Japanese shipping major Nippon Yusen Kaisha (NYK), in partnership with compatriot trading house Mitsubishi Corp, has invested in Australian Integrated Carbon (AIC), an Australian company that sells carbon credits obtained through primeval forest restoration projects.
The investment is part of NYK’s move to reduce greenhouse gas (GHG) emissions from ships by utilising the carbon offset method, which involves participating in projects that reduce and absorb emissions elsewhere or by purchasing carbon credits.
“With this capital participation as a foothold, NYK will acquire knowledge of the carbon credit creation business and aim to expand its business in Australia and also expand the project to other regions such as the United States,” the company said in a statement.
While the financial details of the transaction were not disclosed, earlier this year, AIC announced that Mitsubishi Corp had acquired a 40% stake.
AIC sells the credits that are obtained through CO2-sequestrations achieved in the regrowth of Australia’s native forests through a process called human-induced regeneration. It employs new land-management practices to facilitate the regeneration of native woodlands that have been lost over the past few centuries due to cutting down and overgrazing.
The company aims to capture global CO2 emissions by 100m tons through its portfolio in the future. The carbon credits can then be monetised through the Australian government’s Carbon Farming Initiative (CFI).
Since 2015, the Australian government contributed over A$4.5bn ($3.25bn) to establish the country’s carbon credit auction market, the size of which had reached 16m CO2 tons by 2020 and is today one of the largest in the world.