The Commonwealth Bank (CBA) has announced it has prepaid for a portion of the carbon credits to be generated by a project in Western Australia in a deal worth $1.7 million.
According to the big four bank, the transaction is one of the first known private Australian Carbon Credit Unit (ACCU) payment deals in Australia and represents a “landmark” for the domestic carbon market and the nation’s agricultural sector.
It will support the ecological and social enterprise, Forever Wild, and carbon project service provider, Corporate Carbon, to acquire and manage pastoral leases for cattle stations in Western Australia along with an associated carbon credit project.
“As more businesses make net zero commitments, demand for Australian Carbon Credit Units continues to increase, making supply a critical priority,” said CBA’s executive general manager of commodities, trade and carbon, Alex Toone.
“Farmers need the support of a trusted partner to understand and navigate the nascent carbon market, manage risks and access financing to propel new project development. CBA is committed to playing that role.”
The bank noted that it has prepaid for ACCUs that will be delivered over five years under the financing structure terms.
“We are here to support agribusinesses to advance their decarbonisation journeys and enhance the quality of their natural assets while improving productivity,” said CBA group executive business banking, Michael Vacy-Lyle.
“To do this, CBA is building on our track record of supporting agribusinesses with innovative sustainable financing solutions, from Australia's first Agri Green Loan and first Sustainability Linked Loan for the farming sector, to the first sustainability-linked inventory facility.”
Commenting on the deal, Corporate Carbon managing director Gary Wyatt said that it struck a balance between advancing sustainability and supporting a profitable and viable agricultural economy.
“The properties will remain productive cattle stations, while also delivering better carbon, environmental and biodiversity outcomes,” he said.
“This is the very beginning and we believe there are many more opportunities to make this a normal way of doing business in the Agri sector.”
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Jon Bragg is a journalist for Momentum Media's Investor Daily, nestegg and ifa. He enjoys writing about a wide variety of financial topics and issues and exploring the many implications they have on all aspects of life.