A Northern Territory station will soon be turning off carbon credits instead of cattle following its sale to RM Williams Agricultural Holdings this week.

The 405,000ha Henbury Station south of Alice Springs has been bought by RM Williams in conjunction with the Federal Government for $13m.

Under the deal the property, which is currently carrying 17,000 cattle, will be destocked and revegetated to generate carbon offset credits. The property will be protected under Australia’s National Reserve system.

Conservation activities will include removing introduced plants to encourage the return of native, carbon-storing plants and to cull feral camels on the property to reduce methane emissions.

Environment minister Tony Burke announced the deal yesterday, which he said established a sustainable basis for carbon farming and long-term biodiversity conservation.

Funding from the Federal Governmnet’s Caring for our Country program is understood to have accounted for two-thirds of the purchase sum.

"This iconic Australian business wants to establish a new model for nature conservation and climate protection, where carbon credits fund ongoing biodiversity management," Mr Burke said.

"Henbury is home to a host of rare and threatened native plants and animals. It forms a vital building block in the Territory Eco-Link conservation corridor from South Australia to the Arafura Sea. The corridor links adjacent reserves and boosts the resilience of the landscape, so that native species have room to adapt to a changing climate.

Managing Director of R.M.Williams Agricultural Holdings David Pearse described the project as 'learning by doing'.

"We're in the business of sustainable agriculture and we see an exciting opportunity in carbon sequestration," Mr Pearse said.

"By actively managing fire, water, weeds and feral animals on this former pastoral property we'll encourage natural revegetation, removing carbon dioxide from the atmosphere and storing carbon in the soil and native plants.

“We'll be creating sustainable habitat and enhancing biodiversity.

"Over the next year we'll be working with respected biodiversity and carbon advisers to establish a rigorous scientific methodology for carbon projects like Henbury.

"The development of the project will help to provide a new model for other farmers to improve their soil and native vegetation, and earn new income. It will also help to create a new model for private sector investment in biodiversity conservation across the landscape."

Member for Lingiari Warren Snowdon said it was terrific that a cattle station in the Northern Territory was central to an innovative carbon farming project.

"Henbury station is home to some very important water courses and watering holes as well as a number of threatened plant and animal species. It's a terrific conservation outcome and a great first step for the Australian Government's Carbon Farming Initiative," Mr Snowdon said.

RM Williams Agricultural Holdings was established by Ken Cowley, owner and chairman of RM Williams,  in May 2009 as a vertically integrated agricultural company focused on developing a portfolio of farming properties and companies. 

In addition to Henbury RM Williams Agricultural Holdings owns Labelle Downs and Welltree Station in the Northern Territory which are used for beef production, a 43,000ha aggregation of organic farming properties known as Mirage Plains near Cunnamulla in South west Queensland, and Australia’s largest organic chicken producing operation on 2400ha at Inglewood in southern Queensland.

At the time of its launch, RM Williams Agricultural Holdings announced that it had partnered with carbon trading company C-Quest Capital to invest in forestry and biofuel plantations and to generate tradeable carbon credits.