RLF AgTech Ltd (ASX: RLF) shares have been getting attention from investors today.
At one stage, the ASX plant nutrition company's shares were up as much as 20% to 20.5 cents.
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Why is this ASX share charging higher?
Investors have been bidding this ASX share higher after it announced a partnership with banking giant Commonwealth Bank of Australia (ASX: CBA).
According to the release, the company has formed a strategic carbon alliance with Australia's largest bank to fund a large-scale soil carbon pilot program and to work together to expand the generation of Australian soil carbon credits in the future at scale.
RLF will sell 50,000 Australian soil carbon credit units (ACCUs) to be generated from a pilot program via a $1 million CBA forward payment agreement.
The bank will also be entitled to purchase additional ACCUs generated from the pilot program at a discount to a rate based on available pricing in the spot market at the time.
The release also notes that CBA, as a provider of banking and financial services to Australian farmers, has agreed to refer potential soil carbon projects that it considers would be suitable for the deployment of the technology for commercialisation.
CBA's Group Executive Institutional Banking and Markets, Andrew Hinchliff, commented:
Our clients tell us financing is the biggest barrier to mobilising carbon credit supply, with capex needed to support the development of emerging carbon sequestration methods and technologies. A thriving carbon market is a significant economic opportunity for Australia and will play a vital role in the path to net zero.
We want to play a leadership role in the development of this market and we look forward to collaborating with Australian innovators to support piloting and scaling carbon projects across the country. We are providing funding to RLF's pilot to support a promising and innovative agriculture technology that has the potential to generate large scale soil carbon.
