The potential for soil carbon sequestration to play a significant role in meeting Australia’s greenhouse reduction targets has attracted widespread interest. Despite this interest, the economic scope for soil carbon sequestration remains poorly understood and the practical approaches that could be used to capture any opportunities have not been explored. In this paper we present preliminary results on a pilot soil carbon sequestration variable price, reverse tender auction in the mixed (wheat-sheep) farming system of the Lachlan Catchment, NSW. We draw on the results of the pilot to reveal; contract choice, landholders costs of soil carbon sequestration and the extent and impact of transaction costs associated with basic cost-effectiveness of the market mechanism.