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Fonterra sets on-farm emissions targets – Expert Reaction

Dairy co-operative Fonterra has released its plan to reduce on-farm emissions, aiming to reduce its emissions intensity by 30% by 2030.

The dairy giant is New Zealand’s largest greenhouse gas emitter, and around 86 percent of these emissions come from on-farm operations. These are referred to as “Scope 3 emissions“.

The SMC asked experts to comment.

Troy Baisden, Principal Investigator, Te Pūnaha Matatini Centre of Research Excellence; Motu Affiliate; and Honorary Professor in the University of Auckland School of Environment, comments:

“It’s good to see Fonterra putting ink to paper on their climate plans. Part of the news is that this is not a sideshow – this announcement is part of their annual meeting at their Annual General Meeting. That’s a main event in New Zealand’s business and financial calendar.

“What Fonterra is saying also tells us that climate change is no longer a sideshow – it is part of access to preferred markets and value chains.

“The framing of announcements like this is a crucial stage to watch. Now that Fonterra has framed its commitments, we can see what is planned and consider how it will be measured and verified. Environmental scientists and NGOs will look at the details, and there will be debate about how positively Fonterra’s announcements should be seen by its large customers.

“Progress comes in two forms. The first is achieving a 30% reduction by 2030, and the second is signalling some commitment to imagine what net-zero dairy farms may someday look like – through a farming collaboration with Nestlé.

“The target of a 30% reduction in emissions by 2030 isn’t just one reduction. It comes across four main areas. This has been referred to by leading scientists as replacing the unlikely silver bullet approaches we used to hear about with realistic scatters of silver buckshot.

“The different commitments will need verification methodologies, and even those that are relatively far along, such as on-farm feed and herd performance improvements and getting credit for forest and plantings will likely require more work for on-farm incentives to be accurate and fair.”

Conflict of interest: Troy Baisden has created models that may support emissions reductions via Toha, and was on an advisory group for the Ministry of the Environment not related to the ETS.

Professor Sara Walton, Otago Business School, University of Otago; and Co-Director, He Kaupapa Hononga Otago’s Climate Change Research Network, comments:

“Farming and agriculture plays a significant part in the Aotearoa New Zealand economy. Transitioning to low carbon in this sector is not an easy task and it is important for Fonterra and any large organisation in this sector to show leadership and work in partnership with suppliers and customers in their scope 3 emissions as they report in their latest publications.

“Any company that is exporting is going to need to be actively innovating and transitioning to low carbon. It is good to hear that Fonterra has released a roadmap for their transition and re-assessed its emission targets. Any transition risks should also be clearly outlined in the Climate Disclosures. To not transition to low carbon through mitigation strategies is a significant risk to any organisation and especially those exporting or operating globally.

“The claim made a number of times in the press release of being “one of the most emissions efficient suppliers of dairy at scale” will need to be evidence based to avoid the risk associated with greenwashing. Any headline claim needs to be matched with evidence to develop integrity in the reporting.

“One of the significant issues with the targets that Fonterra has set is that they have chosen to adopt intensity targets rather than absolute targets for scope 3 emissions. While the Forest Land and Agricultural Guidance from the Science Based Targets initiative does allow for intensity emissions in scope 3, the UN recommends absolute targets for emission reduction and I would concur with the UN. By only having intensity targets for scope 3 there is the chance that Fonterra would increase these emissions overall while being emission efficient in relation to the intensity measure. Thus the reason for having absolute emission targets.

“It is good practice that Fonterra have completed an early Climate Risk Disclosure. Our research shows that companies complete these early for a number of reasons, but mostly for in-house learning and developing their discloure reporting competencies.

“Do not underestimate farmers and low-carbon and biodiversity innovations occurring on farms currently. Our research points to the changing notion of the ‘good farmer’ in Aotearoa. Shifting from a ‘good farmer’ being seen as efficiently productive to also being about how they reduce their environmental impact. Particularly, we found that the intergenerational farmers care deeply about the land and the future they are creating for their family and as such were undertaking environmental initiatives on the farm to create sustainability.”

No conflict of interest.

Professor Craig Bunt, Division of Sciences, University of Otago; and Director, University of Otago Agricultural Innovation Programme, comments:

“Fonterra’s recent announcement regarding its climate plans and on-farm emissions targets is a commendable step toward addressing environmental concerns in New Zealand’s agricultural sector. However, it raises questions about the apparent reliance on technologies that have yet to be proven in the country’s agricultural system.

“The target of reducing on-farm emissions intensity by 30% by 2030 is ambitious and essential for mitigating climate change. It is encouraging to see that Fonterra is engaging in efforts to achieve this goal. Still, the allocation of a significant portion of this reduction (7%) to novel technologies could be cause for concern.

“While investing in innovative solutions to reduce methane emissions is crucial, the effectiveness and viability of these technologies in New Zealand’s specific farming context remain unproven. The agricultural sector’s complexity, along with variations in farming practices, challenges the one-size-fits-all approach implied by the reliance on novel technologies. As Fonterra Chairman Peter McBride rightly points out, there’s no single solution to reducing on-farm emissions, and it will require a combination of efforts.

“Fonterra must ensure that it works closely with farmers to develop and implement these technologies successfully, recognizing the uniqueness of each farming system. A cooperative approach, as stated by Mr. McBride, will be essential to achieving the targets while minimizing potential disruptions and challenges that farmers may face.

“It is also crucial that Fonterra remains transparent about the progress of these technologies, continuously assesses their effectiveness, and adapts its strategies based on real-world results. Rigorous peer review and the publication of robust scientific research, including field trials tailored to New Zealand’s conditions, are essential to validate the potential of these novel technologies.

“Fonterra’s commitment to reducing on-farm emissions is a positive development, but the reliance on technologies that at best appear to be in transition from research to development emphasizes the need for rigorous testing and ongoing collaboration with farmers to ensure the success of these initiatives and the sustainability of New Zealand’s agricultural industry.

No conflict of interest declared.