An evaluation of carbon offset options for beef production systems on coastal speargrass in central Queensland, Australia

Abstract

In 2014, the Australian Government implemented the Emissions Reduction Fund to offer incentives for businesses to reduce greenhouse gas (GHG) emissions by following approved methods. Beef cattle businesses in northern Australia can participate by applying the 'reducing GHG emissions by feeding nitrates to beef cattle' methodology and the 'beef cattle herd management' methods. The nitrate (NO₃) method requires that each baseline area must demonstrate a history of urea use. Projects earn Australian carbon credit units (ACCU) for reducing enteric methane emissions by substituting NO₃ for urea at the same amount of fed nitrogen. NO₃ must be fed in the form of a lick block because most operations do not have labour or equipment to manage daily supplementation. NO₃ concentrations, after a 2-week adaptation period, must not exceed 50 g NO₃/adult animal equivalent per day or 7 g NO₃/kg dry matter intake per day to reduce the risk of NO3 toxicity. There is also a 'beef cattle herd management' method, approved in 2015, that covers activities that improve the herd emission intensity (emissions per unit of product sold) through change in the diet or management. The present study was conducted to compare the required ACCU or supplement prices for a 2% return on capital when feeding a low or high supplement concentration to breeding stock of either (1) urea, (2) three different forms of NO₃ or (3) cottonseed meal (CSM), at N concentrations equivalent to 25 or 50 g urea/animal equivalent, to fasten steer entry to a feedlot (backgrounding), in a typical breeder herd on the coastal speargrass land types in central Queensland. Monte Carlo simulations were run using the software @risk, with probability functions used for (1) urea, NO₃ and CSM prices, (2) GHG mitigation, (3) livestock prices and (4) carbon price. Increasing the weight of steers at a set turnoff month by feeding CSM was found to be the most cost-effective option, with or without including the offset income. The required ACCU prices for a 2% return on capital were an order of magnitude higher than were indicative carbon prices in 2015 for the three forms of NO₃. The likely costs of participating in ERF projects would reduce the return on capital for all mitigation options.