Carbon Accounting

Carbon accounting

Carbon accounting measures the greenhouse gases an entity releases and stores (sequesters).

Net carbon emissions (carbon footprint) = carbon released – carbon sequestered.

Agriculture is unique because its production and land management can impact both sides of the equation. Farming practices can release carbon, but they can also sequester it through specific on-farm actions.

The greenhouse gases considered in agricultural carbon accounting are carbon dioxide (CO2), methane (CH4) and nitrous oxide (NO2).

The carbon footprint or emissions intensity of a product is measured per unit, such as tonnes of CO2 equivalent per kilogram of live weight.

Why use carbon accounting?

Measuring carbon emissions on a farm has many benefits, even if you don’t plan to join a carbon market. Knowing your farm’s emissions can help you find ways to improve efficiency and reduce costs. It also supports the growing need for clear reporting on environmental impact. As the world moves toward lower emissions, farms that can show they produce with less carbon or achieve carbon neutrality may have better access to new markets and opportunities.

Full carbon accounting includes Scope 1, 2, and 3 emissions as detailed below.

Carbon Calculators

There are many free carbon calculator tools available to help you measure your farm’s greenhouse gas emissions. These tools give you useful insights and information to better understand your carbon footprint.

If you're uncertain about which calculator to choose or need more information on how to calculate your emissions, please reach out to our team for support.

Emissions category	Farm produce	Buyer of farm produce
Scope 1: Direct emissions released as a direct result of making a product	All emissions on-farm from agricultural activity - eg methane emissions from livestock; nitrous oxide emissions from fertiliser, urine, dung and waterlogged soil; and emissions from operating farm machinery	All emissions from product manufacturing/production
Scope 2: Indirect emissions from the electricity used to make a product	Emissions from the production of purchased electricity eg to operate water pumps or shearing shed, etc	Emissions from the production of purchased electricity
Scope 3: Broader indirect emissions related to the generation and transportation of a product	Upstream/Pre farm emissions: Emissions from purchased livestock / production of feed (grain, hay, silage, fodder, supplements) / production of fertilisers and chemicals / extraction of fossil fuels for electricity and fuel. Downstream/Post-farm emissions: transport emissions / meat processing / retail	All indirect emissions associated with inputs (upstream and downstream) – eg the emissions associated with the product you sell off farm to the buyer

When calculating emissions for an enterprise, setting a boundary is important. For example do the calculations include Scope 1 and 2 only, or also upstream Scope 3 to the farm gate? If data is collected on all three scopes, the reporting of the emissions can be tailored to what the buyer is asking.

As large corporations are regulated and asked to quantify their greenhouse gas emissions, there will be an increasing need for their suppliers (growers of produce) to share emissions data to inform the corporate greenhouse gas emission bottom line. There are also corporations who are making voluntary pledges in order to meet investors’ expectations, and who recognise the importance of managing climate risk and opportunities to decarbonise.

It is expected that the greenhouse gas emissions it takes to grow a product will become increasingly scrutinised and important.

Data you will need to calculate your emissions

Livestock: Livestock information is required in either seasonal or monthly groupings, by livestock category.

Livestock numbers – consider stock losses, sales, purchased, traded
Live weight – average live weight (kg/head)
Live weight gain – estimated average daily (kg/head/day)
Calving and/or lambing rates
Wool – number shorn and wool shorn kg/head, greasy wool production (kg/year) and clean wool yield (%)

Industry averages – emissions intensity

Once you know the emissions intensity of your product, you can assess your result against industry averages. You might find the results confirm efficiency in production.

Product	Industry average emissions intensity	Unit of measure
Chicken meat	1.8 - 2.2 kg	kg carcass weight
Grain production	0.1 - 0.5 kg	kg grain
Dairy	1.0 - 1.2 kg	kg FPCM
Dairy	8 - 21 t	t MS
Beef	11 - 18 kg	kg live weight
Sheep	6 - 8 kg	kg live weight
Wool	21 - 28 kg	kg wool
Wine	0.6 - 1.5 kg	Litre

Managing your carbon credits and achieving neutrality

What to do with your carbon credits

Once carbon emissions are calculated, there may be a positive carbon result (or potential carbon credit); that is more carbon is being stored than released. This could create carbon credits that you can hold, inset, or sell, either through a formal carbon market or by certifying to achieve carbon neutrality.

Hold – Keep the carbon credits for future use; they are not inset or sold.
Inset – Use the carbon credits to offset your own emissions internally, reducing your own carbon footprint.
Sell – Transfer the credits to someone else for payment, allowing them to offset their emissions.

Carbon neutrality

Being carbon neutral means your net greenhouse gas emissions are zero—carbon stored cancels out emissions. The first step is always to reduce emissions as much as possible, then assess what carbon needs to be sequestered to reach neutrality. Independent certification, such as through Climate Active, is required to claim carbon neutrality for your business or products.

Understanding carbon storage limits

It may not be possible for every farm to capture enough carbon to offset all emissions. How much can be stored depends on your property, soil, and type of farming. Knowing these limits helps you plan whether to hold, inset, or sell carbon credits, or whether additional offsets are needed to achieve neutrality.

Climate Active

Climate Active is an Australian Government program that supports voluntary climate action by businesses, including in agriculture. It provides independent certification for businesses or products that have credibly achieved carbon neutrality, meeting the standards of the Climate Active Carbon Neutral Standard. Achieving certification may involve insetting, selling, or using your own carbon credits.

This project is funded by the Commonwealth of Australia through the Department of Climate Change, Energy, the Environment, and Water under the Carbon Farming Outreach Program.