A plain-English walkthrough of how carbon projects work under the ACCU scheme — the methods, the money, the timelines, and what it means for your land.
Carbon farming means managing your land so it either stores more carbon or releases less, then earning tradeable credits for the result. In Australia those credits are Australian Carbon Credit Units (ACCUs), and one ACCU represents one tonne of carbon dioxide equivalent that you have stored in soil and vegetation, or kept out of the atmosphere. You run a registered project under the ACCU Scheme, the Clean Energy Regulator issues ACCUs once the abatement is measured and independently audited, and you sell them for income while you keep farming. This guide covers how the scheme works, the main methods, whether your land is likely to suit one, what the numbers look like, and the risks to weigh before you commit.
What carbon farming actually is
There are two ways a project earns credits. The first is storing carbon, called sequestration: building soil organic carbon, or growing and protecting vegetation. The second is avoiding emissions: changing a practice so it releases less, such as shifting the timing of savanna fires or improving herd efficiency. Either way, the unit you earn is the ACCU.
The scheme is the Australian Carbon Credit Unit (ACCU) Scheme, which was previously called the Emissions Reduction Fund. It runs under the Carbon Credits (Carbon Farming Initiative) Act 2011 and is administered by the Clean Energy Regulator (the CER). The CER registers projects, sets the rules through approved methods, and issues ACCUs once your results are reported and audited. As at mid-2026, roughly 185 million ACCUs had been issued across the scheme since it began, with new supply running at over 20 million units a year.
How a carbon project works, step by step
Every project follows the same broad path, regardless of method:
- Choose a method that fits your land and your goals.
- Register the project with the CER before you start the activity. Projects have to be new, so you cannot register work you have already done.
- Set a baseline, which is the starting point your results are measured against.
- Get consent from anyone with a legal interest in the land, such as your bank or other titleholders.
- Do the work: change grazing management, let native vegetation regrow, adjust fire timing, or establish trees.
- Measure and report the abatement on the schedule your method requires.
- Have the report audited by a registered auditor.
- The CER issues one ACCU for each tonne verified.
- Sell the ACCUs.
The detail on issuance and revenue sits in a separate guide: how landholders generate ACCUs and get paid.
The main carbon farming methods
The CER maintains the full list of approved methods, and it changes over time as some are renewed and others close to new projects. The ones most relevant to landholders are:
- Soil carbon. Build soil organic carbon by changing grazing, pasture and land management. It suits productive grazing country and runs alongside farming. See soil carbon, explained.
- Vegetation and human-induced regeneration. Encourage native vegetation to regrow by changing the management pressures that were holding it back, such as grazing or feral animals.
- Reforestation and environmental plantings. Establish trees on cleared land for long-term storage.
- Savanna fire management. Shift to planned early dry-season burning across northern Australia, including large parts of Queensland, to cut the emissions that late, hotter fires produce.
- Livestock and herd management. Improve the efficiency of a beef herd to lower emissions per animal.
Which one fits depends on individual specifics.
Will your land suit a project?
A few factors decide most of it: the type and condition of your land, your rainfall, what you have done on the property recently, your tenure and scale, and whether you are willing to take on a long storage commitment. There is no single rule, which is why the first real step is a proper eligibility check rather than a sales pitch. Work through is my land eligible for a carbon project? before you go further.
The money: revenue, costs and timing
You can sell ACCUs in a few ways. You can contract to deliver them to the Commonwealth through a carbon abatement contract, sell them on the secondary market to companies that need them (including large emitters covered by the Safeguard Mechanism), or sell to voluntary buyers. Through mid-2026 the generic ACCU spot price sat in the high A$30s, touching about A$42 earlier in the year when demand was strong. Prices move, so treat any figure as a snapshot rather than a forecast.
Against that revenue sit real costs: registration, the measurement and reporting work, independent audits, and a share of the credits or income paid to whoever develops and manages the project for you. Timing matters too. Sequestration builds over years, the first issuance of credits often takes a couple of years from registration, and income arrives in periodic batches rather than as a single payment. Whether a project pays depends on the method, the scale, your costs and the price you achieve, so be cautious of any pitch that quotes a return without showing the assumptions behind it.
Permanence and the commitments you take on
Sequestration projects carry a permanence obligation. You agree to keep the carbon stored for either 25 or 100 years, and that obligation stays with the land even if you sell it. Projects on the 25-year option receive slightly fewer credits to reflect the shorter commitment. If stored carbon is later lost, through clearing or a major fire for example, you can be required to make good by surrendering or replacing credits.
This is the part landholders most often underestimate, because the commitment outlasts most farm business plans and can affect future sale and succession. It is worth understanding fully, which is the focus of the questions to ask before signing a carbon project agreement.
How long does the whole thing take?
A realistic shape is: an eligibility and feasibility check up front, taking weeks; then registration and baselining; then years of on-ground activity, monitoring and reporting before credits accumulate to a meaningful number. Carbon farming is a long-term land decision, not a quick cash injection, and the agreements reflect that.
Getting independent help
Most landholders first hear about carbon farming when a project developer or aggregator approaches them, offering to run the project in return for a share of the credits. Those offers can be reasonable, but the terms vary widely and the agreements often run for decades. Because the developer and the landholder do not always have the same interests, it helps to understand the deal on your own terms before you sign, and to compare it against what the project could earn if it were structured differently. The questions in the next guide are a good place to start that comparison.
Frequently Asked Questions (FAQs)
It can be, but it is not guaranteed. The result depends on the method, the scale of your land, your costs, and the ACCU price when you sell. A credible assessment shows you the assumptions, not just a headline number.
Yes. You keep the title. What you take on is a commitment about the carbon stored on the land, including the permanence obligation for sequestration projects.
Often yes. Several methods, soil carbon in particular, are designed to run alongside grazing rather than replace it. It depends on the method you choose.
There are two timeframes to check. The project’s permanence obligation is 25 or 100 years, and any commercial agreement with a developer has its own separate term. Read both before you sign.
They are the same scheme. The Emissions Reduction Fund was renamed the ACCU Scheme, so older articles describing the ERF are usually still describing the system that operates today.
The Commonwealth through carbon abatement contracts, large emitters meeting their obligations under the Safeguard Mechanism, and voluntary buyers such as companies offsetting their own emissions.
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