Go green and profit, says Fonterra

By Neil Merrett

- Last updated on GMT

Related tags: Greenhouse gas

Fonterra, New Zealand's largest food group has pledged to step up
its commitment to tackling climate change amidst new findings from
the country suggesting businesses could profit from greater
environmental concern.

The company, which is a major producer of dairy products, said it would continue to develop new technologies for this aim, while aiding its farmers and suppliers in reducing their own impacts. As increasing temperatures within the region continue to exacerbate dwindling dairy supply, processors are coming under greater pressure to reduce the impacts they are having on the environment, while maintaining competitive as well. Barry Harris, chairman of Fonterra's Sustainability Council believes as such, that all businesses can take greater care in how they are affecting climate change, without losing out financially. "Climate change affects every sector of the economy - including agriculture - and Fonterra is playing a leading role in tackling the issue and working with Government and other pastoral industries to find practical solutions,"​ he stated. Harris stressed that if done correctly, environmental drives needed come at financial loss to companies. "There are also opportunities for any breakthrough research in reducing methane emissions to have the potential to be sold overseas,"​ he added. The comments follow recent findings by the Sustainability Council of New Zealand claiming technological developments like nitrification inhibitors could help the country both meet its emission reduction, and increase profitability. 49 per cent of New Zealand's emissions stem from livestock farming, according to government estimates. By cutting these emissions the country could achieve savings of over $550m, at the current carbon credit value of $30/tonne, the sustainability council said. The council pointed to technology known as nitrification inhibitors to better achieve this aim. The inhibitor is claimed to drastically cut emissions when sprayed on pasture, while also improving prevention of nitrogen runoff that has been linked to polluting waterways. Methane emissions currently account for two thirds of livestock emissions linked to affecting climate change, with the other third coming from nitrous oxide N2O. By shifting focus to cutting N2O instead of Methane, the technology could grant a new avenue for the dairy industry to work on cutting its emissions. "Assuming all the nation's dairy pasture were treated in this way and savings were in line with trials across the country, some 3.7 megatonnes of carbon equivalent emissions would be saved each year,"​ stated the council in the report. Fonterra backed the sustainability council, suggesting a greater focus on encouraging the use of products like nitrification inhibitors, rather than punishing farmers should be adopted in the country. "We believe measures that encourage behavioural change in farmers, such as incentives to encourage the uptake of nitrification inhibitors will be more effective than punitive penalties such as fertiliser taxes,"​ stated Harris. The company added that trails of nitrification inhibitors had boasted a 30 per cent to 70 per cent reduction in nitrous oxide emissions. The same testing had also found a 15 per cent increase in pasture productivity. There were limitations in the testing though, with a questions mark remaining over their potential in different soil types. Though encouraged by the development of nitrification inhibitors, Harris believes a multi-faceted solution will still be required to win the battle against climate change. "We welcome the development of new technologies like nitrification inhibitors that help reduce emissions, he stated. But it is too simplistic to say a single, silver bullet answer will reduce our on-farm carbon emissions, as this is likely to evolve over time." ​ As such, the company claimed that it would continue to invest in a number of solutions designed to cut its emissions. Harris pointed to the company's existing work, as an example of this focus. "More than $15 million is currently being spent on this research and most of it coming from the dairy sector,"​ he stated. "Fonterra also invests separately in areas like research into pastoral genomics, which aims to increase pasture digestibility and reduce animal emissions."

Related topics: Markets, Fonterra, Sustainability

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