Sunday, August 14, 2022

Companies commit to new ag emissions centre

Joint venture funding for new centre will be close to $100 million a year.

The new Centre for Climate Action on Agricultural Emissions is taking shape with seven primary sector companies discussing a joint venture with the government, first announced in the Budget in May.

Ministry for Primary Industries director-general Ray Smith said the industry partners are Fonterra, Silver Fern Farms, Ravensdown, ANZCO, LIC, Ngāitahu Holdings and Synlait.

How much they have committed was not disclosed but he told the China Business Summit in Auckland this week that joint venture funding for the new centre will approach $100 million a year.

New Zealand will be the first country to establish a pricing system for agricultural emissions after setting greenhouse gas reduction targets.

The pricing system will emerge from He Waka Eke Noa consultation, he said.

Other countries, including Ireland, are looking to NZ to see how we do it.

“It is easy to set [reduction] goals but what is the plan to get there?” asked Smith.

“We are working together [in the joint venture] to be the first to extend our comparative advantage.

“If we are the first to cut the emissions profile then we will also have the intellectual property to take to the rest of the world.

“For sustainability credentials, we start in a really good place, and we will show huge leadership in this area, I believe.”

MPI later confirmed that it is in discussions with joint venture partners and referred back to the Budget announcement that the centre will develop and commercialise smart new products to reduce agricultural emissions.

The government allocated $339m for the development of high-impact technologies and practices to reduce agricultural greenhouse gas emissions, including the establishment of the new centre.

In the Budget announcement, Agriculture Minister Damien O’Connor said the centre would do applied research that drives product development.

“The He Waka Eke Noa partnership has highlighted the demand from farmers and growers for products that will shift the dial on-farm so our sector can hit our emissions reduction targets,” he said.

“The sooner tools are ready for farmers the sooner we move on our goal of biogenic methane reduction of 10% by 2030 and 24% to 47% by 2050.”

Dr Naomi Parker, head of the MPI establishment team, said the centre will have two components: the new public-private joint venture and an enhanced NZ Agricultural Greenhouse Gas Research Centre.

“Industry partners have signalled the need to accelerate investment in this area and are wanting to invest alongside government at scale,” said Parker.

“Discussions are well advanced in defining the scope and functions of the joint venture. 

“The specific entity form, funding and governance arrangements are under discussion and will be defined initially in a memorandum of understanding that is currently being worked through.

“We aim to have the centre up and running by the end of 2022,” she said.

Operational details for the centre are being developed by the government in partnership with Māori, industry and the science sector.

Fonterra’s general manager of global climate policy, Andrew Kempson, said reducing methane emission is the industry’s biggest challenge.

“We have been actively engaging with the government about the partnership and support the move, which will see further investment into product development and commercialisation to drive research in this area.

“We continue to invest in several methane mitigation projects, which are progressing well.”

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