Commonwealth Bank (CBA) has entered a strategic alliance with plant nutrition company RLF AgTech, financing an innovative pilot programme that aims to generate soil carbon credits.
The transaction is the latest milestone in the bank’s strategy to accelerate the development of high-quality Australian carbon credits.
RLF AgTech, a specialist in plant nutrition, has launched a soil carbon pilot programme with Australian farmers who will utilise its accumulating carbon in soil system (ACSS) technology. The pilot aims to demonstrate that ACSS increases soil carbon sequestration and generates Australian carbon credit units (ACCU).
Each ACCU represents one tonne of carbon dioxide equivalent stored or avoided and are registered with the Clean Energy Regulator.
Through the strategic alliance, CBA has pre-paid for the first ACCU generated by this pilot programme. The funding RLF has received from CBA will assist participating agribusiness operators with the upfront costs associated with registering and managing the carbon projects.
CBA and RLF will also seek to collaborate on further soil carbon opportunities with the aim of boosting the supply of high-quality carbon credits in the Australian and international carbon markets.
Andrew Hinchliff, group executive of institutional banking and markets at CBA said: “It will take innovation and collaboration to overcome the challenge of climate change. As the nation’s largest bank, we have a role to play to support leading thinkers with the important work of commercialising that innovation, particularly when it comes to carbon markets.”
“Our clients tell us financing is the biggest barrier to mobilising carbon credit supply, with capex needed to support the development of emerging carbon sequestration methods and technologies. A thriving carbon market is a significant economic opportunity for Australia, and will play a vital role in the path to net zero. We want to play a leadership role in the development of this market and we look forward to collaborating with other Australian innovators to support piloting and scaling carbon projects across the country,” he added.
Re-disseminated by The Asian Banker