According to announcements released Monday by the fund and the companies, BHP, Rio Tinto, and Qantas will contribute a combined A$80 million ($52.7 million) as early-stage investors in an Australian carbon credits fund that seeks to finance land restoration initiatives.
Australian Carbon Credit Units (ACCUs) from reforestation programs will be generated and managed by Silva Capital, a joint venture between Roc Partners and C6 Investment Management. The fund seeks to raise A$250 million to fund this initiative.
The $3 billion Emissions Reduction Fund (ERF) of the Australian government issues ACCUs to assist the nation in reducing its carbon emissions by 43% from 2005 levels by 2030.
Projects that prevent deforestation, restore natural forests, or gather methane from landfills are primarily given credits by the ERF. These initiatives can offer credit to the government or businesses trying to reach their carbon reduction goals.
Businesses that operate in high-emitting sectors of the economy, including mining and aviation, are more and more looking to purchase carbon credits to purchase emissions offsets.
“This fund represents not only an investment in carbon abatement but a significant milestone in Australia’s carbon market, that will, importantly, support the long-term success of our farming communities and nature repair,” Raphael Wood, Silva Capital Co-Managing Director, said in a statement.
According to Wood, Silva Capital intends to invest in agricultural land to create sizable carbon sequestration projects that support environmentally friendly farming and land management techniques.
