For farmers generating Australian Carbon Credit Units (ACCUs) through an eligible soil carbon project, selling them is only one option.
ACCUs can be sold, retained, or retired against emissions – whether your own emissions or as part of an insetting arrangement with supply chain partners. You can also combine approaches, retiring some ACCUs and selling the rest.
The important point is that there’s no single answer for what you should do with your ACCUs. But having them gives you choices.
What is an ACCU?
An Australian Carbon Credit Unit represents one tonne of carbon dioxide equivalent (CO₂e) emissions avoided or removed through an eligible project.
For a soil carbon project, changes in soil organic carbon are measured over time. Where eligible increases are achieved, ACCUs may be issued under the Australian Government’s ACCU Scheme.
It’s worth distinguishing here that the amount of carbon measured in the soil differs from the number of ACCUs ultimately issued.
While one tonne of measured sequestration (CO2-e) is equal to one ACCU, sampling and statutory discounts can reduce the credited amount returned to the producer.
For example, one CarbonLink project demonstrated a net abatement of 128,325 tCO2-e; after discounts this returned 94,666 ACCUs to the producer.
Once ACCUs have been issued, the question of how to use them becomes about what makes the most sense for the farm business.
How ACCUs can be valuable to a farm business
It’s easy to think about carbon credits purely in terms of their sale price. But the value of having ACCUs can be broader than an immediate transaction.
CarbonLink Founder and Executive Director, Dr Terry McCosker OAM argues that the real advantage is the choice they can give the producer.
“The way I look at this is that having ACCUs actually keeps the power with the producer,” he says.
McCosker also sees ACCUs as something that may give producers more flexibility when conditions change.
“If you’ve got ACCUs in your account and you hit a drought or a lower commodity price period, then you can actually sell those ACCUs and keep your cash flow evened out,” he says. “They are a great hedge against future fluctuations.”
That doesn’t mean holding ACCUs will always be the right decision. It means producers have another lever available.
What can you do with ACCUs?
Once ACCUs have been generated, producers have four broad pathways.
| Option | How it works | Potential benefit | Key consideration |
|---|---|---|---|
| Sell the ACCUs | Sell credits to a government or corporate buyer. | Generates revenue from the credits. | Once sold, you no longer hold the credit or its associated carbon claim. |
| Hold the ACCUs | Retain credits rather than selling them immediately. | Provides flexibility to sell credits in the future when opportunities arise, or to support cash flow during challenging seasonal conditions. | Holding ACCUs delays access to revenue. |
| Inset the ACCUs | Retire credits against your own farming operational emissions. | Can help account for some or all of your farm’s emissions for that period. | Once retired for insetting, ACCUs can no longer be sold. |
| Sell the ACCUs to a supply chain partner. | May support supply-chain relationships, co-investment or longer-term contracts | ||
| Inset some ACCUs and sell the rest |
Retire some credits against your emissions and sell the balance.
Or you can sell some credits and hold the rest for future opportunities. |
Producers can mix emissions management with revenue generation or asset holding in any combination they wish. |
Sell your ACCUs
A producer can sell ACCUs in carbon markets to generate revenue. Once sold, the credit and its associated carbon benefit belong to the buyer, so the producer can’t also use that same ACCU to make their own carbon neutral claim.
That may suit a producer whose priority is monetising the credits rather than retaining them for another purpose.
CarbonLink has a relationship with an ACCU broker and can introduce its producers if they wish to sell their ACCUs.
Hold the ACCUs
A producer may choose to retain ACCUs rather than selling them immediately.
Holding ACCUs can provide flexibility. Producers may decide to sell them at a later date if a suitable opportunity arises, or keep them available as an asset that could support the business through future seasonal or market challenges.
For some producers, the ability to access that value at a time of their choosing may be as important as the value of the credits themselves.
ACCUs can be retired against an emissions footprint – known as “insetting”.
Insetting generally refers to emissions reductions or sequestration occurring within a company’s own value chain, rather than through an external offset.
In simple terms, if a business produces 10,000 tonnes of operational emissions and retires 10,000 ACCUs against those emissions, it can account for its operational emission footprint and call itself carbon neutral for that period.
For a farmer, that could mean retiring against their own footprint, or working with a processor, food company or other supply-chain partner that wants to address its Scope 3 emissions.
The latter may involve payments, co-investment or longer-term supply agreements.
There may also be a commercial reason to do so. A lower-emissions or carbon-neutral product could potentially support a producer’s access to particular markets and supply chains. McCosker expects one of those considerations to matter more than the other.
“I think market access is probably going to be more significant than premiums,” he says.
Insetting is still an emerging area, with varying commercial models and reporting expectations.
Retire some and sell the rest
The last option is a hybrid.
A producer might retire enough ACCUs to account for their own operational emissions, then sell the remaining credits. They could also retire only a portion of their credits to reduce their net emissions without going all the way to carbon neutral.
Alternatively, they could choose to sell a portion of their credits for cash flow benefits and hold the remaining for future opportunities – or as a financial buffer for challenging seasons.
As McCosker explains, producers can “do a little bit of both”, depending on what makes sense for the business.
CarbonLink can work with producers to understand the options available and determine how ACCUs may best support their broader business objectives.
Do farm emissions wipe out the value of soil carbon?
It’s a concern we often hear from producers.
A grazing enterprise produces methane and other operational emissions, so it’s reasonable to ask whether those emissions could consume most of the carbon being stored in the soil.
In the projects we’ve examined, that hasn’t been the case.
On one Queensland cattle grazing property, five-year net operational emissions totalled 1,985 tCO₂e, while measured carbon sequestration over the same period was 128,207 tCO₂e.
So even after those deductions, the ACCUs issued substantially exceeded the property’s five-year operational emissions.
On a Victorian mixed grazing property, five-year net operational emissions totalled 11,654 tCO₂e, while measured carbon sequestration over the same period was 36,806 tCO₂e, and after deductions resulted in the generation of 18,864 ACCUs.
“These ratios don’t hold everywhere,” McCosker explains, “but they certainly give you an idea of what’s possible if you have ACCUs and you’re looking at your options.”
What’s true for one property may not be true for another. ACCU prices vary and gross revenue does not account for all project costs.
Generating ACCUs also involves costs including baselining, measurement and project costs, which need to be considered alongside any headline revenue figure.
But on this particular property, the ACCUs required to account for operational emissions represented a relatively small proportion of the credits generated, leaving a substantial balance available for sale.
McCosker believes farm emissions need to be considered in the context of agriculture’s capacity to sequester carbon.
“What we hear about in the market is emissions, emissions, emissions, emissions,” he cautions. “What we need to be talking about is sequestration, sequestration and sequestration, and start putting emissions into the context of what we can actually do in agricultural land.”
Soil carbon should start with productivity, not credits
McCosker stresses that the carbon market shouldn’t replace the farm’s core business.
“The thing that should come first is productivity,” he says. “Your core business is your core business, and changing practices in your core business to add carbon to the soil will increase productivity and generally lower costs.”
McCosker says carbon should be treated as an additional benefit of improving the landscape.
“Treat carbon as a bonus,” he says. “It can be a significant bonus, but let’s consider that it’s a bonus to doing the right thing by your landscape, rather than getting into the business of creating soil carbon credits.”
Those benefits can include increased carrying capacity, greater water-holding capacity and improved ground cover.
If you’re already making management changes that could increase soil carbon, it’s worth considering early whether you want to measure that change and pursue ACCUs.
Could these options matter more in the future?
Food and agricultural companies are increasingly looking beyond their own direct emissions and into their supply chains, where farm-level emissions can form part of their Scope 3 footprint.
CarbonLink Soil Carbon Project Manager Santos Amadeo says that interest is already reaching producers.
“Some of our producers have been getting calls and enquiries from supply chains looking into their data, whether they track their emissions, whether sustainability practices are making a difference and whether they’re involved in an ACCU project,” he says.
That interest could have commercial implications over time. Amadeo says poor emissions data could become a market-access issue for farmers, while early adopters may be better placed for opportunities such as preferred supplier status or co-investment, although he stresses those outcomes are still prospective.
As these pressures develop, producers with reliable farm data and ACCUs may have more options available in how they respond.
The bottom line: ACCUs give producers choices
A soil carbon project shouldn’t begin with the question, “How many credits can I sell?”
The better starting point is what management changes make sense for the land and the farm business, whether those changes can build measurable soil carbon, and whether participating in the ACCU Scheme stacks up for that particular property.
If ACCUs are generated, you have choices.
You can sell them. Retain them. Retire some against your operational emissions. Or combine those approaches.
The right answer will depend on the property, the market and what you as a producer are trying to achieve. The value of having ACCUs is that the choice is yours.
For farmers considering a soil carbon project, CarbonLink can help assess whether the opportunity fits the property, the management system and the producer’s longer-term goals.
Frequently asked questions
Can farmers sell ACCUs?
Yes. ACCUs generated through an eligible project can be sold into the carbon market. Once an ACCU is sold, however, the producer no longer holds that credit and cannot also use the same carbon benefit to account for their own emissions.
Can you use ACCUs to offset your own farm emissions?
ACCUs can be retired against emissions rather than sold. The number required depends on the farm’s measured emissions for the relevant period. Retiring a credit removes it from circulation, so it cannot subsequently be sold.
Can you retire some ACCUs and sell the rest?
Yes. A producer can retire enough ACCUs to account for their own emissions and sell the remaining credits. Whether that makes commercial sense depends on ACCU values, the producer’s emissions and the value they place on retaining the carbon claim.
What’s the difference between offsetting and insetting?
Offsetting generally involves using carbon credits from outside a company’s value chain. Insetting involves reducing or sequestering emissions within that value chain. For farmers, an insetting arrangement could involve a supply-chain partner paying for or co-investing in emissions reductions or sequestration linked to its Scope 3 footprint.
Will farm emissions cancel out soil carbon sequestration?
Not necessarily. In the real-world property examples discussed here, operational emissions were considerably smaller than measured sequestration. But those results can’t be assumed for every farm. Soil, climate, management and enterprise characteristics all affect both sequestration and emissions.
Does every soil carbon project generate ACCUs?
No. Soil carbon farming doesn’t suit every property, and participating in a project doesn’t guarantee a particular number of ACCUs. Project suitability, management changes, measurable increases in soil carbon and the ACCU Scheme’s rules all affect the outcome.
