Silva Capital has announced the first close of its Carbon Origination Fund, revealing that $80 million has already been committed between foundation investors Rio Tinto, Qantas, and BHP.
Aiming to raise $250 million, the fund provides investors with access to large-scale, high-integrity carbon credits from land reforestation projects integrated with sustainable agriculture to support the global transition towards a low-carbon economy.
According to the firm, Silva will originate and manage high-integrity Australian carbon credit units (ACCUs) generated through land reforestation initiatives.
It explained that the strategy involves investing in agricultural land in Australia to develop large-scale carbon sequestration projects by reforesting cleared areas while ensuring the land remains productive for farming.
“We are thrilled to have Rio Tinto, Qantas, and BHP as foundation investors in the Silva Carbon Origination Fund,” Silva co-managing director Raphael Wood said.
“Their partnership and commitment highlight the importance of high-integrity carbon credits in the transition to a low-carbon economy. 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.”
Moreover, the Australian government’s Safeguard mechanism requires large emitters to lower their carbon emissions in supporting the transition to net zero.
As such, Qantas chief sustainability officer Andrew Parker said that high-integrity carbon projects will play a critical role to help progress its climate targets, noting that aviation continues to be a difficult sector to decarbonise.
“Our investment in the Silva Carbon Origination Fund will help to meet our compliance obligations and progress our climate targets with verifiably high-integrity carbon credits. Importantly, the fund will help to scale quality, nature-based carbon credits in the Australian market with social and economic benefits for local communities,” Parker said.
“The investment in the Silva Carbon Origination Fund is aligned with BHP’s integrity standards on carbon credits, which prioritises nature-based solutions and carbon removal,” BHP vice-president climate Graham Winkelman said.
“BHP is actively pursuing structural GHG 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.”
