In October 2020, North Queensland cane farmers Brain and Jamie Dore sold the first-ever Reef Credits to the global bank HSBC. In doing so, they paved the way for farmers to participate in a new environmental market focused on improving land management practices within the Great Barrier Reef catchments, and generating a new income stream based on improvements in water quality flowing onto the Reef.
Environmental markets value ecosystem services, such as storing carbon in regenerating vegetation, or restoring and protecting native habitat. In the case of Reef Credits, it means recognising the effort involved in changing farming practices to reduce the flow of pollutants onto the Reef. And most importantly, doing this without negatively impacting agricultural productivity.
Getting paid for land management best practice
Being paid to implement best practice land management and deliver cleaner water to the Reef, without negatively impacting productivity may seem too good to be true. But according to GreenCollar Business Development Manager Bart Dryden, and the numerous farmers already running Reef Credit projects, it really is a win:win transaction that benefits both the farmer and the environment.
“The two biggest land-based threats to the Great Barrier Reef are excess nitrogen and fine sediment. Reef Credits presents an opportunity for farmers within the Great Barrier Reef catchment to get paid for work that addresses both of those threats.
“Each Reef Credit represents 1kg of dissolved inorganic nitrogen or 538kg of sediment prevented from entering the Great Barrier Reef, so it places an economic value on work undertaken by farmers to improve water quality flowing onto the Great Barrier Reef.”
Generating up to six million Reef Credits by 2030
He said with estimates suggesting a market of up to six million Reef Credits by 2030, the potential is there for farmers and other land managers within the Great Barrier Reef catchments to gain an additional and regular income stream over 10–25-year timeframes.
“We know from farmers that are already involved in the scheme that running a Reef Credits project supports investment back into primary production activities and the continued adoption of sustainable practices,” says Mr Dryden.
“While the value of Reef Credits is variable depending on supply and demand, corporates, governments and others interested in protecting the Reef are supporting the scheme by purchasing credits to meet their environmental targets.”
Three ways to get involved
Mr Dryden explained that Reef Credits could be generated in three different ways. The first is by improving on-farm nutrient use efficiency, the second is by constructing wetlands to filter nutrients and reduce runoff, while the third focuses on gully rehabilitation to reduce fine sediment runoff.
“In a broad sense, the nutrient use efficiency projects are about improving current farm practices, while the wetlands and gully projects require capital investment.
“Of the three, the Managed Fertiliser Application method is currently most commonly adopted; however, the key message for farmers is that these improvements can be made sustainably and even increase their overall profitability.”
Mr Dryden said many farmers are already undertaking changes to adopt best land management practices, and a Reef Credit project supports the adoption of these practices financially over a 10-year period.
No-cost feasibility assessment
Mr Dryden said it is a relatively simple process to determine if a project is feasible.
“The first step is to do an assessment – which is at no cost to the farmer. We look at farm records and maps, and gather yield and fertiliser information. From this, we can quickly determine the inputs and productivity and see whether there is potential for a viable project.
“While property size is not necessarily a defining element, a general rule of thumb is that scale can be important. Generally, the bigger the farm, the more viable the project is likely to be; however, I would encourage anyone to talk to us to see if there is a solution that would work for them.”
Taking a farm-first approach
He said the important thing is that GreenCollar does not prescribe what farmers need to change.
“In our discussions, we always encourage farmers to work with their agronomists or other advisers to determine what changes, if any, would best suit their property or operation.
“For most, the changes being made are supported by industry best management practice. The option to generate and sell Reef Credits provides an additional incentive to make changes, with the bonus of delivering a diversified income for adopting best practice.”
According to Mr Dryden, the added income from Reef Credits can add up over the long term.
“Reef Credits are never going to be the main income for a farm. It’s about farming first, and then using Reef Credits as a complementary income source to support productivity.
“For managed fertiliser projects, a clear operational benefit is reducing fertiliser costs. Improving nutrient efficiency while maintaining productivity helps lower costs and puts more money in your pocket.”
A tried and tested scheme supported by farmers
Cane farmer, Jamie Dore, supports the Reef Credit approach.
“A key aspect of the Reef Credits program is based on the nutrient use efficiency model. It’s not just about reduction; it’s about getting the best bang for your buck in the nutrients that you do put on. It enabled us to focus very heavily on that, because when we achieve that nutrient use efficiency, we get paid for it, and that gives us money that we can reinvest back into the business.”
Mr Dryden said once a project is established, a robust set of procedures are put in place to determine the number of Reef Credits generated.
“At the start of the project, we establish a baseline from farm maps, and use soil tests to determine the yield on fertiliser inputs. Every year we remodel the property based on the data; the findings are independently audited and verified, and the Reef Credits are generated from those results.
Mr Dryden said the rigour applied ensures that Reef Credits encourages and pays for environmental change.
Mr Dore said the good thing about Reef Credits is that participants can put their hand on their heart and say they are making a difference.
“It’s all audited, and the records are there for everyone to see. It’s on a public registry, so the investors buying the Credits can have confidence that the on-ground work is really making a difference.”
