Qantas Airways, the Australian flag carrier, has teamed up with mining giants Rio Tinto and BHP as foundational investors in a new initiative focused on promoting nature-based solutions for climate change mitigation. The initiative, known as the Silva Carbon Origination Fund, is overseen by Silva Capital, a collaboration between Roc Partners and C6 Investment Management. The fund has a target of raising $250 million, with the primary aim of originating and managing high-integrity Australian Carbon Credit Units (ACCUs). These ACCUs will be generated through carefully selected land reforestation and integrated agriculture projects in Australia, adhering to strict sustainability and integrity standards.
The three major companies have already committed a combined $80 million to the fund. Qantas’ contribution comes from its AUD$400 million Climate Fund, established in 2023 to support the airline’s decarbonization goals. The Climate Fund’s focus includes investments in Sustainable Aviation Fuel (SAF) in partnership with Airbus, highlighting Qantas’ commitment to reducing its carbon footprint across its operations.
The importance of high-integrity carbon offsets, especially for sectors like aviation where direct decarbonization is challenging, has been emphasized. The Australian government’s Safeguard Mechanism Policy, along with global emissions reduction targets outlined in the Paris Agreement, are expected to increase the demand for high-quality carbon projects in the near future. Qantas’ investment in the Silva Carbon Origination Fund aligns with its commitment to meeting regulatory obligations and achieving its climate goals using verifiable and high-quality carbon credits.
The fund is poised to significantly scale up the production of nature-based carbon credits in Australia, while also generating social and economic benefits for local communities. Silva Capital’s approach involves acquiring agricultural land in Australia to develop carbon sequestration projects that not only sequester carbon but also promote biodiversity conservation and sustainable agricultural practices. These projects aim to reforest cleared land while maintaining its productivity for farming, creating a win-win scenario for both the environment and local economies.
Andrew Parker, Chief Sustainability Officer at Qantas, underscored the fund’s significance in strengthening the airline’s carbon portfolio and aligning it with nature-based solutions. He stated, “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.”
Mr. Parker further emphasized the fund’s role in shaping the development of the carbon market and Qantas’ commitment to evolving its carbon portfolio. “The Silva Carbon Origination fund will enable us to continue to elevate our carbon market strategy, while also helping to positively shape the development of the overall industry. “We’re continuing to evolve our carbon portfolio to not only include high-quality, high-integrity carbon projects but also align to nature-based solutions. Through our Climate Fund, we continue to turn our attention to Australian projects that create ecological and economic benefits.”
This recent investment in the Silva Carbon Origination Fund builds upon Qantas’ previous efforts in promoting sustainable aviation, including its participation in the Sustainable Aviation Fuel Financing Alliance (SAFFA) fund and its support for a biofuel production facility in Queensland, developed in collaboration with Jet Zero Australia and LanzaJet.
