Commonwealth Bank of Australia Supports Innovation in Soil Carbon Sequestration

Australian lender the Commonwealth Bank of Australia (CBA), has entered a strategic alliance with plant nutrition company RLF AgTech, financing an innovative pilot program that aims to generate soil carbon credits.

The transaction is the latest move in the bank’s strategy to accelerate the development of high-quality Australian carbon credits.

RLF AgTech, a specialist in plant nutrition, has launched a soil carbon pilot program with Australian farmers who will utilise its Accumulating Carbon in Soil System (ACSS) technology. The pilot aims to demonstrate that ACSS increases soil carbon sequestration and generates Australian Carbon Credit Units (ACCUs).

Each ACCU represents one tonne of carbon dioxide equivalent stored or avoided and is registered with the Clean Energy Regulator.

Through the strategic alliance, CBA has pre-paid for the first ACCUs generated by this pilot program. The funding RLF has received from CBA will assist participating agribusiness operators with the upfront costs associated with registering and managing the carbon projects.

CBA and RLF will also seek to collaborate on further soil carbon opportunities with the aim of boosting the supply of high-quality carbon credits in the Australian and international carbon markets.

“It will take innovation and collaboration to overcome the challenge of climate change. As the nation’s largest bank, we have a role to play to support leading thinkers with the important work of commercialising that innovation, particularly when it comes to carbon markets,” said Andrew Hinchliff, Group Executive, Institutional Banking and Markets at CBA.

“Our clients tell us financing is the biggest barrier to mobilising carbon credit supply, with capex needed to support the development of emerging carbon sequestration methods and technologies. A thriving carbon market is a significant economic opportunity for Australia and will play a vital role in the path to net zero. We want to play a leadership role in the development of this market and we look forward to collaborating with other Australian innovators to support piloting and scaling carbon projects across the country,” he added.

RLF AgTech’s pilot program will span 5,000 hectares of prime Australian farming land and represents a major step in the development of its strategy to monetise the generation of ACCUs at scale in the 23 million hectares Australian grain market.

RLF AgTech Chief Executive Officer Ken Hancock said that the team is excited to be working with CBA to make the generation of ACCUs at scale a reality.

“Because soils have such a large storage capacity, holding three times the amount of carbon currently in the atmosphere or almost four times the amount held in living matter, soil carbon has a very important role to play in the world’s journey to net zero,” Hancock said.