In this month's CarbonCurious session, Nick Butcher, co-founder and CEO of CarbonCrop, joined CarbonCrop's Head of Growth, Rebecca Hunink, to discuss how the CarbonCrop platform can help you to understand, protect, and engage your catchment.
Watch the video for more information, or read the transcript below.
TRANSCRIPT
Nick: Awesome. Good afternoon, everybody. Thanks for joining. Sorry, we're a couple of minutes late. I was just figuring out how to hide my bookmarks tab, which is an important, important topic. They didn't teach me in software engineering school. Today we're, we're, because we're a bit late, we'll just dive straight into it.
Today, we're talking about how to use the CarbonCrop platform to understand, protect, and engage your platform. your catchment. So this is a bit of an evolution of the platform journey over the four years that we've been going. We've, some people are using it for this purpose already, but it's only recently that it's sort of reached a stage where we're happy to kind of actively encourage its use and we'll, we'll sort of take you through that.
With me today, I've got Bex, our head of Growth and I'm Nick co-founder and CEO. We sort of tag teaming your way through it. Bex is, extremely conveniently for us, happens to have a second hat, which is as a board member of a catchment group. So, she's been very helpful as we've refined the solution. As usual, if you have questions, drop them in the Q&A panel below.
We've had a huge amount of questions in advance for this session, which we'll try to get through at the end. And because of that, we're going to be doing a pretty superficial treatment of a lot of the stuff that we're presenting today. There's, Sort of each one of the topics we could talk about for an hour.
So this is really intended as a teaser rather than a deep dive. And then if you see things that are of interest to you, ask us to cover them in the future or even better, get in touch with us and tell us how you'd like to use it and what you're looking for.
Bex, I'll let you start off with this one.
Bex: Cool. We'll use the shorthand in this webinar, catchment groups, but actually what we're meaning is a much larger group of, or types of groups of people who are active in this space, environmental groups, NGOs, catchment groups, private conservation groups, local government, professional or industry good groups, and they have many different sort of names and faces, but are typically all sort of going after the same objectives.
Which, go to the next slide now, largely fit into protecting, restoring and strengthening things like biodiversity waterways and communities within a catchment or within an area. And because each catchment is different they all have slightly different challenges, but can largely, I'm going to go to the next slide now, largely in a cyclical manner involve funding, trying to engage the communities within the catchments alignment within within those communities, within the people who are taking action, making decisions, funding, coordinating stuff happening on the grounds, planning, getting trees into the ground or getting water tested, a whole bunch of delivery, monitoring those results and building those, that story year after year, test after test, and doing that consistently, over a long period of time.
Generally not going for one hit wonders. And this is a wee circle because those things happen again and again and again over years.
Nick: Yeah, they depend on each other historically as well, I guess, what you can do in year five probably depends on what you did in year three and what result that had in year four and one that, even with the discussions we've had so far, one thing that's been, recurring is they're different and the ways in which they're different are different, there's different amounts of, funding available, depending on the stage of the catchment group and the history of the group.
And I mean, I keep saying catchment, really, we're talking about that as a shorthand, as Bex said, for a broader category of entities. The current land uses across the region in question can vary wildly, and that has a big impact on the range of interventions that you could consider, because it has an impact on the opportunity costs.
And the level of engagement and the enthusiasm for some of the potential interventions varies wildly based on what sort of threats and opportunities people see. So we're really this loop is sort of engagement that happens in one year might feed through into funding that's available two years down the track because you can prove a larger impact.
Yeah, that's really interesting how, how cyclical it is and how much it's a question of sort of integrated planning and delivery and the constant site, like, like most land use practices, I guess.
Do you want me to jump forward again?
Bex: I think so.
Nick: Okay this one is sort of a bit of where we've come from and where we've got to, which is almost just to give some perspective. Especially for those who have been following CarbonCrop for quite a long time. Some people we spoke to through the sort of engagement process were quite surprised that we were able to offer the tooling that we are offering.
It's like, Oh, I thought you guys just just help people register their forest in the ETS. And we have done that and we do do that, but it's really where the company started out. That was our primary focus. We barely gave anybody access to our tools. They were basically just internal only as we refined them.
And the main form in which people interacted with our systems was, they would get in touch with us to provide a service to them. We would provide some reports and similar, which were generated by our tooling, but no one ever got to log into our platform. We'd send them a PDF and then help them through the process of registering on the ETS.
The next step from that, which was about a year and a half ago, I guess, was that we started making our key mapping functionality and polygon management functionality available through a portal. So now landowners who are working with us could at least, they could sign in, they could see their site, they could see their reports online rather than having to find the latest PDF.
I mean, it got us to another stage in terms of the engagement that we could offer and the capabilities of the platform. A bit after that, and actually this is, the portal was probably two and a half years ago, the platform is more like one and a half years ago. This was as we started to engage with some larger entities which include major forestry developers and major primary sector organisations of very large farms.
They were wanting to deal not with sort of individual farms, but with portfolios. For example, one of the portfolios on our platform, which is active at the moment, is more than 2 million hectares across several hundred farms. You don't want to be dealing with that in a single giant map.
There's like tens of thousands of polygons. It's completely intractable. They wanted a solution that allowed engagement and activities to be separately analysed and tracked and planned. And this very much ties into what you need to do at a catchment where there's hundreds of, you know landowners involved, potentially all of whom have different opportunities and different stages, but you need to be able to manage it in an integrated way.
And the final stage that we sort of have really only just got to in any real form in the last six months is to turn this into a multi stakeholder, multi market solution. So, it's no longer just one perspective on all of these farms, but multiple different perspectives on all of these farms, including like the simplest form is just landholder, Catchment Group, Regional Council, for example.
They're all interested in similar information, they have different access to it, and different motivations around it, and there's a lot of benefit to all of the parties to be gained if they can collaborate efficiently. But if you're all just emailing each other back and forth, then it becomes very painful very quickly.
And there's also multiple different markets that you can pursue, which help create the funding that enables these activities to happen. So, certainly true, we started out primarily helping people register their land on the ETS. From a catchment group perspective, we see the ETS primarily as one of several potential sources of funding and revenue to enable the restoration activities.
It's not the primary focus. Anything you want to add there, Bex?
Bex: Yeah, no, I think that that's a good summation of the journey. I think, as Nick said initially, there's a lot that we could show you. So we thought we would look at it with a lens of how we might use CarbonCrop for my catchment.
We're relatively new and so starting out. So the first step is really to understand that catchment from the top down. Almost as if our catchment was one gigantic farm. Looking for all of the opportunities, what is there in the first place that might look like, where are all of the existing native forest remnants that we could help restore and protect?
Where are all of the native forests which are not yet registered in the ETS, but are eligible? Where are potential sites for future forest planting that could help us reduce erosion and sediment into our waterways? And how can we better and more quickly engage with the farmers within our catchment through things like carbon or the ETS and help make them more accessible?
So those are probably some of the four things that we thought we would show you today.
Nick: All right, into it. So, to start off with, we thought we'd have a bit of a look at how, like, one of the key steps as Bex just sort of alluded to is, If you're starting analysing a catchment or any area, a key question is what even, what even am I analysing and what is actually there, at least at a high level sort of perspective.
So if we consider, and here I've created a sort of a micro catchment example covering a couple of valleys on Banks Peninsula, which I live near and know quite well, the first thing you want to do is get all of the land that comprises the area into a place where you can analyse it. And one way you could do this is just say, Please give me this 100, 000 hectares.
You're not going to engage with that land at the level of 100,000 hectares because that 100,000, well except for some very extreme cases like Fiordland you might but the 100,000 hectares is actually probably broken up to a couple of hundred people, all of whom have their own particular situations and their own opportunities and their own perspectives and their own current statuses.
So our view is, and this has been reinforced by many of the groups we've talked to, you want it, the regional view, but broken up by the basically the farms, or the blocks of land, whether they're a farm or some other level of activity, because that's the resolution at which you're likely to be engaging at it in the next step.
So we enable you to do that in one go. You define your 100,000 hectares, You create representations of every block of land within that 100,000 hectares within our platform, but they're all created as independent entities which can be analysed separately right from the word go. And you get some automated land cover for all of them as sort of the first thing that allows you to start making decisions.
So hopefully if I change that you can see a new screen. So this has been done for an area over. If I zoom out you'll sort of get a sense of it's basically the region comprising, can you see my cursor? comprising these sort of two valleys over here, Le Bon's Bay and Hickory Bay, which are next door to each other.
And the, all of the farm, well I haven't actually added all of the farms just to keep it manageable for talking you guys through it, but we've got 13 farms within those two areas, covering a total of 2150 hectares. And we've started breaking down not just the area of the farms, but the aggregate forest area within those farms.
The total forest cover in this case is quite high because it's relatively lightly farmed and a lot of it's regenerating forest with around a thousand hectares of forest. And within any one of those farms, you can sort of, you know, dip into it, and I had a good one that I was going to start with. I think it was Hickory, no, Crown Reserve 4.
So this is up the top of Hickory Bay, it's crown land, just so I don't go showing you guys somebody's particular farm right out of the gate. So you can see it's automatically been mapped for the vegetation cover. I haven't touched this site at all, this is all stuff that the system's done rather than myself.
We've estimated the current carbon removals across the entire area and the current carbon stock. This is based on regenerating native forest, although a lot of this is actually mature forest, so you'll see that many of these areas aren't being attributed any carbon sequestration at all. These are the numbers behind this total sequestration forecast that's been created across the entire portfolio. And there's sort of a couple of things to note about this as well, is that you're not going to, with this, get a perfect understanding of the exact situation of every single farm. But that's not really the objective at this stage. It's to sort of figure out the general distribution of your opportunities and your, your sort of risks, so that you know who to start talking to.
Because if your focus is on retiring erosion prone land, and converting it to forestry, and you start going and talking to landholders who are primarily orchardists or flatland dairy farmers, then you're probably not going to get very far because you know that the economic case is going to fall over pretty much straight out of the gate and the the risk profile for those landholders is also quite different.
So step one is just get an understanding of the general region level distribution with farm level data so that you know which of these farms you can begin to engage with and then we provide a whole heap of tooling around historical imagery waterways layers fish spawning layers, and erosion, which we'll get to in a moment but to begin with, You've got to have everything in a place where you can start to move bits around and look at it in a way that's manageable and makes sense, rather than just having this gigantic 100,000 hectare blob and you don't know where to get started.
Bex: What this means, I think, is that it's almost like a triage tool as well. Like if you are looking to maximise your impact around protecting existing native forest remnants, for example, it means that you can go straight to the farmers within your catchment or your sub catchment who have that most, the most native forest remnants for protection.
So for the same amount of effort, you can maximise your impact.
Nick: And you can also track the stage of that engagement. So something I didn't mention, but now Bex has highlighted it. To begin with, we try and preserve a lot of anonymity for every one of the farms because we have title holder information, how that can be used is very restrictive.
So we just give it a region and a number. However, once you begin to get more familiar with that landholder and you've actually spoken to them and onboarded them into the system, they might have, like in this case, it's still Her Majesty the Queen rather than His Majesty the King but they might have a particular name for this, like Hickory Bay regeneration reserve.
Maybe it's under management by DOC or something purely speculative. So we now know a little bit more about who is there, and we also might from our side of the sort of, or the catchment group side, we know who within the group. is primarily responsible for sort of moving that project forward and managing the relationship.
And this is really key for engagement, because you want to know that you've talked to them, and that you've sort of, that they're interested, and also who's going to sort of be looking after them. It is going to be, if you decide you want to do something further there, that they're getting ongoing engagement from the same party.
So a lot of that's built in for sort of tracking and delivery. Anyone else on that one, Bex, or should I skip?
Bex: We're good.
Nick: Thanks. So once you've sort of identified some areas, a key thing that you often want to, like, this is going to sound overly prescriptive but it is a very common theme, is that a focus of many catchment groups is improving the water quality and land stability and biodiversity outcomes within the catchment.
And, and often one of the things that involves is identifying. and considering retirement of marginal erosion prone land, especially if it has the potential to have erosion with sedimentation delivery to rivers. So we're just going to have a quick look at how that might look within the platform. A key challenge, and here I'm going to jump over the hill to the creatively named Le Bon's Farm 2.
A key challenge with erosion is that, like, often when people talk about erosion, you'll hear reference to two things. One is the land use classification, and the other is the erosion susceptibility classification, which is a key thing for plantation forestry particularly. And if I sort of, if I zoom way out, and turn on the land use classification.
You can see that it's not insane if we're talking about an area at kind of Canterbury scale, like on balance Banks Peninsula is more prone to erosion. than sort of the big pastoral areas of the Canterbury Plains. But as we begin to move in closer to this particular farm and even these valleys you realise, and here we're just talking about land use, basically I can start turning off these layers and you'll see just how little actual information, and I'll turn off the boundaries so that we can see everything.
There's nothing in LUC8, there's nothing in LUC7, there's nothing in LUC5. There is something in LUC3, I got that wrong, there's nothing in LUC4, or 2, or 1. So basically, oh wait, there was something in there, which is that one?
Oh, okay, there's a little bit of LUC4. This is a pretty coarse assessment of the enormous diversity that occurs even within this small area, so you don't want to be saying something like, Let's plant all of our LUC6PLUS land in forest because that's a pretty broad brush to be painting what's a pretty fine resolution kind of land use possibility with.
However, it's not a terrible place to start in terms of which of my farms are potentially more or less susceptible to erosion and more or less at risk. Separately from LUC, we've got the erosion susceptibility classifications which include waterway, but you can see they're pretty similar.
They're informed by the same underlying data layers and they're at pretty similar resolution. One that we're doing some work with, and I'll just see if I can quickly pull this up while we're Oh, actually, I'll finish this and then I'll come back to it if we can, if we have a moment. But the key point is that if we turn the boundaries back on and perhaps turn this erosion susceptibility layer off and move in a little closer, Once you start looking at the farm itself, you begin to get a bit more of a sense of what's happening on the land.
Like this whole slope here, you can see it's pretty steep. There's clear signs of slip activity in the past. You can begin to see where the existing fence lines are and what might be suitable. And so the key thing we wanted to show here is how quickly you can go from this view into a candidate scenario that could be discussed with the landholder of what they might want to do on their property.
Not even what they want to do, but at least a, sort of, possible intervention that might be of worthy of further discussion and so let's say that we just carve out this area here you can see I'm doing it pretty roughly and you'll see why in a moment So, you can very roughly describe a polygon.
Here I'm lining it up with the fence lines. It'll autoclip to the edge of the forest, and it will also, once you tell it to, autoclip it to the edge of the actual land pastel boundary. We now have a polygon that we can work with, and we can custom define particular planting and vegetation mixes that we might want to use within this region.
Like it could be that we're quite close to the sea, we want to use a mix of hillside and ocean species, or we might decide that there's some biodiverse exotic mix that we've got for erosion control. And in each of these cases you can define the plants per hectare that you intend to have or pre-define them and your expected establishment cost.
And you start to get the sense of what the likely costs are going to be for this particular intervention. And you know what you're talking about with the landholder and figuring do we actually want to, do you want to retire this area here because it's pretty erosion prone? A key question they're going to ask is firstly, what's it going to cost me?
And then, what benefit is potentially going to bring me? And in this case you can see that the, and from this you can calculate a sort of capital requirements and net present value and other things. But the key value, let's assume they decide to go ahead with it and so you go from draft status to this is confirmed, the landholder definitely wants to go ahead with this planting project in 2026.
If we go back to our overview where initially we had no forest planned I better just check I've got the categories right there. Yep. If I refresh the dashboard, you can see that there is now 16 or 11 hectares of future forest that's within the, and this might seem like a lot of effort to go to for very little result in the case of a single farm.
But the point is that you're going to be having tens or hundreds of these discussions across a catchment, and if you don't have an integrated tool to track them all and understand the outlook that they're creating, then you're going to have to do it all with your own spreadsheets and your own emails and it quickly becomes as we discovered early on when we were.
Helping hundreds of people register in the ETS. That's a complete nightmare. Whereas this here, you can track the financial forecasting, the expected land cover, the future carbon sequestration, the costs, the revenues, all within one place, regardless of who's eventually going to be the participant. And it could be the farmer that eventually decides to finance this project and, and register the land and have the ETS revenue.
We're not, we're not prescriptive about how you implement the project, but you need to understand what the requirements of the project are to be able to create a plan for implementation.
Bex: I think that's a really good point, Nick, and it may be worth highlighting that one of the benefits of these tools is that it's collaborative.
So you may identify potential areas on a number of farms within a sub catchment area around a particular water testing site. But, you know, farmers don't know their land better than anyone else. So you go in with, hey this is some, you open the discussion with here are some, you know, potential areas.
And then collaboratively work through what are your options? What are we going to do? What is the impact? What are the costs? So then it becomes, instead of a top down prescriptive, you must or you should plant this area, it's much more collaborative, top down and then bottom up discussion.
Yeah, I don't, we're certainly not suggesting that planting plans can be done unilaterally from an area on the ground.
Nick: No, quite the opposite, and that, which is what I was just going to flag here as well. Multiple parties can get access to this farm, so there's nothing to stop you, and in fact we generally encourage you sharing it with the landholder.
And having them contribute as well and identifying bits that you can collaborate on. It's a really efficient way to sort of make sure you're talking about the same thing. Another, another key element too is understanding what's already there from a, a sort of a more detailed perspective. And if I can just quickly show that one.
So nope, not that one.
Sort of a critical question is what's already going on within the property because often you'll be talking to farmers and like, this is, this is not the first time they thought about it. They're not necessarily starting from scratch. Part of what we support is simple integration of ongoing activities.
So in this case, let's say that this farmer already has, or this landholder already has some registration within the ETS, and they want to, they've agreed to share it with you, and you want to put it to within the system. We can very quickly put you in a position where, you know, you understand the existing registered forest area.
And so that's sort of like the stuff that you don't necessarily need to support the landholder with, because they've already taken care of it. So it sort of shows you what's left on the table. And this, this also lets you sort of understand more detail around the specific yield forecasts for that site based on the existing activity.
And all it takes is an agreement to share data and a single click rather than a whole bunch of remapping, which is then, it's just going to go out of synchronisation again in fairly short order as new things happen. Okay, should we jump to the next one Bex?
Bex: All
Nick: right erosion risk. So we talked about erosion quite a bit before.
As I mentioned, we've sort of got fish spawning, waterways, you've got the LUC stuff, you've got the erosion susceptibility stuff, and we can figure out what the, this was one I drew earlier, what the implications might be of a particular restoration program across that area. What you really want to do at the regional level.
If, if you're trying to sort of achieve a particular outcome for an entire catchment is tracking the, because you care about the catchment, sorry, you care about the individual farm because you want to work with the landholder and help them achieve a good sort of optimised land use outcome. But at the catchment level, you want to achieve an optimised land use and, and sort of environmental outcomes for the entire region.
So you'll be interested in things like - of my total erosion susceptible land across the region, how much of that is currently by the, drafted for planned planting or confirmed planting, and what years do I expect that planting to be completed within. And this is how you can, if you've got some particular goal, for example, like a certain amount of reduction in erosion exposure by 2030, you can use this to see whether you're on track for that goal by looking at how much planning, how much planting you have planned in each year through to that point by year and by erosion risk status.
I've sort of shown some of this already, but a lot of these interventions cost money. There are a number of sources of potential funding, including things like riparian grants and the Held Country Erosion Fund. We are doing work to support further grant funding options within the platform.
But a key one, and what many of these schemes sort of do, potentially depend on under the hood is carbon revenue. And so as, as we showed before, we support cost modelling down to the individual sort of stand level for an intervention, or, or you could model the opportunity cost of the, let's say, a loss of agricultural productivity.
And we also support revenue modelling. specific to the species and the planting environment that you have. And you can do this at portfolio level across the entire region, including the stage of registration, because with the ETS, you don't start getting paid until you're actually registered. So eligibility isn't enough.
You also need tooling to track these projects right the way through to delivery. To make sure that your business case is actually going to work out properly because you're going to get the carbon credits that you expected on time. A couple of additional features we have around this that are proving really valuable to developers and other sort of financiers is that our platform supports custom carbon yield models.
And custom carbon price models, so you don't just have to use the default assumption that we have. You can put in your own model with your own price curve that fits your own sort of acceptable risk profile and or potentially that of your financiers. And the sort of another point we wanted to make is the none of like all of this is to some degree potentially valuable in and of itself, But it's most valuable once you have it all together in one place because you're, you're planning for your afforestation activities and sort of the hectares that you plan to plant per year, for example, has implications for the seedling supplies that you'll need per year across the region for whoever you're sourcing them for.
And both of these have implications for the costs that you're going to face, as well as the revenue that you might achieve. And you can see. The importance here of ongoing planning. Cost doesn't just occur in the year that you plant the trees. There's site preparation costs, which have to happen the year before that you plant the trees, and potentially nursery what's the word? like reserve, oh I forget, the down payments for the seedlings that you're looking to supply often need payment up front, but also once you plant, area, you want to look after the trees as they grow, and that has ongoing costs as well. So you can see here that as the planting occurs, there's this steadily increasing, and in this case we've modelled it for three years retrospectively, there's a, like a, or three years after planting, which varies by species and establishment environment, and the sort of competing factors, you have to make an allowance for ongoing support of those trees to make sure that they actually, Start growing the way you want them to and you've got adequate pest and weed control particularly.
Otherwise you'll end up spending an awfully large amount of money and they'll all die and you'll be back when you started a lot poorer, which is in no one of these interests. And then finally you, often a lot of this is not necessarily in the aid of making a buck. It's in the, I mean, although it may well be extremely valuable for revenue diversification for the farm, it's more likely motivated at a regional level by some outcome which you want to track. So here we've got the level of erosion susceptibility as mentioned earlier sort of a related factor to this which we've also got tooling in the works for is reductions in expected volumes of sediment delivery. But another part is the sort of regional emissions footprint.
So, all else being equal, the more regenerating forest you have within a region, the lower your net carbon emissions will be. That's not to say it's always a good idea to try and convert as much as you can to regenerating forest because there's, there's a whole bunch of other factors, but it is a key variable as we try and move increasingly towards low net emissions.
To maximise the sort of sequestration potential of whatever asset base you happen to have. I feel like we've missed out about 13,000 things, Bex.
Bex: Well, I had a couple of things I was going to jump in and talk about, actually. I think one of the things that is useful and not necessarily immediately obvious, about having all of your stuff in one place, or at least all of your tree related things in one place is that continuity you know, like volunteers change, coordinators change, your board or your committee, they change over time and so this having, having all of your projects and a timeframe of all of your projects since you started can be really valuable from a continual continuity, sorry, of impact and that sort of succession planning type thing.
Nick: Which, which was the cue for something I did mean to show, so thanks for the prompt as well. There's also an integrated task planning framework for this whole thing. We're steadily building out the number of tasks we support, but let's say for example, A key thing that we wanted to do was to assess the ETS eligibility of this forest.
I'm going to make Bex do it because I'm lazy. Sorry. And this, so there's going to be a whole heap of activities like this across your whole portfolio of landholders that you're engaging with. And what we do is offer integrated task planning and delivery tracking across the entire portfolio. So. Now that I've created a task for that particular farm, it's fallen into the catchment group's to-do list and we can track through that Bex is working on it.
She's now got it ready for review and she's going to assign it to me to take a look at. This is really valuable for even just getting a task done atomically, but especially if you've got multiple people sort of playing different roles within the organisation over different time frames, it's a great way to stop having stuff fall through the gaps.
Bex: Yeah. I think another thing that we just to go back to that preconception of where we were, where we started about just registering for us in the ETS we we are now, you know, providing the tooling for, Farmers to register themselves in the ETS or for catchment groups to support farmers to do that rather, rather than relying on say, carbon crop to do it for you for a share of the revenue.
So there are, there are opportunities ahead for catchment groups to create a more sustainable revenue source for themselves through ETS. So which could give you. as a catchment group leverage to unlock further funding and further impact, which is, I think, quite exciting. And the last thing that I wanted to say was more of a public service announcement that next year is the end of a period for the ETS.
And I encourage everyone, no matter how they do it, through CarbonCrop, through themselves, through a forestry consultant, please get your forest registered. Then you can. back claim the three years of carbon, because if your forest isn't registered by the end of next year you'll lose that window to back claim, and that would be a shame.
Nick: Yep, I think a slight, slight amendment there. Don't necessarily get your forest registered, because for one reason or another, depending on your circumstances, it might not be the right thing to do. thing for you, but you should at least make the assessment to understand whether it is or isn't because yeah, what the early 2026, It's not that it's too late, but it's too late for that three years worth and three years of let's say a typical hectare of regenerating native forest Might be getting let's say 10 tons per year is not a, not an out, even more conservative Five tonnes?
That's still, at 63, five tonnes is about 310 per year. Over three years you're going to lose. It's 1, 000 per hectare that will be off the table permanently for that regenerating forest. And if you do plan to restore it, and you do want to have it registered in the ETS eventually, there's a lot to be said for doing it before the end of next year.
And it takes time to get a registration through, so don't leave it until July next year.
Bex: Please.
Nick: Awesome. If any of this has struck a chord, we are super keen for feedback. We are talking to a lot of people around implementation, but we're keen to talk to more. Step one is to get in touch with Bex.
Her details are there. You can also find them on our website, or if you're in a catchment group and you think that this might be something for the catchment group sort of coordination team to take a look at and send the webinar on to them or just let them know that it occurred and they should get in touch.
Righty ho into questions. So I'll start with one of the live questions because that's the perks of turning up. Can our mapping tools identify marginal and highly erodible land? So I guess I've covered some of that. We are currently relying primarily on data sets that are created by various different government entities across the country, like in large part because there's an enormous amount has been invested in this question by them and a lot of it is really good, but you need to choose stuff that's fit for purpose.
I didn't copy into the presentation one that we have, which is much higher resolution which is another layer called the HEL layer. And we're also looking at the ELSE data sets. So there's a lot of different ways to cut it. We also have very high resolution slope models of our own for the farm which we are looking to use to sort of help inform erosion risk. But what we've found across all of the data sets is that all of them are primarily useful for indicating an area to focus on and assess. We haven't got anything which we feel is, or haven't seen anything that we feel is good enough that you would just trust its output straight out of the box and go, Okay, thank you.
Those are my erosion prone areas. I guess I'll plant trees on all of those. It's, it's always, you need to go in and do some sort of assessment and triage yourself. As long as you can do it efficiently, that's not generally an obstacle because, you know, you're going to have to do quite a detailed plan before you start actually planting trees somewhere.
The main thing is to show you the hotspots that you need to begin to focus on.
Okay let's start through the list. So, always keen to understand, I work with farmers and their catchment groups on biodiversity, which usually comes down to incentives and costs. Like, a really good point to actually flag. The aspiration for action is usually massively constrained by the means for action.
A lot of what we're trying to do with this is streamline access to funding mechanisms and to revenue streams because the two are quite tightly linked. I'm always keen to understand more about how carbon sequestration could be an enabler for other environmental improvements on farms. Yeah, it is to a huge degree.
Often carbon is seen as the outcome, which is desired, but I think in many cases, it's almost more important as an enabler of other outcomes, because restoration isn't free, generally. So hopefully this has been helpful. Definitely keen to hear from you if you're working with these catchment groups on biodiversity.
We have quite a lot of additional stuff in the, in the works there as well, especially around native vegetation cover fraction and continuity of native vegetation cover because there's some huge benefits that can be unlocked if you've got pockets of vegetation which become, or connectivity is really the word rather than sort of isolated pockets which you don't necessarily get any transference through.
Bex: Helps make your interventions make economic as well as environmental sense.
Nick: Yeah this one here is an interesting one. There's not a simple market for this, It's a simple answer to should we bother basically you have to model it and whether you should bother or not depends on whether you're happy with the hooks that come with the ETS and whether the benefits are going to outweigh the costs by a sufficient margin that you think it's worth your time.
I would say that anybody with more than a couple of hectares that we've spoken to The decision rate to proceed with ETS registration, which is a good indicator for should you bother, is probably north of 95 percent. So, usually it makes sense in the view of the landholder, but not always. There will be exceptions where there's sort of other competing factors or reservations around risk or similar.
Chime in if you want to add anything to any of these otherwise we'll just keep rolling. Yep. I'm a consultant for a tree care company and I'm curious to see how this platform can help our clients better document carbon storage and sequestration. Documentations are a really interesting part of this.
So one is recognition, another is record keeping. Our system is used for the filing of carbon records. Basically emissions returns, which is like a record of what carbons in your forest and how much was there and blah, blah, blah for well over 10, 000 hectares per year across hundreds of farms. So it is very suitable for that.
We also have a bunch of tooling for particularly sort of primary sector supply chain applications outside of the ETS, where they're looking at making claims around the net position of the products coming off the farms. In a nutshell to this one, so is there an easy overview available for customers of CarbonCrop on my property, the area that is contributing and the carbon credits and dollars earned and to be earned?
In a nutshell, yes, that's a key part of what we offer, you just need to activate the property on our system and import the relevant data if you have it, otherwise you can start doing analysis with our tools.
This is a really interesting question. How much can forest carbon capture be influenced by pest control, particularly of ungulates, and improving, I don't even know how to pronounce this word, mycorrhizae. So this is basically, as I understand it, the kind of the local forest microbiome, I think, especially fungi species in the soil.
I'm sure a whole bunch of Forest ecologists are swearing at their screens right now through different stages of growth. So there's a lot of research going on in this space. It's very much a key question, not just at farm level, but at national level for New Zealand, like how much can ongoing interventions that we do impact our net position as a country and our climate change mitigation success.
I don't think there's a simple answer. I think everybody agrees that it's beneficial. However, The extent to which it's beneficial depends a lot on the specifics of the pre existing and the post pest control state and the stage of the forest. For example, if you have quite well established mid stage forest, then, for example, heavy deer browsing of the understory doesn't necessarily have a particularly large short term impact on the carbon sequestration because most of the annual growth in biomass is in the big trees.
which are going to carry on growing anyway for the most part. However, the impact that it has on the understory and the availability of succession species for if a tree falls over, like do you fill in the gap and on the biodiversity because the understory is where a lot of a lot of the forest species live.
It's absolutely devastating. And it's, yeah, it's shocking when you see the photos of heavily browsed forests. It looks great, basically like farmland. It's hard to believe it's, it's retired. Especially when you contrast it with stuff that has an effective pest control program.
Bex: I'm really hopeful on this point that it'll be a way to attribute value to mature native forests or to the protection and restoration of mature native forests, because right now there's not a hell of a lot of options.
Nick: Step by step process to follow, will you connect us with people interested in your land, how long does it take to receive the certificate, so let's say that we are talking about ETS registration here it takes on the order of six months from submission to achieve registration at the moment, that number changes depending on MPI's capacity and demand the step by step process, In a nutshell, step one is get in touch with somebody who can provide you advice on this topic.
We are one of those people, we're not the only ones. And we'll provide you a whole bunch more detail on steps two through N, of which there's a lot of them. But I won't try and summarise the entire process in the question and answer. Native tree species would you recommend for carbon sequestration and why?
I don't want to recommend any particular species, because I think especially for natives, if you're selecting it primarily for the carbon sequestration, then you're possibly doing it for not the, I won't say the wrong reasons, because that would suggest that, not to say that you've got bad motives. But it would be very easy to plant the wrong tree in the right place because you were focused on some particular carbon outcome and it might be that you don't even achieve that outcome with that tree in that place because it's not suitable to the local environment.
All of that said, I know that Totara is quite a popular species for carbon sequestration as kind of a midterm carbon sequestration option, and we see very widespread use of manuka as a sort of a nursery pioneer species. There's a particular method called the
Bex: Timata
Nick: method which is basically space planting of manuka to generate a sort of an initial canopy closure and sort of You get enough weed suppression and then you start either enrichment planting or just relying on birds seed distribution to get further down the track.
The key question is usually a balancing of the carbon sequestration and the establishment cost. Where you've got a good growing environment rich seed sources, almost always the best option is just to get rid of the pests and the browsing, and then let it regenerate. There's a lot of factors there, and we do support modelling of a whole heap of them, so you really need to try out the scenarios for your site.
And get some advice from a forest ecologist who specialises in native species, which I am not, but we're increasingly trying to build that into the platform as well, because it's a very common question. Ah, this one here. I'd like to know why two planted areas aren't able to be registered with ETS if they are not contiguous without paying a fee to deregister the intervening area.
So really specific question, I'll try and answer it briefly just so that we have some ETS trivia in the course of these calls. The restriction in the ETS is that you can't register anything that's less than one hectare. And you also can't extend an existing registration when it comes to a particular block of forest.
You can add new one hectare blocks into an existing registration. So, so let's say that you've got a block of one hectare in the middle and then on either side of it you've got a block of 0. 7 hectares. Neither of those blocks can be registered independently because they're less than a hectare. They can't be registered together because they don't connect to each other. So even though they're 1.4 hectares in aggregate, they're separate. And you can't join them up through the big block in the middle, because it's already registered and so you can't kind of clip onto the edges of it. So what this is referring to is that one thing you could do is pay to deregister the block in the middle and then re-register the whole initial block plus the bits on the sides, but that costs you a lot of money in two ways.
Firstly, the surrender of your carbon credits when you deregister it and then the cost just to do so. Ultimately this is a limitation in the, from the regulator. It's not particularly technically difficult in our view. And an interesting thing to note is that this constraint doesn't exist in the National Accounts.
So, if the National Accounts see a two hectare area of forest, and then it grows by half a hectare on each side, once that eventually propagates through into the system, it will be recognised as a three hectare of forest and credited. So, if you don't like this, and it's like, I agree it's annoying write to the regulator and say, Hey, I'd love it if this constraint was removed.
It's blocking me from doing restoration activities or similar. This is an interesting one. I'm putting it up because it was in part, of course, to us to help drive engagement. So there's various national level entities that are involved in catchment management. I'm not sure of the particular one that's referenced as far as new national catchment organisation.
I don't want to exclude any, so I won't. But it's basically around biochar as a restoration option. We talk a lot about forests. Forest is not the only thing that we care about or are trying to motivate. It's just the thing where we happen to specialise. If there are options around carbon sequestration and improved land outcomes, so perhaps better soil quality, which is always a key thing to consider when you're talking about high erosion risks we'd certainly support people spending their time and energy in this space, it's just not the main one that we spend our time on because we have to focus.
So this one here, how accurate is the spatial mapping for our properties? It's an important factor for forest owners and I was wondering how you know you've got it right. Right is a very subjective term, like we're never going to get it perfect. We have to get it right enough to be valuable and representative of the forest.
And we never know that we've even got at that, but we think we've got at that because we do multiple rounds of internal review before we share data and we've got a whole bunch of sort of error checking processes. But we've never had an issue with the mapping accuracy of our solution from a compliance perspective.
With MPI, we do a lot of work to make sure that we are compliant. We fairly regularly have minor variations in what we think should be eligible for us versus what the assessment result says is eligible for us. That's pretty typical. It is a somewhat subjective assessment. But if there's a particular case where you think we've got an assessment wrong or somebody else has got an assessment wrong, then please let us know, because we are keen to review it and refine it.
But yeah, as a subjective space with fairly mixed data quality, it's very hard to get it perfect. In fact, it's very hard just to get it good. We think we achieve that, and we fix it whenever we find an issue.
Bex: But that in terms of the accuracy. Like, down to a decent sized tree.
Nick: Yeah, I mean if I, if I jump back to, say, this one here, and we look at the automated mapping, like, you can see this was done entirely automated, and it's pretty cleanly picking out the vegetation boundary across the property, like some of these pockets are included based on certain ETS criteria that says that small pockets within areas of vegetation you can find, and if I turn back on that carbon sequestration attribution layer that we had before You can see, again, it's pretty precisely picking out the bits that aren't forest within the bits that are forest, so we, the resolution of our systems has never as far as we're aware, been a limiting factor in the applications to any meaningful degree, like you might miss, miss a A few hundred kilograms of carbon here or there, or a ton, but it's, it's not going to change the ultimate decision or or lead to a compliance issue.
How stable is the current, I presume it means, is the current ETS operating format? Is it likely to outlast a change of government? I think it's, In many respects, I would say that people involved in the ETS and forestry have been reassured by the relatively limited changes that have occurred to ETS for forestry and the transition into this government and I would say that there has been comments from both sides of government over the years.
Probably at least the four years that I've been watching it closely, and I think much beyond that, that they understand that stability is a key requirement for action, because if you don't provide a stable regulatory framework, then you're going to end up with people being highly reluctant to invest. I think it's entirely within the realm of possibility that there will be a future change which limits the level of afforestation incentives for forests with particular particular characteristics and the current government is signalling one of these at the moment with potential restrictions around exotic afforestation on land with a low LUC, so this is kind of the high productivity pasture, beyond certain thresholds, but I would expect those restrictions in some form to come in over time.
But in general, I think that recognition of carbon removals, especially in existing forest, as opposed to future potential forest, is pretty likely. to continue, because both sides are trying to minimise our liabilities under the Paris Agreement internationally, which means maximising our domestic impact.
in terms of carbon sequestration through afforestation, in parallel with erosion mitigation outcomes and biodiversity outcomes. Which leads neatly into our next one. Are there international options for selling credits? In a nutshell, I would say at the moment, kind of, but not really but that is evolving.
You can, there are voluntary projects registered in New Zealand under international frameworks. That doesn't necessarily mean that it's easy to sell the result, but at least in principle, you can. And. There are One of the most interesting ones for us really though is, like we, we already sell a lot of stuff internationally, like New Zealand's largest exports by value are primary products from farms, and a lot of those downstream buyers of those primary products are increasingly asking questions around the emissions profile that they have, and how much carbon sequestration is happening in connection with them, which is basically selling carbon credits at one step removed.
from your on farm activities. And that's what we see that as a very real opportunity, one where we're doing quite a lot of work with quite a number of different players in the industry and I think it'll only become more established. How can I get carbon credits from my native bush? Step one, get in touch with us or somebody like us and assess what carbon credits your native bush may actually be eligible for, which depends on its history and its characteristics.
Interested in the general direction of price going forward, we, I get asked this question all the time. I'm not going to give price advice. I don't know, as I always say, like, if I did, I'd be making loads of money on speculative trading. But just one sort of brief update there. The last auction of the year, that last ETS auction of the year, is coming up in November.
The reserve price for that auction, i. e. the price below which no units can be sold, is 64. And in the first auction of next year, the reserve price is increasing to 68. So certainly there's a reasonable range of market commentary around how the secondary market price might move in response to those unit availability thresholds.
In the long term, it'll ultimately be informed by general market supply and demand. The auction is just one of the sources of supply. Another is forestry and future forestry restrictions, et cetera, will certainly impact the marginal price of units. Potentially, as will the caps within the ETS, which is essentially how fast the government's saying that people have to decarbonize which is currently in line with.
If you go and have a look at MFE's website, there's a whole heap of information on this and sort of price corridors that are being considered. Directly follows into this question, which is a happy coincidence. We hadn't sorted these in advance. So I would say I don't have to speculate too much here because when the government did.
Indicate that they were reducing the number of units available through the auction. The carbon price immediately went up by five or six dollars. I would say that in part that was the sort of immediate expectations of relative supply versus demand. But it was also, I think, the market's reaction to sort of the perceived government seriousness with which it took the ETS and its commitment to using it as a sort of an emissions control mechanism.
If the government was signalling, Oh we're just gonna - you know - the auctions are going to be a carbon unit lolly scramble - we're going to double the reserve, then I think the price would have collapsed disproportionately because it would have shown that they just didn't really care, that they're seriously looking at total unit supply and overall New Zealand progressing its emissions mitigation suggests that it's going to be carefully managing supply in the future.
What that means in terms of future pricing, I can't say much more than look at the auction floor price as a good indicator and the future forecast marginal price of removals. I would, this one here is a very interesting one. If you've had scrubby farmland refused for carbon, is it worth reapplying?
I would say it depends why you were refused and it depends what's changed and what new evidence you can provide, but it may well be. Especially if the forest species on that farmland have significantly progressed since last time. If you've just got scrub and there's not forest species present, that is a key way, reason that your forest will be rejected because it does not count as forest land unless there are forest species present and growing in a manner such that they're likely to achieve five metres high and more than 30 percent canopy cover within a given hectare. So it could well be again, I suggest getting in touch with somebody who can help you with the analysis or, or use our platform and you can potentially do it yourself. There's quite a lot here. In a nutshell, I think the question is around, can we expect to see extensions of the yield tables by MPI beyond 50 years?
I don't want to speculate for MPI, but I will say that the larger concern that we've had expressed to us in the past is around those tables which are currently capped at 35 years. And the reason for this is that these tables basically don't apply if your forest is established prior to 1990 because you can't register it in the ETS because it's pre-1990
So, 1990 plus 35 years takes you to next year.
This is a pretty urgent one to sort out, otherwise there's the potential, at least, that 1990 forest won't be earning carbon credits in 2026, and not because it's not growing. 50 years takes us all the way to 2040, so I think this is one that's not seen as such an immediate concern necessarily but it is a long term consideration that if you're planting a forest now and you're looking at how to value the forest, you might be looking to understand what the return will be, let's say, beyond 2040.
2074, which would be 50 years from now. I think the general philosophy and certainly the treatment of forest under the international agreements is not that it magically stops growing when it's 50 years old. And the domestic level incentive programs I would say in general terms, looking to be accurate with respect to what's actually happening and what can be recognized on the international framework.
So I would, I would expect that as things evolve. Forest that is 51 years old and is eligible and is still sequestering carbon is likely to be recognized as such in time. But it's, I'd say it's too soon to make any concrete conclusions there. And, and if, if it was like a critical criteria for you to invest, then you might want to pause a little bit and see how it develops.
How to get my project development initial support. If you sent that question in, I'm keen to have more of a discussion, but I'd say if you're looking to use our platform, then get in touch with us in the first step and we'll, we can give you an idea of the terms on which it's available. And then this one here, I think is our last question and we're a couple of minutes over, so I will finish up very quickly, but I think it's essentially talking about net carbons, sorry, carbons, carbon emissions in the atmosphere. Why do carbon creditors attribute?
So in a nutshell, they, we don't attribute all of the carbon sequestered by plants as coming from man's pollution. It's just attributed as carbon that the plants are sequestering. So on balance, it's carbon that's not in the atmosphere anymore. Entirely fair point that some of that CO2 might've come from a volcano.
Some of it might've come from the emissions associated with plants or with plants but all of these schemes are essentially looking at the net. flux and CO2. And that's the thing that they're tracking on both sides of the equation. So, yeah, it has integrity, at least in terms of atmospheric carbon flux considerations.
That's it for the day. Thanks very much for joining. Really looking forward to hearing from those of you who are working in this space around how you see these tools could be useful and how they could be more useful. Sorry, we only got to scratch the surface of how it can work, but we ran out of time anyway.
So yeah, expect more to come. But thanks a lot. Any Bex, anything you want to say in closing?
Bex: No, no, I think other than please investigate getting your forest registered by the end of next year.
Nick: Good call.
Bex: Yeah.
Nick: Thanks all. Enjoy the rest of your day.
Bex: Bye.
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