Here’s a comprehensive, course-ready module for your Sustainable Agarwood Plantation Management & Carbon Farming Course, training manuals, and Oud Academia / CI-ASASE SOPs, covering cost-benefit analysis of combining agarwood production with carbon farming.
Cost-Benefit Analysis: Agarwood Plantation + Carbon Farming
1. Introduction
Integrating agarwood cultivation with carbon farming creates dual revenue streams:
- Agarwood-derived products: chips, essential oil, hydrosol, resin
- Carbon credits: Verified through ARR/VM0047 or other methodologies
This module helps estimate financial returns, investment viability, and ESG value.
2. Cost Components
| Cost Type | Description | Typical Range / Notes |
|---|---|---|
| Land Preparation | Clearing, leveling, soil improvement | PHP 50,000–150,000/ha |
| Seedlings / Tissue Culture Plants | High-quality Aquilaria spp. | PHP 50–150/tree |
| Planting & Labor | Labor for planting, staking, protection | PHP 20,000–50,000/ha |
| Irrigation / Water Management | Rainwater harvesting, drip irrigation | PHP 10,000–30,000/ha |
| Fertilizers & Organic Amendments | Biofertilizers, compost, seaweed extract | PHP 10,000–40,000/ha/year |
| Inoculation & Resin Induction | Fungal / chemical / dual-action methods | PHP 2,000–5,000/tree (one-time or periodic) |
| Pest & Disease Management | Organic sprays, monitoring | PHP 5,000–15,000/ha/year |
| Pruning & Canopy Management | Labor and tools | PHP 5,000–10,000/ha/year |
| Harvesting & Processing | Chips, oil distillation, hydrosol | PHP 10,000–50,000/ha/year |
| MRV & Carbon Project Costs | Sampling, reporting, verification | PHP 50,000–200,000/ha/project cycle |
| Insurance / Contingency | Fire, pest outbreaks, extreme weather | 5–10% of total costs |
Costs vary depending on planting density, technology, and management intensity.
3. Revenue Streams
| Revenue Source | Description | Typical Range / Notes |
|---|---|---|
| Agarwood Chips | Resin-rich wood | PHP 10,000–30,000/kg (depending on grade) |
| Essential Oil | Steam distillation / SC-CO₂ | PHP 200,000–500,000/liter (premium grade) |
| Hydrosol | Co-product of distillation | PHP 500–2,000/liter |
| Carbon Credits | Verified under ARR / VM0047 | USD 5–15/tCO₂e (voluntary market) |
| Agroforestry / Intercrop Products | Nitrogen-fixing legumes, fruit trees | PHP 5,000–20,000/ha/year |
| By-products | Mulch, pruning residues for biochar | Added value or cost saving |
Revenues depend on resin content, tree age, processing efficiency, and carbon credit verification.
4. ROI Estimation (Illustrative)
Assumptions:
- Plantation: 1 ha, 250 trees/ha
- 10-year harvest cycle for resin induction
- Carbon credits: 1.6 tCO₂e/ha/year
- Average chip & oil revenue per tree: PHP 10,000
- Carbon price: USD 10/tCO₂e (≈PHP 550/tCO₂e)
| Component | Revenue (PHP) | Notes |
|---|---|---|
| Agarwood products | 2,500,000 | Chips + oil + hydrosol |
| Carbon credits | 9 years × 1.6 t × PHP 550 = 7,920 | 10-year project minus first year |
| Total revenue | 2,507,920 | Combined |
| Total costs | ~1,000,000 | Plantation establishment + maintenance + MRV |
| Net Profit | ~1,507,920 | 10-year cycle |
| ROI | ~150% | Over 10 years (15% annualized) |
ROI increases with premium resin induction, higher carbon credit prices, and efficient processing.
5. Risk Adjustment
- Include buffer pool deduction for carbon credits (10–20%)
- Factor natural risks: fire, typhoons, pests → potential revenue loss 5–15%
- Apply discounted cash flow (DCF) for long-term projects
6. ESG & Co-Benefits
- Carbon farming + agarwood aligns with impact investing goals
- Provides biodiversity conservation, soil health, and local livelihoods
- Enhances investor confidence and supports premium market access
7. Key Takeaways
- Combining agarwood production with carbon credits significantly improves financial viability
- Costs are front-loaded (land, seedlings, inoculation, MRV), revenues occur mid- to long-term
- Carbon credits provide risk-adjusted revenue and ESG alignment
- Strategic pruning, resin induction, and organic management maximize both resin yield and carbon sequestration
Optional Next Deliverables
- 🌱 Detailed cost-benefit analysis spreadsheet template for 1–10 ha plantations
- 📊 Cash flow projection chart: agarwood + carbon credits
- 🧾 ROI, break-even, and risk-adjusted scenarios
- 📘 Farmer/investor-friendly infographic: dual revenue stream from agarwood + carbon
I can prepare a ready-to-use CBA template + cash flow and ROI projections, tailored for Oud Academia / CI-ASASE plantations, next.
Do you want me to create that?