Soil carbon farming has been mooted as one of the key strategies for offsetting Australia’s greenhouse gas emissions, with the ancillary benefit of improving soil health and farm productivity. However, several barriers restrict farmers from participating in schemes designed to monetise the production of carbon credits. Some of these obstacles include differing perceptions of what increase in soil carbon storage is achievable and whether income is likely to exceed a project’s cost.

This paper explains in simple terms the procedures for a landholder to participate in the Australian Government’s Emissions Reduction Fund. The authors evaluate national and international scientific data on annual rates of soil carbon storage for several environments, which are compared with some of the exaggerated claims made by commercial aggregators. The paper also looks at variable project compliance costs and compares them with the possible income from carbon credits.

The paper concludes that the overriding metric determining whether a project is financially viable is the opportunity cost of changing the land management practice, which generally far exceeds the net income from carbon credits. However, the benefit-cost ratio could become more favourable if the value of ecosystem services provided by an improved soil condition could be realised.