The Queensland state government in Australia has committed A$10 million ($6.4 mln) towards purchasing reef credits from two project developers if they can’t find other buyers, in a bid to kickstart the nascent market.
Project developers GreenCollar and Palladium will be able to sell credits to the government for that amount in the case of the private market attracting insufficient demand, the government announced this week.
“The appointment of these organisations marks a significant step in our ongoing efforts to attract investment towards achieving cost effective and verifiable outcomes for the Great Barrier Reef through the reef credit scheme,” Queensland Environment Minister and the Great Barrier Reef Leanne Linard said in a statement.
“The Palaszczuk government is leveraging A$10 million to help support the emerging reef credit market.”
The government guarantee was offered in a bid to provide the developers with the financial certainty they need to initiate projects.
One reef credit represents 1 kilo of dissolved inorganic nitrogen, estimated to equal 538 kilos of sediment prevented from reaching the Great Barrier Reef.
The reef credit scheme is administered by independent environmental market regulator Eco-Markets Australia, which issued the first credits in 2020.
“Reef Credits not only help to improve water quality and protect the Great Barrier Reef, but the market is also providing new ways to value Queensland’s significant natural capital assets,” Linard said.
“I strongly hope these projects will open the door for more organisations and companies to invest in the future of the Great Barrier Reef and encourage landholders to explore opportunities to undertake reef credit projects.”
The government said the two organisations would now help secure new investment and work with landholders to developer new projects on the ground.
Palladium executive officer Bernadette Howlett said the partnership with the state government would reduce the risk in the early phases of the market.
“We see this as an important step in helping to grow this environmentally important market that will result in meaningful outcomes for Queensland landholders and the Great Barrier Reef,” she said.
GreenCollar water general manager Carole Sweatman said the government’s strategic investment in reef credits would build market confidence, noting that some 40,000 reef credits have already been generated by GreenCollar and sold to a mix of investors.
“[The reef credit scheme] is playing an instrumental role in encouraging corporate investment into the Great Barrier Reef, which is vital to supporting Queensland agriculture and improving the health of this vast and vital ecosystem,” she said.
The government said the two organisations were selected after an open procurement process.
Earlier this month GreenCollar and two other companies released a draft methodology to allow landholders to earn reef credits from improving grazing and land management in a bid to boost soil health and improve water quality at the Great Barrier Reef.
Four methods have previously been developed under the scheme, including constructed wetlands, waste water treatment, gully rehabilitation, and managed fertiliser applications.
By Mark Tilly – mark@carbon-pulse.com
** Click here to sign up to our weekly biodiversity newsletter **
