Although methane only stays in the atmosphere for roughly 12 years while carbon dioxide hangs around for up to 1,000 years, it is 25 times more potent and must also be priced.
The two European pensions have acquired a controlling stake in Wenita Forest Products, with their investments to be managed by Sydney-headquartered New Forests.
The firm has set its sights on two funds that will invest across the UK and Northern Europe, with a further two targeting Australasia and potentially the US, says managing director Olly Hughes.
The asset class has seen a flurry of fund launch activity as its uncorrelated credentials and inherent sustainability chime with new and returning investors.
A third of the fund’s returns will be derived from carbon credit sales marketed in New Zealand’s internal marketplace which is not open to foreign purchasers or credits.
The firm’s first regional Australia-New Zealand fund will convert from a 10-year closed-end fund in a move that could be replicated in its other funds.
Rabobank’s Global Dairy Quarterly finds upwards price growth in late 2019 stalled early this year, with the uncertainty over covid-19 leading to investors scrambling to assess the impact.