Known to be an absolute powerhouse in regenerative agriculture and carbon, Lachlan Ritchie was recently appointed as the founding CEO of Kakariki Land.
Lachy grew up on the land and is driven by the belief that adjusting the way we manage the land is the most critical pathway towards creating a healthier planet. Over the years he has co-founded several purpose-driven businesses, each able to generate financial returns while benefiting the broader environment and community.
He has worked broadly across the agriculture industry; from carbon farming, biodiversity offsetting, managing regenerative farmland, developing regenerative sourcing protocols for a food company, guiding carbon neutral certification for an oat milk product, to developing a regenerative agriculture investment strategy for an Australian Impact Investment office, and co-founding Regen Farming News.
Notably, in 2020 Lachy co-founded and ran the Carbon Farming Foundation (CFF) that has helped farmers all over Australia integrate profitable carbon farming projects into their farming operations.
The CFF was born from the belief that Australia can’t get to net-zero emissions without farmers. Operating nationally, it helps landowners integrate profitable carbon crops into their farming operations. Now a nationally recognised brand, CFF is the go-to-source for trusted independent advice and education in the carbon farming space.
As part of this role Lachy designed Carbon Scout, an unbiased economic feasibility software tool for carbon farming that allows landholders to quickly assess profitability, understand the business case and identify the best pockets of land for a carbon project.
CEO of Kakariki Land
Privately owned Kakariki Capital is developing institutional carbon plantings projects across Australia. Its Kakariki Land Generation Fund (LGF) invests in mispriced Australian agricultural land that’s being re-optimised to develop carbon sequestration projects that generate income from premium ACCUs.
As CEO of Kakariki Land, Lachy is establishing a diverse team of property and carbon management leaders to oversee the LGF’s investments in asset backed carbon. The core focus of his work is supporting the uptake of land management practices that sequester carbon, build soil health, improve the water cycle, and enhance biodiversity.
I recently spoke to Lachy to discuss how he is applying the culmination of skills he’s built over the last ten years at Kakariki.
While Kakariki’s focus is asset backed carbon, as Lachy explained (below), there are really three stories within that: the land story, the carbon story and the opportunity in carbon, and the third piece of the puzzle is impact.
An Impact perspective: restructuring excessively cleared farmland
“Talking initially to the impact piece, farmers have effectively been paid for a hundred years to clear land. As recently as the 1960s and 70s, especially in WA, farmers were incentivised to clear land for agriculture. But you’ve now got this emergence of carbon markets and ecosystem markets, where farmers are going to be paid to put trees back where they shouldn’t have been cleared.
“To consider how this looks on the ground, if you take a big blank canvas farm, let’s say it’s in the WA wheatbelt, and let’s say it’s been excessively cleared and there’s only 5% vegetation left on the property.
“Of that land, there are areas that are super productive for agriculture, and then you’ve got areas of that farm that are less productive for agriculture — really marginal land, where maybe the crops are not performing very well. So on that one farm you’ve got these different land classifications. At the moment, that land on a lot of farms around the country is all farmed the same way.
“The opportunity is to look at a piece of land and evaluate what is the highest and best use for each pocket of land on a farm. Where does it make sense to reintegrate biodiverse environmental plantings of trees back into the landscape? That could be big belts of trees 40-50 metres wide running through paddocks that can slow wind across the land, reduce evapotranspiration, provide shelter for livestock and create a wildlife corridor.
“At Kakariki we look at an asset and put trees where it makes sense to do so for the broader benefit of the landscape. Some farmers had already been doing this because they know it’s the right thing to do for the land — knowing that it will improve the resilience of the farm.
“But now you’ve got carbon markets adding economic incentive to reintegrate trees back into the landscape with biodiverse environmental plantings. There’s also the flow on benefits of enhancing the ecosystem resilience of the farm as a whole. This can increase agricultural production in the other areas of the farm, so you end up with a more resilient farming system that can better handle extreme weather events.
“From an economic perspective for the farmer, they’ve got a more resilient agricultural system, and a new ancillary revenue stream from carbon credits, making the farm economically more resilient.
“The idea is that if markets are functioning correctly to achieve their goal, the financial incentive triggers a behaviour change in farmers of putting trees back onto the farm, who then see all these other flow-on benefits.
“In theory, in 50 years from now, we’ve got climate change under control, we’ve caught back up on all the carbon that’s been released in the atmosphere, we’ve sucked a whole lot away and we’re back in the black on the carbon ledger, then there probably won’t need to be that incentive anymore because people will understand the value of trees on farms. But that’s a long way away and a lot of incentivisation will be needed by then to get that to happen.”
Carbon opportunity: premium carbon credits
“The supply-demand dynamics around the carbon market are really exciting at the moment if you’re a supplier, they’re less exciting if you’re trying to buy carbon credits domestically and it’s especially hard to purchase environmental tree planting credits.
“One of the most exciting developments in the market in the last 1-2 years is more and more sophistication in understanding that carbon credits are all different; that there’s not one flavour of carbon and that a tonne is not just a tonne.
“There’s emission avoidance credits which are very different to an emission removal credit. Removal credits essentially suck carbon out of the sky and store it and lock it away for a period of time. Those credits are being priced higher in the market, and high quality credits are particularly hard to get a hold of.
“And if you layer in something like a biodiversity story — where you’ve got rich environmental plantings of native local seedlings, designing the species mix of trees to match the local ecosystem to become a really good habitat for wildlife — those kind of credits are trading around $60-$70 when the current carbon spot price is around $30 give or take.
“This presents a huge opportunity in the market to differentiate with really high quality carbon credits. Helping that is a good amount of questioning going on about different methodologies in different carbon credits, which is a great thing for the market because it should be interrogated. It should be investigated. Questions should be asked around integrity.”
“It means that the really good projects, the high integrity projects, are rising to the top. There’s an awesome opportunity around differentiation that we’re focusing on at Kakariki.
“The big picture carbon opportunity is that there’s no way we can get to net zero and repair the damage done without carbon credits. Businesses need to focus on reduction and carbon credits are not a replacement for reduction, but we need to focus on reduction and sequestering carbon at the same time.”
The future of farmland: carbon ecosystems
“At a high level, Kakariki is looking to buy agricultural land. Landscapes today are dominated by monoculture, things like single wheat crops for example, are very void of biodiversity that needs to get back into the system.
“We’re looking to buy the ‘worst farm in the best street’ in the sense that we’re looking for farms where the underlying ecological potential is high, but maybe they’ve been excessively farmed, excessively cleared, or not managed very well.
“From a rural real estate point of view these properties have a lower value for agricultural production, but we can see the carbon opportunity that local real estate agents might miss. On that land Kakariki will plant in areas of poorer agricultural performance and lease the balance of the land back to local farmers.
“Environmental planting credits are going to be the backbone of what we do. But we are also looking at partnering with farmers to do soil carbon credits and may look at small elements of farm forestry.
“What you don’t want to see is if you plant a whole block of land wall-to-wall with trees, you’re effectively taking land out of food production and there’s no industry there anymore and no one there to look after the farm for the next 25-100 years. So it’s all about careful integration.
“It’s about evaluating each farm and deciding what’s the highest and best use to re-optimise the farm to consider agricultural production and carbon and really getting those pieces of the puzzle integrated, because farms of the future are going to be integrated. Farmers are going to be earning just as much from their carbon crops as from their other crops.
“There’s now a really unique opportunity in time to purchase agricultural land and take it through that transition to become what the future of farming will look like, which is carbon ecosystem services integrated with agricultural food production.”