NYK to invest in Australian Integrated Carbon

Japanese shipping major NYK has decided to invest in Australian Integrated Carbon (AIC), an Australian company that sells carbon credits obtained through primeval forest restoration projects.

Once the relevant authorities approve the deal, NYK will jointly invest in AIC with compatriot trading company Mitsubishi Corporation through Japan Integrated Carbon (JIC), an intermediate holding company established by them.

The investment amount has not been disclosed.

In order to reduce greenhouse gas (GHG) emissions from ships to zero, the shipping industry is now shifting from the use of heavy oil fuel to liquefied natural gas (LNG) fuel, and additionally, the R&D is progressing toward future zero-emission fuels such as hydrogen and ammonia.

On the other hand, since ships have a long life cycle of about 20 years, it is expected that some ships among more than 50,000 ships worldwide will be forced to use fossil fuels during the transition to zero-emission fuels even after the prospect of practical use of them.

For vessels that have not yet introduced zero-emission fuel in the future, it is expected that their GHG emissions will be reduced to net zero by utilizing the carbon offset method.

Under these assumptions, NYK will invest in and participate in AIC as it is considered to make it possible to realize ESG management through acquisition of the experience and know-how of the carbon credit creation business and supporting the net zeroization of GHG emissions of ships all over the world.

AIC sells the credits that are obtained through CO2-sequestrations achieved in the regrowth of Australia’s native forests through a process called human-induced regeneration. Human-induced regeneration is a methodology established in Australia. It employs new land-management practices to facilitate the regeneration of native woodlands that have been lost over the past few centuries due to cutting down and overgrazing.

The amount of CO2 stored in the regenerated forests is officially certified as Australian Carbon Credit Units by the Australian Government. AIC aims to capture global CO2 emissions by 100 million tons through its growing portfolio in the future.

With this capital participation as a foothold, NYK aims to acquire knowledge of the carbon credit creation business and aim to expand its business in Australia and also expand the project to other regions such as the United States. The investment is part of the company’s sustainability strategy which aims to integrate ESG into NYK’s management strategy and promotes activities that contribute to the achievement of the Sustainable Development Goals through business activities. 

In July this year, Mitsubishi Corporation also revealed the acquisition of a 40 per cent interest in AIC. With this move, the company said it wants to support forest-regeneration and other large-scale, CO2 sequestration projects that are dedicated to the decarbonization of our planet.