Canada’s La Caisse and the Clean Energy Finance Corporation (CEFC) have launched a new platform, Meldora, to generate accredited carbon credits, while reshaping the role of agriculture and timberland in institutional portfolios.
La Caisse has committed $200 million to the $250 million Meldora platform, with CEFC providing the remaining $50 million. Meldora’s first purchase is a 15,000-hectare broadacre and irrigation farm in Central Queensland, earmarked for sustainable agriculture and carbon production under the federal government’s Environmental Plantings methodology, part of the Australian Carbon Credit Units (ACCUs) scheme. The project is managed by Gunn Agriculture Partners (GAP).
Mining giant Rio Tinto has agreed to purchase the platform’s carbon credits, making it Meldora’s foundation offtaker. For Rio, this adds to its growing portfolio of carbon commitments, following its investment last year in the Silva Carbon Origination Fund – a joint venture with Roc Partners and C6 Investment that also counts Qantas and BHP as founding investors. Both initiatives reflect a rising corporate demand for high-quality ACCUs.
Both managers are to undertake environmental plantings, requiring native vegetation to be planted and maintained to sequester carbon, which is then used to generate ACCUs.
Corporates As a New Source of Capital
Corporates are becoming increasingly sophisticated buyers, Heechung Sung, Head of Natural Capital at CEFC, told [i3] Insights. “Businesses like Rio Tinto have dedicated teams looking closely at underlying projects. They are interested in pre-contracted credits to control price, volume, and integrity,” she said.
This is not CEFC’s first involvement with a corporate investor.
To invest in the production of high-integrity carbon projects, you require heavy capital expenditure
“We did a deal three years ago with Goodman Group, which is not your typical high-emitting company, but one that is certainly very focused on decarbonisation,” she said.
CEFC and Goodman invested in the Wyuna Regenerative Agriculture Investment Fund to help the global logistics landlord and developer mitigate the impact of the built environment.
“Corporates are a new source of capital that can be tapped. To invest in the production of high-integrity carbon projects, you require heavy capital expenditure,” she says.
Meeting Net Zero Obligations
These vehicles are also providing an avenue for institutional investors, such as pension funds, to meet their net zero obligations while generating returns.
“Teaming up once again with the CEFC and GAP – and with Rio Tinto as a foundation offtaker – reinforces our confidence in this platform’s ability to scale,” Emmanuel Jaclot, Executive Vice-President and Head of Infrastructure at La Caisse, said.
“It reflects our commitment to sustainable land use and our broader net zero ambition, as we position ourselves early in a growing market for high-quality carbon credits.”
By adopting an integrated sustainable land management model, this strategy can produce high-quality agricultural commodities while also increasing biodiversity, improving ecosystems, and earning carbon revenues through investment in native landscape restoration
Sung adds: “This initiative represents a long-term investment in nature and land-based strategies in Australian agriculture. By adopting an integrated sustainable land management model, this strategy can produce high-quality agricultural commodities while also increasing biodiversity, improving ecosystems, and earning carbon revenues through investment in native landscape restoration.”
She says sustainable agricultural practices across Australian farmland pave the way for a more resilient future with better environmental outcomes. By utilising a high-integrity method – environmental plantings – that also supports biodiversity, these carbon credits have the potential to command a premium in the market.
While carbon credits are now an established product in the world of ecosystem services, Sung notes that other emerging products include biodiversity offsets and nature repair credits. However, markets for these products will take time to establish.
Facing Hurdles and the New Nature Repair Act
In Australia, one hurdle is the lack of a single regime for biodiversity offsets. The states run their own schemes. For instance, NSW has a longstanding program that requires developers to provide a one-off offset for individual projects. These state-based systems do not lend themselves to creating a genuine marketplace for biodiversity offsets.
The federal government’s new Nature Repair Act 2023, however, has the potential to eventually replicate the ACCUs market. The legislation aims to introduce what is believed to be the world’s first national, voluntary biodiversity market. The scheme will enable tradable biodiversity certificates, allowing organisations and individuals to fund projects that restore or protect nature.
Sung says one of CEFC’s investments in NSW, managed by Gunn Agriculture and registered as an environmental plantation carbon project, is also registered under the Nature Repair Scheme. “It will be interesting to see how the market responds, where price differentiation exists, and how biodiversity certificates can be valued.”
But she stresses: “It’s super early days. We are participating where we can, particularly where there is an emissions angle, because CEFC’s mandate is to invest in low-emissions technologies and energy efficiencies. Whilst we have an eye on biodiversity and nature repair markets, we view them as closely linked to climate action and decarbonisation.”
Early Days for Nature Repair and Biodiversity Markets
For decades, investors treated farmland and timberland primarily as commodity plays – grain, beef, cotton, or timber logging. Today, new layers of value are being added, including carbon sequestration, biodiversity markets, and landscape restoration.
Sung says Australia’s vast landscapes are particularly well suited to this model. Large farms, often undercapitalised, can be aggregated and reconfigured to generate new revenue streams. Many farming assets have been underutilised and under-invested. “There are opportunities to aggregate farming assets and reimagine their use to tap into different markets and not just focus on commodity production.”
Water efficiency, carbon, biodiversity, and traditional crops can coexist, creating diversified cash flows while enhancing climate resilience.
Meldora itself is not producing timber for harvest but restoring land with native species under the environmental plantings methodology.
The broader nature repair and biodiversity space is still a developing market, but that’s no reason not to participate. It’s like where infrastructure assets were 20 or 30 years ago. Then, no one really understood the asset class, but the early movers gained a lot of advantage
“These trees are designed to restore landscapes and resilience, not to be logged,” Sung says.
“You can de-risk the investment so it’s not just a pure play on carbon credits. Income will come from both agricultural production and the sale of carbon credits. It is a very different strategy from plantation forestry, but it reflects where the market is heading.
“The broader nature repair and biodiversity space is still a developing market, but that’s no reason not to participate. It’s like where infrastructure assets were 20 or 30 years ago. Then, no one really understood the asset class, but the early movers gained a lot of advantage,” she said.
Investors are starting to understand that agriculture and timberland are no longer one-dimensional assets. They are evolving into platforms that generate value through food, fibre, carbon, biodiversity, water, and nature repair. The Meldora platform demonstrates how some of these multiple strands can be woven together in practice.
As the market matures, first movers – corporates and investors alike – are positioning themselves to capture the emerging premium on natural capital.
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[i3] Insights is the official educational bulletin of the Investment Innovation Institute [i3]. It covers major trends and innovations in institutional investing, providing independent and thought-provoking content about pension funds, insurance companies and sovereign wealth funds across the globe.