Prime Carbon: Soil Enhancement & Carbon Sequestration Program

Prime Carbon Soil Enhancement and Carbon Sequestration Program

Presentation Overview
Why Soil Carbon Sequestration is a key solution to Climate Change issues
About Prime Carbon and the Prime Carbon “Soil Enhancement and
Carbon Sequestration” program

A message from Professor Tim Flannery 2007 Australian of the Year and Chair of the Copenhagen Climate Council Tim Flannery 19th May, 2008 “ Regardless of what happens to emissions in the future, there is already far too much greenhouse gas in the atmosphere. Cutting emissions is not enough. Mankind now has to take greenhouse gases out of the air.” "The current burden of greenhouse gas in the atmosphere is in fact more than sufficient to cause catastrophic climate change. It's extremely urgent."

A message from Professor Tim Flannery 2007 Australian of the Year and Chair of the Copenhagen Climate Council Tim Flannery 30th October, 2008 at the Carbon Market Conference Broadbeach “ within 15 years we could see our first iceless winter unless action is taken to address the legacy emissions currently in the atmosphere ”.

Why Carbon Soil Sequestration is the answer What would an iceless world mean? If all of the Antarctic ice melted, sea levels around the world would rise about 61 meters (200 feet). If all of the ice covering Greenland melted sea levels would rise about 6 or 7 meters (20 feet). If all of the Antarctic ice melted, sea levels around the world would rise about 61 meters (200 feet). If all of the ice covering Greenland melted sea levels would rise about 6 or 7 meters (20 feet). If all of the Antarctic ice melted, sea levels around the world would rise about 61 meters (200 feet). If all of the ice covering Greenland melted sea levels would rise about 6 or 7 meters (20 feet). If all of the Antarctic ice melted, sea levels around the world would rise approximately 61 metres (200 feet). If all of the ice covering Greenland melted sea levels would rise between 6 and 7 metres (20 feet).

Why Carbon Soil Sequestration is the answer 10 20 30 40 50 Years Soil Forests Clean Coal Nuclear Wind Solar The World has 10 Years to do something serious about Global Warming- STERN REPORT / NASA QuickTime™ and a TIFF (Uncompressed) decompressor are needed to see this picture. Why Soil Carbon Sequestration is the solution Slide courtesy of Michael Kiely

Why Carbon Soil Sequestration is the answer What does Soil Carbon Sequestration Mean? Soil Carbon Sequestration simply means the capture of carbon—generally from the air – and the return of this carbon back into the soil. In reality this happens continually in all sorts of ways. However, one of the most important methods is by photosynthesis.

Why Carbon Soil Sequestration is the answer What are the benefits of Soil Carbon Sequestration?
The benefits of restoring carbon levels in our soil are numerous and include:
Improved soil structure
Better water use and storage
Buffering against drought and plant heat stress
Less erosion
Increased soil fertility
Improved biodiversity
Healthier ecology
Improved agricultural performance

About Prime Carbon
Prime Carbon Pty Ltd is a North Queensland company which exists to a make a real difference to our future by:

Providing a simple and practical solution to improve
the quality of our soil and waterways by
encouraging behavioral change that results in
sustainable conservation agriculture land and farm
management practices .

Linking Australian and International Green House
Gas emitters with Landholders and Farmers who
capture carbon .

About Prime Carbon

About Prime Carbon
Prime Carbon undertakes two main activities.
We offer our “ Soil Enhancement and Carbon Sequestration” program to Landholders. This Program encourages conservation agriculture practices to capture carbon from the atmosphere and return it to the soil by the process of photosynthesis.
The Program generates Carbon Credits for the Voluntary Carbon Market.

Broker of Carbon Credits 2. We then act as a wholesale broker and sell these Carbon Credits to emitting companies. Carbon Credits issued by Prime Carbon are listed on the National Environment Registry (NER) Prime Carbon is registered as a broker with the National Stock Exchange (NSX) and in this capacity Prime Carbon is able to sell/trade the carbon credits .

What is a Carbon Credit A carbon credit is a commercial term used to assign a value to a metric tonne of greenhouse gas emissions. Carbon credits are measured in tonnes of carbon dioxide, where 1 credit = 1 tonne of CO 2 . The Prime Carbon Program forecasts that soil carbon will increase by 1% over a 2 year term. A 1% increase equates to the removal of 15 tonnes of Carbon from the atmosphere per hectare. This equates to 55 Carbon Credits per hectare.

About the Program The Program has been operational since July, 2008. Seven Landholders are currently under contract representing 900 hectares/50,000 carbon credits. We are in final negotiations with a further 4 Landholders representing 14,500 hectares/800,000 carbon credits. Our first sale of carbon credits within Australia was completed in September and we are currently negotiating our first international sale.

Voluntary Market
Currently in Australia there is a Voluntary Market in operation and companies can voluntarily purchase carbon credits through carbon credit brokers.
Eg QANTAS, Jet Star and Virgin Blue.
Prime Carbon operates in this
Voluntary Market.

Compulsory Market
The Federal Government’s “Carbon Pollution Reduction Scheme” also known as the “Emissions Trading Scheme” is currently under development.
It is unclear if Soil Carbon will be included within the Compulsory Scheme.

Consumer Pay for "Permits" to pollute ... + GST GST 10% "100% of the money" Goes to households and businesses Cost of everything goes up From 2015 the majority of Emissions "NOT ALLOWED" The money cycle for 60% of Australia’s Emissions 1000 Top Polluters Two main reasons why Soil Carbon should be included In the Carbon Trading Discussion

Two main reasons why Soil Carbon should be included in the Carbon Trading discussion 473 m t 410 m t The Not Allowed and Forgotten emissions will cost Aust $8.8b pa in 2010 rising to $22 b pa in 2050 2008 2010 2015 2008 Aust Emissions Deficit = 630 Million Tonnes Per Annum “ Allowed” and covered by Pollution Permits 2050 10% or 63 m t 75% 65% Cap Target for ETS: Permits issued to reduce to 10% by 2050? 50% Best Possible reduction by ETS Companies from Efficiency and Abatement (30% of current emissions) “ Not Allowed” Only o ptions are Penalties, JI’s or CDM’s Forgotten 63 Million Tonnes pa in 2010 rising to 252 Million Tonnes pa in 2050 158 Million Tonnes rising to 315 Million Tonnes IF WE HAVE NO GROWTH IN ACTIVITY AT ALL Proposed ETS Capture level

Just some of the other benefits of including Soil Carbon
Soil is improved
Potential for significant financial rewards to be paid to Australian Farmers for improving their soil
Australia’s agricultural soils continue to be available for producing food for our growing future population
Improved agricultural soil means less runoff which will improve our major waterways and reduce future damage to the Great Barrier Reef
Importantly soil carbon represents the ONLY AVAILABLE buffer against the impacts of climate change already being experienced.
Buffering against drought – what other options are there?

What is the likelihood of Soil Carbon Sequestration being included within a Compulsory Scheme ? The likelihood of Soil Carbon Sequestration being included in a compulsory scheme for carbon management is directly related to the co-benefits of Soil Carbon Sequestration. Soil Carbon deals with the IMPACTS of climate change not just the REDUCTION of EMMISSIONS

What land can be used in the Prime Carbon Program
The following is a quick eligibility checklist:
Must be greater than 150 hectares
The person signing the agreement must have the right to perform activities on the land for the next 2 years
The land can not previously have been used to sequester carbon which has resulted in the generation of carbon credits.

What the Program requires Landholders to do
The Prime Carbon’s Program, which complies with the Kyoto rules (as currently interpreted) requires Landholders to:
reduce the use of chemical fertilizers by at least 30%
use approved microbially enhanced Bio-fertilizers and Inoculants
adopt minimum tillage practices being no more than once annually and then only to a maximum depth of 200 mm
allow independent measurement of changes in the allocated land to be undertaken and
allow independent auditing of the process.
Importantly, there is no restriction on
continuing to farm or use the allocated land
during the agreement

Overview of the “ On Ground” process
The Landholder signs the Agreement
Initial soil samples are taken to determine the baseline verification/measurement for carbon in the soil
The Landholder then applies the first application of “Approved Products”. A second application is required after 12 months
Additional measurements to monitor the soil carbon increase are undertaken over the 2 year term at 3, 6, 12 and 24 months
Independent auditing is also undertaken

Overview of the Cash Flow
At the start of the process the Landholder pays to Prime Carbon part of the Deposit of $0.20 for each of the estimated Carbon Credits that will be generated. Assuming there will be a 1% increase in soil carbon over a 2 year term ... 55 carbon credits are generated per hectare. This $0.20 covers Prime Carbon’s costs relating to the NER registration and transaction fees, $0.05 donation to the R&D Fund and operating expenses.
Once the results of the Benchmark measurements have been received and the Landholder has applied the first application of the Approved Products, the Carbon Credits are issued and registered with the NER.
The Carbon Credits are then offered for sale (alternatively the Landholder may wish to retain the credits)

Overview of the Cash Flow cont.
The Landholder pays the costs associated with undertaking the measurement/verification costs at the start and then at 3, 6, 12 and 24 months.
The Carbon Credits are offered for sale at between $8 to $10 each(this price is as at today’s date) Note: There is no guarantee that a buyer will be available for the Credits and this is seen as a risk with the Program whilst we are operating in a Voluntary Market . If the program was operating in a Compulsory market it is anticipated that demand would be very high.

O verview of the Cash Flow Cont.
At the time the Credits are sold the funds are distributed as follows:
15% of the sale price is paid to the Landholder
1% of the sale price is paid to Prime Carbon as a brokerage fee
$0.25 per Carbon Credit is paid to Prime Carbon as the remaining part of the Deposit ... this is known as the Balance Fee
The remaining funds are held in a Trust Fund until the end of the 2 year term. If for some reason the soil carbon does not increase by the projected 1% an adjustment is made out of the funds held in the Trust Fund.

Financial Example Total Hectares under the Agreement 1000 Listing Price Per Credit Unit $8.00 Rate of Commission Payable on Sale of Credit Units 1.00% Estimated Measurement/Verification Costs per Credit Unit $0.23 Estimated Predicted Credit Units per Hectare 55 Estimated Number of Credit Units Generated 55000 Estimated Total Value of the Credit Units $440,000.00 Deposit: $0.20 per Credit Unit $11,000.00 Estimated total costs associated with Measurement/Verification costs $12,650.00 Balance Fee: $0.25 per Credit Unit $13,750.00 Value of Commission Payable on Sale of Credit Units $4,400.00 Estimated Gross Profit if all Credit Units are Sold $398,200.00 How funds are distribution if all Credit Units are sold Initial allocation of up to 15% paid to the Landholder $66,000.00 Broker Commission is paid to Prime Carbon $4,400.00 Balance fee is paid to Prime Carbon ($0.25 per Credit Unit) $13,750.00 Final Distribution is paid to the Landholder (min 1% increase in soil carbon) $355,850.00 Total Distributed $440,000.00

Not a Cash Crop Land contracted under this Program can only be used once for the general of soil carbon credits. The land details are recorded with the NER. This is not a cash crop that will generate profits for Landholders repeatedly. It is a once only program.

Carbon Credits are not the most important benefit from increased soil carbon
The main benefits to Landholders are:
Much greater water retention in soils resulting in reduced need
for irrigation. Indications are that a 1% increase in carbon in the
soil equates to an additional 8 inches of rainfall per annum
Much improved water quality in river catchments due to reduced chemical
fertilizer/nutrient run off
Cost savings and greater efficiencies in nutrient use
Improved buffers against disease outbreaks in plants
Improved sustainable land productivity
Most importantly soil carbon buffers against drought,
heat stress and uncontrolled erosion which are key impacts
of climate change

The Approved Products
Products from the following companies have been approved as at Sep, 2008.
Microsoil Pty Ltd
Soil Care Pty Ltd
VRM Pty Ltd
Prime Carbon actively encourages applications from other providers of products to be included as Approved Products.

Other Programs Will Prime Carbon expand it’s offering in the future to include other programs that result in Carbon Soil Sequestration or that reward the generation of co-benefits? We are interested and keen to expand our offering ... However at this early stage our focus is solely on our current “Soil Enhancement and Carbon Sequestration Program”.

Summary The legacy emissions currently in the atmosphere must be addressed. Carbon Soil Sequestration provides a simple and practical solution to address the legacy emissions together with addressing the impact of Climate Change.

Summary Soil Carbon Sequestration is not only a simple and practical solution but it is also a win win solution ...... as it benefits: Landholders ..... By improving their soil, their produce and their profits whilst contributing to a cleaner greener sustainable world. Companies ... By economically offsetting their carbon emissions whilst supporting Australian Farmers. The Environment ...By improving soil and water quality The Economy ... By providing an economically viable and politically acceptable method to offset Australia’s carbon emissions The Community ... By working together with communities and developing initiatives to support a sustainable future.

Summary If we all work together to increase the Federal Government's awareness of the benefits of Soil Carbon Sequestration .... Soil Carbon Sequestration may be included as offsets in a Compulsory Emissions Trading Scheme.

Summary
We have covered a brief overview of the Prime Carbon
“ Soil Enhancement and Carbon Sequestration” program.
We welcome discussions with:
Landholders interested in joining the program
Product Suppliers interested in having their product
included as an “Approved Product
Program Providers interested in having their programs
included (noting that at this early stage our focus is
solely on establishing the current SECS Program
Community Groups interest in forming their own
Carbon Community Cluster

Contact us Prime Carbon Pty Ltd P: 07 4772 5431 F: 07 4772 6064 E: [email_address] W: www.primecarbon.com.au Address: No 4 The Strand Townsville Qld. 4810 PO Box 5600 Townsville. Qld 4810

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Prime Carbon: Soil Enhancement & Carbon Sequestration Program

by Carbon Coalition on Dec 28, 2008

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Prime Carbon: Soil Enhancement & Carbon Sequestration Program — Presentation Transcript