BHP, Rio Tinto and Qantas to invest $52.7 million in Australian carbon credits fund

BHP (BHP.AX), Rio Tinto, and Qantas will invest a combined A$80 million ($52.7 million) as early-stage investors in an Australian carbon credits fund focused on land reforestation projects. 

Managed by Silva Capital, a joint venture of Roc Partners and C6 Investment Management, the fund aims to raise A$250 million to create and manage Australian Carbon Credit Units (ACCUs) from these initiatives.

Companies in high-emission industries, such as mining and aviation, are increasingly purchasing carbon credits to offset their emissions.

"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.

ACCUs are issued by Australia’s $3 billion Emissions Reduction Fund (ERF) to help the country cut carbon emissions by 43% from 2005 levels by 2030. The ERF primarily awards credits to projects that prevent deforestation, regenerate native forests or capture methane from landfills. 

These credits can be sold to the government or to companies aiming to meet their emissions reduction targets.

Wood added that Silva Capital plans to invest in farmlands to develop large-scale carbon sequestration projects, promoting sustainable agricultural and land management practices.