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A carbon sequestration-focused joint venture fund managed by Roc Partners and C6 Investment has received $80 million in commitments from foundational investors Qantas (ASX: QAN), BHP (ASX: BHP) and Rio Tinto (ASX: RIO).
The commitments represent almost a third of Silva Capital's $250 million target for its Silva Carbon Origination Fund, which originates and manages high-integrity Australian Carbon Credit Units (ACCUs).
To secure these ACCUs, Silva acquires or leases Australian agricultural land to develop carbon sequestration projects that actively promote sustainable agricultural and land management practices such as reforesting cleared land while enhancing biodiversity and conservation efforts.
Reforestation efforts take place in tandem with keeping the land productive for farming, with Silva claiming the fund is designed for financial investors seeking attractive risk-weighted returns as well as carbon market participants seeking access to high-integrity ACCUs to help meet their emission-reduction goals.
Qantas' investment comes from the airline's $400 million Climate Fund established last year as part of its decarbonisation plans that also involve investing in sustainable aviation fuel (SAF) in partnership with aircraft manufacturer Airbus.
Alongside investments in direct decarbonisation technologies like SAF, Qantas expects high-integrity carbon offsets will play an ongoing and critical role in difficult to abate industries such as aviation.
The Australian Government’s Safeguard Mechanism Policy and the Paris Agreement’s global emissions reduction targets are anticipated to increase the demand for high-integrity carbon projects.
The airline's chief sustainability officer Andrew Parker says the Silva Carbon Origination Fund will further Qantas’ commitment to evolving its carbon portfolio to align with nature-based solutions.
"For hard to abate sectors, such as aviation, high-integrity carbon offsets will play an important role in achieving climate targets," Parker says.
"We expect the demand for carbon offsets to continue to grow into the future and it’s going to take partnerships across industries to enhance the overall availability of high-quality, high-integrity carbon credits.
"The Silva Carbon Origination fund will enable us to continue to elevate our carbon market strategy, while also helping to positively shape the development of the overall industry."
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