What is going on with emissions reductions targets within Australia’s agricultural supply chain, and how does it affect farmers?
Australia has set a target toward the 2015 Paris climate agreement of 43% emissions reductions by 2030 and, further, net zero by 2050. However, the contribution expected of our agricultural industry toward these goals is unclear.
Agriculture contributes significantly to greenhouse gas emissions. This is due to a combination of methane emitted from animal production, nitrous oxide emitted from fertilizer, waste, and legumes, and carbon dioxide emitted from energy, lime, urea application and fertilizer production.
In response to the Australian Government’s commitment to net zero by 2050, many major organisations in the agri-food supply chain have started the process of reforming toward decarbonisation, and setting their own targets to reduce emissions and even reach net zero themselves. Reporting requirements for greenhouse gases are expected to ramp up post 2030, with potential for significant penalties where net total greenhouse gas emissions fail to be reduced.
From a boots on the ground perspective, my role as NACC NRM’s Sustainable Agriculture Facilitator has provided opportunities for further learning in this area. Recently, I undertook training in the area of Carbon Neutral Agriculture at the University of Melbourne, led by Professor Richard Eckhard of the Primary Industries Climate Challenges Centre. I found a key take away from this course to be that farmers will soon be met with an inundation of encouragement from their agricultural suppliers and buyers to determine and understand their baseline greenhouse gas emission figures on farm.
An essential part of understanding this process is unpacking the three ‘scopes’ or categories of greenhouse gas emissions.
- Scope 1 emissions are direct emissions generated by a business, and includes fossil fuel combustion.
- Scope 2 emissions are indirect emissions that result from purchase of electricity, heat or steam.
- Scope 3 emissions are other indirect emissions that occur in a business’s supply/value chain.
Let’s look at a fertiliser company, for instance.
- Scope 1 emissions are the natural gas burned in the power plant,
- Scope 2 emissions come from the electricity purchased to keep the business running, and
- Scope 3 emissions are a result of the nitrous oxide emitted from fertiliser used in the field, as well as all other emissions that exist both up and down the supply chain.
Currently, gaps in reporting within the supply chain are causing organisations to struggle in understanding their scope 3 emissions, let alone reporting them. This is largely because of the absence of information from farmers; baseline figures and intensity of emissions related to the product or products generated on farm. With net zero targets looming, it is likely that either the government or the supply chain will put pressure on farmers to actively work to understand their emission numbers. In recent years, the New Zealand government took action to resolve a similar complex situation. Under the Climate Change Response Act, all farms were required to complete mandatory carbon audits by 2022.
Farm emissions figures are crucial to the suppliers and buyers achieving their net zero targets and emissions reduction goals. Companies looking to meet their targets on the journey to net zero may start transitioning toward working exclusively with farms operating on lower emissions.
Tools for reporting on Scope 3 emissions are quickly evolving, and while only big emitters are required to report to the Clean Energy Regular, Scope 3’s are not included in this reporting. Given Europe has already made plans to phase in Scope 3 disclosures in the near future, it is anticipated that a similar transition is coming our way. This is why some agribusiness companies are looking into offering services to farmers that would enable them to calculate their Farm Emissions Profile. While this is currently voluntary, suppliers could request that farmers provide them their greenhouse gas emission figures – from both farm and product – prior to trade of goods and services.
Intensity of emissions per agriculture sector typically varies between:
- Grain production: 0.1 to 0.5kg CO2eq/kg grain
- Canola production: 0.5 to 0.7kg CO2eq/kg grain
- Beef production: 11 to 18 kg CO2eq/kg LWT
- Prime lamb production: 6 to 8kg CO2eq/kg LWT
- Wool production: 21 to 28 CO2eq/kg wool.
Professor Eckhard suggests that although intensity of emissions varies across sectors, farmers’ figures should not be cross-referenced against other sectors using different outputs. For example, grain farmers use CO2eq per kg of grain, as opposed to livestock farmers who use CO2eq per kg Live Weight. Needless to say, it would be in the interest of farmers to not only reduce their emissions intensity factor wherever possible, but also to be on the lower end of the scale within their respective sectors.
There are plenty of options out there for farmers looking to start the process and get prepared. In 2021, DPIRD commissioned a report on carbon calculators, and noting the absence of an online, user-friendly carbon calculator designed for WA conditions, have summarized current tools available to farmers, available here. The Greenhouse Accounting Framework tools for Australian Primary Industries is free to download, and will predict the magnitude and sources of greenhouse gases emitted from both farm and product. Alternatively, farmers can consult industry professionals to assist in undertaking a carbon farm audit.
For further information on this topic, please contact NACC NRM’s Sustainable Agriculture Facilitator Katrina Sasse.
E katrina.sasse@nacc.com.au | P (08) 9938 0110 | M 0447 361 335
Sustainable Agriculture Facilitators are supported by the Australian Government through funding from the Natural Heritage Trust under the Climate-Smart Agriculture Program.
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