HUGH KILLEN, MANAGING DIRECTOR & CEO
The North West Shelf gas project expansion notwithstanding, the Labor Government’s return, backed by a climate-focused Senate, confirms climate action is here to stay in Australia.
For agriculture, the question is no longer if we have a role to play, but how we unlock our sector’s full potential in the transition to net zero.
FROM VOLUNTARY TO VITAL: A MARKET IN TRANSITION
Australia’s carbon market is changing, as demand shifts beyond just voluntary markets driven by ESG goals and corporate net-zero pledges. With the Safeguard Mechanism now in force, we’ve entered a new era of regulated demand.
[For international readers: the Safeguard Mechanism is the government’s scheme for requiring Australia’s largest emitters to reduce emissions in line with national targets: 43% below 2005 levels by 2030, and net zero by 2050. If they can’t cut emissions, companies must offset them.]
It sends a clear market signal: action on carbon is no longer optional for big emitters. And that’s driving demand for high-integrity Australian Carbon Credit Units (ACCUs) that deliver real emissions outcomes.
THE UNDERVALUED CLIMATE ASSET
Agriculture is ideally placed to supply them. It’s an overdue opportunity for a sector that has long-delivered environmental value without reward, as private capital flows into our land sector to fund climate solutions at scale.
But scale requires both support, and scrutiny. As seen with recent mass exits from the government’s voluntary offsets program, Climate Active, integrity matters. Without measurable climate outcomes, the market is vulnerable to activist campaigns that frame offsets as a ‘license to pollute’.
This is where agriculture comes in. When done right, land-based offsets aren’t a loophole; they’re a legitimate climate solution.
SAFEGUARDING OUR SECTOR
The Safeguard Mechanism, if implemented well, can deliver real benefits to agriculture:
- Stronger, long-term demand for quality carbon credits
- Incentives for climate-smart land management
- And critically, diversified revenue for land managers.
It’s not a pipedream. We’re already seeing it. With over 85% of Australia’s agricultural exports headed to countries with net-zero targets, climate credentials are fast becoming a requirement for market access, even for bulk commodities. And as we head closer to 2030, demand will only increase.
OFFSETS ARE A BRIDGE, NOT A BACKDOOR
The energy transition is real, but it will take time. Fossil fuels remain part of the mix for now, and they come with an environmental cost. Offsets are essential to bridge the gap between what we can reduce today and what we can’t. But to be effective, they must be credible.
That’s why investment in high-integrity, land-based solutions is so critical.
Take environmental plantings, which restore marginal or non-productive land for carbon (plus biodiversity) gains. These projects are real, auditable, and already generating carbon credits trading anywhere from $5 to $75 per tonne, depending on region and species. For land managers, that’s a material income stream, with room to grow.
MOVING THE MARKET
At Impact Ag Australia, we’re seeing interest in high-integrity projects build. Land managers are asking intentional questions about soil health, biodiversity, and how to monetise natural capital. Investors and corporates are no longer treating environmental outcomes as a ‘nice-to-have’ – but as core strategy.
And yet, the architecture to scale this is still incomplete. We’re still waiting on the Integrated Farm and Land Management (IFLM) method, a crucial reform that would allow vegetation and soil carbon sequestration under one method on a single parcel of land. It’s the missing link that would enable producers to optimise outcomes without compromising productivity.
IT’S TIME TO ACT
Australia has a chance to lead the world in a low-carbon economy, but only if we get the settings right:
- Equitable access to carbon markets for all farmers,
- Clear and stable rules for project registration and credit generation,
- Guardrails to prevent perverse outcomes, like large-scale landuse change displacing food production.
We’ve got the land. We’ve got the market signals. We’ve got a government with the mandate.
Now we need a mindset shift – from policymakers, financiers, supply chain partners, and consumers alike. One that stops seeing agriculture as a climate problem, and starts backing it as the solution.
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