Carbon Conscious readies to start planting trees

THE BOURSE WHISPERER: Carbon offset company Carbon Conscious told the market that Origin has recommitted to an original agreement with Carbon Conscious from 2009.

The exercise is Australia’s first major carbon bio-sequestration investment since the passing of the Clean Energy Act 2011.

Under the transaction, Origin has committed to:

–    Exercising the 2012 component of the commercial forestry options granted to Origin in the 2009 Carbon Plantation Agreement; and

–    To bring forward the 2013 contract plantings into the 2012 planting season.

As a result, Carbon Conscious will plant approximately 10 million native Mallee Eucalypt trees in the wheatbelt region of Western Australia in the 2012 planting season, which in turn represents a fivefold increase on the previously anticipated planting for 2012.

Origin retains approximately $163 million worth of commercial forestry options, which can be exercised for the forthcoming three planting seasons (2013–2015).

According to the Carbon Conscious announcement the two parties anticipate further discussion around the balance of the options in the near future.

“We are very pleased that Origin has continued its support for Carbon Conscious and made this important commitment to secure capacity in our Australian Mallee Eucalypt project,” Carbon Conscious executive chairman Stephen Lowe said in the company’s announcement to the Australian Securities Exchange.

“Carbon Conscious is excited to lead the charge and we anticipate a number of deals to be announced by the industry.

“We have always believed that when carbon pricing became a reality in Australia, Australian business would be eager to invest in carbon abatement projects.

“Carbon forest sinks offer the best opportunity due to proven technology, low project risk and scalability.

“Origin is the first of many Australian companies expected to make substantial investments in carbon bio-sequestration.

“As the industry matures, the size and value of such investments is expected to grow significantly.

“This is a new multi-billion dollar Australian industry in its infancy that will attract substantial investments from Australian and international companies.”

Carbon Conscious said the Clean Energy Act provides a clear carbon pricing mechanism for Australia’s largest carbon emitters to purchase carbon credits on an open and transparent market.

 “As we develop sustainable recurrent earnings from our carbon forestry contracts, we expect to develop a highly profitable business that will continue to grow rapidly over the coming decade,” Lowe said.

“Based on the volume of new business enquiries we have received from Australian companies over the past weeks, we anticipate solid growth over the coming years.”

Carbon Conscious operates plantation forests in Australia’s wheatbelt region and in New Zealand, utilising low productivity or degraded farm land in low rainfall areas to plant native tree species.