TOKYO -- Japanese trading house Mitsubishi is entering Australia's carbon emissions trading market through a local specialist that helps farmers turn grazing land back into native forests, looking for lessons it can apply in North America.
The Tokyo-based company has acquired a 40% stake in Australian Integrated Carbon for an undisclosed sum, becoming the top shareholder.
AI Carbon provides guidance to livestock farmers, showing them how to regrow native vegetation lost due to deforestation or excessive grazing. Improvement techniques include fencing off an area and managing herding. Regrowth of native vegetation requires less expense than revegetation.
The company analyzes satellite images and estimates carbon absorption volumes chiefly using tree evaluation. Regenerated plants will be deemed to have reduced atmospheric carbon dioxide, and carbon credits approved by the Australian government will be sold.
Australia formed a scheme for purchasing carbon credits in 2015 to meet the climate goals of the Paris Agreement. Credits worth 16 million tons of emissions are traded yearly, with projects protecting plants accounting for 80%. AI Carbon expects sales to private-sector businesses to increase. Proceeds from carbon credit sales are shared with farmers, giving them a more reliable income source.
Mitsubishi aims to tap AI Carbon's know-how and launch a similar service in areas of North America where carbon emissions trading is available.
Founded in 2016, AI Carbon is one of the newer entrants to the field, which has about a dozen players in the Aussie market. AI Carbon is expanding its network of partner farmers and seeks to help slash an aggregate 100 million tons of emissions by 2050.