Australia agricultural land faces pressure from carbon credits and renewables

Australian agricultural land is facing significant pressure from two distinct directions: large-scale carbon forestry projects and renewable energy developments.

Policy analysts and farming groups warn that the federal government’s ‘Safeguard Mechanism’ is driving a massive shift in land use. Forestry projects designed to generate carbon credits for industrial emitters are consuming vast amounts of productive farmland. While some estimates suggest a few hundred thousand hectares might be lost to the renewable energy transition, newer modelling indicates that carbon-credit projects could occupy as much as 18 million hectares—roughly four-fifths the size of Victoria.

Conversely, some farmers are finding economic stability through renewable energy. In regions like northern New South Wales, landholders have integrated wind and solar projects into their operations. For these farmers, the steady income from hosting infrastructure provides a financial buffer against the volatility of agriculture and the impact of severe droughts, allowing them to maintain their properties and invest back into their farms.