Birchip Cropping Group chairman Ian McClelland said although agriculture emissions were not directly included in the scheme, the scheme could affect on farm costs.

The government's Carbon Pollution Reduction Scheme places a limit on the amount of carbon pollution an industry can emit.

Australian companies which produce more than 25,000 tonnes of carbon pollution a year will have to buy a pollution permit for each tonne of carbon they contribute to the atmosphere.

The government will make a final decision to include agriculture emissions in 2013, in consultation with industry. Agriculture emissions make up 16 per cent of Australia's carbon pollution.

Mr McClelland said 10 per cent of broadacre farmers' costs had a direct association with fuel and electricity.

"Another 30 to 40 per cent of our costs have a fuel component, like chemicals, fertilisers, freight and shipping costs," he said.

"The short-term problem is what effect will carbon trading have on on- farm costs and are there any opportunities for us to be able to sequence carbon?

"There's a huge amount of work to be done before agriculture can be included, not only to measure carbon but to be able to give back to people. It's a huge challenge."

National Farmers Federation president David Crombie welcomed the 2015 target date to include agriculture emissions.

"Farmers have maintained that we are willing to play our part in meeting Australia's, and the world's, climate change challenge," Mr Crombie said.

"The green paper provides the opportunity for government and farmers to work together to ensure this can be achieved in an equitable, measured and sustainable basis."

Mr McClelland said it was important the government focused on using science and technology to reduce emissions.

"We need to change practices and use technology that either reduces carbon or generates energy that doesn't use carbon," he said.

"We need to be more efficient in the way we use the world's carbon. We need to use new technology that can put carbon away for hundreds of years.

"Most of the solutions at the moment are based on delaying the ultimate solution and not solving the problem."