AgriZeroNZ says the world's big food companies are on board with measures aimed at reducing greenhouse gas emissions from livestock.
AgriZeroNZ says the world's big food companies are on board with measures aimed at reducing greenhouse gas emissions from livestock.
AgriZeroNZ chief executive Wayne McNee says moves to reduce agriculture’s greenhouse gas emissions look likely to survive climate change scepticism because it’s what the big customers want.
The public-private partnership between agribusiness and the New Zealand Government invests in start-ups specialising in developing ways to reduce agricultural emissions.
About 53%of New Zealand’s greenhouse emissions come from agriculture, which is unusually high.
In Ireland – perhaps New Zealand’s closest peer in agriculture – the percentage is 38%.
New Zealand has a “split gas” target for domestic emissions, which considers biogenic methane separately from all other greenhouse gases.
International efforts to curtail greenhouse gas emissions are under the spotlight, given US President-elect Donald Trump is a known climate sceptic who wants the United States to withdraw from the Paris Climate Agreement.
Buy McNee says the world’s big food companies look likely to carry on with their climate change commitments regardless.
New Zealand aims to reduce emissions of greenhouse gases (other than biogenic methane) to net-zero or lower by 2050 and beyond.
The other two components are focused on lowering biogenic methane emissions by at least 10% below 2017 levels by 2030, and by 24-47% below 2017 levels by 2050.
AgriZeroNZ’s job is to invest in finding ways to reduce emissions from ruminant animals – cattle, sheep and deer.
It seeks out early-stage companies to help them develop their technologies, working along similar lines to a venture capital fund.
It has investments in the US, Europe and New Zealand.
McNee says the issues for New Zealand are different to most other agriculture-based economies because of its pasture-based system.
AgriZero has $191 million to invest over four years and has made seven investments so far, with more in the pipeline.
In September, AgriZeroNZ and the New Zealand Agricultural Greenhouse Gas Research Centre put up $13.5m for Lucidome Bio, which is spearheading the next phase in the country’s pioneering methane vaccine research.
He said a vaccine that reduces methane from ruminant animals would be a transformational tool for New Zealand’s agricultural sector and farmers worldwide.
“It’s widely recognised as the holy grail to reduce emissions, as it’s a low-cost, high-impact solution which has the potential to be adopted into all farming systems,” he said at the time.
The funding follows an announcement in August from the Bezos Earth Fund that it will provide US$9.4 million for an international consortium to build scientific evidence for a methane vaccine.
McNee said the world’s big food companies are demanding climate change solutions.
“The Government has goals to reduce emissions but the main driver for us has been the private-sector call from the likes of Nestle, McDonald’s, Danone, Tescos and Sainsbury’s – they all have fairly challenging Scope 3 targets that they are trying to reach, so that’s why our ambition is to achieve a 30% reduction in emissions by 2030 [compared with the Government’s 10% target],” McNee said.
In August, AgriZeroNZ invested a further $4m in Ruminant BioTech to accelerate the commercialisation of a methane-inhibiting bolus specifically suited to New Zealand’s pastoral farming system.
The slow-release, biodegradable bolus sits in the animal’s rumen, releasing a controlled dose of a methane inhibitor for up to six months. The latest trial on cattle demonstrated impressive results, showing a 75% daily methane reduction for 100 days from a single treatment.
The product is expected to be on the market by 2025 – for beef, initially.
McNee said there are different feed additives aimed at reducing emissions, but these are less applicable for a pasture-based system.
“But certainly ... bolus and vaccines and long-acting formulations look quite promising.”
McNee, a former chief executive of NZX-listed Livestock Improvement Corp, says the reaction to climate change initiatives from farmers is mixed.
But in the dairy sector, most farmers are on board because of Fonterra’s announced targets, he says.
Wayne McNee, chief executive of AgriZeroNZ.
“[Fonterra] has invested in us to try [to] get those tools to farmers, so most dairy farmers get it, and major customers of New Zealand have announced very publicly that they want to see emissions reduced,” McNee said.
“It’s a bit tougher in the sheep sector because it’s harder to find things that are going to work for sheep, and obviously the sector has been quite depressed in terms of profitability,” he said.
In beef, the big food chains are also pushing hard on climate change initiatives.
AgriZeroNZ has invested in three companies in the US – typically spun out of universities.
He doubted climate change scepticism would affect the need to find tools to reduce emissions in agriculture
Earlier this year, he met with representatives from Friesland Campina (the Netherlands), Arla (Denmark) and Tirlan (Ireland) – all made public commitments on climate change “and are getting on with it”.
“It comes back to the views of the customer.
“Is McDonald’s going to change its view? Are the big dairy buyers going to change their views?
“It’s a long-term game and these things will take a few years to get to the market, so we will just keep pressing on in the meantime finding things to invest in, and there is a lot of private capital coming in from the other big funds as well.”
“I think the private sector will carry on and do its thing.”
Jamie Gray is an Auckland-based journalist, covering the financial markets and the primary sector. He joined the Herald in 2011.
