A REVIEW of Australia’s soil carbon scheme is showing ongoing division about how the industry should be legislated, prompting the soil carbon industry to call for suspensions of the program to be quickly ruled out.

Soil carbon is one of the only agriculture-based methodologies in Australia’s carbon market. It incentivises producers to measure soil carbon stocks, change practices and awards them with Australian Carbon Credit Units if they measure increases in the years after.

The first soil carbon methodology was developed in 2014 before it was updated in 2018 and again in 2021 – with the Government trying to strike a balance between rigorous testing and practicality for producers entering a new market.

But division about the way the scheme is legislated became clear in 2023 when the Government started making large-scale issuances of ACCUs that prompted a group of scientists to raise concerns about over-crediting and a lack of safeguards against carbon being lost from the soil in dry times.

Now the methodology is being reviewed by a group called the Emissions Reduction Assurance Committee – which advises the minister about the way carbon methodologies are legislated.

While ERAC does not publish submissions made to its routine reviews of carbon methodologies, groups have voluntarily published their own submissions.

What happens if soil carbon is lost?

One of the main challenges with soil carbon projects is proving that increases in soil carbon are due to management changes and not changes in rainfall.

The Government has several measures in place to safeguard against carbon being lost from the soil.

When projects first measure an increase in soil carbon a 25pc “permanence” discount is deducted from their issuance of ACCUs for the 25-year lifetime of the project. Another 25pc is taken as a “temporary discount”, which the project holder receives at the next test if they keep the carbon in their soil.

In a public submission to the review, a group of Australian National University scientists, who ultimately called for the Government to move away from soil carbon, said the 25pc withholding was inadequate – due to it only being applied to the first round of sampling.

“It is also based on the false assumption that the application of a single discount to the first estimation event is likely to be sufficient to capture the effects of seasonal variability, ignoring the potential for later seasonally induced increases in SOC (carbon) levels to lead to the crediting of non-additional abatement,” the submission said.

ANU’s submission is at the other end of the spectrum to the National Farmers’ Federation, who said the withholding of the credits was overly conservative for a market that needed to be financially viable for producers to participate.

The 25pc has come down from 50pc under the 2014 and 2018 methodologies. The Soil Carbon Industry Group says any changes to this buffer risks deterring investors from the ACCU scheme as it will send signals of a Government willing to “flip-flop” on regulations.

How often should soil be tested?

Prior to the 2021 update of the soil carbon methodology, projects were only supposed to be credited every 10 years, with three tests to take place in that time.

But with soil carbon being set up as a commercial incentive to use practices that build carbon, 10 years was seen as being too long a payback period for producers investing in the testing and making developments to their properties.

The ANU scientists say the Government should look at putting in longer periods between tests to give more confidence in the results.

“It is likely to take approximately 7-10 years in most cases to reliably detect any SOC (carbon) changes that are attributable to the project activities,” its submission said.

The Soil Carbon Industry Group’s view is that the current methodology incentivises more testing, which it says helps producers make clear decisions to prevent a loss of carbon in the soil.

SCIG said it was important to note that measurement costs money and needed to be financially viable – which is where the regular issuance of ACCUs came into play.

Is there a risk of Govt suspending the scheme?

The current Australian Government has been very reactive to criticisms of the carbon market – particularly when they are from scientists like the group from ANU.

The same group of scientists made a series of highly publicised criticism of a vegetation-based carbon methodology called Human Induced Regeneration – which has since finished up with no methodology to replace it.

Following the criticisms from the group, Federal climate change minister Chris Bowen commissioned a review of the scheme before the 2022 election. That review (known as the Chubb-review) largely gave Australia’s carbon market a clean bill of health.

However, the criticism from the scientists has remained and the Government has been reluctant to support further development of the carbon market.

A similar review of another methodology that was based on reducing methane emissions through cattle herd efficiencies resulted in that methodology’s suspension.

The soil carbon criticisms have not triggered as much backlash from the Federal Government as the HIR criticisms did, with hundreds of new projects signed up in the past two years. No special reviews have been commissioned like that of HIR and the current review is a routine process – which the industry has been trying to reiterate in recent months.