GTAO Carbon Project Info Pack V1.6

GROUND-TRUTH® AUSTRALIAN ORCHARDS Carbon Project Information Pack

Introduction Carbon Friendly is pleased to invite our clients to join the Ground-Truth® Australian Orchards Carbon Development Project registered under the Verra, Verified Carbon Standard (VCS), VM0042, Agricultural Land Management (ALM) methodology for Agriculture, Forestry and Other Land Use (AFOLU).

This opportunity is available for CF clients that have completed a GHG Emissions Reduction and Removal Enhancement Assessment (GHG Assessment) and that commit to implementing carbon reductions and removals initiatives for their agricultural assets.

Benefits of a carbon project:

Making a public statement of clear intent demonstrating legacy of achievement Accelerating the uptake of sustainable and regenerative farming Demonstrate commitment to measure and lower or neutralise emissions within farm boundaries, using verified science-based methodology Sequester carbon at scale and invest in sustainable practices to reverse soil degradation and climate change Improving yields, product quality and value, Foster biodiversity Strengthen ecosystem services Building climate resilience into assets, improving their asset value

This is undertaken through the framework of carbon projects, where a farmer can earn carbon credits that can be used for their own means or commercialized with commitments to reinvest a portion of the gains into further sustainability initiatives.

Important Information The content of this document is confidential, contains commercial in confidence and proprietary information, and is intended for the recipient/s specified as shown on the document.

This document is not for distribution except with written permission from Carbon Friendly Pty Ltd. No information or contents provided herein should be considered financial advice.

This presentation may include forward-looking statements. Forward-looking statements are only predictions and are subject to risks, uncertainties, and assumptions outside the control of Carbon Friendly. Actual values, results, or events may materially differ from those expressed or implied in this document. Given these uncertainties, recipients are cautioned not to place reliance on forward-looking statements. Any forward-looking statements in this presentation speak only at the date of issue of this document.

Subject to any continuing obligations under any applicable law, Carbon Friendly does not undertake any obligation to update or revise any information or any of the forward-looking statements in this presentation of any changes in events, conditions, or circumstances on which any such forward-looking statements are based.

Information Pack Contents This information pack contains a summary of the relevant information to provide farmers with a comprehensive overview of the process of participating in such a project.

1.

Carbon Project Process This outlines a summary of the steps to investigate and enact a carbon project on your farm with Carbon Friendly.

2.

Carbon Project summary activities, responsibilities and timelines An overview of the key steps, who does what, sequence and typical duration the projects follow.

3.

Common questions Commonly asked questions about our integrated GHG and carbon projects. We welcome your unique questions!

4.

Project Forecast Schedule Prospective Project Proponents will be supplied with a standard forecast model which can be used to calculate the feasibility of a carbon project, giving a transparent outline of costs, potential returns and key variables.

5.

Key Terms of the Contract A list of key terms of the contract between CF and the Project Implementation Partner.

6.

Carbon Farming Commitment Guidelines The Guidelines provide information about the project activities and additionality requirements.

7.

Project Fee Schedule Providing detail about fees and levies At its core, Carbon Friendly only wants to undertake projects where there is clear benefit to the landholder/farmer where they can achieve some or many of the goals outlined herein. This means we will only work with our clients who have engaged Carbon Friendly for GHG Assessments, to gain a clear understanding of their farm emissions and carbon intensity of their products. With this, it enables the client to make informed decisions on the farm’s business future, strategy and opportunities that may or may not involve carbon projects outlined herein.

Our Carbon Project Process

CF performs a GHG Emissions Reduction and Removal Assessment (GHG Assessment) establishing the baseline and performing the first GHG assessment based on primary data provided by the

CF review the project potential under the VM0042 methodology of Verra’s VCS Program and provide pre-feasibility documentation to the Project Implementation Partner if interested.

farm.

CF prepares project description and program registration documentation

Project verification occurs (typically annually).

through Verra platform.

This involves CF preparing a

This step also includes a

documentation required for a

project risk analysis to establish the buffer account percentage, which is kept

monitoring report and all qualified independent 3rd party verification (ISO 14064-3 accreditor). Includes all GHG emissions reduction and

Obtain independent 3rd party

back by Verra to allow for

auditing and/or verification of the

non-permanence events.

removal calculations,

CF coordinate and manage

This is typically part of GHG

outcome.

ISO 14064-2 (2019) aligned GHG Emission Reduction and Removal Enhancement Report and Certificate.

If the Project Implementation Partner wishes to continue, CF will provide contract documentation for signing (PIP Agreement).

project validation with Verraapproved auditing body.

collation of datasets, etc.

Assessments that are undertaken for the farm in any case.

After successful verification, CF applies to Verra for issuance of credits (VCUs) and pays associated fees.

Verra issues the VCUs into CFs account.

CF then distribute the proportionate share of VCUs to the Project Implementation Partner’s Verra account (or takes other instruction from the Implementation Partner as requested).

Steps 4 and 5 occur annually until project duration is

Terminology When we say, “Project Implementation Partner (PIP)”, we mean the individual, business or body corporate that is seeking to undertake the carbon project and has operational and financial control of the farm or land, reporting, data collection and sustainability practices. This can mean the farmer / client / landholder.

completed.

Carbon Project Explained Year 1: New grower GHG baseline assessment

Year 2 onwards: • Grower implements sustainable practice changes • GHG assessment against base year • 3rd party verification Qualifying farms join a carbon project

Income from carbon credits re-deployed to enhance sustainability practices

WOOLWORTHSCARBON FRIENDLY WOOLWORTHS PROJECT

CLIMATE PARTNER CARBON PROJECT PROGRAM

Verra project management & monitoring by Carbon Friendly

EXPLAINED

International assessment and 3rd party verification

External emitters buy carbon credits to offset emissions

Carbon credit issuance on Verra Register

Overview: Activities, Responsibilities and Timelines Activity

Phase

Ongoing for life of project

Project Setup to First Credits

Farm GHG Assessment and pre-feasibility

Activity Number

Responsibility Project Implementation Partner

Timeline

CF

3rd Party

1

Soil sampling costs and results

2

Historical farm management data

3

Farm GHG Assessment(s)

4

Carbon Project pre-feasibility assessment

5

Carbon Development Contract

6

Implement Sustainable Farming practices

7

Carbon Project pipeline documentation and registration including responding to all queries, public comment period, etc

Pipeline registration submitted to Verra

8

Verra Public Comment Period

Verra

9

Project Validation and Verification Prep, coordination and management

10

Project Validation and Verification, including responding to all queries and referrals

3rd party Validation & Verification Auditor

11

Credit Issuance application, coordination and management including transfers

Verra issues VCUs

12

CF transfers VCUs into Implementation Partners’ account. Available to trade at the Implementation Partner’s discretion

13

Annual GHG Assessment

14

Continue sustainable agriculture practices, soil sampling Annual carbon project monitoring report and associated activities

15

Baseline Year

Project Start

Years 2-20 recurring

12-36 Months

Implementation Partner responsible for review and any legal advice sought

~ 6-12 months

1-2 months ~3-4 months ~4-6 months

~4 months

Implementation Partner responsible for soil testing, farm data provision and CF GHG Assessment fees

16

Project Verification, including responding to all queries and referrals

3rd party Validation and Verification Auditor

17

Credit Issuance application, coordination and management including transfers

Verra issues VCUs

18

CF transfers VCUs into Implementation Partners’ account. Available to trade at the Implementation Partners discretion.

~4 month

~2 month

Common Questions What is a Carbon Project?

•

A soil carbon project involves removing carbon dioxide from the atmosphere and storing it, primarily by increasing the

What is the VCS Program?

amount of decomposing plant material and microbes as

The Verified Carbon Standard (VCS) Program, formerly known as

carbon in the soil. Typically, this is done through a

the Voluntary Carbon Standard, is a program managed by Verra

management practice change which promotes activities

that allows certified projects to turn their greenhouse gas (GHG)

that improve agricultural soil conditions and subsequently

emission reductions and removals into tradable carbon credits.

What method will the project be registered under?

The project will be registered under the VCS VM0042 methodology for Agriculture Forestry and Other Land Use (AFOLU).

It falls under the Agricultural Land Management (ALM) subcategory.

improve crop and pasture growth.

Since its launch in 2006, the VCS Program has grown into •

•

What are the roles and obligations of Carbon

A carbon project facilitates the removal and reduction of

the world’s largest voluntary GHG program. VCS projects include

greenhouse gas entering the atmosphere by promoting

dozens of technologies and measures which result in GHG

Friendly in the carbon project?

practices in which carbon is stored (or sequestered) in the

emission reductions and removals, including forest and wetland

CF is the Project Proponent and is responsible and accountable

soil. The major source of stored carbon in the soil is derived

conservation and restoration, agricultural land management,

for the lifecycle of the carbon project. We undertake all dealings

from the breakdown of root, stem and leaf material of

transport efficiency improvements, and many others. There are

with Verra, 3rd parties and auditors, project management,

pasture grasses and crops. The stored carbon is called

currently around 1,600 registered projects in over 82 countries that

compliance and governance through the full term of the project.

‘carbon stock’.

have generated more than 450 million carbon credits.

The carbon stored by the project is calculated and expressed as tonnes of carbon dioxide equivalent (t CO2e).

What is the Verra Registry?

What are the obligations of the Implementation

The main steps are determining the amount of carbon stored

The Verra Registry is the platform that records all projects and

Partners?

in the project area over a set project reporting period and

programs (listed and registered) and VCUs issued under the VCS

•

then deducting the net emissions from this number. These

Program.

project activities •

calculations follow the international Green House Gas (GHG) carbon accounting methodology.

Who is Verra?

Verra is a nonprofit organisation founded in 2005 by environmental and business leaders who recognized the need for greater quality assurance in voluntary carbon

Annual measurement of soil carbon in accordance with the CF Soils sampling protocol and upkeep of farm records

What is a VCU? Under the VCS Program, projects are issued unique carbon credits known as Verified Carbon Units or VCUs. Each VCU represents a reduction or removal of one tonne of carbon dioxide equivalent (CO2e) achieved by a project.

markets. The Verra headquarters are in Washington, D.C. Verra develops and manages sustainability standards that

Undertake sustainable farming practices aligned with the project’s

•

Provide required data on annual basis to Carbon Friendly

•

Contractually agree for Carbon Friendly to run carbon project on the farm (management, administration, and governance)

•

Agree to build and maintain soil carbon stocks for 20 years from the commencement of the project

•

Pay the fees as outlined in the forecast schedule in accordance with the Carbon Development Contract requirements.

Is this the same as an ACCU?

are globally applicable and that advance sustainability

No, although an ACCU and a VCU both represent 1 tonne of

action across a wide range of sectors and activities and is

CO2e removed or avoided from the atmosphere, VCUs are

also the body responsible for administering the VCUs.

obtained through an international voluntary standard (Verra -

•

The Implementation Partner is not allowed to register any part of the Project Area under another Carbon Program without the prior written approval of the Project Proponent.

VCS), and not through the Australian Government’s Clean Energy Regulator Carbon Farming Initiative.

Terminology When we say, “Project Proponent”, we mean the individual or organization (i.e.

Carbon Friendly) that has overall control and responsibility for the carbon project.

Common Questions continued What are my upfront and ongoing costs for a carbon project?

• As per project fee schedule

What if I want to leave the project early?

What are my potential revenues?

• As per forecast schedule

The contract can be terminated at any time with 12 months prior

can these be counted towards the project?

notice. If the contract is terminated sooner than 10 years, the

Maybe, there are specific eligibility requirements for historical

Implementation Partner will not be entitled to any other buffer

practices. CF will work with you and assess these on a case-by-case

credit payouts and any credits accumulated during the notice

basis.

What fees does Carbon Friendly charge for the project?

•

As per project fee schedule

period until the impact of the exit (loss of credits) on the rest of the group is established and negated.

What are the eligibility criteria to participate in this project?

•

Sufficient historical soil carbon data

•

Detailed farm records (fuel, fertiliser etc.)

•

Detailed records of farm’s previous agricultural land management activities

•

Project area must not have been cleared from native vegetation with 10 years of the project start date

•

Must not be enrolled in another VCS project

What if I lease the farm on a long-term lease and want to undertake the project?

You need to provide Carbon Friendly with a copy of your lease agreement. The contract term of the PIP Agreement will match the remaining period of your lease agreement. The PIP contract can be renewed if the lease agreement is renewed.

OR You must obtain consent from the landowner. The agreement is then tripartite signed between the landowner, lessee, and Carbon Friendly. Should the lease not be in place for 20 years, the obligation to maintain carbon stocks in the soil for the remaining period of 20 years from project commencement will fall to the landowner.

What if want to sell the farm?

If the farm is sold it triggers the termination of the agreement. If this happens < 10 years of the project commencement date, the same rules apply as when leaving a project early.

All endeavors must be undertaken to assign the project to the buyer to continue the project with CF.

I have commenced sustainability initiatives in recent years,

What is the relevance of additionality?

•

what would be achieved under a “business as usual” scenario, and

No, there will be no interests or encumbrances registered on title

the activity would not have occurred in the absence of the incentive

for the carbon project.

What approvals, permits or permissions do I need?

provided by the carbon markets.

•

real reduction of GHG emissions and can thus be used to offset

practice changes covered through the carbon methodology will

emissions.

require any statutory or regulatory approvals from the local or third-party interests in the land (e.g., easements, mortgages, etc) as the suite of practices will still be farming techniques and no ‘infrastructure’ or ‘permanent forests’ are being built.

What if there is a net loss in carbon reductions (i.e., drought, etc.) for the period?

Only the net reductions compared to the baseline will be credited.

If this is below the baseline, there will be no credits issued. Further, a

Additionality is an important characteristic of GHG credits, including VCUs, because they represent a net environmental benefit and a

This will be on a case-by-case basis. However, it is unlikely that

state government. It is unlikely that approvals will be needed from

A project activity is additional if it can be demonstrated that the activity results in emission reductions or removals that are more than

Are there interests or caveats registered on title?

How does the farm receive VCUs? The Farm (Implementation Partner) will open a Verra registry account, (~USD500 fee) and Carbon Friendly will transfer the VCUs to the Implementation Partners’ Verra Account within one month after issuance unless otherwise instructed Carbon Friendly can assist the Implementation Partner to set up their Verra account as needed.

buffer amount of credits is held by Verra to account for reversal and

How frequently can the farm receive credits (VCUs)?

loss events. This risk is calculated, and buffer adjusted at every

This will typically be on an annual basis, as CF schedules project

verification.

verifications and hence credit issuance annually.

Is there a risk that I must pay back any proceedings from

What can the farm do with the VCUs?

VCUs issued to me?

•

Hold in Verra account

No, all the program risks are managed by Verra through an

•

Retire credits for own reasons

international buffer account and no Implementation Partner will

•

Trade directly to buyers, through brokers or trading platforms

have to pay back any proceeding from the sale of VCUs.

•

Carbon Friendly can also assist in the trade of credits on the Implementation Partner’s behalf where requested.

Common Questions continued

Will my farm obtain unique and traceable VCUs back to

What is a Pooled Buffer Account?

my farm if part of a group project?

Non-permanence risk in Agriculture, Forestry, and Other Land Use

Yes, traceability will be achievable through Carbon Friendly's

(AFOLU) projects is addressed through a project risk analysis using

online platform, regardless of the farm's participation status.

the AFOLU Non-Permanence Risk Tool, which determines the

Whether a farm is registered with its own unique carbon project

number of credits to be deposited in the AFOLU pooled buffer

or is part of a group participating in a collective carbon project,

account. The pooled buffer account holds non-tradable buffer

individual traceability will still be possible. Even within a group,

credits to cover the non- permanence risk associated with AFOLU

each participating entity can be identified and traced.

projects. It is a single account that holds the buffer credits for all projects.

Does the Australian Government recognize VCUs if they

Buffer credits are cancelled to cover carbon known or believed

are developed in an international voluntary method, and

to be lost. As such, the VCUs already issued to projects that

not the CFI Act? Yes. For example, VCUs are an approved credit for use under the Australian Government’s carbon neutral certification program, Climate Active. However, VCUs are not accepted for use for the safeguard mechanism.

subsequently fail are not cancelled and do not have to be “paid back”. All VCUs issued to AFOLU projects (as with all projects) are permanent. The VCS approach provides environmental integrity because the AFOLU pooled buffer account will always maintain an adequate surplus to cover unanticipated losses from individual project failures. The net GHG benefits across the entire pool of AFOLU projects will be greater than the total number of VCUs issued.

The Carbon Friendly Difference We are a leader in holistic GHG accounting for cradle-to-farm-gate and cradle-to-market (whole of value chain) system boundary assessments.

We engage with clients after their operation’s GHG emissions intensity has been assessed to enable informed decision-making on the farm’s needs, future challenges, and sustainability strategy, including where the client may choose to retain a personal pool of offsets to enable the farm’s product(s) to be sold as ‘carbon neutral’ or ‘low carbon’ to achieve higher prices potentially, comply with buyer requirements, avoid carbon taxonomy, etc.

Where a client pursues a carbon project, they make a commitment to reinvest a portion of the carbon credit revenue to further sustainability initiatives on their farm.

We are motivated to foster and accelerate emission reduction (through reducing farm inputs such as fertiliser, chemicals, fuel etc.) and carbon removal (via carbon sequestration improvement in soil and native vegetation systems).

Verified carbon credits are transferred to the Implementation Partner’s Verra account, giving the Implementation Partner full control of how the credits are utilized.

We are only involved in projects with robust sampling programs where carbon stocks are physically measured, congruent with other soil carbon frameworks, and independently certified. Uncertainty factors are applied based on the level of variability and uncertainty in the primary data to ensure that the reduction and removal achievements are not overstated.

Annual Site-Specific Soil Testing

The Carbon Friendly Assessment methodology is based on actual annual site-specific soil carbon testing based on the CF SOC Testing Principles and Protocol to achieve the highest accuracy •

The SOC is required to be monitored by site-specific measurement on the annual basis for the project area and not through estimating from modeling tools

•

A GPS marked monitoring site where practice improvements have not been implemented, should be identified and monitored

•

We combine a random sampling approach with the targeted sampling approach to ensure the impacts of practice changes cover the whole project area

•

Soil samples for SOC and soil bulk density are taken for the 0-30 cm layer in general, and the subsoil layer (e.g., up to 100 cm profile) depending on soil types and expectations of project proponents (Implementation Partner). Additional 30-60 cm samples are preferred for baseline sampling

•

SOC improvement is generally assessed based on the change in the soil carbon stock of 0-30 cm layer, but also can be monitored for the subsoil

•

Uncertainty factors may be applied to soil data to account for potential sources of error, such as: availability of historical soil data, variability in soil characteristics, sampling methods and density, analysis procedures and the availability of measured bulk density data.

•

Total soil organic carbon content is required to be analysed instead of total carbon (TC) to avoid contamination of inorganic carbon

•

Soil test results are only accepted from accredited laboratories

Note Carbon Friendly’s official soil sampling protocol will be provided to ensure that all SOC testing complies with Verra's requirements

Key Terms of the Contract between Carbon Friendly Pty Ltd (CFPL) and the Project Implementation Partner (PIP) Item

Aspect

Legal Right

• Registered landowner contractually assigns carbon rights of the land to Carbon Friendly for the contract term.

Parties to the Contract (to execute)

• Carbon Friendly Pty Ltd (the Project Proponent) • The Legally Registered Landowner, and if the land is leased, the Lessee (the Project Implementation Partner).

Term of Agreement and Termination

• Contract term: 10 years, renewable/match the remaining period left on lease agreement and renewable when lease agreement is renewed • The PIP can terminate the contract anytime, with 12 months prior notice. If the PIP terminates the contract sooner than 10 years, the PIP will not be entitled to any further buffer credit payouts until the impact of the exit (loss of credits) on the rest of the group is established and negated.

Registration on Title

• No caveat is proposed to be registered.

Key Obligations of the PIP

• To perform one or more Project Activities on the Project Area during the term to maximise GHG emissions reductions and removals. o refer to “PIP Project Activities” slide for more detail • Annual GHG assessments and soil testing.

Buffer, Loss and Reversal

• A buffer account will be established through Verra to mitigate carbon losses.

• The PIP will never have to pay back any issued credits.

Change of land Ownership

• The PIP shall make every effort to assign this contract to any new party relevant to a change in land ownership or lease.

Group Project

• This agreement is for one of several farms forming a grouped project.

Contract Fees

• Project sign-up fee • Annual GHG assessment fees

Contract opportunity

• Earning carbon credit income for GHG emission reductions and removals.

Credit Issuance Frequency

• Annually

Contract Intent

• CFPL and the PIP intend to undertake the Project collaboratively, and both parties understand that there may be learnings that arise during the development and implementation of the Project that results in variances or changes concerning the information provided to the PIP by CFPL before the commencement of this Agreement.

Carbon Farming Commitment Guidelines

In alignment with the ISO 14064-2:2019 Standard, and the requirements of the VM0042 methodology of the Verra, VCS Standard, an improvement in GHG emissions must adhere to the “additionality” guidelines.

A project activity is “additional” if, compared to “business as usual”, it can be demonstrated that it is a new practice, a cessation of a previous practice, an amended practice, i.e., a higher composting rate, or a combination of these changes.

The adoption of such changes should also be motivated by an additional awareness of the potential benefits of ‘carbon farming’, and the financial rewards that may stem from such practices.

Project Implementation Partner Project Activities (PAs)

The Project promotes and facilitates adopting specific regenerative agricultural practices (Project Activities, PA) by generating carbon credit income as a funding source to enhance and support these activities.

The project is committed to utilising the carbon credit income to drive the implementation and advancement of various regenerative agriculture practices, which include: PA1: Reducing reliance on synthetic fertilisers PA2: Cover cropping and inter-row biomass generation PA3: Improved irrigation methods and water-use monitoring PA4: Establishment of new permanent tree crops PA5: Return of organic crop wastes to the orchard

Project Fee Schedule Phase

Activity

Fees (AUD)

Project Setup to First VCUs

• Carbon Project registration and listing • Project Validation and Verification preparation, coordination and management • Credit Issuance application, coordination and management including transfers • CF transfers VCUs into the PIP’s Verra Registry account. Available to trade at the PIP's discretion

Project Monitoring (annually)

• Annual VM0042 compliant GHG Assessment required to inform Project Verification • Annual carbon project monitoring report and associated activities • Project Verification, including responding to all queries and referrals from Validation and Verification Bodies • Credit Issuance application, coordination and management including transfers • CF transfers VCUs into the PIP’s Verra Registry account. Available to trade at the PIP's discretion

$8,000/farm

Trade of Credits

• CF can arrange credit sales or • PIP can trade directly with broker or purchaser

Negotiable

Carbon Credits to Carbon Credits to CF post buffer PIP post buffer

Carbon Credits to Buffer Account

VCU Issuance Levy to Verra (Payable at Issuance)

10 – 15 %

$0.20 per credit

Sign-up fee

Grouped Project: < 100 ha - $7,000 101 - 500 ha - $9,800 501 - 1000 ha - $11,300 1000 – 1500 ha $16,700 1501 - 3500 ha -$20,000 >3500ha - $25,000

15%

85%

Important information regarding Project Forecast Schedule • Variability in carbon credits is highly dependent on the performance of the farm undertaking sustainable farming practices as well as external factors, i.e., weather conditions.

• Credit generation is not guaranteed. The estimates provided herein are based on previous (site-specific) CF GHG Assessment soil carbon and emissions data, which are critically susceptible to farm management practices and weather conditions.

• These estimates should not be relied upon as being fixed or firm, and we strongly recommend the Implementation Partner undertake their own assessment and evaluation of outcomes and implications.

• Further definition of feasibility is required before project commencement which may include tenure checks, farm zoning, land use and management practices or other potential project barriers.

Assumptions in the Project Forecast Schedule *Credit price provided herein is hypothetical, and prices fluctuate regularly. Several credit exchanges, reports and platforms exist where the landholder can inform themselves of credit pricing and set their own pricing to sell as they wish on the open, voluntary market. Carbon Friendly can direct landholders to these organisations or facilitate credit transactions upon request. **Estimated project costs included herein are summarised. In general, these costs include Carbon Friendly cash fees for carbon assessment, baselining, preparing and submitting all carbon-related documentation to the applicable standard, acting as Project Proponent and full carbon program management with the standard body for the life of the project and Standard body fees (i.e., Verra), 3rd party audit fees. It does not include soil sampling and testing costs associated with the land/project, costs for practice changes, or any other farm costs including project management and admin. These costs are additional and typically expected to be considered farm operational costs.

The project forecast estimates and assumptions are based on: • • • • • • • •

Baseline GHG assessments undertaken by Carbon Friendly and associated relied upon information provided by the landholder Proposed project commencement year as indicated on the Project Forecast Schedule.

The costs for sustainable agriculture practices are not included in the forecast schedule. These costs are to be estimated and borne by the farmer when considering this project.

The agricultural practices continue to build soil carbon on a linear trend as per the Project Forecast Schedule.

Assumed Verra Safeguard buffer of 11% credits Carbon Friendly Carbon partner fee of 15% credits for the first year and look back period and 12.5% for following years (post buffer) No reversal events occur within crediting period.

CPI on costs have not been included

Important Note Landholder is responsible for building SOC stocks within the project area through the agreed practices, ensuring that the carbon methodology conditions and sampling protocols are complied with. Put simply, the amount of carbon credits issued will only reflect the increase in the net emission reductions (including SOC stocks within the carbon project areas) compared to the previous year. Therefore, the landholder is responsible for the actual credit performance of the project.

Project Potential Credits Schedule - Soil and Tree Carbon

Scenario

Soil Organic Carbon %

Soil Carbon (tCO2e/ha/year)

Income** @ $25/ha

Income** @ $30/ha

1

1.0%



1.05%

7.2

$ 180

$216

2

1.0%



1.35%

50.4

$ 1 260

$1 512

3

1.0%



1.70%

100.8

$ 2 520

$3 024

* Applicable to orchards planted after 2018 ** Gross income, Assuming AU $25 / tonne or $30/tonne based on other comparable carbon projects

Disclaimer

Variability in carbon credits is highly dependent on the performance of the farm undertaking sustainable farming practices as well as external factors, i.e., weather conditions.

Credit generation is not guaranteed. The estimates provided herein are based on previous (site-specific) CF GHG Assessment soil carbon and emission data, which are critically susceptible to farm management practices and weather conditions.

These estimates should not be relied upon as being fixed or firm, and we strongly recommend the Implementation Partner undertake their own assessment and evaluation of outcomes and implications.

Further definition of feasibility is required before project commencement which may include tenure checks, farm zoning, land use and management practices or other potential project barriers

Next Steps •

Discussions and clarifications between landholder and CF as required

•

Client fill out the eligibility criteria checklist

•

If landholder is eligible and wishes to proceed, parties execute the carbon contract with detailed activity, responsibilities and fee schedule included in contract

•

CF commence carbon registration process

Documents to be provided by CF  Copy of template PIP Agreement  Forecast Schedule  Information Pack  GTAO Eligibility Criteria & Evidence Checklist

Further Information As at 30/08/2023, there are currently 4 projects requesting registration, 30 projects under development and 54 under validation. These projects are located globally, including UK, USA, South Africa, Germany and Italy.

Sample projects are shown below: USA: Cibo Initiative For Scaling Regenerative Agriculture https://registry.verra.org/app/projectDetail/VCS/3351 UK: Great British Sustainable Farming Project https://registry.verra.org/app/projectDetail/VCS/2640 South Africa: Cng Agricarbon Rewards Programme 2 https://registry.verra.org/app/projectDetail/VCS/3394

Below is a list of resources that may be useful (not exhaustive) Verra Carbon Standard: •

https://verra.org/

•

https://verra.org/project/vcs-program/

Verra Project Methodology VM0042: •

https://verra.org/methodology/vm0042-methodology-for-improved-agricultural-land-management-v1-0/

Verra Project Registry: •

https://registry.verra.org/app/search/VCS

Carbon Trading Platforms: •

https://xpansiv.com/cbl/

Carbon Market Reports: •

https://www.clearbluemarkets.com/

•

https://www.reputex.com/

•

https://marketadvisory.com.au/

•

https://www.spglobal.com/commodityinsights/en/our-methodology/price-assessments/energy-transition/carbon-credit-price-assessments

Voluntary Carbon Market Overview: •

https://www.spglobal.com/commodityinsights/en/market-insights/blogs/energy-transition/061021-voluntary-carbon-markets-pricing-participants-tr ading-corsia-credits

THANK YOU Carbon Friendly will be pleased to discuss any queries further Contact detail: mariki@carbonfriendly.com.au maike@carbonfriendly.com.au