Mitsui & Co said on Thursday it has agreed to buy a 33.7% stake in a rapidly growing Australian company that works with farmers, indigenous land owners and conservation groups to manage carbon.
Climate Friendly, majority-owned by private equity firm Adamantem Capital, generates carbon credits from projects that regenerate vegetation or improve soil health.
Climate Friendly and Mitsui declined to comment on the price Mitsui paid.
Mitsui’s acquisition adds to last year’s purchase of the Australian unit of carbon farming company Outback Carbon to generate offsets for its emissions in Australia.
“Australia is one of the most important countries for Mitsui business, and we will proactively work to reduce the GHG (greenhouse gas) footprint of our group companies as part of our decarbonisation strategy,” Mitsui said in a statement.
Climate Friendly company stored 20 million tonnes of carbon as of 2020, making it one of the largest carbon farming project service providers in Australia.
‘Integrated Farming’ Method
“We are looking forward to accelerating our impact, including through our new integrated farming method, and scaling up rapidly in this critical climate decade to deliver on our carbon abatement target of 100 million tonnes by 2025,” Climate Friendly co-chief executive Skye Glenday said.
When Adamantem bought its majority stake in Climate Friendly last year, a media report said it paid more than A$100 million ($69 million).
Projects that Climate Friendly works on generate Australian Carbon Credit Units (ACCUs), which are in demand from companies seeking to buy offsets for their carbon emissions.
ACCU prices hit a record high of around A$57 a tonne ($39 a tonne) in January but have slumped 50% since March, when the government announced a change in policy allowing millions of carbon credits that were due to be bought by a government fund to be sold instead on the private market.
- Reuters, with additional editing by George Russell