Rio Tinto to buy carbon credits from A$250M agriculture platform

[Ben Graham]

Canadian pension fund La Caisse, together with Australia’s Clean Energy Finance Corp. (CEFC), is investing A$250 million in the launch of a diversified agricultural platform designed to generate Australian carbon credit units (ACCUs).

The platform — named Meldora — will combine sustainable agricultural production with large-scale environmental plantings under the ACCU scheme, a joint statement said on Monday.

Underpinning the investment is a commitment by global miner Rio Tinto (ASX: RIO) to serve as a “foundational offtaker” for the carbon credits generated by Meldora. The firm’s aim is to halve its scope 1 and 2 emissions by 2030 from 2018 levels, and the credits are expected to account for up to 10% of the reduction.

The Meldora platform will be managed by Australian agriculture and natural capital asset manager, Gunn Agri Partners (GAP). As its first asset, Meldora has purchased a farm of over 15,000 hectares in central Queensland to practice sustainable agriculture and carbon capture and storage.

Under the “environmental plantings” methodology for ACCUs, native vegetation is planted and maintained for a minimum of 25 years for some projects and as long as a century for others, providing long-term carbon sequestration and biodiversity benefits.

“This investment is a timely step toward advancing resilient, climate-smart agriculture in Australia, while delivering measurable environmental and economic value,” said Emmanuel Jaclot, EVP and head of infrastructure and sustainability at La Caisse, which contributed A$200 million of the investment, with CEFC committing an additional A$50 million.

“This initiative represents a long-term investment in nature and land-based strategies in Australian agriculture,” Heechung Sung, CEFC’s head of natural capital, added. “It’s a great privilege to again be able to work with La Caisse and GAP to invest in this strategy and alongside Rio Tinto, who have demonstrated with their long-term offtake, a commitment to invest in high-integrity carbon credits.”