TOKYO -- Mitsui & Co. is expanding its forest-related business in Australia with an investment in a local company that offers carbon farming services.

Using its knowledge gained through forest management and fertilizer sales in Japan for over half a century, the country's leading trading house hopes to speed up its decarbonization business by raising trees in Australia.

At an investment company in Sydney in February, Kensuke Suda of Mitsui's carbon solutions office emphasized to executives of Climate Friendly, an Australian consultancy that creates and sells carbon dioxide (CO2) credits, that Mitsui has a special agricultural unit and can contribute to land improvement and fertilizer optimization.

The negotiations led to an agreement under which Mitsui will acquire a 33.7% stake in Climate Friendly, possibly in June.

Climate Friendly advises farmers on land management, such as selecting grazing areas for cows, and restores forests in order to create and sell CO2 credits on behalf of farmers. In return, it receives commissions and part of the credits.

Managing a total of 10 million hectares of farmland for 130 farmers, Climate Friendly is the "world's largest operator" in the business, Suda said.

Mitsui is Japan's fourth-biggest private owner of forests. In Australia, it has been involved in the forest business for paper and pulp companies, building material makers and others for more than 25 years. It also uses its experience in areas such as land improvement through afforestation, fertilzer usage and carbon-credit measurement to drive its decarbonatization business.

In addition to the investment, Mitsui will support Climate Friendly's business of reviving primary forests. The two companies plan to create carbon credits equivalent to more than 70 million tons between 2022 and 2025 -- four times more than Australia created in 2021.

Under the Australian Carbon Credit Units system, the reduction of carbon emissions, achieved by means other than those by businesses on their own, are also treated as credits. These reductions are roughly divided into two categories: the natural regeneration of forests and prevention of wildfires; and improving energy efficiency at factories and other facilities.

Mitsui is targeting the first category, as those credits trade at prices about 10% higher than those from the second category in Australia.

In Australia, one ton of credits trades for about 60 Australian dollars ($42.14) compared with the equivalent of AU$100 in Europe. "There remains room for rises in trading prices in Australia," Suda said.

Mitsui also decided to buy more shares in New Forests -- the world's second-largest forest asset management company in which Mitsui first invested in 2016 -- after which it will become the biggest shareholder with a 49% stake.

Through their joint investment in a forest carbon-credit fund, Mitsui will acquire credits while selling lumber.

The Australian government has set up a fund of AU$4.55 billion to buy carbon credits from private companies as part of ongoing efforts aimed at accelerating decarbonization.