Forico, Tasmania’s largest private forest manager and a portfolio company of Sydney-based New Forests, has entered into a long-term contract to sell carbon credits to the Australian government along with environmental services provider CO2 Australia.
Forico will assign 630 hectares in north-east Tasmania to a new project based on developing long-term pine plantations. The carbon credits generated from the plantation’s forestry activities will be sold to the government under the Emissions Reduction Fund, a A$2.55 billion ($2.0 billion; €1.7 billion) voluntary scheme that provides incentives for Australian farmers and land holders to adopt new practices that help reduce Australia’s greenhouse gas emissions.
“Forico is pleased to have achieved project registration so quickly after the release of the method earlier this year,” said Forico’s chief executive Bryan Hayes, referring to the Plantation Forestry Method the Australian government approved under the ERF.
“For the first time in the history of federal Australian climate change policy,” Forico and CO2 Australia added, the method “allows for the recognition of carbon sequestration in new and longer-rotation plantation forests as well as the carbon stored in wood products.”
The approved project is expected to remove nearly 69,000 tons of CO2 equivalent over 10 years.
“This is a significant milestone for the plantation forest sector in Australia as the carbon market is recognizing the ability of Australian timber plantations to be a part of the country’s response to climate change,” Hayes said.
“This also adds carbon credits to the balance sheet of plantation forests, supporting Forico in how we manage our forests for multiple values and providing economic incentives for increasing carbon sequestration,” he added, noting that Forico is the first forest manager in Australia to be approved under the ERF.
New Forests hopes the pilot project will demonstrate proof-of-concept for timberland investors, proving that fighting climate change can also support improved commercial returns in sustainable forestry. The investment manager said it will explore other carbon opportunities that may be developed across the Forico managed estate, which comprises 180,000 hectares managed on behalf of New Forests.
Founded in 2005, New Forests manages more than 780,000 hectares of land and forests in the Asia-Pacific region and the US. Its assets include sustainable timber plantations, rural land and conservation investments related to ecosystem restoration and protection. The firm manages more than A$3.9 billion in assets globally.