Take home messages

• GHG emission calculations will be required by growers to access higher value markets in the future.
• The immediate focus for advisors should be on helping growers calculate their emission intensity, not only to understand individual business performance but also to empower growers so they can inform the supply chain as they begin to set emission targets.
• Examine ways current data recording could be adapted to make emission reporting as simple and streamlined as possible.

Background

Accounting for greenhouse gas (GHG) emissions in the grains sector will feature in future farm sustainability credentials. While GHG emissions from grains are only about 2% of Australia’s national emissions, the whole of the economy is expected to contribute to lowering overall emissions. This includes accounting for the direct emission within farming operations (scope 1 and 2 emissions) but also the emissions embedded in the manufactured products growers use, such as fertiliser, fuel and chemicals (scope 3 emissions).

The pressure for GHG accounting, as one component of future sustainability credentials, is coming from three directions:

• government, through the various global initiatives (for example, Paris Agreement) where Australia has committed to carbon neutrality by 2050 along with 5-year interim targets
• commodity specific industry bodies, for example, GrainGrowers who are aiming for a 15% reduction in emission intensity by 2030, to halve embedded emissions in inputs (scope 3) by 2040 and achieve carbon neutrality by 2050
• supply chain, where approximately 70% of Australia’s annual grain production is exported, the GHG emissions associated with our grain production are considered scope 3 emissions that occur further down the supply chain, both in Australia and overseas.

Arguably, it is the supply chain that will have the greatest influence in changing grower practices. To quote Richard Eckard from the University of Melbourne: ‘Of the 100 largest economies in the world, 69 are companies and 31 are countries. Government policy may now be less influential than market forces.’

More than 9 400 companies worldwide have committed to setting verifiable GHG emission reduction targets through the Science Based Targets Initiative(SBTi), with 6 000+ companies having approved near term and 2050 targets (as of August 2024). While the agriculture sector has been slower to commit to the SBTi, especially in Australia, momentum is building (Table 1).

The SBTI promotes best practice, scientifically based target setting, legitimate carbon reduction practices and verification methods that align with the Paris Agreement and Assessment Reports. The agriculture sector has its own guidance (FLAG – Forestry, Land and Agriculture).

Table 1: SBTi commitments and approved targets for the food production and food processing industries.

Emissions intensity (EI)

In the short term, many companies are taking a pragmatic view to reaching net zero by 2050 (Both the FAO and the SBTi do not have a net zero emissions target for agriculture). They recognise the transition will take decades, rely on new technologies, farming practices and approaches. However, in the interim, the supply chain expects to see progress by growers by using the tools and practices they currently have at their disposal. The focus is on how efficiently a product can be grown against the GHGs emitted. Referred to as emission intensity (EI), the metric is simply a measure of the amount of product grown and the scope 1, 2 and 3 emissions associated with its production. This may or may not include (legitimate) permanent carbon sequestration in the calculation.

It is unlikely all products in all markets will require the same level of evidence about their EI. A country that has food scarcity in their population is unlikely to make the same demands for carbon accountability as a higher value market where consumers can pick and choose. Nevertheless, there will be a growing requirement to have a verifiable EI number that is associated with the grain produced.

The immediate challenge facing the supply chain is having credible GHG emissions data to formulate their EI targets. While there have been a few benchmarking type studies, the data are broad and not detailed around specific commodities and regions. Example EI values for the grains industry are:

• 0.1 to 0.5kg CO2e/kg grain (Wiedeman et al.2014, Browne et al. 2011)
• 0.22 to 0.41kg CO2e/kg malt barley (SFS, 2022).

In the absence of credible data, many companies are reverting to a percentage reduction between two time periods, for example, NV Heineken.

Reduce absolute scope 3 FLAG GHG emissions by 80% by 2040 from a 2022 base year

The percentage reduction approach to EI by the supply chain because of the lack of data to set absolute targets will favour currently less efficient growers because they have greater opportunity to lower emissions with existing technologies than the more emissions efficient growers. Therefore, increasing the credible data that can be generated against crop types and regions will be highly beneficial in informing the supply chain. If individual growers can calculate their EI, and then choose to pool their results, it has potential to increase grower influence in the supply chain (rather than being dictated to with unrealistic benchmarks).

Calculating emissions intensity is recommended for growers because it can be benchmarked and examined to identify areas of productivity improvement. This approach is appealing to growers as it highlights opportunities to increase profitability.

Emissions intensity differs from achieving net zero emissions. GHG emissions on a farm could increase even if emissions intensity decreases due to higher productivity. However, calculating emissions intensity helps the supply chain identify more efficient suppliers of scope 3 products.

Emissions Intensity should be seen as an interim step, offering an opportunity to remove existing GHG emission inefficiencies in farming operations, while beginning to adopt GHG emission reducing technologies.

Calculating GHG emissions

My preferred emissions calculator is the Greenhouse Accounting Framework (GAF) tools developed by the Primary Industries Climate Challenges Centre at the University of Melbourne (https://piccc.org.au/resources/Tools.html). The GAF tools use the standards, assumptions and equations adopted by the Australian Government for their Paris Agreement reporting. The GAF tools operate in Excel, which makes the calculations visible. This allows advisors to see how emissions against a product, land use or practice affect the final output. An online version with a more user-friendly interface is available, though the workings are hidden (https://aginnovationaustralia.com.au/ea-platform).

Current emission calculators at the farm scale are far from perfect. Some GHG emissions associated with a farming business are either not captured, considered to have the same emissions irrespective of where they are supplied from, and regional differences with emissions are not adequately reflected. For instance, lower emissions products like N loss inhibitors on urea, are not included. In addition, the assumptions and calculations in the equation are constantly evolving as new research provides improved understanding of emissions in different contexts. As such, emissions calculations will be approximately accurate, but they lack precision when applied at the farm level.

To maintain the integrity of the calculations, any changes to the GAF must undergo a lengthy approval process. These changes require credible evidence from peer reviewed published research, which takes time. Despite the calculations being approximately accurate, consistency is achieved if everyone uses the latest version of the same calculator. Comparisons can still be made, and imperfections in the calculators should not be an excuse for lack of action.

Data collection

As with any calculation, producing a meaningful output depends on entering credible data. Even if assumptions are refined in the future, the fundamental data requirements will remain unchanged. Fortunately, the information needed in the cropping GAF is relatively simple compared to the livestock calculators. The core data needed are:

• crop type, area sown and yields,
• fertilisers used, by crop, type of product and rate,
• lime use across crop type,
• area of stubble burnt across crop type,
• fuel consumption (diesel, petrol, LPG), across crop type,
• electricity use,and
• herbicides used as kg of active ingredient, summarised into glyphosate, diquat, paraquat as one group and all others in a second group.

A valuable starting point is to examine how easily a grower can provide this core data. Streamlining the data collection, for example, do we have a simple way of recording herbicides by active ingredient, will make the process simpler in the future.

References

S Wiedemann, BK Henry and EJ McGahan (2014) Resource use and greenhouse gas intensity of Australian beef production: 1981 -2012. Agricultural Systems 133 (109-118)

N Browne, RJ Eckard, R Behrendt, RS Kingwell (2011) A comparative analysis of on-farm greenhouse gas emissions from agricultural enterprises in south eastern Australia. Animal Feed Science and Technology 166-167(641-652)

Useful resources

GrainGrowers carbon and climate (https://www.graingrowers.com.au/policy/carbon-and-climate)

Science based targets target dashboard (https://sciencebasedtargets.org/target-dashboard)

Contact details

Cam Nicholson
Nicon Rural Services
cam@niconrural.com.au