Aggregation: piggy in the middle?

Many people are interested in the role of the Aggregator in the Australian farm offsets market. The role is strategic because Aggregators form the interface between supply and demand. There is no doubt that the role is important, despite the fact that the Legislation does not mention it, placing the responsibility for the supply side management on the shoulders of the “Project Proponent”, ie. the Grower. Most Growers can’t assemble enough tonnage to deal cost effectively with the market direct. But even a corporate landholder with sufficient land too deal direct will need specialist advice. The average landholder will have to deal through an aggregation service. Organisations with memberships have access to potential growers/suppliers and bureaucracies which can supply the necessary arms and legs. Banks may see synergies, especially since the legislation defines the offset unit as a financial product and therefore those giving advice or dealing in them must have a Financial Services Certification. To give advice tat maximises the Growers opportunity, the aggregator must understand how to draw up a Carbon Farm Plan that integrates practices and boosts emissions reductions and amounts stored in soils. There are five options facing Growers: 1. Deal Direct with a big polluter. 2. Engage an aggregator as an agent. 3. Sell the rights to your units to an aggregator or agent. 4. Join an aggregation as a member. 5. Sell direct to the farm gate market. Aggregators will need to have sound knowledge of the five pieces of legislation that established the Carbon Farming Initiative. They will need a sophisticated data management system, an education function, an outreach program, and connections with local services such as measurement and auditing. At the same time, they will need to engineer costs out of their services to keep middleman costs down and prices competitive.

Aggregator Briefing: An Introduction to Carbon Farming – A One Day Workshop. Delivered by Carbon Farmers of Australia. FarmReady Approved. Call 02 6374 0329