Mr. Bill Callanan:

I will refer a couple of the Senator's questions to my colleague, Mr. Moore, particularly those relating to forestry.

On the question of individual farm inventories, there is movement in that direction. Bord Bia is doing carbon auditing at individual farm level, which is identifying whether there is opportunity to improve the overall carbon profile of farms. In the context of this discussion, however, which is on carbon sequestration in soils, etc., and in response to the Senator's question about timelines, we have created a working group that includes quite a number of people to work out how one would structure the issue of the potential for carbon trading and farmers getting rewarded in that regard. That requires identification of a baseline. The national soil carbon observatory, the soil testing and so on will contribute to that. It requires consideration of verification and how that should be validated. I know that others will present to the committee and will have particular views on this. There are issues of permanence as well and, from a Government point of view, the issue of how one oversees or referees, effectively, the process whereby carbon could be traded or counted at individual farm level. That progression is at an early stage.

We have to give surety and certainty to people with regard to what they should expect in carbon accounting. I have to caution the many farmers who are saying they need to be given credit for the carbon in the soil. We have to remember that our land-use sector is emitting carbon, so we have to overcome that in its primacy.

In terms of the ownership piece, from the point of view of businesses, there is a lot of interest in this area and it is predominantly coming from corporate social responsibility. While that is driving it, we must recognise this is about the voluntary carbon market as opposed to the structured market. I am sure members have spoken to the Department of the Environment, Climate and Communications about this. The structured market is the emissions trading system and the non-emissions trading system. The former involves large energy users, etc. The current structure does not provide for them to offset, for example, through afforestation. It is an emissions trading structured system and afforestation is not countable under that mechanism. The idea of offsetting is not where the current policy direction is. It is more around the voluntary carbon market developing for industry. We regular encounter advertisements on radio and television in which businesses state they are climate neutral because they are offsetting. That is somewhat different from a formal emissions trading system. A business will not have the capacity, through its involvement in the likes of the woodland environmental fund, to say it rather than the individual farmer owns the carbon credits. That is important.

On the anaerobic digestion question, under the commitment in the climate action plan, 1.6 TW hours of anaerobic digestion is to be developed. I am sure members are aware of the cost associated with biomethane production. The actual feed stocks, as was pointed out, are the likes of manure, food waste and crops grown specially for it. In the delivery of 1.6 TW hours, 30% to 50% would probably come from food waste or manures, with the remainder coming from the likes of grass. That must, however, be delivered under the recast renewable energy directive, RED II, which means it must be sustainably produced. The benefit of anaerobic digestion is that a significant number of businesses in the food processing industry are looking to decarbonise their energy system. They see a value in it. From an agriculture point of view, we would see the removal of methane associated with the manure that goes into it and the displacement of fertiliser, which is now being replaced with digestate from that plant. If digestate is going out to reduce the amount of fertiliser used, the agricultural sector will benefit from that.

There is a contribution on the energy which is displacing heavy fuel oil or gas, in this case, biomethane. I do not see it as a plus-and-minus scenario in terms of the grass because it must be produced in a sustainable way. That is why work is going on in establishing multispecies as a feedstock, as well as a production system for animals, to make sure it can be compliant with that sustainability requirement. If someone seeks to secure the credits associated with anaerobic digestion systems, only a very low fertiliser input system is allowed. Perhaps Mr. Moore will speak about when forestry is most valuable in terms of carbon credits.