A WORLD first project of verified greenhouse gas abatements, involving the purchase of land clearing rights from Queensland farmers, has been completed by Rio Tinto Aluminium with the help of Minter Ellison.
A response to the Federal Government’s ‘Greenhouse Friendly’ initiative, Rio Tinto has persuaded landowners to hand in their native vegetation clearing permits, with the ultimate aim of preserving 30,000 hectares of forest area, and creating 2 million tonnes of emission abatement.
Lawyers from Minters’ Brisbane office advised on the ‘Minding the Carbon Store’ project, led by partner Allison Warburton, of the climate change and sustainability practice. She believes the transaction is entirely unique, given that the company is under no legal requirement to undertake the project.
“The credits that Rio Tinto are buying don’t have any statutory basis. They are not required under a statutory scheme, they are not recognised in law as such — Rio is really taking the initiative here, to buy credits, which are a bundle of contractual rights at this stage,” Warburton said.
The clearing permits granted to the landowners were to expire this year, and so the native vegetation would have removed, had Rio Tinto not offered to buy them in partnership with project manager The Carbon Pool Pty Ltd.
Warburton said that although Queensland legislation provides for the carbon rights to be registered, it was the first time a company had taken on the risk of buying carbon credits it was not compelled to buy, and which have no specific monetary value in Australia. At the initial stage, Rio Tinto’s project has avoided the release of 1 million tonnes of greenhouse gases by sparing 13,000 hectares of native vegetation.
Assisted by senior associate Justin Grove and lawyer Nick Sayeg, Warburton provided advice on securing the carbon abatement rights, negotiating the sale transaction and ensuring the long-term management of the project so that emissions are effectively managed.
The project manager is The Carbon Pool Pty Ltd, which has contracted with the landowners, and will on-sell ‘carbon rights’ to energy intensive industries looking to reduce their emissions. Director Mark Jackson said the project has a buffer of 20 per cent of abatements to cover losses, such as drought, fire and pests.