04 Mar 2022
As part of ANZ’s environmental sustainability strategy we are looking at ways to better support our customers and the community in the transition to net zero.
A new project in Western Australia’s vast Wheatbelt region is one of the many ways we are proactively playing our part.
“The immensely productive Wheatbelt region is exposed to the growing challenges of climate change and land degradation risks.”
The project concept, initiated by ANZ, looks to integrate native reforestation and carbon farming with the production of biomass for renewable biofuels. We partnered with INPEX, one of Japan’s major energy companies and long term investor in Australia, for the initial prefeasibility study. And we are thrilled to be also joining forces with Qantas to take this project forward.
Close engagement and long-term partnerships with landowners and the community in the Wheatbelt are at the very heart of this project. Western Australia’s Wheatbelt region is home to more than 3,000 predominantly private family-owned broadacre cropping and pasture operations.
This immensely productive region is however exposed to the growing challenges of climate change and land degradation risks - including the impacts of salinity, soil erosion and soil acidification.
Over the last year, the team has been working hard to consider the lessons learned from the past and the challenges likely to emerge across the Wheatbelt in the future. Leveraging more than two decades of world-class research, we have developed a project execution plan that tailors a selection of specific native planting activities to enrich different Wheatbelt landscapes.
Under this model, native reforestation for the purposes of carbon farming will be applied to marginal-to-low yielding land. Additional feasibility work will be undertaken to assess native biomass crops, such as Mallee Eucalypts, for the production of renewable biofuels.
This approach provides an opportunity for landowners to benefit from more drought-resilient cash crops, diversifying farm incomes and reducing the volatility of crop yields and cashflows. It will also provide direct exposure to the rapidly growing carbon and renewable biofuels markets while supporting scalability.
Scale is vital for the establishment of a globally competitive business for the sponsors and landowners and importantly for achieving impactful environmental outcomes.
Now we fully understand there are, very real, concerns around what is known as “green washing” and the credibility of some markets in the sustainable finance sector.
We are listening to feedback – and criticism - from across the market and we are committed to ensuring this project is both credible and comprehensive to help build confidence in the carbon market.
The integrity of the project is what sets it apart. It will be underpinned by robust and well-established methodologies for translating carbon sequestration into carbon credits.
It will satisfy the rigorous scrutiny this emerging – and vital – sector is under.
With many customers in the Wheatbelt region, we understand and respect their differing needs and wants. For this reason, the project model has been designed to provide landowners with flexibility and different options for participation, depending on their landscapes, farming systems, financial position, stage of life, personal preference and risk appetite.
But what is consistent is that the model has been developed to minimise the landowner’s direct financial risk. Whether it be development funding, project execution or operational risks – these risks will be borne by the project sponsors. In addition, farm owners will still own the land.
We expect the benefits of this project to move beyond the farmgate and will also support Wheatbelt farming communities with local employment and regional infrastructure investments and improvements. While it’s only early days for this project, it’s evident the potential is incredible.
While we’re still in early days, this Memorandum of Understanding gives us the opportunity to take this project forward. We are looking at feasibility studies into harvesting the biomass and, ultimately, the production of biofuels. These are examples of the kind of innovation that is possible as we move towards a net zero carbon emissions world.
However, we genuinely believe this first phase of the project will have benefits for our customers and shareholders - while meeting the needs of the landowner, community and the environment.
Shayne Elliott is CEO of ANZ
The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.
04 Mar 2022
09 Feb 2022