Soil carbon projects involve nutrient, sampling and testing costs.

9.6.1 Nutrient costs

Scientific research indicates that in order to stabilise carbon in the soil it needs to be combined with nutrients, including nitrogen. Table 9.3 uses the findings of Lam et al. to provide indicative nutrient costs, in terms of nitrogen requirements, for selected soil carbon approaches.
 

Note: The original 2015 edition of this manual included urea at $600/t so we have added the $500/t column to align with pricing at the time of this update in January 2021.
Source: Lam et al. (2013), ‘The potential for carbon sequestration in Australian agricultural soils is technically and economically limited', Table 2, Nature Scientific Reports, 3, article no. 2179  
 

While Lam et al. calculated nitrogen costs for soil carbon storage, other authors have suggested that soil carbon projects will also involve other nutrient costs. For example, recent research at CSIRO* suggests that soil carbon sequestration would also require the addition of phosphorus and sulphur, potentially at additional cost to those listed above.

This research indicates estimated total nutrient costs of around $250 per tonne of carbon sequestered, which comes to around $70 per tonne of CO2 sequestered. Note that these are nutrient costs only, and do not include administrative and other costs associated with a soil carbon project.

Note also that the discussion above imputes a nutrient cost by assuming that nutrients are provided through explicit addition of fertiliser to the soil.

9.6.2 Sampling and testing costs

Soil carbon projects also involve sampling and testing costs. The currently available soil carbon methodology is a sample-based methodology. Recently, the Australian Farm Institute indicated the costs for soil carbon projects set out in Table 9.4.
 

These costs are similar to those reported by CSIRO**, which suggested fixed field work costs of $2000, a field work cost per sample of $40 (based on an hourly field work rate of $120 and a time of 0.33 hours to take one sample) and laboratory costs of $30 per sample.

Building up the cost of sampling

To understand the potential cost of sampling and testing under the methodology, it is important to understand the way that sampling works. The methodology requires that your project area be divided into carbon estimation areas (CEAs).

There is no specified size for a CEA or recommended number of CEAs within a project; it is a matter of your farm circumstances. For sampling, each CEA is divided into equal areas, called ‘strata'. Soil samples are taken from the strata.

A sample from each stratum can be combined to create a composite sample. For example, a CEA may be divided into nine strata, and three samples taken from each stratum (a total of 9 × 3 = 27 samples).

The samples from each stratum can then be combined into three composites. This could be termed a ‘9 × 3' sampling strategy. The cost would be the cost of taking 27 field samples plus the cost of three soil tests (only the composites are tested). Using a representative cost of $40 per field sample and $30 per test, the total cost would be $1170 for that particular CEA.

This cost will be incurred at the beginning of the project (for the baseline sample) and at regular intervals over the life of the project (every two to four years). The methodology for sequestering carbon in soil grazing systems recommends a minimum of five subsequent samples over a 15-year project.

The key challenge is determining the appropriate sampling strategy for your project. Too few samples will mean that soil carbon changes will not be detectable (essentially, the error from the sample will be greater than the amount of carbon change, and so will not be detectable). In such a case, the project will not earn ACCUs.

On the other hand, too much sampling will be expensive—potentially more expensive than the value of the ACCUs earned. The sampling strategy is a crucial decision, as the design does not allow for restratification once the baseline sampling round has been undertaken.

Choosing a sampling strategy requires professional advice and should be considered very carefully when evaluating a project. Illustrative sampling costs over the life of a project Table 9.5 provides some indicative costs per hectare for different sampling strategies.

The costs are expressed in $/ha/year and assume a 100 ha CEA and a 15-year project with a baseline and five subsequent samples over the life of the project. Note that this table includes only the variable sampling costs.

Note: Calculations assume field sampling costs of $40 per sample, laboratory costs of $30 per test, one baseline sample and five subsequent sampling rounds over a 15-year project. Assumed CEA size is 100 ha.
Source: CIE estimates.

The minimum sampling allowed in the methodology is 3 × 3. For a 100 ha CEA, the methodology suggests a minimum 6 × 3 sample, with a very strong suggestion that this should be 8 × 3 or 10 × 3. Table 9.5 shows how the costs increase rapidly as the numbers of strata and composites increase. Comparing Table 9.5 with Tables 8.1 and 8.5 suggests that the ACCU price will need to be greater than $25 for the project to cover variable sampling costs.

Even with the sample sizes set out in Table 9.5, there is no guarantee that the resulting sample will be able to detect changes in carbon over the life of the project, particularly if there is large variation within a single CEA. The only way to ensure detection is to have a very large sample frame, which is unlikely to be economic unless ACCU prices are very high.

In recognition of potentially high sampling costs, Carbon Farming Initiative soil sampling design: methods and guidelines notes that:

• This soil sampling design is not expected to be suitable from very large Project Areas where the increase in SOC (soil organic carbon) is slow, such as in more arid areas, as it is unlikely to be cost effective to sample at an intensity required to detect a change in SOC over a reasonable time period (e.g. 4 to 5 years). For this reason, this soil sampling design is not considered suitable for areas of the Australian rangelands.***

* The research is reported in the GRDC's Ground-Cover- Issue-107-NovDec-2013/Soil-carbon-changes-complex-and-slow. 

** See Chappell A, Baldock J and Rossel RV (2013), Sampling soil organic carbon to detect change over time, CSIRO report to Grains Research and Development Corporation and Australian Department of the Environment 

*** See Department of the Environment (2014). Carbon Farming Initiative soil sampling design methods and guidelines.