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Senior Executive and Non-Executive Director

Agricultural Science Journal (Vol 34) https://bit.ly/3QT8kB1 (requires subscription) Matt Warburton-Edgerton's article, "Carbon Project Agreements – Landholder Risks and Recommendations," offers a detailed analysis of the considerations and risks involved in carbon project agreements in Australia, specifically for landholders. The article sheds light on the role of Carbon Service Providers (CSPs) and their various business models, underlining potential conflicts of interest and emphasising the need for landholders to maintain control and flexibility in land management. Key considerations for landholders highlighted in the article include: 1. Understanding Permanence Obligations: Awareness of long-term commitments in carbon sequestration projects, which may last 25 or 100 years, is crucial. 2. Business Models of CSPs: The article describes three primary business models used by CSPs, advising landholders to ensure agreements allow them to retain maximum benefit and flexibility. 3. Control over Australian Carbon Credit Units (ACCUs): Managing ACCUs is critical, impacting the landholder's ability to manage their property and future sales. 4. Legal and Financial Implications: Seeking legal advice before entering these complex agreements is essential to avoid potential disputes and financial burdens. For land managers considering carbon farming agreements, the article points out several critical aspects: Risk Assessment and Contractual Terms: It's important to evaluate the risks associated with different CSPs and the terms of contracts to avoid binding long-term commitments that may be unfavorable. Flexibility in Land Management: Agreements should allow flexibility in land management, avoiding overly restrictive land use. Financial Viability and Market Risks: Assessing financial implications, including risks associated with ACCUs and potential costs in buying back ACCUs, is essential. Legal Advice and Contract Negotiation: Professional legal advice is recommended to negotiate terms that protect landholder interests and ensure fair distribution of benefits from carbon sequestration.

Agricultural Science Journal

Agricultural Science Journal

aginstitute.com.au

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