PROJECT
Carbon Market Barriers & Opportunities for Plantation Forestry in North Queensland
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Hub Priority
Bioenergy and Carbon 

Project Overview

This report explores the regulatory barriers and opportunities for North Queensland’s plantation and farm forestry sectors to participate in carbon markets through the Emissions Reduction Fund (ERF), now referred to as the Australian Carbon Credit Unit (ACCU) Scheme.

Key Findings

• Carbon Farming as a Co-Benefit

  • Carbon farming can provide additional income to support plantation expansion, but its complexity and regulations pose significant entry barriers.

• Major Regulatory Challenges

  • Complicated ERF eligibility requirements (e.g., land clearing history, legal rights, tenure)

• Technical limitations of FullCAM (the carbon accounting tool)

  • Native title and land tenure approval complexities

  • Stringent consent rules for eligible interest holders (banks, governments, Indigenous groups)

• ERF Method Limitations

  • Very few plantation and farm forestry projects registered in Queensland due to outdated carbon estimation methods and restrictive eligibility rules.

  • Recent removal of the “water rule” (as of June 2024) now benefits North Queensland regions.

• Market Potential

  • The carbon market is expected to grow significantly, with up to $24 billion in investment by 2030. Carbon credits (ACCUs) offer a potential revenue stream if regulatory barriers are addressed.

• Project Risks

  • Include natural disasters (cyclones, fires), policy changes, and compliance costs. Many landholders opt to partner with aggregators or carbon service providers to manage risk and reduce complexity.

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Recommendations

• Update and Simplify Methods: Improve FullCAM modelling and create more flexible ERF methods for forestry projects.

• Policy Support: Government incentives and streamlined approvals could unlock more participation.

• Stakeholder Engagement: Native title holders, leaseholders, and government agencies must collaborate early.

• Education & Extension: Build industry understanding of carbon project design, obligations, and market mechanisms.