An evaluation of carbon offset supplementation 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.

Climate Clever Beef: options to improve business performance and reduce greenhouse gas emissions in northern Australia

“…* Improving genetics and breeding better adapted and productive livestock (Hegarty et al 2007;Cullen et al 2013Cullen et al , 2016Walsh and Cowley 2016). * Nitrate supplementation instead of urea supplementation can reduce daily methane emissions (Callaghan et al 2014;Cottle et al 2016). * The use of some forages such as leucaena not only improves productivity but also contains compounds, which reduce methane emissions relative to intake (Durmic et al 2010;Harrison et al 2015).…”

“…The 'nitrate methodology', which is being trialled by a large corporate beef producer (Nason 2014), has toxicity and supplement price risks requiring careful management. For most producers, these risks are unlikely to be compensated for adequately through the sale of ACCU (Callaghan et al 2014;Benu et al 2015;Cottle et al 2016). The 'beef cattle herd management' methodology focuses on improving emissions intensity through complementary improvements in productivity (Australian Government 2015a).…”

“…regrowth retention, Gowen and Bray 2016;Whish et al 2016), increased costs (e.g. nitrate feeding, Cottle et al 2016) or business risk (e.g. increased debt, Rolfe et al 2016).…”