CSIRO study calls for change on how methane is judged on climate goals

The red meat sector has been urged to urgently act to change how methane’s short-lived warming impact is calculated, compared to other emissions.

VFF Livestock President Scott Young. Picture: Zoe Phillips

Banks could make lending harder for red meat producers – without large-scale emission offsets for each farm – if the sector does not “urgently act” to change how methane’s short-lived warming impact is calculated, compared to other emissions.

This is the warning from a new study that says banks could rebalance lending and investment “away from red meat producers”, making refinancing or buying sheep and cattle properties “difficult”, hitting farm profit and land values.

The Victorian Farmers Federation livestock spokesman Scott Young said “not many farmers realise this yet, but this is one of the biggest issues coming at us and there’s going to be a lot of challenges”.

The research also reveals the push for products with sustainability credentials was not coming from consumers.

Instead, the drivers were the global financial system and co-ordinated climate action policies by financial institutions, plus growing government climate-related financial legislation.

The Drivers of Sustainability Credentialling in the Red Meat Value Chain study, published by CSIRO researcher Dr Bradley Ridoutt last week, found the “risk is that increasingly, business-level decision making in the red meat value chain will be directly influenced by financial service providers”.

The CSIRO report stated the red meat sector needed to take “urgent action” to see different climate metrics used to judge the impact of methane, compared to carbon dioxide emissions.

It also found that the goal of climate stabilising could be achieved without reducing the short-lived warming impact of methane emissions from the red meat supply chain to net zero.

VFF’s spokesman Mr Young said around the world, farmers needed to advocate to have the methane accounting changed.

“This is a real challenge, the European farmers are five years ahead of us on this,” Mr Young said.

“We are going to have to provide banks with this data to take out a loan, to export our stock; it is a big piece of work and much advocacy is needed.”

Dr Ridoutt’s report said “net zero transitioning presents many risks to red meat value chains, potentially involving costly interventions and greater difficulty accessing financial services, with direct implications for production costs and asset values.”

“This would undoubtedly have implications for productivity, profitability, and the value of assets”.

Lending products were now being developed where interest rates were linked to sustainability and emissions targets, which could make lending even harder for smaller producers particularly.

Dr Ridoutt’s research involved interviews with red meat processors, who reported they did not expect carbon neutral red meat products would become more commonplace, due to the increased costs and limited market opportunities.

He found little evidence consumers would pay more for meat with higher sustainability credentials.

Meat processors told the scientist the main demand for sustainability credentials was coming from large corporate entities in the value chain, banks and other financial service providers, and governments.

This was “less about increasing value to red meat consumers and more about addressing their own requirements to report corporate sustainability information and to address corporate policies”, the report found.