source and it involves methane being released by ruminant animals when belching, with cattle and sheep being the major contributors in Australia.
Agricultural soils involves nitrous oxide emissions mainly occurring when soil nitrogen undergoes nitrification or denitrification. Manufactured nitrogen fertiliser is major contributor to agricultural soils emissions output.
Savanna burning occurs in the northern areas of Australia and it involves both methane and nitrous oxide emissions that can not be re-absorbed by the landscape.

6. Contents Section 1: The carbon cycle and greenhouse gas emissions
Section 2: Carbon policy implications for farm businesses
Section 3: Case study analysis including beef cattle, sheep and cropping enterprises
Section 4: FarmGAS Calculator upgrade and the Financial Tool.
This next section is on carbon policy implications and there are government policies aimed at emission reductions activities which farmers can get involved-in.

7. Australian carbon policy
ACCUs: In 2011, the Australian Government established the Carbon Farming Initiative (CFI) to allow farmers and land managers to voluntarily participate in carbon markets by earning Australian Carbon Credit Units (ACCUs) by storing or reducing greenhouse gas emissions on the land
ERF: The Coalition Government - elected in September has planned to merge the CFI with the Emissions Reduction Fund (ERF). The ERF is a central component of the Government’s Direct Action Plan climate policy
Incentive based: Essentially, the ERF will be an incentive-based approach aimed at supporting Australian businesses in lowering their energy costs and increasing their productivity, while at the same time reducing Australia’s greenhouse gas emissions
Clean Energy Regulator: Projects are that using emissions reduction methodology determinations, including methodologies approved under the CFI, will be eligible to participate in the ERF reverse auction process, and this process will be administered by the Clean Energy Regulator.
The Australian Government has developed processes such as the Carbon Farming Initiative and the Emissions Reduction Fund which provide a legal process for farmers and land managers to participate in carbon farming activities.
The Emissions Reduction Fund is an incentive-based approach that support Australian businesses in lowering energy costs and greenhouse gas emissions whilst increasing their productivity.
The Clean Energy Regulator is responsible for approving CFI projects using approved methodologies, and can then issue Australian carbon credit units and facilitating the marketing arrangements.
Approved carbon farming projects include methodologies that either mitigate/avoid/reduce greenhouse gas emissions or sequester/store/sink carbon.

8. Participating in carbon farming projects
Projects: Carbon farming projects are approved by the Clean Energy Regulator
Methodologies: Projects must follow a methodology that has been legally assessed and determined for commercial use. The methodology determinations process includes rigorous evaluation by a reference committee appointed by the Commonwealth Department of the Environment
Rules: Methodologies that are approved will contain detailed rules that ensure projects earn ACCUs according to the conditions set within the carbon policy framework.
Criteria: Methodologies must be additional to a business-as-usual case, involve no emissions leakage, have scientific validity, follow permanence obligations where required and be audited routinely by a third party.
Participation: The two main ways for farmers to participate in carbon farming projects include direct participation or through an aggregation method.
The methodology for a carbon farming projects needs to be approved by reference committee which is appointed by the Commonwealth Department of the Environment.
Under the current carbon policy, methodologies that are approved follow detailed rules and must show that the project is additional to a business-as-usual case, involve no emissions leakage, have scientific validity, follow permanence obligations where required and be audited routinely by a third party.
Farmers and land managers can participate in carbon farming projects either directly or through an aggregation method.
The direct method will mean that the farmer or land manager will deal with Clean Energy Regulator directly and cover all the costs and risks for project.
The aggregation method means that the farmer or land manager will contribute to a project which is managed by an aggregator who efficiently spreads the costs and risks for the project across the projects participants.

9. Sample of Methodology Determinations – agriculture and vegetation only
Agriculture (livestock, soil carbon, fertilisers, feral animals)
Destruction of methane generated from dairy manure in covered anaerobic ponds
Destruction of methane from piggeries using engineered bio digesters
Destruction of methane generated from manure in piggeries
Reducing greenhouse gas emissions in milking cows through feeding dietary additives.
Vegetation (regrowth, reforestation, avoided clearing and harvest)
Environmental Plantings
Human-Induced regeneration of a permanent even-aged native forest
Native forest from managed regrowth
Native forest protection (avoided deforestation)
Quantifying carbon sequestration by permanent plantings of native mallee eucalypt species using the CFI reforestation modelling tool
Reforestation and Afforestation
Savanna burning
Here are some examples of project methodologies that have been approved.
Apart from agriculture and vegetation methodologies, there are also landfill and alternative waste treatment methodologies and these can be found on the Clean Energy Regulator website

10. Contents Section 1: The carbon cycle and greenhouse gas emissions
Section 2: Carbon policy implications for farm businesses
Section 3: Case study analysis including beef cattle, sheep and cropping enterprises
Section 4: FarmGAS Calculator upgrade and the Financial Tool.
The next section includes case study analysis for a selection of farmers involved in beef, sheep and grains enterprises across eastern Australia.
The Australian Farm Institute worked with each farmer to estimate the greenhouse gas emissions for each specific farm.
The FarmGAS Calculator was used for estimating each farms greenhouse gas emissions and for modelling different emissions reduction scenarios for each farm.
The emissions reduction scenarios that were developed for each farm were a combination of emissions reduction methods that were either compliant with approved Government policy, based on hypothetical methods that may become available in the future or just general practice changes that may be suited for the farm’s specific location.

11. Farm-1: Beef cattle breeding and sheep farm in North East Victoria
Key points
Farm-1 is 4,166 hectares and consists of mainly alluvial river flats and mountain grazing land
The farm enterprises include a beef cattle breeding herd of more than 1,500 cows and a flock of 600 breeding ewes.
The first farm case study was from north east Victoria and involved a farm business with beef cattle breeding and sheep.

12. Farm-1: Greenhouse gas emissions output summary
Key points
The Australian Farm Institutes FarmGAS Calculator estimated that the total annual greenhouse gas emissions from Farm-1 were 6, tonnes of carbon dioxide equivalents (CO2-e)
The major greenhouse gas emissions output from Farm-1 was enteric methane from the beef cattle breeding enterprise.
The total greenhouse gas emissions from this farm were estimated to be above 6,000 tonnes of carbon dioxide equivalent
The major greenhouse gas emissions source was the beef cattle breeding herd

13. Farm-1: Greenhouse gas emissions abatement scenarios
Key points
The FarmGAS Calculator was then used to compare three hypothetical project scenarios to the current farm operation (whole farm comparisons).
The greenhouse gas emissions scenario modelling estimated that the enterprise change to running more sheep and less cattle scenario provided the largest amount of greenhouse gas abatement. This scenario was based on the existing livestock characteristics and production factors for this specific farm
There were three scenarios analysed for this specific farm including a dietary supplement for cattle to reduce methane emissions, a general practice change for running more sheep and less cattle, and an environmental tree planting
The general practice change which involved running more sheep and less cattle was estimated to provide the largest amount of greenhouse gas abatement.

14. Farm-1: Farmers feedback on each scenario
Dietary supplement for beef cattle:
This technology sounded exciting but would require a thorough cost analysis on this specific farm before implementation
There would also need to be a clear understanding to how beef consumers would feel about this technology
Changing enterprise structure in order to run more sheep and less cattle:
The farmer was interested in hearing about how these types of changes can reduce greenhouse gas emissions output. The farmer also understood that this scenario is a general farm management decision and is not likely to be a carbon farming project that could generate credits under a carbon crediting scheme
Due a wild dog problem in the local area, this scenario would require significant investment in wild dog management before it could be implemented
Tree plantings:
Some tree plantings have already occurred on this farm and farmer sees a lot of benefits not only for carbon farming but for biodiversity and soil erosion control
However, tree plantings on this farm are costly to implement due the manual labour required in the establishment phase. For further tree plantings on this farm, there would need to be more incentives that could offset upfront costs.
The farmer provided feedback on each scenario
The dietary supplement for cattle sounded exciting but cost analysis and consumer concerns were raised as initial requirements to overcome before implementation on this specific farm
Changing the enterprise structure to include more sheep and less cattle also looked interesting but would require a lot of investment in wild dog management before implementation, as wild dogs are a big problem for this specific farm.
One point to keep in mind for these types of scenarios is that they might not be able to generate ACCUs (credits). For example, carbon farming projects will only be approved to generate credits if they provide genuine emissions reductions – that are considered real and additional contributions to Australia’s emissions reduction. A general farm management decision to change the enterprise structure may not be seen as making an additional contribution and could be subject to leakages issues where emissions reductions from one scenario may transfer (leak) to another area/enterprise.
Tree plantings was a scenario that the farmer saw a lot of benefits including carbon sequestration, biodiversity and soil erosion control. However, tree planting is a costly exercise for this specific farm and these costs are currently restricting further tree plantings from occurring on this farm.

15. Farm-2 case study: Cropping and sheep farm in the central southern NSW
Key points
Farm-2 is an aggregation of farming properties that covers an area of 1,488 hectares and consists of mainly undulating cropping land
The farm enterprises include a winter cropping rotation that plants 1,100 hectares of crops each year (including grain crops) and a flock of merino sheep with more than 2,800 ewes.
The second farm case study was from the southern wheat sheep zone of NSW and involved a farm business with cropping and sheep.

16. Farm-2: Greenhouse gas emissions output summary
Key points
The FarmGAS Calculator estimated that the total annual greenhouse gas emissions from Farm-2 were 1, tonnes of carbon dioxide equivalents (CO2-e)
The major greenhouse gas emissions output from Farm-2 was enteric methane from the sheep enterprise.
The total greenhouse gas emissions from this farm were estimated to be above 1,200 tonnes of carbon dioxide equivalent
The major greenhouse gas emissions source was the sheep enterprise

17. Farm-2: Greenhouse gas emissions abatement scenarios
Key points
The FarmGAS Calculator was then used to compare three hypothetical project scenarios to the current farm operation (whole farm comparisons)
The greenhouse gas emissions scenario modelling estimated that the environmental tree lot scenario provided the largest amount of greenhouse gas abatement.
There were three scenarios analysed for this specific farm including a general practice change for switching lambing from autumn to spring and weaning earlier, an environmental tree planting and nitrogen fertiliser inhibitor used in the cropping system
The tree planting scenario was estimated to provide the largest amount of greenhouse gas abatement
Although the scenarios for this farm showed relatively low amount of greenhouse gas emissions abatement, if all three scenarios were actioned at the same time then this farm would see an emissions reduction of 10%.

18. Farm-2: Farmer feedback on each scenario
Switch from autumn to spring lambing and wean lambs at two months:
The farmer was interested in hearing about how these types of changes can reduce greenhouse gas emissions output. The farmer also understood that this scenario is a general farm management decision and is not likely to be a carbon farming project that could generate credits under a carbon crediting scheme
The farmer preferred that lambing occurred in autumn as this timing fitted in with cropping activities from a labour and pasture availability perspective
Tree plantings:
The farmer could see benefits with tree plantings and this scenario would be considered if permanence obligations were less than 50 years
The farmer was concerned about the permanence obligations for sequestration projects as international scientific standards require a 100 year commitment to achieve carbon sequestration
Nitrogen fertiliser inhibitor:
Although the nitrogen fertiliser inhibitor only reduced whole farm emissions by 1%, the fertiliser inhibitor technology did reduce the cropping enterprise greenhouse gas emissions by 11%
However, the farmer had concerns that the cost of the manufactured fertiliser technology may outweigh the benefits.
The farmer provided feedback on each scenario
Changing the lambing/weaning practice looked interesting but would not currently fit in with the farmers cropping activities which the farmer currently thought was the most effective economically.
As mentioned in the previous case study however, one point to keep in mind for these types of scenarios is that they might not be able to generate ACCUs (credits). For example, a general farm management decision to change the enterprise structure may not be seen as having the capability, consistency and creditability for emissions reductions and therefore may not be considered as making an additional contribution to Australia’s emissions reduction.
Tree plantings was a scenario that the farmer saw a lot of benefits including carbon sequestration, biodiversity and soil erosion control. However, the farmer was concerned about the permanence obligations for sequestration projects as international scientific standards require a 100 year commitment to achieve carbon sequestration
The nitrogen fertiliser inhibitor sounded exciting but a cost analysis was raised as initial requirements to overcome before implementation on this specific farm. The farmer also felt that efforts they had made in using a legume crop which naturally fixes nitrogen in the soil was already providing environmental benefits from this specific farm.

19. Farm-3 case study: Sheep farm in the southern tablelands of NSW
Key points
Farm-3 is 530 hectares and consists of hill grazing land
The farm enterprises includes a merino breeding flock of more than 1,200 ewes.
The third farm case study was from the southern tablelands of NSW and involved a farm business with a sheep enterprise.

20. Farm-3: Greenhouse gas emissions output summary
Key points
The FarmGAS Calculator estimated the total annual greenhouse gas emissions from Farm-3 were tonnes of carbon dioxide equivalents (CO2-e)
The major greenhouse gas emissions output from Farm-3 was enteric methane from the sheep enterprise.
The total greenhouse gas emissions from this farm were estimated to be above 360 tonnes of carbon dioxide equivalent
The major greenhouse gas emissions source was the sheep enterprise

21. Farm-3: Greenhouse gas emissions abatement scenarios
Key points
The FarmGAS Calculator was then used to compare three hypothetical project scenarios to the current farm (whole farm comparisons)
The greenhouse gas emissions scenario modelling estimated that the tree planting scenario provided the largest amount of greenhouse gas emissions abatement.
There were three scenarios analysed for this specific farm including a general practice change for switching lambing from autumn to spring and weaning earlier, another general practice change involving a fixed trading period for wethers and an environmental tree planting.
The tree planting scenario was estimated to provide the largest amount of greenhouse gas abatement.

22. Farm-3: Farmer feedback on each scenario
Switch from autumn to spring lambing, increase lambing and wean earlier:
The farmer was interested in hearing about how these types of changes can reduce greenhouse gas emissions output. The farmer also understood that this scenario is a general farm management decision and is not likely to be a carbon farming project that could generate credits under a carbon crediting scheme
The farmer was open to changing lambing/weaning practices if that provided additional benefits in emissions reductions
Change enterprise structure for wethers to be on-farm for nine months only:
The farmer was interested in this scenario and understood that this scenario is a general farm management decision and is not likely to be a carbon farming project that could generate credits under a carbon crediting scheme
The farmer would look at a sheep trading scenario on this farm if it provided additional benefits in emissions reductions
Tree plantings:
The farmer could see benefits with tree plantings and this scenario would be considered if permanence obligations were less than 50 years
The farmer was concerned about the permanence obligations for sequestration projects as international scientific standards require a 100 year commitment to achieve carbon sequestration.
The farmer provided feedback on each scenario
Changing the lambing/weaning practice and reducing the period for sheep trading both looked like interesting scenarios and the farmer would consider implementing these scenarios if they provided additional benefits in emissions reductions.
However, as mentioned in the previous case studies, one point to keep in mind for these types of scenarios is that they might not be able to generate ACCUs (credits). For example, general farm management decisions to change the enterprise structure may not be seen as having the capability, consistency and creditability for emissions reductions and therefore may not be considered as making an additional contribution to Australia’s emissions reduction.
Tree plantings was a scenario that the farmer saw a lot of benefits including carbon sequestration, biodiversity and soil erosion control. However, the farmer was concerned about the permanence obligations for sequestration projects as international scientific standards require a 100 year commitment to achieve carbon sequestration.
These conditions may change with Emissions Reduction Fund (ERF) as there will be more flexibility with permanence periods offset by discount rates. For example, the

23. Farm-4 case study: Beef cattle farm in the Central Highlands Northern Queensland
Key points
Farm 4 is 16,119 hectares and consists mainly of sub-tropical grazing land
The farm enterprises include a beef cattle breeding herd of more than 2,000 cows and up to 4,400 store cattle.
The fourth farm case study was from the central highlands northern zone in Qld and involved a farm business with a beef cattle breeding and beef cattle stores.

24. Farm-4: Greenhouse gas emissions summary
Key points
The FarmGAS Calculator estimated the total annual greenhouse gas emissions from Farm-4 were 6, tonnes of carbon dioxide equivalents (CO2-e)
The major greenhouse gas emissions output from Farm-4 was enteric methane from the store cattle enterprise.
The total greenhouse gas emissions from this farm were estimated to be above 6,000 tonnes of carbon dioxide equivalent
The major greenhouse gas emissions source was the beef cattle stores enterprise

25. Farm-4: Greenhouse gas emission abatement scenarios
Key points
The FarmGAS Calculator was then used to compare three hypothetical project scenarios to the current farm operation (whole farm comparisons)
The greenhouse gas emissions scenario modelling estimated that the dietary supplement in cattle feed scenario provided the largest amount of greenhouse gas abatement.
There were three scenarios analysed for this specific farm including a dietary supplement for cattle to reduce methane emissions, improved beef cattle breeding genetics, and a general practice change that involved a shorter trading term for beef cattle stores.
The dietary supplement for cattle was estimated to provide the largest amount of greenhouse gas abatement.

26. Farm-4: Farmer feedback on each scenario
Dietary supplement for beef cattle:
This technology sounds exciting but would require a thorough cost analysis on this specific farm before implementation
Improved beef cattle breeding genetics that lower methane emissions:
The farmer was interested in hearing about research being undertaken in cattle breeding for lowering methane emissions output
However, the farmer was concerned about the practicality of this scenario given it might impact the productivity developments already achieved with breeding beef cattle on this specific farm
Shorter trading period for store cattle:
The farmer was interested in hearing about how these types of changes can reduce greenhouse gas emissions output. The farmer also understood that this scenario is a general farm management decision and is not likely to be a carbon farming project that could generate credits under a carbon crediting scheme
The store cattle trading period on this specific farm fits in with the farmers beef cattle breeding operations located on other farms. This means that the seasonal conditions on the other farms is the main determinant for grazing practices and would likely prevent this farmer from committing to a fixed trading period due to the variability in seasonal conditions.
The farmer provided feedback on each scenario
The dietary supplement for cattle sounded exciting but a thorough cost analysis was raised as initial requirement to overcome before implementation on this specific farm
Improved beef cattle breeding genetics looked interesting but the farmer was concerned about the practicality of this scenario given it might impact the productivity developments already achieved with breeding beef cattle on this specific farm
The farmer was interested to hear that general practice changes such as shorter trading period for beef cattle stores could lower greenhouse gas emissions output. However, the beef cattle stores trading period on this specific farm fits in with the farmers beef cattle breeding operations located on other farms. Seasonal conditions on the other farms is the main determinant for grazing practices and would likely prevent this farmer from committing to a fixed trading period.
Again as mentioned in the previous case studies, one point to keep in mind for these types of scenarios is that they might not be able to generate ACCUs (credits). For example, a general farm management decision to change the enterprise structure may not be seen as having the capability, consistency and creditability for emissions reductions and therefore may not be considered as making an additional contribution to Australia’s emissions reduction.

27. Contents Section 1: The carbon cycle and greenhouse gas emissions
Section 2: Carbon policy implications for farm businesses
Section 3: Case study analysis including beef cattle, sheep and cropping enterprises
Section 4: FarmGAS Calculator upgrade and the Financial Tool.
The next section looks at some new developments to the Australian Farm Institute’s FarmGAS Calculator website. The new developments include a Financial Tool that allows people using the FarmGAS Calculator website to conduct financial modelling. Ultimately this financial tool takes into account both emissions and economic factors by generating a Marginal Abatement Cost Curve which is also known as a carbon farming MACC.

28. FarmGAS Calculator Scenario Tool and Financial Tool
Key points
The FarmGAS Calculator Scenario Tool (ST) has been upgraded to comply with Government reporting methods. Majors changes include savanna burning and emissions factors
The FarmGAS Calculator ST upgrade also includes Model Scenarios to assist Users learn more about the tool.
A separate Financial Tool has been developed that uses farm and emissions information from the FarmGAS Calculator ST to conduct financial modelling for different emissions reduction projects.
The FarmGAS Calculator Scenario Tool also referred to as FarmGAS Calculator ST has been upgraded so that items such as savanna burning in the northern parts of Australia comply with Australian Government reporting standards. Users can now apply different burn factors including different fuel loads for grasslands and woodlands.
The FarmGAS Calculator ST has also been upgraded to include model farms preloaded which can be selected, copied, modified and saved. The model farms provides people using tool, particularly new Users, an opportunity to learn more about the tool without having to enter large amounts of farm and emissions information on their own.
The FarmGAS Calculator ST upgrade also includes the development of a new calculator called the Financial Tool. This new calculator uses farm and emissions information from the FarmGAS Calculator ST to conduct financial modelling for different emissions reduction projects.

29. FarmGAS Financial Tool and the Marginal Abatement
Key points
The Financial Tool requires data entry for farm business items such as overheads, gross margins and capital expenditure.
Annual monetary benefits, discount rates for the capital costs involved in the project and the project life in years are then used to generate a Net Present Value (NPV) for each project.
The net present value and the emissions reduction amount gathered from the FarmGAS Calculator ST then produce a Marginal Abatement Cost Curve (MACC).
The Financial Tool allows up to eight projects to be compared on the MACC.
Once the FarmGAS Calculator ST data is entered and summary estimates for GHG emissions reductions for different scenarios compared to a baseline farm are generated, then the Financial Tool is ready for use. However for learning purposes it does not matter if these details are not entered as the Financial Tool includes three model comparisons for people using the tool to test on their own.
To assess the financial performance of farm scenario GHG emissions modelling that has be completed in the FarmGAS Calculator ST, then people using the Financial Tool will need to input financial information for each farm project scenario. The financial information for data entry includes overheads, gross margins and capital expenditure.
The Financial Tool will then use this information to calculate the net present value (NPV) for each project. The NPV’s are then divided by the emissions reduction amounts so that a marginal cost of abatement is generated.
The Financial Tool allows up to eight projects to compare either independently or on a cumulative basis. This comparison is shown in table format and on a visual display which is called a Marginal Abatement Cost Curve which is also known as a MACC.
The farm business case studies shown in this presentation did not use the Financial Tool as it was not developed at that stage. However, the Financial Tool would provide a decision support tool for these farm businesses if they decided to review carbon farming projects more closely for both environment and economic benefits.
The primary development of the FarmGAS Financial Tool was completed by the University of Southern Queensland (USQ). The online FarmGAS Financial Tool was a collaborative effort between the Australian Farm Institute and USQ and this project was supported by funding from the Australian Government.

30. Key messages
Human activities such as burning fossil fuels has put the carbon cycle out of balance by increasing levels of greenhouse gases, and this is leading to warmer temperatures globally.
Once registered and verified, carbon farming projects provide incentives for farmers and land managers to reduce greenhouse gases by earning Australian carbon credit units
The Clean Energy Regulator administers carbon farming projects which farmers and land managers can implement directly or through an aggregator
Farm case studies with beef, sheep and grains enterprises were analysed for current farm greenhouse gas emissions output and potential emissions reduction scenarios. The hypothetical emissions reduction scenarios included dietary supplements in livestock feed, enterprise changes, tree plantings, nitrogen fertiliser inhibitors and improved livestock breeding genetics
The environmental and economic benefits of these farm case studies could be further analysed by using the FarmGAS Calculator Financial Tool which was launched publicly in June 2014.
The carbon cycle is out of balance and carbon farm projects can play a role in improving the carbon cycle balance
Carbon farming projects can provide farmers and land managers with an opportunity to earn Australian carbon credit units
The Clean Energy Regulator has an important role in coordinating the project approval process and facilitating the carbon market opportunities
Farm case study analysis with beef, sheep and grains enterprises was conducted by the Australian Farm Institute which indicated that dietary supplements, tree plantings, nitrogen fertiliser inhibitors, improved breeding genetics and general practice changes are example farm scenarios that provide opportunities for farmers and land managers to reduce greenhouse gas emissions.
The environmental and economic benefits of these farm case studies could be further analysed by using the FarmGAS Calculator Financial Tool which was launched publicly in June 2014.