Mills Oakley has released what is believed to be Australia’s first comprehensive analysis of the carbon farming services industry, examining the commercial models, market structure and governance arrangements supporting more than 2,800 registered projects under the Australian Carbon Credit Unit (ACCU) Scheme.

The report, Australia’s Carbon Farming Industry: Market and Business Model Analysis, analyses more than 20 carbon service providers and provides one of the first detailed assessments of the businesses that develop, finance and manage carbon projects on behalf of landholders.

Among the report’s key findings:

• The market is concentrated, with the top four carbon service providers involved in approximately 72% of surveyed projects, while the top three account for 63%.
• Commercial models are becoming more diverse, with 50% of providers using revenue-sharing arrangements, 23% operating fee-for-service models, and 27% offering hybrid structures.
• Landholder-as-proponent models now account for approximately 45% of surveyed projects, compared with 36% under provider-as-proponent structures, indicating growing demand for direct project ownership and control by landholders.
• The sector has attracted increasing institutional investment from major domestic and international investors.

Mills Oakley Partner Matt Egerton-Warburton said the research highlights the growing sophistication of Australia’s carbon market.

“While much of the public discussion has focused on carbon policy, market integrity and carbon prices, there has been very little independent analysis of the businesses that develop and manage projects on the ground.

“Our research shows there is no single model for developing a carbon project. Providers vary significantly in how they structure remuneration, allocate risk, fund project establishment and support landholders throughout the life of a project.”

The report also identifies a growing shift towards greater landholder control.

“We are seeing increasing adoption of landholder-as-proponent structures, allowing landholders to retain ownership of their projects and play a more direct role in governance and compliance.”

According to Mills Oakley, the findings suggest Australia’s carbon farming sector has evolved into a mature professional services industry, with market participants increasingly focused on provider selection, governance, risk allocation and long-term project value rather than simply project registration.

The report is expected to be of interest to agricultural businesses, investors, carbon market participants, financiers, policymakers and organisations involved in the natural capital sector.

Download the report: Australia’s Carbon Farming Industry: Market and Business Model Analysis.

Media Contact

Matt Egerton-Warburton

Partner | Mills Oakley

E: [email protected]

P: +61 2 8415 7621