CEFC invests A$75m in Macquarie’s Paraway Pastoral Company

CEFC’s investment will be used to help Paraway Pastoral Co achieve a target of cutting on-farm methane emissions by at least 30% by 2030.

Australia’s Clean Energy Finance Corporation has a made a A$75 million ($51 million; €52 million) commitment to an agricultural fund managed by Macquarie Asset Management that will help the latter’s Paraway Pastoral Company reduce on-farm methane emissions.

The investor, owned by the Australian federal government, has been increasingly active in agriculture in recent years and previously pledged A$100 million to the closed-end cropping fund behind MAM’s Viridis Ag platform, which closed on its hard cap of A$1 billion in October 2019.

MAM’s open-end Macquarie Pastoral Fund owns the 28 pastoral and cropping farms that are in turn managed by the asset manager’s Paraway Pastoral Company. The fund was established in 2007 as a closed-end vehicle and closed on A$700 million in 2011, before restructuring in 2015 to become open-ended.

The CEFC said in a statement that its latest commitment would be used to help Paraway work towards a target of reducing its methane intensity by at least 30 percent from 2020 levels by 2030, in alignment with the principles of the Global Methane Pledge.

Paraway Pastoral Company will “trial and showcase new technologies and practices to cut emissions, including altered herd management and genetics selection, changes to feed additive and farm practices, vegetation management and enhanced emissions measurement,” the statement said.

The firm has pledged to share its learnings from its efforts to decarbonize with the wider farming sector and establish a series of demonstration arms in different regions that have a variety of production systems.

CEFC CEO Ian Learmonth said in a statement: “The agriculture sector is a vital part of the Australian economy and critical to our efforts to feed the nation and the world. As an emissions intensive industry that contributes significantly to Australia’s carbon footprint, we must redouble our efforts to help farmers do their important work sustainably.

“We are excited to work with Paraway on its net zero pathway, including addressing important methane emission reductions which we hope can be translated to the broader pastoral sector. Paraway’s portfolio of farms is ideally suited to test some of the innovative emission reduction technologies and practice changes for pastoral operations. By adopting the principles of the Methane Pledge, Paraway has shown significant industry leadership in its’ commitment to curb methane emissions.

“Cutting methane and on-farm emissions is vital to ensuring Australian livestock producers are on a level playing field with other big meat producing nations, who are also lifting their focus on emissions.”

The CEFC celebrated its 10th anniversary in August 2022, marking A$10.76 billion of investment commitments across 265 large-scale transactions. It had made A$308 million of investments in natural capital assets, including the latest A$75 million commitment to Macquarie, across 19 transactions.