In this month's CarbonCurious session, Nick Butcher, co-founder and CEO of CarbonCrop, is joined by Cristy Mead, Agnition's Ag Tech Growth Specialist, to discuss how the Agnition Pilot Farm Network has helped to shape the CarbonCrop platform.
Watch the video for more information, or read the transcript below.
Nick: Welcome along everybody, we'll just give those who are slight stragglers one extra minute and then we'll get straight into it. Thanks for joining us today. So we are talking today about two things neatly amalgamated into one thing. The first is with my guest Christy from Agnition, who's going to be talking to us about Agnition in general and the Pilot Farm Network specifically.
So, Christy, and. In the context of that we're going to be talking about how we, CarbonCrop, use the Pilot Farm Network to help test some of the new innovations for landholder engagement with our platform and with their forests and with people supporting them in connection with their forests which is sort of following on from the stuff that we shared last week.
So yes, Kristy Mead is an Ag Tech Growth specialist from Agnition Ventures. I'll be handing over to her to sort of give you a full spiel about five minutes in, and I'll stop talking for a bit, and then we'll get into the details of. The sort of results that we got from the Pilot Farm Network and how we expect those to be applied as our product evolves.
As usual any questions that come in, drop them in the Q&A panel. Hopefully I don't completely crash the webinar later on trying to find out where that's gone because honestly I'm having a day of it with Zoom at the moment, but we've also got a whole bunch of questions that came in advance, so we can have a look at those too.
So, for those of you who joined last month's webinar, this will be a very familiar slide. The reason that I'm sharing it again is that the evolution that was sort of outlined here from sort of our, Our beginnings as a company of mostly being an internally technology enabled forest consultancy service to then making the portal available to our customers, to then making a platform available to larger customers, to then making a multi stakeholder platform available to groups of customers.
You'll see on the left hand side of this, this final little picture, you'll hear there's all of the little happy farmers in their overalls with their trees. What's, these, like, landholders are a key stakeholder in this whole process. It's like ultimately your land that's going to have some forest on it and be registered in the scheme or, or not.
And so the, the key thing we were looking to test was How are our tools for landholders to engage with directly rather than for a full time forestry consultant to use them and that's what we were looking to use the Pilot Farm Network for. The, the sort of background to this was, and this is actually a more recent comment, but the, the idea that we had was that, A lot of the stuff that happens on a farm is something, sorry, a lot of the stuff that happens on the farm in connection to the recognition of forest on that farm, or carbon, is things that farmers are well positioned to actually deal with.
And this is a comment I got about two months ago from a, not a customer, just someone I was talking to this about idly, before I'd mentioned that we're making this product available, and they said, I'm not stupid, and I feel like I could do most of this stuff, I just need the right tools and some hints.
And I was like, well, funny you should say that, because. We very much share that view. I'd say even more than that. Our view isn't just that farmers would be able to do a lot of these things that we're talking about here in terms of the sort of forestry recognition process, but you're also the best people to do a lot of these things, better than a consultant, because when it comes to something like, what's the history of this area, or what did we do on the farm last year, or what do we plan to do next year, and is this scheme right for us?
A lot of that is context that if, like, carbon crop, for example, was to come in and start talking to you about it. We have to ask all of these questions. We don't have the history and we have to build up a model of what's right for you and your property, and you'd already know all of that. However, there are a bunch of obstacles to a landholder just going away and doing all of this themselves, which is due to the complexity of the, the frameworks and the systems.
And we routinely find people asking questions like, Do I actually have anything? Am I on the right track with the process? Am I going down the wrong path? Have I missed something critical? Is this all going to go horribly wrong? And so the sort of the key question that we got to was, Like, I just need the right tools and some hints, like, how far are we off having those right tools and the appropriate hints at the right point?
So is this something that we actually can better empower landholders to do a sort of like, supported do it yourself kind of approach, or is it still too big a gap? So it was with, with that sort of question in our minds, and the state that our tools were at, at that point, that we got involved with the Pilot Farm Network as disclosure, like, Ravensdown is an investor in carbon crop, by way of ignition, which I'll leave Christy to talk about more but, so, there, there was sort of a, We already had a relationship where we got involved, but it was also a very compelling fit for us that it would clearly help us reach a certain demographic to help us ask this question.
And so with that, I'll hand over to Christy to tell you a little bit more about what Ignition is and how it fits with Ravensdown, Christy.
Cristy: Yeah. Thank you, Nick. I suppose just for like a little bit of context on me and my role. So I have worked with Ravensdown for around seven years now. I spent the first six or so of those on the road as an agri manager.
So out there talking to farmers on the East coast of New Zealand every day. From there I started with Agnition a little over a year ago, and in my sort of Ag Tech Growth Specialist role. So one of, this is one of the parts of my role that I do, which is the Pilot Farm Network, something I'm particularly passionate about.
We live on Sheep and Beef Farm in Hawkes Bay that my husband manages, so very much kind of in touch with the day to day there and help out where I can outside of work as well. So a bit of context on who's kind of speaking to you on, on this Pilot Farm Network stuff. But to give a bit of a bigger picture, so I would assume that pretty much everyone here has heard of Ravensdown.
We essentially have around 50 percent of the New Zealand farmers buying their fertilizer and other farm inputs from Ravensdown directly. And what Agnition is, is essentially the commercial sort of innovation arm of Ravensdown. Ravensdown. So we still sort of function with that same sort of vision in mind, which is that smarter farming for a better New Zealand, but instead of focusing on that core business around nutrients and essential inputs and, and really the right products and the science and things like that, we're sort of looking a little bit more into the future on what sort of opportunities are out there that could potentially solve some real world challenges on our farmers and shareholders farms.
So to give a bit of context on what sort of sits under Ian's umbrella, if you will. Next slide please, Nick. We'll, a hundred percent owned by Ravensdown fact is with its own board and CEO. And then I'm one of the sort of seven of us that are in the core team. We sort of have three. So these are the key parts to our business.
So there's the scale function, which is where some of Ravensdown's existing portfolio businesses or historical portfolio businesses fit in, things like the ARL laboratory where our soil testing and water testing and plant testing gets done. We also have some shares in SEDAX, Crop Mark Seeds, and Southstar Technologies, which are a fertilizer coating plant or a product coating plant here in Christchurch.
So, there's those kind of businesses which are already existing and it's really looking about how we can scale or take those into the future. We look at some things that are kind of, new businesses or science that's been done and how that can be taken into the future. So an example of that is sort of Ecopond, our recent collaboration with Armour, and there's a bunch of other things that we have sort of working in the background around what could we start or partner with to start at that really sort of incubator stage to look at some of those problems in the future.
And we also invest in early stage promising ag tech companies. So that's where carbon crop kind of comes into the mix. So we're also always on the lookout for companies that are functioning in a space that we think can provide genuine value to our shareholders, but also sort of fitting with that smarter farming for a better New Zealand kind of overarching brand.
One of my parts of the role is I sort of function across You know, all, a lot of those with the pilot farm network. So, that kind of fits in a few different places. So, with that, we sort of leave Ravensdown to do the core, fertilizer, agrochemicals, seeds, with the, in collaboration with CropMark. But we sort of function in that adjacency sort of space.
So, either things that are kind of near to that in the nutrient space, but also looking a little bit further into what other opportunities are out there that maybe. Can have some real tangible change for our industry. So things that might be around sort of analytics or you know, robotics or drones, or, you know, looking into either opportunities and sort of tourism or finance and, and how that can kind of all feed back into, into our sort of core customer and what they value.
So I suppose this is where it kind of comes into our portfolio companies. So we have these are, these are apparent ones. This is completely up to date. So we, these companies fit in one shape or form into that kind of rainbow of, of context. So just to kind of take you through just ever so briefly the range that we have here.
So we have AEMR, which essentially is around pasture management, improving productivity, utilizing AI, Carbon Crop, which we're all here for today. We also have more recently invested in IF, which is actually founded in Australia. And that's around looking at, essentially for consumers, people in towns, to invest in a farmer's produce.
In a really sort of fun app kind of manner, a little bit like Sharesies. LEAFT is looking at protein and protein extraction from green leaves. So, where that kind of fits with farmers is, you know, our farmers have the ability to grow that product, and LEAFT has a, essentially, a new market for it.
So, what they're using at the moment there, I believe, is Lucerne is kind of what they've got their baseline on. Looking to expand further. Kiwi Fibre, early stage New Zealand company, got put up in lights a wee bit at the field days more recently. So they're using Harakiki, or Flax, to create a really strong fibre that can then be utilised for other products.
And then very, very new to the portfolio is PES Technologies, and that's around looking at soil health and soil measurement in field, so testing in field, getting results, you know, to your phone within minutes. But yeah. sort of physical, chemical, and obviously biological type soil data. So that's kind of the range of, of companies that we have invested in this far, and they all kind of fit one way or another into, into our sort of greater mission as sort of spoken about earlier.
So the Pilot Farm Network sort of fits, fits across a lot of what we do. It was created really to, to get some of these innovations, either new innovative companies with cool products or existing companies that have something new to come to the market and getting it on real farm quicker. So that's really our goal.
And what we found was there's, you know, a lot of farmers they're busy. They're keen and curious to see what's coming up in the future, but don't necessarily have the time nor want to muck about with sort of technologies that don't actually suit their system or their goals. And on the other hand, a lot of our innovators or companies that we speak with, some of which we invest in, a lot of which we don't they are, have a product but are really looking to get that bit of feedback or sort of refinement from the farmers directly.
And this is a way for them to access some of their markets. So it's very much a two way street. And it's really about connecting, yeah, real innovations with real farmers to accelerate that part of our sector. So for a bit of context around what we've had in our pilot farm network this far. So in the past, it's been going for a little over a year.
So this is, this slide here is our first two webinars. So over our first two webinars, we had eight innovations. We now have them out on just over 60, 63. Great. Pilots that are active on farms or have been completed since then. These are the range of companies that we've showcased through our Pilot Farm Network thus far.
So, you can see there's a bit of a range. There's some, like, you can see that we've invested in that are our portfolio companies. So, like, Crop Mark Seeds, one of the originals, and AMR and CarbonCrop, and IF, which are much newer. And then other companies that are doing really cool stuff out there in the market, so.
Each of these come to us with a, or bring to the Pilot Farm Network, a pilot or an offer for our farmers to engage with. And then we bring everyone into the room in a webinar format. And it's probably a little bit different in the sense it's a bit of a Shark Tank, Dragon's Den type setup. It's a pilot style where our innovators all have sort of around 10 minutes or so to pitch their pilot and showcase what it is they're doing and what they might want to get out of engaging with the farmer to trial this on their farm.
And our farmers can listen and then sign up or select a pilot that suits them and their business and their goals. And it really sort of reduces the risk, I think, for both parties. There's some pretty cool stuff out there. We've had, you know, everything from pasture measurement to soil sensors, we've had wool pole protectors, we've got software, we've got hardware, we've got a little bit of everything.
And it's been really cool to see the engagement from our farmers throughout these first two webinars and, and be able to get, you know, that much more innovation out in, you know, 60 farms. 60 pilots across New Zealand. So, it's just for a little bit of context, that gives it a flair for what we've had so far.
What we've actually got live currently is just four, four pilots that were launched in the spring. So these ones have just been launched in our most recent webinar and are currently available, you know, for farmers to sign up to if they're interested. AEM has come back for a second round with their Vision app, so a new development for their product.
So, existing company now but new product that they're quite keen to share. Market Drench Gun is actually owned and created by a young farmer. She's only 19, and she actually won the Young Innovator of the Year award. At the field days this year, so really cool to showcase a little, a young innovator that's got something really cool coming through from that sort of a perspective.
Bitwise is an Australian company, New Zealand girl, but Australian company looking at berries and, and forecasting yield to get, you know, really very, very accurate forecasts and, and yield predictions. And then Dronehand another Australian company looking to expand into New Zealand where they essentially have a drone, the farmer's own drone, flown on their, flown on their own property.
Whereby they can count livestock live, and also check animal, animal health. So it'll look at if you've got a downed cow or a cast ewe, it'll be able to identify that live as the drone skirts out. So, big time saver, particularly for our sheep and beef guys in that one. So, those ones are live at the moment on our website, but, They sort of complete our first just over 12 months of the pilot farm network and what we've got.
Yeah, had come through the pipeline. So yeah, pretty cool stuff, I think. And yeah, Nick obviously has been, yeah, part of it from the very, the very first one and can, yeah, tell us a little bit more.
Nick: Cheers Christy, that's excellent. So if you do have particular questions around that I think there's a way we can get, well, go to the Pilot Farm Network website.
I'm sure you'll find a way to Christy's contact details in some form or another fairly quickly then, but also throw questions in the Q& A if you want Christy to answer something while we've got her here today. So our, our objective going into the Pilot Farm Network was basically, I think firstly we were interested in the experience of using the Pilot Farm Network as an outreach mechanism and a farmer engagement mechanism, but also we had a fairly clear question in our mind, which it was a nice kind of platform to test, which was how useful will our sort of updated digital platform be for farmers under a sort of supported DIY ETS registration process.
We were a bit sceptical that it would be something where we could just throw it up on a website and anybody could use it without any expertise whatsoever because of the huge amount of it which requires still quite a lot of expertise. But we also were quite confident that people could do a lot themselves without us having to sort of, you know, do literally every single part of it for them.
So that was the, the test was where in that spectrum was the result actually going to fall. As Christy mentioned, we had eight inquiries from, I'm not sure what the, The actual audience size wasn't those first sessions, Christy, but it was, it was like a fairly high interest rate on the order of sort of 30 percent ish of those we presented to, I think, expressed some interest.
Do you know the numbers, Christy?
Cristy: Yeah, in the webinar itself we had around 80 participants come through. Half of the participants in the webinar signed up for a pilot and then of the carbon crop ones, or the those that registered their interest in carbon crop, I think, yeah, around sort of do 60 percent of them carried on, carried on through.
Nick: Okay. Yeah. All right. 10 percent rather than 30%, my numbers are a bit too optimistic, but yeah, it was still quite high, for something where it's just someone turning up to a webinar and maybe being interested in some stuff that's on show. And what was also interesting was across that portfolio, how much we identified in terms of stuff that was of value and the value wasn't currently being captured or recognized.
So we analyzed 3, 100 hectares of land across those, I think it was eight. farms, or I'm not sure if that was the five farms that progressed to the later stages. Of that, 1, 200 hectares was forest. A big chunk of it was already registered in the ETS so that was like, they already knew that they had forest, it was more just validation of what else was there and checking out the modeling tooling.
But there was also a lot of forest that wasn't yet registered in the ETS, and so that block of forest which was split across, I think, three or four farms, was sequestering 300, 000 worth of carbon a year that wasn't currently being claimed. And then there was another 250 odd hectares of forest which wasn't eligible for the ETS, but was potentially eligible for inclusion for sort of in supply chain inset applications, which we can also support.
Of those 200 hectares that were eligible for the ETS, One of those farms has now completed the entire process right through to ETS application for registration submission. I think they're now waiting on the results to come through, but it allowed us to prove out quite well that, yes, this was something where somebody who's engaged in the process and motivated and is willing to invest a moderate amount of time can do a lot of it themselves.
And I mean, I've been at pains to emphasize as well, we don't necessarily view this as primarily a cost saving thing, like, you probably will save some money, but forestry consultants are really good at their jobs generally, and they're quite efficient, they use these tools all the time. I think much more important than that, and you may well still be working with a forestry consultant in various capacities.
A huge part of the benefit, though, is the insight that you gain through the process and the extent to which you build intuition about this sort of general carbon forestry area of activity, which until now I think a lot of farmers have sort of treated as a, as this sort of off to the side thing that's a little bit black magic and it's like works in this weird regulated market and it might not be entirely clear what the obligations are and the opportunities are etc etc.
If you can actually get your hands on the tools yourself. and start trying out some options, then you start to sort of demystify it, and therefore be in a much better position to assess the opportunities that might be available in the context of what you want to do and how you want to do it. And the way you do that, I'm definitely not going to go through all of the functionality today, and I'm not even actually going to load up the full portal as I did in the last webinar.
Go back and have a look if you wanted a slightly closer spoiler, partly because I think it makes everybody seasick when I start zooming around. Or the camera angles, but we now have a lot of the core tasks and workflows sort of built into the application and the sort of step by step through the app of, in order to do this, you first have to do this, and then you have to do this, and then you have to add these maps here, and then you have to assess this, and like, if you just view it as a big, complicated, Get your forest into the ETS or, or figure out what forest you have that's eligible.
And then if you haven't, you get it into the ETS. It's a little bit hard to approach and quite daunting if you don't have expertise in the domain, but if you break it out into all of the little individual tasks that have to be accomplished, most of them are totally manageable for somebody who doesn't necessarily have a lot of background in the space, but is sort of.
Standard level conversant with computers and mapping tools and is happy to spend a bit of time working with it. So here's just a couple of very quick screenshots. Like a question that might be asked is, Is my regenerating forest eligible? So these forest boundaries here have been drawn in automatically by the tools.
That's one of the things you get when you sort of click into the application. And we've got access to all of the relevant aerial imagery for your farm. You don't have to go looking for it. You don't have to figure out how to load it into a GIS application. It's already there. And you can look at it and go, Oh, yep.
I see if I go back to 1990, some of these areas, they're reasonably well vegetated. They're probably not going to fly, but quite a bit of it is actually very lightly vegetated. I probably can register that in the ETS. The next question you generally ask yourself is, Why would I bother? In fact, you might have even asked yourself that beforehand.
What might it return? And so we can immediately show you the potential yield for that area of forest. And now, now you're not talking about an ETS registration, which is a little bit of a nebulous and ephemeral thing. You're talking about 5, 000 per year. for this area highlighted in yellow over the next 10 years or so.
And then you can start to trade that off against what other things you might be spending your time on, what other things you might be doing with that land, whether you're happy to accept the restrictions. What's the actual process for registering it now that you've decided you wanted to? So there's two key parts.
Firstly, you need the correct accounts. And then secondly, you need to go through the registration process. We've got, this is an MPI evidence report tool, which takes you through a whole, so there's, there's a couple of things going on here. Firstly, you've marked the areas that you're interested in registering.
And from then, the tool just starts, Throwing these prompts at you saying you still need to add this. You just need to put this little bit of information in there. This geometry is not quite right. And it means that you go from a fairly big complicated set of unknowns into a checklist of just. Add your ETR account number, add the establishment method for this forest add the land status in 1989 for this forest here, and it's surprisingly quick, like I could, I could probably finish the registration for this bit of land in the next 15 minutes, and possibly we'll actually do one like that at some point in the future, just to kind of properly take the complexity away, but we're already going to run out of time so that right now.
Another, I'd say almost the most valuable area, is exploring new plantings, which might not be visible from aerial imagery and where it's only that you've got the local farm knowledge of the fact that you recently put some trees in there to know that it happened at all. Or perhaps even more so, areas that you haven't planted yet, that you're going to but you're thinking about it and you want to sort of play around and explore some options like what if I planted that hill up there that's constantly every time it rains I'm worried I'm going to have a landslide, I'm thinking of retiring it, I don't know what the economics would be, which species should I pick?
It's very quick and easy to test that out and try some scenarios. In the same way that you might consider changing a stocking mix on a particular area or even the stock you're running, you can sort of have a look at this option of what if I put that We are framing all of this as supported DIY. I think, you know, maybe the Nirvana eventually is full DIY, but I think there's enough questions that tend to come up through the process, especially our experience with the Pilot Farm Network, that this isn't something where we're saying, don't you worry one click.
Everything will be taken care of for you and be able to run it all yourself. Like, there is a lot of support that's valuable at various key points during the process around assessing eligibility and then just sort of a sanity check, almost more for comfort and confidence than anything else pre submission.
And then once you're registered, we think that our tools offer a lot of value for ongoing management of sort of forecasting and compliance assurance, but you don't have to use them. And at this stage we're planning on primarily making this available with the support functions through the catchment groups that we're starting to work with because they're in the sort of really natural aligned group that tends not to be a purely commercially focused entity, tends to have the interests of the members of the catchment at heart and be looking to help them achieve the best outcomes for their land.
And they're also already engaged in these various activities of helping with biodiversity support and forest restoration and protection and erosion control, which tends to be pretty well aligned with reasons that farmers that we've spoken to are interested in getting forest into the ETS as well.
I should add this isn't a completely exclusive launch channel. We are working with a number of land use advisors and forestry consultants as well who are also. an excellent channel for this kind of thing, but the catchment groups are kind of the new one. So these key steps under this model will be heavily supported by the catchment group coordinators for those groups where we're participating.
We're also involved in the process as well, and the key is that we think that the tooling that we have makes it a lot easier than it would be to do it under sort of legacy delivery system models. So, as I mentioned before, There's really three benefits that I want to highlight that I think you get by being directly involved rather than sort of somewhat more hands off.
Firstly, it demystifies the whole thing, like, there's nothing like playing around with it a little bit to properly understand it. And we are seeing this in many of our discussions as an emerging key revenue stream for a lot of hill country farms. And I imagine if you talk to Hill Country farmers who do have forest in the ETS, they'll be telling you the same thing at the moment.
We certainly saw a lot of carbon sold in the last 18 months when commodity prices in other sectors were down a little bit, and it's a sort of a relatively decoupled source of cash flow. To smooth out when other stuff's looking a bit murkier. It also helps you build intuition around your current and future opportunities, and this is something which I think is really hard to outsource to anybody else, because anything that you could do on your farm in the future is sort of whirling around in your head, when you're having a coffee or having a shower or trying to go to sleep at night.
It's very hard for somebody else to do that kind of balancing of options and thinking through possibilities for you, versus you kind of weighing up, well I have been thinking about putting a new fence in there after all. If I was to put that fence in at the same time as I did the planting, and the planting was going to be this species, and it was going to have that future yield, and it would cost me this much up front.
It's, it's kind of following those little threads. That's difficult to do if you don't have an intuition for it. But if you can build an intuition with tools it becomes actually almost do it without thinking in the same way that you do for many other on farm practices. And the final benefit is that this is very much as in when it suits you to engage.
Like you're, you're not at the mercy of anybody else's schedule. If you've got some time that you want to explore something, it's very cost effective to do it in little bits. If you just want to register three hectares, it's very cheap to just register three hectares with multiple sensors. You don't have the sort of fixed overhead of having to engage a third party professional in the way that, if you're planning on building a massive new fence, you might hire a fencer, but if you just want one fence post re nailed, you're probably not going to hire a professional fencer to come in and do it for you.
It's good to be able to do the little bits and pieces yourself. That's my spiel. If you'd like to try this, Best way to get started at the moment is to contact your catchment group or catchment collective coordinators and have them get in touch with us or just contact us directly yourself at hello at carboncrop.
com. And with that, unless there's anything you'd like to say, closing Christy, I'll jump into the Q& A. No, that
Cristy: sounds perfect. Thank you for, thank you for having me keen to see what the questions are.
Nick: Well, there's one I know about soil that I might throw to you given your recent comments about investment.
So okay. So. First one up, have you thought about looking into any modelling for innovative tree planting regimes, i. e. a shelterbelt with tangential lines either side that qualifies for the ETS, poplar or willow poles with native interplanting for soil stabilisation, or the Wilding Pine Risk Calculator?
Thanks. Yes, we are working on all of those things, actually, in various forms. And this is actually a perfect example of The kind of thing where it's great to be able to get your hands dirty and play around with the tooling yourself and test out some scenarios. You can model arbitrary forest geometries in our system and various species mixes will give you guidance on what the relevant species table would be for a particular planting plan.
And you can absolutely do a shelterbelt with tangential lines either side that qualifies for the ETS. This is actually quite widely done and increasingly so as as people become more familiar with these systems and opportunities especially around agroforestry. Similarly let's, like, there's this sort of traditional narrative that riparian planting tends not to be eligible for the ETS because it's usually only a sort of narrow riparian buffer of three or four meters wide.
But there's actually like completely reasonable ways that you can join up the riparian buffer across the river. for the registration as long as it's a small river and it's on your land. And also if you were to plant sort of shade trees at suitable spacings somewhat inset to the paddock from where the fences and the riparian buffer is, then that's another way that you can sort of create what qualifies as a forest under the ETS within the rules and get it registered and recognized.
So yes, all of these things are stuff we're working on. If you're thinking about this kind of stuff and you want to try out some options for your farm, that's exactly what we are encouraging with this tool. Another opportunity is connecting up small areas of existing vegetation into something that exceeds the forest threshold.
Like there's a lot of stuff that's, we call it scattered forest in our system. It's sort of isolated pockets hectare. They don't qualify as forest land because forest land by New Zealand definition has to be one hectare. And they, they can't be registered in the ETS, but if you buffer them or join them up with other bits, then that can completely change.
What is the best way to check the eligibility of scrub blocks? I, it's hard to say the best way, but there's two key things that have to be true for an area of scrub to be registered in the ETS. The first is that it was not forested in 1990, and the second is that it is forested now. And both can be a challenge for scrub, because if the scrub is visibly there in 1990, you have to prove that while scrub was there, tree species growing in such a manner as to achieve forest state were not which tends to be difficult with aerial imagery alone.
You sort of have to look at the ongoing evolution of the forest and any sort of change in management practices. And for what's there now, a key thing is just demonstrating the presence of tree species. Not scrub species that aren't going to achieve the tree definition, at sufficient density. And that again requires some level of, usually aerial imagery.
We are starting to increasingly use LiDAR for this. And also ground sampling imagery if it comes to it. We've done some previous webinars on this topic. Is there a government approved model for measuring net farm carbon surplus or deficit? Wink if you want to answer this one, Christy, so the there are quite a few models.
I wouldn't say that any of them in New Zealand are 100 percent government approved. Forestry is a government approved model and as much as the ETS for forestry is a legislative and regulatory framework. For net farm emissions though I don't actually know of any endorsed framework by the New Zealand government that says your farm is a net emitter or a net producer, but there are a lot of various voluntary and private sector initiatives.
Science Based Targets Framework is a key one that's fairly widely used as is the ISO, 14064 family of standards. Yeah, there's quite a few in a nutshell and all of those you can be certified to and recognized under. And when we, when we look at entities, whether they're a farm or otherwise.
Making a claim around their net carbon position. It's usually under one of those Frameworks or standards or at least the same accounting approaches that they have Obviously there has been a lot of work done in the space in New Zealand Sort of most visibly over the last five or ten years in the context of the He Waka Eke Noa project And that did define accounting approaches and all sorts of other stuff And there was also accounting that New Zealand has to use for its national inventory for our international reporting under the UNFCCC and the Paris Agreement.
Though it's not necessarily a stage where you could sort of pick it up now and apply it to your farm. That tends to be more the Greenhouse Gas Protocol or SBTI or one of the ISO standards. So this is where I was going to, I don't know if you've got a strong opinion on this, Christy, but I think it's like soil carbon, we get asked about it all the time.
I, so there are standards internationally. I think Australia actually has a crediting framework for soil carbon. Our general attitude to it has been that soil organic carbon is great. Carbon credits, recognizing increases in soil organic carbon are pretty tricky and there's a very high risk of reversal in the instance of drought, but it's, it's a super interesting space and that's why I was wondering if if soil carbon is one of the things that the soil testing startup that you've been working on.
Recently become involved in, is involved, like, does anything, Christy?
Cristy: Yeah, I believe that they do. Obviously the, the ARL lab is already testing this across, you know, multiple blocks and, and tests that they've come through from years and years of data. PES, I believe, does. But yeah, there's a really interesting space in the sense that, You know, carbon in New Zealand soils, I've done a little bit actually personally for an international company that owned farms in New Zealand, and that was something that they were really keen to test and track across their farms.
But what we find often is that, particularly in sheep and beef or pastoral farming, in comparison, comparatively to, to arable, for example the soil carbon levels are very good and are, You know, at or above sort of international type standard for, for what's classed as, as healthy. So we found even with, you know, testing sort of every three to five years across these blocks, there was very limited change, but the results were consistently very good, comparatively.
Nick: Yeah. Which is excellent in terms of soil health and productivity and all of those things, but fairly difficult in terms of achieving some further increase in the stored soil organic carbon and qualifying as a removal or whatever. Although, all of that said, one of the big reasons to invest in erosion control is because a great way to lose soil organic carbon is to have a massive landslide that takes all of your topsoil under the river and washes it out to sea.
Soil carbon is part of the reason that it's good to invest in. to stabilize your slopes. Future for carbon reddits with so much confusion in the marketplace, it's a really good question and I I can't say with certainty how it's going to evolve, but I can point to a couple of things that have recently occurred which point in the direction of carbon credits remaining part of the overall system and being an increasingly important part.
Firstly, within New Zealand, the role that they're expected to play in achieving our emissions reduction targets has only strengthened. Like the, it's been reiterated that New Zealand's targets are net targets, not gross targets, and that large quantities of removals incentivized through carbon trading mechanisms are part of how we're going to achieve those net targets.
And at an international level the COP29 conference of the parties for the climate change, I think is the umbrella topic like that, the COP connected with the UNFCCC. And sorry, I won't go down that rabbit hole, but they, they just finally agreed the general principles and I think the rules of the trading framework that would enable trading of carbon credits between state actors under the Paris Agreement framework.
So there's a lot of the international trading of carbon agreements that you've heard of in the past is either peer for peer trades between like, one country can come up with a bilateral agreement to trade with another country. or their voluntary sector trades, which is sort of not really that linked at all to the state level commitments under Paris.
What's just been agreed is a framework for sort of a generalized market where you can have sort of many to many trading between people who are achieving emissions mitigations and people who want to, you know, pay others to achieve those emissions mitigations because they don't think they're going to achieve their domestic targets themselves.
This points to further investment in that, further commitment to that, and a lot of countries, including New Zealand, are expecting the purchase of effectively carbon credits or these internationally transferable mitigation outcomes to be part of how they achieve their emissions. Reduction targets as a nation.
So, there's still a lot of confusion. I would say they're not going away any time soon. And most of what's been evident recently is further commitment and investment and dependency on them as a way to achieve like global level climate change mitigation. Are there any developments in respect of parties who own native bush that currently doesn't qualify?
We have 100 hectares, so I'm assuming this mean doesn't qualify for the ETS, and that's, so the first test, two tests that we mentioned before around scrub, it's, it's gotta be forest, and it has to have not been forest in 1990. If you are both forest and not forest in 1990, then I'd say yes there are developments and that we certainly have a lot of ongoing discussions with major ag sector players around decarbonizing their supply chains.
They don't care if it was there in 1990 or not. What they care is that it's still growing now and it's still removing carbon now. And if that's the case, then it could be used in support of a supply chain emissions reduction claim. And that's increasingly something that's potentially has revenue associated with it to support ongoing restoration and decarbonization activities.
In terms of eligibility in the ETS, Yes, there are developments at various stages. There's a lot of different parties working on this. So basically recognition of carbon removals in pre 90 forest. I'd say it's still too soon to promise that anything's just around the corner though. So for that space, we're still primarily looking at the voluntary market and the, the ag sector supply chain.
Who to contact for initial cost financing of our project feasibility and development? I'm not totally sure what the background to that question is, but if you want to start with us, then we can try and help find a bit more detail. If you're looking at actually financing, the development of a forest.
That's not something that we do directly, but we do work with partners who are in basically the afforestation development space, including financing. So this one threw a couple of people on our team for a loop when it came up, like what is happening on the powdered olivine carbon sequestration initiatives?
It sounds like some fancy new dietary supplement, but so powdered olivine is, but olivine is like a rock. If you powder it, then you can, if you just spread it on a surface, it will absorb CO2 from the atmosphere, at least this is my layman's understanding of it. And there's various suggestions around how you can sort of achieve soil enrichment and also carbon sequestration by spreading crushed up rock across I think there's a number of different rocks that work across farmland or putting it in the ocean or similar.
So it's basically a form of carbon sequestration. I don't know what stage it's at in terms of recent developments. I know that the economics are quite challenging. And I know that it's not recognized under the New Zealand ETS at the moment. And I'm not actually aware of any international state level frameworks where it is recognized.
I think there are some projects in the voluntary carbon market which do recognize But they have methodologies for this as a sequestration approach. But I don't know the details and it's not something we're deeply involved in. Again, I think one of the big challenges is economics. And no, we are not West Australian based, but we are looking at expanding our operations in Australia.
So if you're interested and you're in Australia, then please get in touch. And that's all we got, I think. Were there any other questions that came in? Anybody who's carefully watching the little question thing?
Cristy: There's one in the Q& A next. Awesome. And it's what are your thoughts on Crop COP 29?
Nick: All right.
Well, I, yeah, that's a big question. There was a lot covered. I, I don't actually know enough to say anything sensible around where things landed with the financing commitments or lack thereof and the levels of financing for climate change mitigation versus emissions reduction or risk management. I haven't actually read the newly proposed rules on the the Article 6.
4 Trading Frameworks, which is the thing for multiple countries to trade all together. But there, there's something which is, it's good to see that there's some progress there. I'll withhold judgement on how good the progress is until I've actually read it, but yeah. So, I don't know in a nutshell. Overall, I'm concerned about the ongoing level of conflict and misalignment and lack of ambition in the targets.
I think that, as I've said before, we are way off track. Adequate Climate Change Mitigation and when you see a lot of the, sort of, petro state actors basically, you know, understandably given their economic interests, but it's still a real disaster that they're lobbying so strongly for continued exploration, continued emissions, continued expansion of emissions.
That's definitely a concern to see that it's. Still a really controversial topic, and that we're not decarbonizing as quickly as we need to. On the other hand, a lot better that we have the COP and that we have a forum for those arguments than if it was just wasn't being raised as a topic. But yeah, I, it's a big topic and I think I'll probably, we might cover it in a future session once I've actually read the key, key proposals.
But the main one that we're looking at is afforestation frameworks, not because They're the only one that we think matters or we care about. We're hugely supportive of decarbonization generally, but the one that we can actually do something about as a company is the afforestation stuff.
And with that, I guess we can call it a session. Thanks so much, Christy, for joining and for giving us an introduction to all that Ignition are doing. We've certainly appreciated being part of your Under the Umbrella. And yeah, being part of the pilot farm network was really helpful. So I encourage anybody listening who's got an innovation to get in touch with Christie and finding out how, how they can be part of it.
Cristy: Thank you very much for having me. Much appreciated.
Nick: Excellent. Thanks everybody. Enjoy the rest of your days.
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