Qantas, Australia’s national carrier, is making a significant investment in a carbon credits fund managed by Silva Capital. The fund aims to raise $250 million to manage Australian Carbon Credit Units produced through land reforestation projects. Qantas, along with mining giants BHP and Rio Tinto, will be founding investors in this initiative. By investing in this fund, Qantas is not only meeting its compliance obligations but also working towards achieving its climate targets.
The fund, developed by Silva Capital, focuses on acquiring or leasing agricultural land in Australia to secure carbon credits. This investment will not only help Qantas but also have social and economic benefits for local communities. It will also contribute to the scale-up of high-quality, nature-based carbon credits in the Australian market.
Qantas will fund its share of the project through its $400 million Climate Fund, which was announced in May 2023. Chief Sustainability Officer Andrew Parker stated that this investment will help Qantas shape the development of the overall industry and increase its carbon market strategy. He emphasized that high-integrity carbon offsets are crucial for hard-to-abate sectors like aviation and that partnerships across industries are necessary to enhance the availability of such credits.
Silva Capital’s projects are designed to complement and enhance farming activities. The fund will focus on developing mixed-use agricultural and environmental projects in Australia to generate carbon credit units at scale. Carbon market participants and financial investors will have the opportunity to participate in the fund to gain access to carbon credits and attractive financial returns.
Qantas has been at the forefront of climate change initiatives in the aviation industry. It was one of the first airlines to commit to net zero emissions by 2050 and aims to reduce carbon emissions by 25 percent of 2019 levels by 2030. The airline has already achieved a 20 percent reduction in emissions. Qantas also plans to have 10 percent of its fuel mix comprised of Sustainable Aviation Fuel (SAF) by 2030, rising to 60 percent by 2050.
Qantas CEO Vanessa Hudson acknowledged that aviation is a challenging sector to decarbonize and emphasized the need for partnerships across industries to address this issue. Competitor Virgin Airlines is also making efforts to reduce emissions, aiming for a 22 percent reduction by 2030 and net zero emissions by 2050. Virgin Australia’s fleet renewal program, which includes 35 new Boeing 737 aircraft, will contribute to emissions reductions per seat per trip.
In contrast, Air New Zealand has recently removed its 2030 emissions reduction target and withdrawn from the U.N.-backed Science Based Targets initiative. The airline cited challenges such as the availability of new aircraft, affordability and availability of alternative jet fuels, and regulatory and policy support as reasons for this decision.
Overall, Qantas’ investment in the carbon credits fund managed by Silva Capital demonstrates its commitment to sustainability and climate action. By participating in such initiatives, the aviation industry can make significant progress towards reducing its carbon footprint and achieving its climate targets.
