With more than half of the Federal Government's Emissions Reduction Fund (ERF) committed, a carbon project developer believes now is the time for landholders to get involved in carbon farming.

James Bulinski, managing director of CO2 Australia, an environmental services company that manages carbon projects under the $2.5 billion ERF, said over the past 12 months, he had seen an increase in landholder interest in carbon farming, but said now was the time to act.

"$1.5 billion is already committed," he said.

"The time is really now if people want to engage with this opportunity, because that funding source won't last forever.

"In real terms the Government is running auctions, which is the process where these contracts are entered every six months, and our prediction is that there is probably around 12 months' worth of auctions left in the system, at least with the current funding."

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. Listen Duration: 5 minutes 33 seconds 5 m Carbon project developer, James Bulinski says now is the time for landholders to engage in carbon farming. ( ABC Rural: Lydia Burton ) Download 2.5 MB

He said Queensland offered the greatest opportunity.

"We are very interested in Queensland in working with landholders who might have regrowth vegetation on their properties," he said.

"We work with those landholders to establish carbon projects, get carbon credits for those projects and then get payments from the Government for those credits.

"There is around 30 activities that you can create carbon credits from.

"A couple of those relate to vegetation management on landholding including letting regrowth come back and really retaining that over the long term."

There are two timeframes, Mr Bulinski said landholders need to be aware of.

"One of the key commitments that landholders are making when they take on these projects is that they are going to retain that regrowth for at least 25 years — that is just within the area that you say is generating the carbon credits," he said.

"The other is, the way the carbon credits are sold, through a contract to the Government and that contract can run up to 10 years."

CO2 Australia, managing director, James Bulinski says he has seen an increase in landholders interest in carbon farming. ( Supplied: CO2 Australia )

Carbon farming — a way to diversify a property's income

Mr Bulinski said carbon farming offered producers the opportunity to diversify their property's income.

"One of the key things in all of this is scale … we typically say it is around 5,000 acres and upwards that creates for a viable regrowth project," he said.

"If you have got that scale and you are willing to retain regrowth over the long term on parts of your property, then it can certainly be a very useful revenue stream.

"A key positive feature is that it is locked in revenue for up to 10 years. It is consistent revenue and it is a passive income stream for landholders.

"It is not exaggerating to say that in some cases, people looking to put less work into their land or just do less work generally, have used this as a means to either semi or fully retire."

Space to play or pause, M to mute, left and right arrows to seek, up and down arrows for volume. Listen Duration: 5 minutes 21 seconds 5 m Western Queensland grazier, Bill Tomlinson discusses why he got into carbon farming. ( ABC Rural: Lydia Burton ) Download 2.5 MB

For western Queensland grazier Bill Tomlinson, the ability to make a guaranteed income from his property regardless of seasonal or market conditions, is what attracted him to carbon farming.

Mr Tomlinson has a 25-year agreement for parts of his Wyandra property, Elmina station.

"It gave us a diversified income —whether it rained or whether it didn't rain or whether cattle prices were good or whether cattle prices were low — we still had a certain amount of money coming in that we could absolutely budget on and knew that we were going to get it," he said.

"We thought over 10 years we would get about 1.8 times the value of the land.

"Who knows what carbon may be worth in the future. But I think that there is always going to be a market for carbon, in my lifetime anyway."

Western Queensland grazier, Bill Tomlinson says he entered into carbon farming to diversify his property's income. ( ABC Rural: Lydia Burton )

But, Mr Tomlinson said there were a number of things to consider before entering into a carbon project.

"Firstly, we can't pull scrub on any of the area that is affected by the carbon farm," he said.

"We also have to lighten our stocking numbers so that we don't keep the mulga broken down, so that it is allowed to grow.

"[So] our beef operation in that area now is no longer the major land use.

"Our major land use now is the carbon farm and the secondary land use becomes the livestock, so that has to be given careful consideration by anybody that is planning or considering doing a carbon project.

"[But], we do have some areas of our property that are not affected by the carbon farm, so that we can still feed our cattle when it is dry."

Mr Tomlinson said at the end of the day the figures stacked up.

"Our country that we have put into the carbon project was thickening and if we were to maintain our earning capacity on that country we would have to get permits to thin it," he said.

"Otherwise we would lose carry capacity.

"[But] sometimes those permits [to thin the country] are not easy to get . We made a decision that if we were to let it thicken then we needed to be doing a carbon farm with it.