Mood of the Boardroom: Why methane emissions are a touchy subject

A Mangamuka farmer seems tired of being blamed for destroying the planet. Photo / Sheryl Bainbridge

There's one issue the business leaders are pretty much in unison on — New Zealand should be investing more in research to reduce methane emissions in the dairy and beef herds on the farms.

Some 86 per cent of the respondents agreed the research would lower the impact of major export drivers on New Zealand's emissions profile; 8 per cent disagreed, and 6 per cent were unsure.

On another "touchy" issue — agriculture will not be included in the Emissions Trading Scheme (ETS) until 2025 — 59 per cent of the respondents agreed with this timetable; 29 per cent didn't; and 12 per cent were unsure.

Fonterra director Cathy Quinn said 2025 is hardly very far away. "We need the science folk and the industry to work hard to find viable solutions to address the problem before we require farmers to do something for which there currently is not a solution.

"Suggesting farmers simply cut stock numbers is hardly a solution. How would you feel if you were told to cut your production by 50 per cent and your business is uneconomic for the better good of mankind? Agriculture, including dairy, has been a key contributor of New Zealand dealing with Covid from an economic sense. Let's support our farmers to find solutions," she said.

Roger Partridge, chairman of the New Zealand Initiative, said there was no point penalising farmers.

This will simply see emissions exported overseas. A banker said: "Sort coal first before we worry about cows."

An oil industry executive said flexibility and long lead times are always preferable for business, including agriculture, so the appropriate changes can be made without significant impact.

An investment banker said, however, "I've never understood why farmers are treated differently from any other small business.

"To not have used the last 10 years, and the $70 billion Covid fund, to assist with transition is a waste."

A forestry leader said methane accounts for 60 per cent of the global heating effect. Leaving agriculture out of the ETS is purely political, not science based. "Farmers vote, businesses don't vote — simple as that."

Terry Copeland, Federated Farmers chief executive, said the timetable gives industry, government and iwi partnership He Waka Eke Noa time to present a better option to reduce emissions than simply taxing them and raising the cost of food production, which is already too high for a lot of Kiwis to afford.

Tony Carter, Datacom's chair, also warned: "Be aware of unintended consequences. I recall when biofuels were all the rage. The impact was a rapid increase in food prices which had significant negative consequences, especially for the most vulnerable."

A dairy company executive said the agricultural sector was working with government, iwi and others to meet the reduction targets and establishing farm level pricing mechanisms for incentivising greenhouse gas emission reductions.

The ETS was the backstop if they don't deliver.

"Agriculture is such an important export sector where we lead the world with lowest emissions per kg milk solids. I support further reductions, and we should market this unique position as a strength," he said.

A banking leader said the argument for deferring the inclusion of agriculture in the ETS is that the technology to reduce the greenhouse gases produced by ruminant livestock does not exist. "I am personally aware of a technology which significantly reduces both nitrous oxide and methane emissions."

Rob Fyfe, Michael Hill International chairman, said there's a massive prize for innovation in this space. "Quite frankly if we can't, the consumer will make the decision for us.

"The trend to plant-based milks and meats is accelerating, and dairy and animal meat will become increasingly irrelevant if we don't solve these problems."

What companies are doing to lower emissions

We've moved into a green star rated building. Reviewing our carbon footprint. Our assessors are reducing their travel by completing some assessments via video. We joined the Sustainable Business Council to contribute to broader corporate action, and we're proactively including sustainability elements into our decision making. - Blair Turnbull, Tower

1. Currently moving to EV/Hybrid (firstly car fleet and then making available for personal use) 2. Hybrid working — less local travel for our people. 3. Earmarked Funding for Lending funding (and passing cost benefit on) to lend to customers for climate transition initiatives. We have a number of focuses in supply chain with and end-to-end view of how we manufacture, move and package products. Our energy consumption is constantly under review and we have accelerated the use of LED lighting and solar power with battery storage. - Banker

Taking ownership of what we can control. Solar power for all new buildings, water collection to potable standards from all buildings, electric handling equipment and the trialing of electric trucks. The ability for our customers to measure the carbon footprint per consignment and the choice of mode, Rail vs Road. - Don Braid, Mainfreight

We measure emissions and where it makes sense we have plans to reduce them eg lighting etc but Governement regulation will drive adverse outcomes (Natural gas is needed now). - David William Mair, Skellerup

Investing capital and opex in sustainable aviation fuel and green hydrogen/electric planes. Supporting studies. - Aviation leader

Electrified our dealer network with charging stations and have introduced the Transit PHEV and Escape PHEV and plan to launch an all electric Transit in Q2 '22. - Simon Rutherford, Ford NZ