The Plantation Forestry Feasibility Process Explained

Let’s quickly recap Plantation Forestry

A plantation forestry carbon project involves sequestering carbon by growing trees within either a new plantation, or by including existing plantations into the carbon project. Carbon can be stored in the trees as well as the debris and harvested wood products. By building up carbon stocks within the plantation and its products, you are removing carbon from the atmosphere. This removal – and subsequent increase in your carbon stocks – earn you carbon credits.

What the rulebook says…

At the CFF, we help customers run plantation forestry carbon projects under the Carbon Credits (Carbon Farming Initiative—Plantation Forestry) Methodology.

Under the 2022 Plantation Forestry Method, there are four different ways to earn carbon credits, known as Australian Carbon Credit Units (ACCUs).

These four options are called schedules, and include:

1. Establish a new plantation
2. Convert existing plantation from short to long rotation
3. Continuing plantation activities (rather than converting to ag land)
4. Transition to permanent forest

It’s important to note that there is no real-time carbon measurement under the methodology. Instead, the projected carbon yield that will be stored in your project’s trees, plantation products, and debris across a 25-year crediting period is calculated in advance using the government’s Full Carbon Accounting Model (FullCAM) tool. 

The Feasibility Process

Here at the CFF, we want to make the process of determining the feasibility of a carbon project as smooth as possible. Let’s break down the steps involved.

Step 1: Assess Your Opportunity 

Carbon farming got your ears pricked and keen to get started on the process? Your first step is to have a chat with one of our project facilitators, so we can gauge the key parameters of your project, and sense-check whether your plans are eligible, viable and suitable for us to take on board.

At this point, if your project scale is more towards the marginal side, we’ll quote you a fair rate to work out an indicative FullCAM yield. This is to see if the projected yield is high enough to get your project over the line and to avoid wasting your time and money in case it’s not. If yield is looking good, or your project has a clear scale advantage from the outset, we’ll suggest you go straight through to the pre-feasibility stage. 

Step 2: Pre-Feasibility Presentation and Q&A

Happy with your carbon yields and want to dig further? We suggest you order a feasibility presentation, so we can give you and your stakeholders a more detailed financial breakdown of your carbon project. The presentation will:

• Explain eligibility criteria so you can check you tick all the boxes.
• Provide a snapshot of your project’s potential carbon yields, costs, profits, cash flow, risks and success factors.
• A breakdown of the different service offerings and costings.
• Comprehensive Q&A session, allowing you to map out your next steps and operational & budget considerations.

Step 3: Feasibility Report

If the numbers add up and you’re keen to explore further, the CFF can pull together a tailored feasibility report. This handy document will help you understand all the nuts and bolts involved in a carbon project, tailored to your land and your operation.

The feasibility report unpacks:

• A comprehensive analysis of the eligibility, suitability, risks & success factors of your carbon project.​
• Tailored recommendations to enhance returns and support your business case.​
• Comprehensive (low, medium & high) cost, yield, gross profit & cashflow scenarios.​

With this report in hand, you can develop a detailed risk assessment and financial budget for your project. These reports can also be submitted to your banks as part of eligible interest holder consent.

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Outline of the Feasibility Report:

Your Schedule

Looking at your project, we will outline the carbon yield estimate, crediting periods for both short and long rotation plantations, permanence period discounts and outline the schedule that your project would be eligible for including how to go about registering the project under the chosen schedule.

Desktop Assessment

Here we outline the proposed project activity, forest cover location and rainfall to confirm they are within the method’s eligibility. We also determine whether the project will be eligible for a forestry managed investment scheme, or other co-benefit programs.

Cost Drivers

This section fleshes out the assessment of yield for the project, project set-up costs and ongoing compliance costs for different cost scenarios (low, medium and high).

Revenue Drivers

Understand the implications of the carbon spot price and the project’s permanence price on your revenue stream.

Performance

This section considers the performance of the proposed project based on a standard analysis, to understand profitability and cash flow over the 25-year crediting period.

Great, how much do those services cost?

Keen to expand your carbon farming understanding?

Get started here with these plantation forestry articles:

• Plantation Forestry Carbon Farming 101
• Our Plantation Forestry Feasibility Report in Action

Explore our range of educational resources in our Carbon Farming Education Hub where we frequently publish educational articles, webinars, and guidebooks. 

When you’re ready to explore the feasibility of undertaking a carbon project on your property, email us at hello@carbonfarming.org.au or give us a bell at (08) 6835 1140 to be connected with one of our project facilitators.