The Role of Agriculture in the Australian Government’s Emission Reduction Fund

Abstract

Australia’s greenhouse gas emissions from agriculture in 2022 were 67.8 million (M) tonnes (t) of carbon dioxide equivalent (CO<sub>2</sub>-e), amounting to 12.9% of total emissions. Erupted methane (CH<sub>4</sub>) from ruminant animals comprised 42% of agricultural emissions. By 2030, the Australian Government aims to reduce total emissions by 43% from the 2005 level. The primary policy instrument for achieving this reduction is the Emissions Reduction Fund (ERF) in which there are two main pathways for agriculture – emission avoidance through suppression of CH<sub>4</sub> emissions and soil carbon sequestration (SCS) through approved projects. Although agriculture since 2014 has promised 15.2 Mt of abatement, by April 2022 it has delivered only 1.1 Mt. Examples are given of potential abatement by SCS for pasture and cropping land in different rainfall zones. Methods of suppressing CH<sub>4</sub> emissions have yet to be scaled up commercially and proven for grazing animals. The main constraints on SCS are the unreliability of Australian rainfall, the high cost of project management relative to the value of a C credit, and the opportunity cost of maintaining an approved land management for at least 25 years.