THE new frontier of Australia’s carbon market is likely to be tested following the decision to market two extensive Northern Territory grazing properties with significant approved carbon projects.
After being sold in September 2022 in a separate land and cattle deal worth a combined $175 million (on a walk-in walk-out basis involving around 50,000 head of Brahman cattle), Maryfield Station and Limbunya Station have unexpectedly returned to the market through LAWD.
Back then, Sam Mitchell from Sydney-based Wealthcheck purchased the land component, while Garry Edwards from Brisbane-based AAM Investments secured the cattle. Since then, AAM has been operating the business under a lease arrangement.
While Mr Mitchell would not confirm whether he had purchased the stations for carbon potential at the time of the sale, this week’s listing confirms the carbon opportunity on both Maryfield and Limbunya was the drawcard.
The latest listing is one of the first and most significant attempts at testing demand for carbon credit-producing land after the Federal Government last year changed the ‘safeguard mechanism’ – the main law that drives demand for credits.
In line with its more ambitious emissions reduction targets, the Labor Government’s amended legislation is expected to significantly increase demand for credits towards the end of the decade.
During his brief ownership, Mr Mitchell has gained approval for a significant Human Induced Regeneration of a Permanent Ever-Aged Native Forest (HIR) carbon project across both assets.
This methodology applies to projects that store carbon by regenerating native forest using one or more eligible activities on land where regrowth of native forest has been suppressed for at least ten years.
These activities include:
- Excluding livestock and taking reasonable steps to ensure livestock are excluded
- Managing the timing and extent of grazing
- Managing feral animals in a humane manner
- Managing plants that are not native to the project area
- Implementing a decision to permanently cease mechanical or chemical destruction, or suppression, of native regrowth.
The sale of Maryfield and Limbunya are expected to whet the appetite of ‘big-emitting’ companies seeking greater exposure, with millions of tonnes of ACCUs likely to be available.
Maryfield is estimated to generate 4.6 million Australian Carbon Credit Units over a 25 year crediting period, with a 100 year permanency period.
Limbunya is forecast to generate 5.8 million ACCUs over the same time frame.
LAWD director Danny Thomas and said Maryfield and Limbunya were ‘not the properties that Sam Mitchell purchased’ back in 2022.
“The listing is a first, and we are certainly pioneering here. With the carbon approval in place, I am anticipating being pleasantly surprised about just how broad the market is,” Mr Thomas said.
One of the critical aspects about taking the land component back to the market was that the stations have a long-term lease.
“The land is being well-stewarded, so there is no exposure for an incoming purchaser to find a grazing solution. It would just be a pure play by a financial investor, driven principally by access to the ACCUs, to secure the land,” Mr Thomas said.
Interested parties are likely to consider one of three number options:
- Secure the land component only (which means Sam Mitchell will retain the carbon project)
- Purchase the carbon project (which means Sam Mitchell will retain the land)
- Buy both the land and carbon project
Maryfield and Limbunya will be offered for separate sale by expressions of interest closing on April 11, with LAWD agents Danny Thomas, Olivia Thompson and Erica Semmens handling the process.