As the carbon market continues to expand, farmers and landholders have an opportunity to generate additional revenue by undertaking carbon farming projects. With the complexities of compliance, project management, and more, aggregating multiple landholdings provides a way to spread costs.
One of the most effective ways for smaller or dispersed landholders to participate in the carbon market is through aggregation. This involves multiple properties being managed under a single carbon project, which can take two primary forms:
- Multiple landholders under an umbrella organisation – a group of farmers or a supply chain organisation can work together under one project, enabling economies of scale and reducing individual compliance burdens.
- Single landholder with multiple properties – a landholder with distributed properties can aggregate their own land, making it easier to manage a larger carbon project under one entity.
Who is the Project Proponent?
The project proponent plays a crucial role in ensuring the success of an aggregation project. This entity acts as the project manager, responsible for collating information, coordinating with stakeholders, and ensuring compliance with carbon farming regulations. The proponent can be:
- Multiple landholders under an umbrella organisation – a group of farmers or a supply chain organisation can work together under one project, enabling economies of scale and reducing individual compliance burdens.
- Single landholder with multiple properties – a landholder with distributed properties can aggregate their own land, making it easier to manage a larger carbon project under one entity.
Who Pays for the Project?
The financial structure of an aggregated carbon project can vary depending on the setup. Some common payment structures include:
- Shared costs among participants – The fees for carbon service providers, planting, and monitoring, reporting, and verification (MRV) can be distributed across all participating landholders.
- Supply chain-funded projects – An organisation may cover the costs in exchange for a carbon credit agreement, ensuring they receive the credits to offset their scope 3 emissions.
Who Receives the Carbon Credits?
The distribution of carbon credits depends on the organisational structure of the project:
- Umbrella organisation model – If an organisation is managing the project, they may claim the credits in exchange for financing the project.
- Cooperative or industry group model – Credits can be distributed among participants based on factors such as land area contributed, carbon yield potential, or a pre-agreed share.
- Single landholder aggregation – When a landholder aggregates multiple properties under one project, they retain all the credits.
Key Considerations for Aggregation
While aggregation offers significant benefits, it also comes with additional complexities that need to be managed effectively:
- Time and administration – Aggregated projects require more upfront work, but they provide landholders with a cost-effective entry into the carbon market.
- Long-term commitments – Carbon farming projects typically run for 25 or 100 years, making clear legal agreements essential to ensure responsibilities are maintained.
- Compliance Management – Partnering with a trusted not-for-profit carbon developer helps streamline the compliance process, ensuring projects run smoothly and remain viable over time.
How CFF Can Support
A not-for-profit carbon developer like the Carbon Farming Foundation provides fee-for-service support, allowing landholders to focus on their core farming activities while ensuring their project remains compliant and financially sustainable. This includes:
- Expert guidance on compliance and regulations
- Project management and administrative support
- Assistance with monitoring, reporting, and verification (MRV)
- Transparent fee structures with no hidden costs
By working with CFF, landholders can confidently enter the carbon market, secure financial benefits, and contribute to a sustainable future. If you’re considering carbon farming, engaging with a compliance specialist will help you navigate the process and maximise your success in the carbon market.
Check out an aggregation project the CFF facilitates by Dirty Clean Food here.
To learn more and speak with our expert team, simply book a free consultation call here.
