Australia's green bank has joined forces with a Canadian pension fund to reduce the carbon footprint of farming.
The Clean Energy Finance Corporation (CEFC) will invest $50 million in Wilga Farming, an agriculture investment vehicle for sustainable farming and carbon sequestration.
Alongside the global investment group CDPQ, a total of $200 million will bankroll Wilga to help reduce greenhouse gas emissions and improve productivity in the high-emitting sector.
The first asset purchased by Wilga is The Glen, a 1200-hectare property near Delungra in northern NSW, where farmers will reduce synthetic fertiliser use and improve irrigation, grazing, and soil carbon management.
"Bringing down on-farm costs through efficient energy, fertiliser and water use is good for business, while also being good for the environment," Minister for Agriculture Murray Watt said on Thursday.
Wilga will be managed by Gunn Agri Partners, an Australian fund manager and land operator focused on sustainable farm management.
Agriculture is responsible for more than 15 per cent of Australia's greenhouse gas emissions.
With methane emissions and fertiliser use the main contributors to its carbon footprint, the agriculture sector needs to do more than switch from diesel to renewable energy generation.
CEFC head of natural capital Heechung Sung said there was "enormous untapped potential" for new investment in sustainable agriculture as part of a net zero economy.
"The long-term impact of climate change on the agriculture sector and its critical role in food and fibre production is an important problem to tackle in a world that needs to rapidly decarbonise," Ms Sung said.
Supporting regenerative farming methods and improved land management techniques also leads to broader "nature-positive" outcomes, she said.
CDPQ and the CEFC have also taken a minority stake in Gunn, enabling them to influence decarbonisation efforts across its $750 million portfolio.
