• JERA has committed A$25 million to the Silva Carbon Origination Fund, which targets A$250 million in total capital.
• The fund will generate Australian Carbon Credit Units through reforestation, environmental planting and sustainable agriculture projects.
• Credits may help JERA meet decarbonisation targets and compliance obligations under Australia’s Safeguard Mechanism.

JERA has invested A$25 million ($17.5 Million) in one of Australia’s largest nature-based carbon credit funds, linking its regional LNG operations with reforestation, sustainable farming and regulatory compliance.

Japan’s largest power generation company has joined the Silva Carbon Origination Fund, which plans to raise A$250 million. The fund has already secured A$100 million from its foundation investors.

Silva Capital, a joint venture between Roc Partners and C6 Investment Management, will manage the fund. It will develop agricultural and environmental planting projects that generate Australian Carbon Credit Units, known as ACCUs.

The investment gives JERA access to a potential supply of domestic carbon credits. These could support its efforts to reduce and offset emissions from Australian LNG projects.

Carbon projects linked to working farmland

The fund plans to restore forests on previously cleared land while allowing agricultural activity to continue. Projects will include native environmental plantings designed to capture carbon, improve soil quality and support biodiversity.

Rather than removing land entirely from production, Silva Capital intends to combine carbon sequestration with sustainable farming. That structure aims to protect rural productivity while creating credits for companies facing climate targets or regulatory obligations.

JERA Australia CEO and Managing Director Gaku Takagi said the fund’s approach was central to the company’s investment decision. “The combination of ongoing farming activities with habitat and biodiversity restoration benefits both local communities and companies like JERA, which are committed to responsible carbon abatement and robust carbon credit methodologies,” he said.

“Silva Capital’s aim to balance agricultural productivity with environmental stewardship is a model that supports both economic and ecological sustainability.”

JERA produces about 30% of Japan’s electricity and ranks among the world’s largest buyers of liquefied natural gas. It has participated in Australian LNG developments through JERA Australia and related companies.

The company has also committed to achieving net-zero emissions by 2050. It expects ACCUs generated by the fund to complement direct emissions reductions across its Australian assets.

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Safeguard Mechanism raises compliance pressure

The investment also carries a regulatory dimension. Australia’s Safeguard Mechanism requires large industrial facilities to reduce emissions against declining baseline levels.

Covered facilities can meet their obligations through operational emissions reductions, approved crediting mechanisms and the surrender of eligible ACCUs. For LNG investors, the framework places greater financial value on securing credible abatement options.

JERA said the credits could help it meet obligations to joint venture partners operating under the mechanism. The investment therefore supports both its corporate climate strategy and its exposure to Australian carbon regulation.

For executives and investors, the deal reflects a broader shift in carbon procurement. Companies are increasingly seeking earlier access to project pipelines rather than relying only on credits available in secondary markets.

Fund targets high-integrity credit supply

Silva Capital Co-Managing Director Raphael Wood said JERA would join a group of investors backing large-scale nature-based projects. “The Silva Carbon Origination Fund provides benefits to local communities and to investors and as the Fund manager, we welcome the involvement of JERA as Japan’s biggest energy company and a global player in the LNG sectors,” he said. “JERA joins other quality partners in projects that will reintroduce forests on cleared lands, incorporating a diverse range of native plant species, and designed to maintain the agricultural productivity of the land which enables concurrent agricultural activities without compromising environmental goals.”

The integrity of land-based credits remains a central concern for carbon markets. Investors must assess additionality, permanence, measurement standards and the treatment of local communities.

Silva Capital said community engagement would guide project development and determine how landholders participate in the fund’s activities.

“Our goal is mutually beneficial outcomes,” he said. “Integrating sustainable agriculture with carbon sequestration can be successful for both the local communities we operate in, and the companies that choose to invest in the creation of high integrity carbon credits.”

JERA’s participation connects Australia’s carbon market with the decarbonisation strategy of a major Asian energy company. It also illustrates how national climate regulation is shaping capital allocation across LNG, agriculture and land restoration.

As Safeguard Mechanism baselines decline, demand for credible Australian credits is likely to remain strategically important. The challenge will be proving that nature-based projects deliver lasting carbon reductions without weakening food production, biodiversity outcomes or community trust.