Plantation forests deliver growing future in carbon abatement
Natural capital resources harnessed for net zero transition
The Australia New Zealand Landscapes and Forestry Fund managed by New Forests supports the development of plantations and harnesses the power of natural capital to drive down emissions through carbon sequestration. The plantations have the potential to support the growth of the carbon credit market in Australia.
$600 million
low carbon fund
Forestry first
for CEFC
Unlocking
carbon credits
Investors globally are now thinking about the role of forestry, agriculture and land use transition in not only delivering returns, but reducing emissions, contributing to conservation, and the circular bioeconomy. We believe there is no credible pathway to net zero without investment in the forestry and land use sectors, and we are pleased both new and existing investors are taking an important step in continuing the transition to a sustainable future.David SheltonManaging Director Australia and New Zealand, New Forests
Our investment
The first CEFC investment in the forestry sector is $75 million equity in the Australia New Zealand Landscapes and Forestry Fund.
The landmark investment targets one million tonnes of carbon abatement over 10 years, through harnessing the power of Australia’s natural capital to drive down emissions through sequestration.
New Forests, a global investment manager of nature-based real assets and natural capital strategies, will manage the Fund. The underlying plantations will have the potential to generate revenue through Australian Carbon Credit Units, supporting the growing carbon credit market in Australia.
The CEFC investment is part of a $600 million equity raise that also includes German pension fund Bayerische Versorgungskammer (BVK), and one of northern Europe’s largest pension funds, Andra AP-fonden (AP2).
our impact
Forestry’s role in a net zero future
Natural capital assets offer significant opportunities to contribute to the decarbonisation pathway for Australia and to build competitive new industries for a net zero future. These outcomes require a long-term investment focus.
As we all transition to a low carbon future, the plantation forestry industry has an important role to play in the transition, by reducing its own operating emissions while also generating high integrity carbon credits which can be used by industry and high emitters to offset their carbon footprint.Heechung SungHead of Natural Capital, CEFC
Fund plantations support higher carbon abatement potential
The Fund will support the development of new plantations and the conversion of existing hardwood plantations to softwood plantations, where the longer rotation periods have higher carbon abatement potential. It will also invest in agriculture and downstream timber processing opportunities, with the majority of assets located in Australia. The Fund will not harvest native forests and will ensure that all its forestry operations are compliant with the highest globally recognised sustainability standards.
Ambitious sustainability measures
As part of its investment commitment, the CEFC has spurred the inclusion of ambitious sustainability measures by the Fund to demonstrate decarbonisation strategies at scale. These include:
- Targeting investment in new greenfield plantations in Australia to further support carbon abatement activity
- Transitioning vehicles and farm machinery to electric or renewable fuels
- Working with suppliers to achieve Scope 3 emissions reduction
- Ongoing engagement to trial and promote emerging technologies to reduce emissions intensity in the sector.
