Silva Capital Launches Carbon Origination Fund with A$80 Million from Rio Tinto, BHP, and Qantas

Silva Capital, a carbon assets and investment manager, has announced the launch of the Silva Carbon Origination Fund, designed to provide access to large-scale, high-integrity carbon credits from nature-based projects in Australia. The fund targets reforestation and sustainable agriculture projects and aims to raise a total of A$250 million.

In its initial phase, the fund has secured A$80 million (USD$53 million) from major mining companies Rio Tinto and BHP, along with airline company Qantas, as foundation investors. These investments underscore the growing commitment to carbon neutrality and sustainable practices across industries.

Rio Tinto’s Chief Decarbonisation Officer, Jonathon McCarthy, emphasized the importance of carbon credits in meeting the company’s compliance obligations, stating, “We are absolutely committed to decarbonising our operations, but many of the technologies we need will take time to develop and implement. Meanwhile, our investment in the Silva Carbon Origination Fund helps us meet our compliance obligations with high-integrity carbon credits.”

Qantas is financing its investment through its A$400 million Climate Fund, which was established last year to support the company’s decarbonization efforts. Andrew Parker, Chief Sustainability Officer at Qantas, highlighted the role of carbon offsets, saying, “For hard-to-abate sectors, such as aviation, high-integrity carbon offsets will play an important role in achieving climate targets. 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.”

BHP Vice President of Climate Graham Winkelman noted that while the company is pursuing structural GHG emission reductions, carbon credits will be part of achieving its 2050 net-zero goals. “BHP is actively pursuing structural GHG emission abatement from our operations, 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 said.

Silva Capital, a joint venture between Roc Partners and C6 Investment Management, focuses on developing high-integrity carbon abatement projects to generate Australian Carbon Credit Units (ACCUs). The Silva Carbon Origination Fund, the JV’s first fund, will invest in mixed-use agricultural and environmental planting projects to generate ACCUs at scale.

The fund’s strategy involves acquiring agricultural land to develop large-scale carbon sequestration projects by reforesting cleared areas, ensuring the land remains productive for farming. These projects will integrate robust carbon credit methodologies, enhance farming activities that benefit local communities, and promote habitat restoration and biodiversity protection.

Silva Capital Co-Managing Director Brad Mytton stated, “Sustainable agriculture is at the forefront of our investment strategy. With the Silva Carbon Origination Fund, we aim to create a portfolio of mixed farming land with significant canopy cover, generating a large volume of high-integrity carbon credits. The Fund has been designed to appeal to both corporate investors seeking to access carbon credits and institutional investors seeking portfolio diversification, ensuring that we can maximise the volume of capital invested into the sector, capital which is needed to enable Australia to meet its decarbonisation targets.”