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Q. How do we sell carbon credits?
A. The Carbon Farming Initiative (CFI) is a government program that enables us earn carbon credits which we can sell on the carbon market. The types of projects that may be permitted include planting native vegetation.
The credits can be bought by companies that need to or want to offset their emissions.
This is why they are called an “offset” – they allow emitters to bridge the gap while they invest in the changes they must make to be part of a low carbon economy. Offsets earned in Agriculture are known as “Australian Carbon Credit Units” (ACCUs).
Q. How much can we make from the CFI?
Nobody knows how high the price will go, but it is certainly going to increase.
The Government has set a fixed price for carbon of $23/tonne for the “Compliance” market (the market made up of those companies listed in the top 500 emitters).
This will rise by 2.5% each year until 2015 when the price will float. Not all CFI ACCUs will be eligible for purchase on the Compliance market. Non-Kyoto-compliant CFI ACCUs are restricted to the “Voluntary” market (the market made up of those companies and individuals who want to go carbon neutral to reduce emissions) which is expected to attract lower prices.
The Government has put aside $250 million to buy Voluntary ACCUs to support the market. The prices are hard to predict. However, ACCUs are bankable, so one can wait for the right price before selling.