Well, we are now at the end of the carbon price market and there has certainly been a flurry of savanna action. In the early days it was just Fish River, now there are projects right across the north of Australia. What’s happening out there?
It turns out we are not the only ones being busy – in the last several months, a stack of projects have come online in Cape York and in Arnhem land. Altogether, there are now 34 savanna projects, 17 of which have negotiated the tricky highway to credit issue. Importantly, 14 projects are either indigenous owned or have significant indigenous involvement.
Overall, 1.3m savanna credits have been issued, with the lion’s share of 1.1m coming from projects with indigenous involvement. The West Arnhem Land Fire Abatement project has piled on nearly 600,000 alone – the project covers an enormous area of Arnhem Land.
There seem to be a couple of issues at play in this upswing. First, to setup a project is extremely complex – wading through the CFI Act and regulations and undertaking detailed vegetation mapping and fire management pursuant to a rather lengthy savanna determination. It all takes time and resources to pull it all together. So the projects have taken a few years to fire up.
Second, we have known that the carbon price market is closing for 6 months or more. It is now closed. No doubt, many projects have struggled through to access a market where buyers are staring at carbon bills of $24 a tonne. Buying on the voluntary market at a slightly lesser price is very attractive, while giving savanna projects a very solid return.
So as project players have gotten on top of regulations, and the carbon price deadline has approached, the savanna card has filled to a very healthy 34 projects. These projects cover a significant proportion of the eligible areas in northern Australia.
We’ve come a long way from the lonely Fish River days but the next step is not as yet clear: how will the Emissions Reduction Fund auctions play out?, and will the voluntary market find new life without its big carbon price brother?
With a new savanna method proposing to expand coverage to the >600mm rainfall zone, further expansion of the savanna sector is certainly a possibility. Stay tuned.