Consumer, processor or farmer? Who will pay the multi-million “cost” of livestock emissions

Farm leaders warn that if farmers are pushed to be net zero, food production would be compromised, putting the world’s 360 million food insecure people in further jeopardy.

Offsetting methane emissions in the Australian supply chain of one of the country’s largest meat processors would cost it a whopping $85 million a year on current carbon prices.

The stark figure from Thomas Foods International and comes as the processor says its international and domestic customers, and governments, were increasingly asking it to report and curb supply chain emissions amid setting “pretty aggressive” targets.

And TFI’s farm assurance and supply chain manager Mark Inglis told The Weekly Times he “doesn’t know” if costs would eventually be pushed back onto livestock producers.

“If we are going to go net zero from a livestock perspective, we need a silver bullet,” he said.

Thomas Foods International, Mark Inglis.

Mr Inglis said environmental sustainability and governance pressures were coming at the company, which has an annual turnover of around $3 billion globally, “quicker than most of us would like”, including the Australian government requiring reporting of scope one, two and three emissions by 2025; and from banks, investors and financial services.

Many multinational customers were setting reduction targets with aims to be net-zero by 2050. “Their expectation...is the products we sell them will be net zero, they do not want to inherit anything (emissions),” Mr Inglis told a net zero field day hosted by Paraway Pastoral at Willaura last week.

More than 90 per cent of TFI’s emissions were “inherited” from purchased livestock, he said.

“If we look at overall 2022 kill data, 2.8mt of carbon was produced over that period of time.

“To put a dollar figure on that... what is the cost of this, based on a carbon price of about $30 a tonne, to offset that as a company at $30/t, we are talking $85 million a year. Do you think we are going to get that back from our customers?

“Are our customers going to pay that - I don’t know the answer to that, to be honest.”

He said the company had to decide if it wanted to focus on net zero, carbon neutral, or climate neutral - and which metrics it used to stack up claims.

Cattle Australia recently called for change to how methane is evaluated but Meat & Livestock Australia’s Carbon Neutral 2030 project uses the internationally recognised GWP100 which acknowledges methane’s ongoing warming role.

In contrast to Cattle Australia’s push, TFI’s Mr Inglis said international customers wanted accounting in the GWP100 method.

The company was in the process of deciding “do we offset or inset”: “Do we offset $85 million a year; or if we inset, we’re now looking at how do we reduce our carbon emissions within our supply chain.”

National Farmers Federation natural resources general manager Warwick Ragg said the “community needs to make a decision if we still want food producers”.

“If we continue to push producers to be net zero we will potentially compromise food production, and the Food and Agriculture Organisation (already) estimates by 2030 there will be 360 million food insecure people,” he said.