Tuesday, March 5, 2024

‘Wake up and smell the carbon, NZ’

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Net carbon zero is a target the country risks missing, says top analyst.
Food companies like Nestlé have set net-zero targets and New Zealand needs to escape the siloed attitude it has on emissions reductions or it will be left behind.
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New Zealand’s primary sector risks failing to meet customer expectations if it does not double down on achieving zero-carbon targets over the next five years.

Dr Victoria Hatton, PwC’s director for sustainability and climate change, said NZ risks confusing carbon neutral with carbon zero, and losing out to countries that have made carbon zero central to their food policies.

Hatton is a keynote speaker at this year’s Agri-food Tech 2035 Oceania summit, to be held in Auckland on October 10-11.

She said it is important to understand the distinct difference between the two terms, with “carbon neutral” referring to no further increases in emissions, and achieving reduction through offsetting, such as tree planting. Net-zero means making changes to reduce carbon emissions to the lowest amount possible, using offsetting as the final backstop.

NZ is utilising forestry planting of both natives and exotics as a key plank in its carbon policy for offsetting. 

Hatton said removing all emissions from livestock here will always be highly unlikely, but there has been a failure to delve deeper into farm systems’ supply and network chains to remove other emissions sources. 

This includes hydrocarbons from transport and farm vehicles, and fertiliser inputs and supplementary feeds, for example.

“In the net-zero area the United Kingdom is leading the pack. Food producers like Danone and Nestlé, they have all set net-zero targets, and you have to be one to be a supplier to those businesses.” 

Tesco, for example, has a declared goal of becoming carbon neutral in its own operations by 2035, and net zero across its entire supply chain by 2050.

The company is measuring all emissions from suppliers throughout its supply chain, and focusing particularly on top-selling items, of which pork and chicken are two.

“And they have worked with suppliers to set up systems to allow those pork and chicken to become net-zero aligned.”

Dr Victoria Hatton, PwC’s director of sustainability and climate change, says New Zealand risks missing out on the net carbon zero goals other countries and processors are working harder towards.

Despite efforts coming around He Waka Eke Noa that will reduce methane emissions from livestock by 10% by 2035, NZ is otherwise nowhere near meeting such requirements, and has only a small window to get on board as an entire primary industry.

“An early mover advantage does exist. We missed it with the grass-fed beef proposition, we had been sitting on that for decades. We can’t miss this.”

Hatton said she fears covid-19 has left the industry, and NZ in general, with an attitude that has become siloed from where much of the rest of the world is heading.

“There are other suppliers, out of Europe and United States, who have clearer net-zero carbon goals that has us as laggards. If we want to be suppliers of high quality milk and meat to discerning customers, we have to meet market and it will be net zero.”

Given the scale of the change, she believes NZ has only 18-24 months to more clearly define how the entire primary sector supply chain will achieve that.

She fears for the estimated $60 million to run He Waka Eke Noa, which in itself may take out only 5% of methane. The industry risks missing other opportunities to make more material gains, possibly for less investment.

She welcomed efforts to market “carbon neutral” beef in the US. 

However, she cautioned this would not gain traction in Europe, possibly jeopardising any potential within the newly signed free trade agreement there, which does contain conditions around sustainability and climate change commitment.

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