Soil and pasture management, feed additives and breeding are among the most promising approaches to reducing greenhouse gas emissions in beef production, according to a Rabobank report.
“You don’t actually need to completely turn the system upside down to start generating reasonable reductions in emissions, but it’s not as sexy as talking about blue ocean bonds, or growing red seaweed in Hawaii,” global protein strategist Justin Sherrard told Agri Investor.
Sherrard co-authored Rabobank’s June report exploring steps producers are taking to improve sustainability of the upstream and production stages of the beef supply chain, which account for about half of the sector’s 6 percent cumulative contribution to global emissions.
Methane released during digestion accounts for a majority of the emissions associated with beef, which also include nitrogen and carbon dioxide associated with land use change, feed crop production and other production practices, according to the report.
Rabobank describes how a misalignment of costs and benefits throughout the supply chain is holding back progress in reducing emissions. It notes that recent calls for regulation threaten to impose a flat rate tax on beef production and endorses market-based mechanisms as the best approach to “change how players are recognized and rewarded” and accelerate development of relevant technologies.
Soil and pasture management to reduce land use change; breeding and genetic advancements to select for low-emission traits and create efficient hybrid beef/dairy breeds and the formulation of feed that allows for adjustments to the basic diet are among the most promising approaches, according to Rabobank. Sherrard and co-author Eva Gocsik wrote that the sector has the potential to reduce global beef supply chain emissions by more than 30 percent by 2030.
Sherrard said producers’ early focus has been on technologies designed to measure and reduce emissions, camera-based sensors and electronic fencing to improve operations and early steps towards monetizing their own efforts to reduce carbon emissions. Most of the advancements in bovine and crop genetics likely to prove most effective over the long term, he said, are still at earlier stages of development.
“The first bits are not going to be all that hard, but if you really want to get to net zero, you’ve got a lot of work in front of you,” he said. “You don’t have to do it all this year or next year, but you want to start really thinking about how we are going to get that innovation into the system and what part you want to play in it.”
Thus far, he said, the investors most active in supporting the early-stage technologies currently under developments have been angel and venture capital firms and investing units attached to large supply chain incumbents.
Sherrard said all are focused on net-zero commitments being made by food retail, food service and manufacturers, including beef processors themselves. Rabobank’s report highlights the danger that these goals could prompt some food companies to reduce the share of higher-emitting commodities like beef.
Sherrard said he expects these pressures will propel a coming burst of activity, as investors move from digesting emissions reductions targets toward thinking about adjustments necessary for targets often framed by goals to be accomplished by 2050.
“Importantly, if you don’t get involved now, are you actually going to miss out? Are you going to get shut out somehow and not have access to the technologies because you didn’t get in at the early stage?” Sherrard said. “These are the questions that are tough for investors because you are asking a PE fund or a family-type investor to make an angel-type decision, and that’s not always comfortable.”