Carbon farming – the “who”, “what” and “when” of the new Integrated Farmland Management Method

June 18, 2026

The Clean Energy Regulator (CER) is expected to release the new Carbon Credits (Carbon Farming Initiative—Integrated Farmland Management) Methodology Determination mid-2026. This new method represents a significant structural reform to Australia’s carbon crediting framework under the Australian Carbon Credit Unit (ACCU) scheme.

What is IFLM

Under Australia’s current system, landholders cannot undertake multiple eligible carbon activities under a single project, regardless of whether they are located on the same property. Instead, landholders looking to undertake multiple projects must establish two completely separate projects, incurring duplicate administrative, establishment and transaction costs.

While the IFLM method is not intended to replace any specific existing carbon farming methods, it looks set to provide optionality for landholders wanting to either participate in a single activity methods or opt for an ‘integrated’ approach in order to undertake multiple carbon sequestration or avoidance activities on the one property, depending on what’s desirable in their circumstances.

Such an approach is intended to:

• lower barriers of entering into carbon farming through reduced complexity and costs;
• streamline carbon farming practices with regular agricultural operations and management, leading to increased participation across a broad range of ecosystems and land use activities; and
• generate ACCUs with a higher degree of integrity.

Key features of IFLM

• Activity stacking: Multiple eligible activities can be included as part of a single project, allowing landholders to account for a wide range of carbon management activities that may be available on their property (i.e. combining vegetation and soil carbon sequestration).
• Increased economic viability: By allowing an integrated set of carbon management activities to be undertaken on the one property under the same project, it is envisioned that landholders will be able to develop projects to a scale of greater economic viability – producing higher integrity ACCUs – by adopting holistic, ‘whole-of-farm’ accounting principles, increased additionality and incorporation of the latest scientific modelling and measuring.
• Reduced transaction costs: It is expected that the transaction costs associated with participating in a carbon project such as monitoring, measurement and audit requirements will decrease as it becomes more cost-effective when shared across multiple projects.

Who will be affected by IFLM

The ability to ‘stack’ multiple carbon activities on the one property under the IFLM framework is expected to increase participation from landholders and managers across a broader range of agricultural and farming operations.

Eligible Activities

The primary eligible project activities are expected to include:

• Soil Carbon Sequestration: Activities that increase soil organic carbon content in agricultural systems.
• Reforestation and Afforestation: Establishing and maintaining environmental or mallee plantings.
• Native Forest Management: Management of native vegetation to achieve forest cover.

Strategic considerations for Landholders

The introduction of the IFLM Method presents both opportunities and important considerations for the agricultural sector:

• New Revenue Streams: The ability to combine activities may make previously unviable projects commercially attractive, opening up new income sources through the generation and sale of ACCUs.
• Project Planning is Critical: Landholders considering a carbon project should assess whether the IFLM method aligns with their long-term property management plan. Key legal considerations, such as carbon service agreements, permanence obligations (either 25 or 100 years), and contractual arrangements for the sale of ACCUs must be addressed clearly at the outset.
• Transition of Existing Projects: While not mandatory, landholders with existing projects may wish to evaluate the benefits of transitioning to the new method.

When will the IFLM apply

ERAC is currently undertaking review and assessment of submissions received during the public consultation period and developing the IFLM.

We will provide an update on the CER’s official release of the final methodology determination, which is expected in mid-2026.

Upon its release, the team at Fox and Thomas can provide detailed analysis and advice on:

• assessing the eligibility of your property and proposed activities under the new IFLM method;
• navigating the project registration and compliance process; and
• drafting and negotiating documents such as carbon services agreements and ACCU sale contracts.

Please contact our office to discuss how you might be able to leverage this significant regulatory development.