ImpactAg boss Hugh Killen says there is a lot of work to do to rehabilitate our farms
Millions of dollars of global capital is headed for the ‘safe haven’ of Australian farms and their green potential, while home owners are seeing the benefits of electrification despite political cynicism, these green energy leaders say.
Agri-business leader Hugh Killen says millions of dollars of global capital is headed for the “safe haven” of Australia, with investors prepared to wait for years for their pay-off from “green” farming.
The former boss of the giant Australian Agricultural Company (AACo) says agriculture offers one of the biggest pathways to net zero, through better farming practices and the creation of carbon offsets.
And while inputs and energy costs are already “through the roof, irrespective of the energy transition”, he’s adamant the shift to a decarbonised economy has to happen.
“Politics shouldn’t be allowed to get in the way of it,” Mr Killen says in an interview for The List, a special magazine published on Friday to celebrate Australia’s Top 100 Green Energy Players.
Along with Killen, the list profiles Australia’s leading policymakers, manufacturers, innovators and investors focused on addressing climate change.
They include the innovator, author and co-founder of Rewiring Australia, Dr Saul Griffith, who has led the push to “electrify everything”.
Griffith has been on this green journey for a while now, and he’s played a key role in huge policy and practical changes in the US, Australia and New Zealand.
When he speaks at town hall meetings around Australia he attracts hundreds of people eager to hear from the “electrify everything” guy and to tell him how they are already saving on energy, thanks to renewables.
“It’s pretty extraordinary,” says Griffith, the Australian engineer, inventor and advocate with a global reputation, who is focused on building community support – street by street – in the battle against climate change.
“It’s because they’re interested in where the world is going. And a huge number of the people you talk to at those events tell good stories, ‘oh, we’ve done this, and we’re already saving thousands of dollars a year’,” he says.
Australian farm potential
Killen is now the CEO of ImpactAg Australia, a specialist investment, farm management and advisory company with assets of about $1bn and a commitment to increasing productivity through regenerative practices.
Proof of the global interest in Australia land was the European family office which had just invested $170m in small farms here, with a five to seven year wait for a return, he said.
The properties included macadamia farms in Bundaberg, an irrigation block in Queensland, a mixed farming operation at Cootamundra and farms near Forbes in NSW.
Killen said there was still a lot of work to do to rehabilitate Australian farms: “Ninety eight per cent of the world’s food production is actually still soil-based and if you think about it from an Australian perspective, two thirds of Australian ag land is degraded.
“That’s not so much the cattle – it’s the application of synthetic fertilisers, lack of rotation and a few things like that.”
He said Australian farmers were “super innovative” and often followed best practice in terms of farming principles, but they were still focused on “extractive farming” and high volume output.
“I’ve just done a soil test on a farm we’re looking to buy and the soil is basically like substrata, it’s dead, but it raises crops because of the inputs put into it,” he said.
“So it’s an imperative that we start to transition farms.”
The ImpactAg model is to “buy farms that are productive and make them more productive” by building soil carbon, developing reforestation programs and drawing on methodologies around environmental plantings, for example.
“What we’re doing is we’re giving that farm a new future that’s actually higher returning than it was just as a farm back in the day,” he said.
He believes agriculture is experiencing a “purple patch” in terms of the broader Australian community’s attitudes to the bush.
“I think it’s been a really good five or six, or even 10 years,” he said.
“The general public looks to us as farmers and feels we’re doing the right thing by them, in terms of being stewards. I also think, in many regions, we’re now seeing real rural and regional towns starting to flourish.
“So when I think about the farm of the future, it might have less people on it, but it might have different people on it. We have 20 to 30 people running around on our farms, chasing cattle and driving tractors and doing their stuff, but in our office, we have environmental scientists, data scientists, we have finance people, all living regionally and supporting Australian farms.”
Killen spent 25 years in global financial markets before managing the AACo. This year he began as CEO of ImpactAg Partner which has been operating here since 2010.
His appointment was quickly followed by the announcement of a joint venture between ImpactAg and Macdoch Australia, whose executive chair Alasdair MacLeod is one of Australia’s leading regenerative farming advocates. The company is focused on nature-positive agriculture and ecosystem services.
As part of the deal, ImpactAg Australia took over management of Macdoch’s showcase 8000ha beef cattle operation, the Wilmot Cattle Company. MacLeod, who is also in the Top 100 List, is chair of the new joint venture.
Politics versus progress
A lack of leadership; allowing ourselves to be distracted by the Coalition’s talk of a nuclear solution; and the denialists who are “cynically exploiting a 15 or 20 year old headline”, anger Griffith, even though he says that Australia is on the right trajectory in the transition to a decarbonised economy.
He has worked with politicians on both sides of politics to lobby for policy change, such as a loans scheme for households to help them electrify.
In October this year, his not-for-profit, Rewiring Australia, was named as part of a $5.4m electrification trial in NSW. The Australian Renewable Energy Agency (ARENA) will partner with Rewiring Australia, Brighte and Endeavour Energy to support the electrification of 500 homes in northern Illawarra.
“If Australia electrified the whole domestic economy, we’d save $1.7 trillion by 2050; any Australian household that electrifies their car, their cooking, their heating (will save),” Griffith says. “It’s also true for small business, it’s also going to be true for schools and churches … because electricity is much, much cheaper than petrol or natural gas. And it’s true in Victoria and Tasmania and Queensland, and Western Australia.”
Griffith, who has a PhD from the Massachusetts Institute of Technology, accepts that some people will have to borrow money to electrify but says: “If we invest in ourselves as a country, and we have some self-confidence, we save a tonne of money.” The problem is that many people either don’t want to take out a loan to fund a change in their household appliances, or they just can’t get a loan.
There’s a big policy opportunity here: “The government has traditionally figured out how to finance things. We have created a huge amount of public policy that helps Australia get into the property market.”
He says both sides of politics are considering schemes: “I believe we will see some versions of these things in the next 12 months. There are a lot of mechanisms by which you could get there. In the US, they use tax cuts and tax incentives. That doesn’t work for everyone because you have to pay enough tax to get the tax cut. So we could look at using the value of your property or an income contingent loan like HECS.”
Griffith acknowledges that with both major parties averse to giving rebates on electric vehicles (“even though it is the most impactful thing that any individual Australian can do to reduce their emissions”) the loans would more likely be given for heat pumps for heating houses and water, and for more rooftop solar and batteries.
He recognises too that while the domestic economy will save money from electrification, it will be a cost for some sectors of the industrial economy. Yet technology is “on the near horizon” to ease the pain.
But the author of the 2021 book, Electrify: An Optimist’s Playbook for our Clean Energy Future, says that industries simply must invest in changing their processes. “They’re not going to be able to do the things the way they’ve done them for 70 years,” he says. “That’s fine. If they don’t invest, they will miss out in the same way that China is now crushing the American economy in the production of batteries and solar. If we don’t move first, if we let China get to green steel before we do, we lose.”
Despite his frustration, Griffith says we’ve made a lot of progress and federal Labor is “moving everything in the right direction”. He’s optimistic too that there will be market and regulatory reform in the next 18 months.
He says the Australian Energy Regulator is designed to defend coal plants and natural gas whereas, “if you’re a punter in the street, you invest in solar, in a battery, and then they change the feed-in tariffs, and then you start losing money”.
“We literally are not designing the energy market or the regulations in favour of Australian people,” he says. “This is the reason we’re doing all the community work.
“If you engage communities to let them know what’s happening, you let them know what the prize is, then you create the political pressure that’s going to give the government permission to go further.
“The reason governments aren’t going anywhere is because they still don’t necessarily believe the Australian public gives a f …, they’re still scared of taking away the ute, they’re still scared of taking away the gas stove.
“You have to show pull from the community … that’s why we’re now working with 50 communities around Australia on electrification, advocacy and education, and we hope to expand that to 1000 communities in the next couple of years … you’ve got to engage the people to create the political noise, to get the policy done.”
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