One of Australia’s first carbon funds has secured an initial $80 million of investment from Rio Tinto, BHP and Qantas.
Image: Silva Capital
The Silva Carbon Origination Fund aims to raise $250m to provide investors access to large-scale carbon credits from land reforestation carbon capture projects integrated with agriculture to support the global transition towards a low-carbon economy.
The fund is managed by Silva Capital, a joint venture between investment managers Roc Partners and C6 Investment Management.
Silva Capital will originate and manage Australian carbon credit units (ACCUs) generated through land reforestation initiatives occurring on its own properties.
Silva Capital Co-Managing Director Raphael Wood says Rio Tinto, BHP and Qantas joined as foundation investors, signalling the fund’s first close.
“Their partnership and commitment highlight the importance of high-integrity carbon credits in the transition to a low-carbon economy,” he says.
“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.”
Wood says he hopes the fund will set a precedent for more institutional investment in Australian carbon projects.
Fund complements decarbonisation strategy, miners say
Silva Capital says carbon credits are an “important piece of the puzzle” for many large companies as they work towards decarbonisation while low-carbon technologies are still developing.
“We are absolutely committed to decarbonising our operations, but many of the technologies we need will take time to develop and implement,” says Rio Tinto Chief Decarbonisation Officer Jonathon McCarthy.
“Meanwhile, our investment in the Silva Carbon Origination Fund helps us meet our compliance obligations with high-integrity carbon credits. We also believe it is important to enable more carbon projects that partner with farmers and local communities to integrate agriculture with nature repair.”
BHP Vice President Climate Graham Winkelman says the investment in the fund aligns with the company’s integrity standards on carbon credits, which prioritises nature-based solutions and carbon removal.
“BHP is actively pursuing structural GHG [greenhouse gas] emission abatement from our operations to meet our FY2030 target, but we anticipate a role for carbon credits as part of achieving our 2050 goal for net zero scope 1 and scope 2 GHG emissions from our operations, and to meet compliance obligations under the Safeguard Mechanism Act,” he says.
‘Sustainable’ investment strategy
Silva Capital’s strategy involves investing in agricultural land, currently focused on Australia’s east coast, to develop large-scale carbon sequestration projects by reforesting cleared areas while ensuring the land remains productive for farming.
It aims to balance carbon projects with productive grazing farm operations.
Silva Capital confirmed it was in the process of purchasing its first two farming properties, pending approvals.
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