Australian agriculture industry groups are setting their own pace to achieve agriculture carbon neutrality in the wake of COP26.
To remain competitive in a global market our industries must reduce emissions. Acknowledging this Australia’s red meat sector has committed to being carbon neutral by 2030, while the pork industry is aiming for the same achievement by 2025.
Last week, the New South Wales Irrigators Council announced a commitment for their members to become carbon neutral by 2050, with an aspirational goal of 2030.
“The economy of the very near future will demand and expect nations to demonstrate their demonstrate Australia is doing our bit,” said CEO Claire Miller.
“It’s only a matter of time. We are already seeing the shift, with the EU recently warning Australia may face carbon tariffs if it does not commit to strong 2030 targets.”
The potential implementation of tariffs is likely to continue motivating industry participation in reducing agricultural emissions, and aiming for agriculture carbon neutrality, despite the Australian Government’s stance.
Europe Proposes Carbon Border Adjustment Mechanisms (CBAMs)
Looming on the horizon, Carbon Border Adjustment Mechanisms (CBAMs) will assign a tax to the carbon content of imports from countries without an emission trading scheme or carbon tax, including Australia. The EU, US, Canada, and Japan are considering implementing CBAMs. UK Prime Minister Boris Johnson has suggested a carbon club with membership reserved to countries with high climate ambition.
The EU’s proposed CBAM covers heavy metals, electricity, cement, and fertiliser. An analysis of this proposal predicts a significant risk to the profitability of Australian suppliers, who would be penalised with an additional tax. As a result, many suppliers have undertaken significant investments in renewable energy.
Townsville-based Sun Metals, the largest producer of zinc worldwide, has pledged to be 85 per cent powered by renewables by 2030 and 100 per cent by 2040.
“With our existing portfolio of 124MW of solar and 30 per cent interest in the 924MW MacIntyre wind farm, which is targeting full commercial operations by November 2024, we could potentially be producing green zinc as early as 2025,” said Daniel Kim, the CEO of Sun Metal’s sister company Ark Energy.
“We feel a responsibility to demonstrate corporate leadership in tackling global warming, so it’s the right thing to do. But it’s also the smart thing to do,” he says.
CBAMs Scope Could Capture Agriculture
While the development of CBAMs currently focuses on heavy industrial imports, there is scope for agricultural imports to be on the cards. A recent report by Ernst & Young warns Australian agriculture to “be prepared for the risk that agricultural products are captured under the CBAM.”
Research from the Australia Institute goes one step further, proposing CBAMs as a source of opportunity for exporters.
“…a CBAM would only create positive price signals for clean exports. Indeed, Australia’s abundant and low-cost solar and wind resources, minerals endowment, land availability, and scientific and technological capacity would position it to prosper in a low-emissions world.”Australia Institute, Carbon Border Adjustments – What are they and how will they impact Australia?