WEBVTT - Planning for Prosperity: NetZero 2050: What farmers need to know with Professor Richard Eckard 0:00:00.050 --> 0:00:02.930 This podcast is sponsored by Action Steel. 0:00:06.980 --> 0:00:10.250 Because the fossil fuel sector has started reducing its emissions, 0:00:10.250 --> 0:00:13.400 the transport sector started reducing its emissions and agriculture stayed 0:00:13.400 --> 0:00:16.670 the same. Suddenly this year we're not 14% like we 0:00:16.670 --> 0:00:19.400 were last year. We are 17%. It's a percentage game. 0:00:19.400 --> 0:00:22.099 So what's going to happen over time is if agriculture 0:00:22.100 --> 0:00:25.069 does nothing, we'll become the only sector of greenhouse gas 0:00:25.070 --> 0:00:27.680 emissions while all other sectors go to zero. 0:00:27.710 --> 0:00:31.520 Hello and welcome back to Shared Solutions by BCG. I'm 0:00:31.520 --> 0:00:35.510 Janine Batters. In this episode of our series planning for prosperity, 0:00:35.510 --> 0:00:37.760 I'm going to be speaking with the University of Melbourne's 0:00:37.760 --> 0:00:40.910 Professor Richard Eckard, about what farmers can expect from the 0:00:40.909 --> 0:00:43.699 net zero policy and steps they can take now as 0:00:43.700 --> 0:00:46.640 farmers and in the near future. I feel like Richard 0:00:46.640 --> 0:00:50.479 needs no introduction. We're actually talking about you in the office, Richard, 0:00:50.479 --> 0:00:55.460 as soil carbon royalty. So you were named as Reuters, 0:00:55.460 --> 0:00:59.890 one of Reuters top most influential scientists, is that correct? 0:00:59.920 --> 0:01:04.510 Yes. Thanks, Janine. And I named 1000 of the top 0:01:04.510 --> 0:01:08.530 climate science influencers. And I think it's got a lot 0:01:08.530 --> 0:01:11.740 to do with annoying in the media, regular appearances in 0:01:11.740 --> 0:01:14.770 the media, because everybody wants to know something about carbon farming. 0:01:14.770 --> 0:01:17.020 And can we get to net zero? And there's not 0:01:17.020 --> 0:01:19.180 a lot of voices out there that are independent. 0:01:19.209 --> 0:01:21.520 We are so pleased to have you in the room, Richard, 0:01:21.520 --> 0:01:24.610 and I feel like I should be calling you Professor Richard, 0:01:24.610 --> 0:01:27.009 so I hope it's okay that I'm calling you Richard. 0:01:27.040 --> 0:01:31.120 We also have with us BCG senior research and extension 0:01:31.120 --> 0:01:33.789 manager Grace Hosking, who's going to be joining us. 0:01:33.790 --> 0:01:36.310 Thanks, Janine. I am not royalty, but I'm feeling very 0:01:36.310 --> 0:01:38.080 lucky to be with royalty today. 0:01:38.080 --> 0:01:41.080 Looking forward to chatting to you today about what farmers 0:01:41.080 --> 0:01:43.570 can do now, things that are in their control to 0:01:43.600 --> 0:01:45.700 help in this space. I thought it might actually be 0:01:45.700 --> 0:01:48.700 interesting for our listeners. Richard, if you gave a little 0:01:48.730 --> 0:01:52.420 bit of a background on why you actually are in 0:01:52.420 --> 0:01:56.290 this space, so your experience and why you actually chose 0:01:56.290 --> 0:01:57.340 to do this. I was really. 0:01:57.340 --> 0:02:00.210 Introduced the other day as the grandfather of carbon farming. 0:02:00.750 --> 0:02:03.600 And I'm not sure I'm still processing that, but it 0:02:03.600 --> 0:02:06.420 goes to history as to, you know, doing an undergraduate 0:02:06.420 --> 0:02:09.660 in biochemistry of ruminant nutrition, which positioned me to look 0:02:09.690 --> 0:02:14.370 at methane and then doing a master's degree in soil nitrogen, 0:02:14.370 --> 0:02:17.550 so suddenly became a soil scientist. It was really at 0:02:17.550 --> 0:02:19.770 this sort of PhD and then subsequent level, that it 0:02:19.770 --> 0:02:22.320 took more of a systems view of the world stepping 0:02:22.320 --> 0:02:24.540 back and say, how does it all fit together? And 0:02:24.540 --> 0:02:26.760 that's what got me into carbon farming, because it's not 0:02:26.760 --> 0:02:29.280 just we're just going to put on less nitrogen. It's 0:02:29.310 --> 0:02:32.730 actually a whole systems view of carbon cycling through our 0:02:32.730 --> 0:02:36.179 agricultural systems. And unless you take that sort of holistic 0:02:36.180 --> 0:02:38.459 view of how this is all going to come together, 0:02:38.460 --> 0:02:40.590 you don't get the right picture. You could get skewed 0:02:40.590 --> 0:02:41.760 action that makes sense. 0:02:41.760 --> 0:02:44.160 And, Grace, can you tell me how you came to 0:02:44.160 --> 0:02:45.030 be in this space? 0:02:45.060 --> 0:02:47.220 No worries Janine. So I grew up on a farm 0:02:47.220 --> 0:02:50.400 at Quambatook, so a broadacre livestock and cropping farm. I 0:02:50.400 --> 0:02:52.710 then went away to study a Bachelor of Agriculture at 0:02:52.710 --> 0:02:55.980 the University of Melbourne, and in recent years have returned 0:02:55.980 --> 0:02:58.200 to the region. So I'm now working in the research 0:02:58.230 --> 0:03:02.040 and extension team at BCG. So our team works with 0:03:02.040 --> 0:03:04.200 a number of projects, and one of the really exciting 0:03:04.200 --> 0:03:08.070 projects that we're involved in is the Carbon Farming Outreach Project. 0:03:08.100 --> 0:03:10.920 So it's in collaboration with the grower Group Alliance, and 0:03:10.919 --> 0:03:14.820 it involves a suite of extension activities surrounding carbon awareness raising. 0:03:14.820 --> 0:03:16.710 Grace thought it might be helpful for some of our 0:03:16.710 --> 0:03:19.350 listeners to know a little bit more about what are 0:03:19.350 --> 0:03:23.190 the basics behind greenhouse gas emissions, what are they, and 0:03:23.190 --> 0:03:26.490 then what is meant by scope one, scope two, and 0:03:26.490 --> 0:03:27.329 scope three? 0:03:27.360 --> 0:03:29.580 Yeah, so it can be a bit of a confusing space, 0:03:29.580 --> 0:03:32.190 particularly as a grower. Janine, we're hearing it in the media. 0:03:32.220 --> 0:03:35.880 There's lots of different jargon being used, but essentially it 0:03:35.880 --> 0:03:38.310 presents quite an opportunity for the industry and a bit 0:03:38.310 --> 0:03:41.430 of a challenge. On one hand, we're emitting greenhouse gases, 0:03:41.430 --> 0:03:45.930 so things like carbon dioxide, nitrous oxide and methane, and 0:03:45.930 --> 0:03:50.220 that's through various farming activities. So it might be running machinery. 0:03:50.250 --> 0:03:54.120 It's through using fertilizers and even the breakdown of crop residues. 0:03:54.120 --> 0:03:57.710 But then on the other hand, through photosynthesis, our crops 0:03:57.710 --> 0:04:00.530 actually take in carbon dioxide from the atmosphere, and some 0:04:00.560 --> 0:04:03.470 of that carbon gets stored in the soil as organic carbon. 0:04:03.470 --> 0:04:05.840 And that's really essential to a healthy soil. So we 0:04:05.840 --> 0:04:08.960 can then kind of break emissions down further into what's 0:04:08.990 --> 0:04:12.410 known as scope one, scope two and scope three. So 0:04:12.410 --> 0:04:15.830 it's things like carbon dioxide from burning diesel in our tractors, 0:04:15.830 --> 0:04:19.700 or nitrous oxide that's released when fertilizers and crop residues 0:04:19.700 --> 0:04:22.550 break down in the soil. We've then got scope two emissions. 0:04:22.550 --> 0:04:25.730 So they're what's known as indirect emissions. And for our 0:04:25.730 --> 0:04:28.940 farming system they're mostly from electricity use. So a really 0:04:28.940 --> 0:04:32.870 good example of this is aeration cooling for stored grain 0:04:32.870 --> 0:04:35.900 on farm. The electricity that is used to run that 0:04:35.900 --> 0:04:39.230 cooling system is what's known as a scope two emission. 0:04:39.230 --> 0:04:41.810 Then finally there's scope three emissions. And these ones are 0:04:41.839 --> 0:04:44.239 kind of the trickiest for us because they come from 0:04:44.240 --> 0:04:47.120 the production of the inputs that we use on farms. 0:04:47.120 --> 0:04:52.609 So anything like urea, herbicides, pesticides, other fertilizers, that sort 0:04:52.610 --> 0:04:55.179 of thing. So whilst we don't directly emit these, they're 0:04:55.180 --> 0:04:57.580 part of the carbon footprint of the products that we 0:04:57.580 --> 0:04:59.710 rely on and so we inherit them. 0:04:59.740 --> 0:05:02.410 Okay. Thanks, Grace. That was a really good outline. So Richard, 0:05:02.410 --> 0:05:05.350 can you tell our listeners why it's important that we 0:05:05.350 --> 0:05:09.550 understand scope one, scope two and scope three, and why 0:05:09.580 --> 0:05:12.490 our scope one is other people's scope three? 0:05:12.520 --> 0:05:16.060 Yeah, correct. Scope one, two and three, as Grace explained, 0:05:16.060 --> 0:05:20.350 differs depending on which organisation you are in the supply chain. 0:05:20.350 --> 0:05:24.220 So when you are selling your product to your supply 0:05:24.220 --> 0:05:26.800 chain and they have a target. Their target is your 0:05:26.800 --> 0:05:29.680 scope one, two and three. They call it their scope three. 0:05:29.680 --> 0:05:32.529 So if you think about what Grace was saying, the 0:05:32.529 --> 0:05:36.250 supply chain scope one is just their local petrol consumption. 0:05:36.250 --> 0:05:39.250 Their scope two is electricity, but their scope three is 0:05:39.250 --> 0:05:42.130 your farm and that is your on farm emissions of 0:05:42.130 --> 0:05:45.400 scope one, two and three. So that's why it matters, 0:05:45.400 --> 0:05:48.460 because when you're at a farm level and you're looking 0:05:48.460 --> 0:05:50.560 at the different scopes, well, there's something you can do 0:05:50.560 --> 0:05:52.800 about each one of them, but it's a different action. 0:05:52.830 --> 0:05:56.100 Scope one is changing farm practice or doing less to 0:05:56.130 --> 0:05:59.220 emit on farm. Scope two is deciding whether you put 0:05:59.220 --> 0:06:02.970 solar panels and batteries versus drawing electricity out of the grid. 0:06:03.000 --> 0:06:06.450 Scope three is your purchasing power. Where do you buy 0:06:06.450 --> 0:06:09.810 your products from? Where do you buy your your your glyphosate? 0:06:09.810 --> 0:06:12.420 Where do you buy your grain? Where do you buy inputs, 0:06:12.420 --> 0:06:16.680 fertilizer inputs. So that's that's purchasing power rather than doing 0:06:16.680 --> 0:06:18.030 something different on farm. 0:06:18.060 --> 0:06:23.760 Whereas our scope one is say big banks, scope three correct. 0:06:23.760 --> 0:06:26.940 Largely a farm scope one is what the banks and 0:06:26.940 --> 0:06:30.690 the supply chain are concerned about. That's direct emissions from 0:06:30.690 --> 0:06:31.409 the farm. 0:06:31.410 --> 0:06:34.260 And so that's why they're interested in what we're doing. 0:06:34.290 --> 0:06:37.109 They have set targets because they have to appeal to 0:06:37.140 --> 0:06:40.830 international shareholders who are concerned about the risk of exposure 0:06:40.830 --> 0:06:43.890 to greenhouse gas emissions. So you can see how they've 0:06:43.890 --> 0:06:46.680 set the targets, but they're equally nervous about they don't 0:06:46.680 --> 0:06:49.650 control what farmers do on farm. So they're concerned about 0:06:49.650 --> 0:06:51.690 how they're going to get to their targets. It makes. 0:06:51.690 --> 0:06:54.810 Sense. So I think taking a step back now, can 0:06:54.810 --> 0:07:00.029 you explain to our listeners what actually is net zero? 0:07:00.060 --> 0:07:03.120 So there's two terms out there carbon neutral and net zero. 0:07:03.120 --> 0:07:06.210 And they sound very similar but they are slightly different. 0:07:06.240 --> 0:07:09.630 Carbon neutral implies you're going to do everything you can 0:07:09.630 --> 0:07:12.480 in your power to get your emissions down to zero. 0:07:12.480 --> 0:07:15.780 And then if you can't get the last few kilograms 0:07:15.780 --> 0:07:18.000 down to zero, you plant a few trees or you 0:07:18.030 --> 0:07:21.690 sequester carbon in soils and you offset the balance. Net 0:07:21.690 --> 0:07:24.750 zero doesn't care how you get there. Net zero says 0:07:24.750 --> 0:07:28.260 the sum of what you emit, minus what you store 0:07:28.260 --> 0:07:31.170 in the soil and tree, must just be a zero sum. 0:07:31.170 --> 0:07:33.960 So you can plant trees first as the first course 0:07:33.960 --> 0:07:36.540 of action and still be net zero. So if you 0:07:36.540 --> 0:07:39.990 think about case studies, we've done Jigsaw Farms, which is 0:07:39.990 --> 0:07:43.560 a prominent case study. And essentially we used to talk 0:07:43.560 --> 0:07:46.740 about it being carbon neutral. But it's not actually it's 0:07:46.770 --> 0:07:50.360 actually net zero because they have planted trees, but the 0:07:50.360 --> 0:07:53.239 methane from the animals is still there. They haven't done 0:07:53.240 --> 0:07:56.420 anything about reducing that. And that's where we've got to 0:07:56.450 --> 0:07:58.250 in that case study is saying, what are we going 0:07:58.280 --> 0:08:00.950 to do about that? Because actually to get to carbon neutral, 0:08:00.950 --> 0:08:03.170 you've got to turn the equation around and do something 0:08:03.200 --> 0:08:06.800 first about your scope one emissions and then offset only 0:08:06.800 --> 0:08:07.700 the residual. 0:08:07.730 --> 0:08:11.450 So they're both about counterbalancing not just about reducing our 0:08:11.450 --> 0:08:12.350 emissions to zero. 0:08:12.380 --> 0:08:15.470 That's the true definition of carbon neutral is getting emissions 0:08:15.470 --> 0:08:19.010 down to zero. It's embedded in both terms net zero. 0:08:19.010 --> 0:08:22.100 But net zero says we can plant trees first rather 0:08:22.100 --> 0:08:24.710 than actually take the hard yards of doing something about 0:08:24.710 --> 0:08:25.910 the emissions. 0:08:25.940 --> 0:08:29.480 So, Richard, as a grain grower, knowing that these targets 0:08:29.480 --> 0:08:32.180 are on the horizon, should I be trying to focus 0:08:32.179 --> 0:08:34.820 on my my farm becoming carbon neutral? 0:08:34.850 --> 0:08:37.910 I'd say no. No supply chain at this stage is 0:08:37.910 --> 0:08:40.610 asking for carbon neutral. If you look at all the targets, 0:08:40.610 --> 0:08:43.550 they vary a bit. But most supply chain and banks 0:08:43.550 --> 0:08:47.540 have a target of about 30% less emissions intensity by 0:08:47.590 --> 0:08:51.820 2030 and net zero by 2050. So really 2050 is 0:08:51.820 --> 0:08:55.120 the zero target and it's hopefully a long way out still. 0:08:55.120 --> 0:08:59.500 So 2030 is really about emissions intensity, which says can 0:08:59.500 --> 0:09:02.290 you be more efficient at producing that kilogram of grain. 0:09:02.320 --> 0:09:04.959 Okay. So let's talk about that. Both of us are 0:09:04.990 --> 0:09:07.360 grain farmers. What are some of the things that we 0:09:07.360 --> 0:09:11.170 can do now to help reduce our emissions or meet 0:09:11.170 --> 0:09:12.790 this net zero target? 0:09:12.820 --> 0:09:15.400 So if you're a grain producer and you look at 0:09:15.400 --> 0:09:19.840 the pie chart of grain emissions, it's mainly from nitrogen fertilizer. 0:09:19.840 --> 0:09:23.320 So it's about where you buy your nitrogen fertilizer. And 0:09:23.320 --> 0:09:26.319 it's how you use your nitrogen fertilizer on farm. So 0:09:26.350 --> 0:09:30.100 immediately it goes to can we buy more benign sources 0:09:30.100 --> 0:09:32.680 of nitrogen, or can we move one day to on 0:09:32.679 --> 0:09:36.969 farm generation of nitrogen using solar energy. And those technologies 0:09:36.970 --> 0:09:41.140 are emerging. So we see a future post 2030 where 0:09:41.170 --> 0:09:44.920 farmers will have solar panels generating their own ammonia for 0:09:44.950 --> 0:09:47.820 instead of buying fossil fuel fertilizer. 0:09:47.850 --> 0:09:50.910 I'm very excited about this, Richard, because what I feel 0:09:50.910 --> 0:09:55.260 like farmers are thinking when they hear net zero got 0:09:55.260 --> 0:09:58.199 to reduce our nitrogen is how am I going to 0:09:58.200 --> 0:10:00.929 grow a crop if I have to reduce my nitrogen? 0:10:00.929 --> 0:10:04.949 So can you explain what you mean by more benign products? 0:10:04.980 --> 0:10:08.880 A more benign source of urea, for example. Urea has 0:10:08.880 --> 0:10:11.520 a massive amount of natural gas used to fire the 0:10:11.520 --> 0:10:15.420 haber-bosch process, which makes ammonia out of air. And so 0:10:15.420 --> 0:10:18.780 it has a very high carbon footprint. Now, it depends 0:10:18.780 --> 0:10:20.819 where you buy urea from around the world. If you 0:10:20.820 --> 0:10:24.270 buy from China, for example, where they don't recycle within 0:10:24.270 --> 0:10:28.140 the manufacturing plant, that's 2.7 tons of emissions per tonne 0:10:28.140 --> 0:10:31.170 of urea. If you buy from Canada where they do recycle, 0:10:31.170 --> 0:10:34.229 that's 0.9. So now we've got fertilizer companies in Australia 0:10:34.260 --> 0:10:38.040 preferentially buying from Canada to reduce the footprint of the product. 0:10:38.040 --> 0:10:40.140 So selling something more benign. 0:10:40.170 --> 0:10:41.610 Are they passing that on to the farmer or is 0:10:41.610 --> 0:10:43.170 that more expensive. 0:10:43.200 --> 0:10:46.280 It wouldn't be more expensive. csbp in Western Australia have 0:10:46.280 --> 0:10:49.550 already gone down that route and the unit cost is 0:10:49.550 --> 0:10:53.180 the same. It's just they what they do pass on 0:10:53.179 --> 0:10:56.090 is the 0.9 instead of the 2.7. So when you're 0:10:56.090 --> 0:10:58.940 doing a farm audit and you're a Western Australian grain producer, 0:10:58.940 --> 0:11:02.390 you should use a 0.9 in your scope three emissions. 0:11:02.390 --> 0:11:04.820 So that makes quite a big difference if you think 0:11:04.820 --> 0:11:07.250 about it. But then we've got the on farm side 0:11:07.250 --> 0:11:11.449 which is about coated ureas. So these nitrification inhibitor products 0:11:11.450 --> 0:11:13.430 that also make urea more benign. 0:11:13.429 --> 0:11:17.120 So about those, is there a risk that if I'm 0:11:17.120 --> 0:11:20.420 in a low rainfall environment that by coating those products, 0:11:20.420 --> 0:11:22.400 it might not work as well in my soil? 0:11:22.429 --> 0:11:25.280 Correct. The main process by which nitrous oxide is lost 0:11:25.280 --> 0:11:28.340 is what we call denitrification, which is where you've got 0:11:28.340 --> 0:11:32.060 nitrates sitting in the soil and it's waterlogged so it's anaerobic. 0:11:32.090 --> 0:11:35.150 Now if you think about the Western Australian grains industry 0:11:35.150 --> 0:11:39.079 with sandy soils and 200mm of rainfall, that doesn't happen 0:11:39.080 --> 0:11:42.170 very often. So most of the nitrous oxide they they 0:11:42.170 --> 0:11:46.670 lose is from an aerobic process called nitrification. And really 0:11:46.670 --> 0:11:49.730 if that's the main source of nitrogen you're losing, it's 0:11:49.730 --> 0:11:52.550 not a big issue. So you probably wouldn't spend the 0:11:52.550 --> 0:11:55.670 extra money to reduce that nitrogen because you talk about 0:11:55.700 --> 0:11:57.470 milligrams per hectare okay. 0:11:57.500 --> 0:12:00.020 I also really like that. I'm sure Grace really liked 0:12:00.020 --> 0:12:02.990 what you spoke about before, about making our own urea, 0:12:03.020 --> 0:12:05.989 because I think that might help input costs, too. But 0:12:05.990 --> 0:12:08.569 I could be dreaming. Richard, am I going to need 0:12:08.570 --> 0:12:11.150 to turn my farm into a solar farm to make 0:12:11.150 --> 0:12:12.200 my own urea? 0:12:12.230 --> 0:12:14.540 We've done some work in the cotton industry, where we 0:12:14.540 --> 0:12:17.810 discovered that the majority of water pumping in cotton is 0:12:17.809 --> 0:12:20.450 off grid solar. And if you think about how many 0:12:20.450 --> 0:12:22.819 months of the year they pump, it's probably less than 0:12:22.820 --> 0:12:27.500 half the year. So they had a lot of off grid, disconnected, 0:12:27.530 --> 0:12:30.590 idle solar for six months of the year. And so 0:12:30.590 --> 0:12:35.150 if you connect that up to a passive green hydrogen technology, 0:12:35.150 --> 0:12:38.420 which is available commercially already and is pretty much being 0:12:38.420 --> 0:12:41.870 developed rapidly, you could use surplus solar on farm to 0:12:41.950 --> 0:12:46.240 generate your own ammonia. So the idea of a solar farm, 0:12:46.240 --> 0:12:50.290 you could if you wanted to move quicker. But if 0:12:50.290 --> 0:12:52.660 you had lots of off grid pumping or you had 0:12:52.840 --> 0:12:55.270 lots of off grid solar, you could already have the 0:12:55.270 --> 0:12:56.470 capacity sitting there. 0:12:56.470 --> 0:13:00.610 So what does that look like for us visually? What 0:13:00.610 --> 0:13:03.130 is that solar? How much space is that going to 0:13:03.130 --> 0:13:03.790 take up? 0:13:04.000 --> 0:13:07.660 If you had to generate all the passive ammonia for, say, 0:13:07.660 --> 0:13:10.719 a large grain property in the north west of Victoria, 0:13:10.750 --> 0:13:14.170 you're not talking about hectares under solar, you're talking about 0:13:14.170 --> 0:13:18.429 sub hectares. So it would require a solar farm, but 0:13:18.429 --> 0:13:20.650 it wouldn't be a solar farm that occupies a lot 0:13:20.650 --> 0:13:23.439 of land area because you can get them fairly efficient 0:13:23.440 --> 0:13:26.290 within less than a hectare to generate all the ammonia 0:13:26.320 --> 0:13:27.280 you would need. 0:13:27.309 --> 0:13:30.670 Okay, I'm leaning in and I'm sure Grace is too. 0:13:30.700 --> 0:13:33.880 How much do these commercial plants cost? 0:13:33.910 --> 0:13:35.920 Unfortunately, I have no idea. 0:13:36.220 --> 0:13:38.920 That was that was that was what I was like. Righto. 0:13:38.950 --> 0:13:40.390 Sign me up. I'm ready to buy one. 0:13:40.420 --> 0:13:40.719 Yeah. 0:13:40.720 --> 0:13:44.340 Can we go back to the scope one? The scope 0:13:44.370 --> 0:13:48.840 two and the scope three. And why there is such 0:13:48.840 --> 0:13:52.710 a push? We're hearing carbon credits. We're hearing banks now 0:13:52.740 --> 0:13:56.610 talking about these things. What do farmers need to know 0:13:56.610 --> 0:14:02.010 about net zero about these different scopes if they're being 0:14:02.010 --> 0:14:04.770 approached by other people in the supply chain? 0:14:04.950 --> 0:14:07.410 Yeah. So what we're starting to see is all those 0:14:07.410 --> 0:14:09.900 targets set by your supply chain, what we call your 0:14:09.900 --> 0:14:12.929 value chain, which is the banks as well as the, 0:14:12.929 --> 0:14:15.390 the buyers of the product and perhaps some of the 0:14:15.390 --> 0:14:18.270 suppliers of products, the farms, they all have these scope 0:14:18.300 --> 0:14:21.930 three targets. And those targets are actually your phone. And 0:14:21.930 --> 0:14:24.570 so they need what you have on your farm to 0:14:24.600 --> 0:14:27.390 meet their target. They can't meet their target without your 0:14:27.390 --> 0:14:32.040 farm participating and sharing or socializing their carbon number along 0:14:32.040 --> 0:14:35.340 the value chain. So this creates an interesting dynamic where 0:14:35.340 --> 0:14:39.090 there's a co-dependency that hasn't been realized before, where the 0:14:39.140 --> 0:14:44.690 banks scope 330% target is the same as Cargill's 30% target, 0:14:44.690 --> 0:14:47.030 which is the same as Nutrien's target, which is the 0:14:47.030 --> 0:14:50.690 same as everyone else's target, which is your phone. But 0:14:50.690 --> 0:14:53.600 what we haven't seen is those entities setting the target, 0:14:53.630 --> 0:14:57.260 actually sitting around the table and realizing their codependency. And 0:14:57.260 --> 0:14:59.840 we think that's where the solution lies. Actually, the farmers 0:14:59.840 --> 0:15:02.840 got something to offer, which is a low number that 0:15:02.840 --> 0:15:07.460 they would preferentially want to buy. But we need to 0:15:07.460 --> 0:15:09.620 figure out what the business model looks like for each 0:15:09.620 --> 0:15:13.400 of these, because that co-dependency means not everybody's paying. We're 0:15:13.400 --> 0:15:14.390 all sharing. 0:15:14.390 --> 0:15:16.400 So you're the guru. I'm sure you've got an idea 0:15:16.400 --> 0:15:17.750 on how they could. 0:15:17.840 --> 0:15:19.640 There are ways in which we can do it. It's 0:15:19.640 --> 0:15:23.780 fertilizer companies working with government on pre coating all the fertiliser. 0:15:23.780 --> 0:15:26.360 So can we get all the fertilizer we buy instead 0:15:26.360 --> 0:15:29.330 of buying straight urea you're buying coated urea and you're 0:15:29.330 --> 0:15:32.900 cropping emissions are 50% less overnight. If all the fertiliser 0:15:32.900 --> 0:15:36.560 companies did it it wouldn't be 14% per unit nitrogen. 0:15:36.560 --> 0:15:39.240 It would be 4%. So suddenly you're talking about a 0:15:39.240 --> 0:15:43.260 more tolerable level. And then if everyone in the value 0:15:43.260 --> 0:15:46.020 chain were able to come to the party with a 0:15:46.020 --> 0:15:50.940 small amount of investment to buy into that consortium, that 4% 0:15:50.940 --> 0:15:51.960 is negligible. 0:15:51.990 --> 0:15:56.250 So are you talking about working with the government to Precoat? 0:15:56.250 --> 0:16:00.540 But the question I asked before about low rainfall environments, 0:16:00.540 --> 0:16:02.970 and I'm probably got this wrong because I'm not neither 0:16:02.970 --> 0:16:06.330 a soil scientist or an agronomist. Does that mean that 0:16:06.330 --> 0:16:09.210 if it's in a low rainfall environment and you have 0:16:09.210 --> 0:16:12.180 to buy the pre coated stuff, that you're not going 0:16:12.210 --> 0:16:14.220 to be able to have as much nitrogen available as 0:16:14.220 --> 0:16:16.350 if you didn't buy the pre coated urea. 0:16:16.380 --> 0:16:18.930 That probably wouldn't be the case because the nitrogen would 0:16:18.930 --> 0:16:21.900 just be slightly more efficient regardless of which system you 0:16:21.900 --> 0:16:25.320 put it on. What you'd probably argue is if the 0:16:25.320 --> 0:16:28.650 system that it goes on to is never anaerobic is 0:16:28.650 --> 0:16:32.790 never saturated, then the efficacy of the coating is probably 0:16:32.790 --> 0:16:35.430 not as much as if it was put on in 0:16:35.430 --> 0:16:38.440 a saturated the environment, so the amount of savings of 0:16:38.440 --> 0:16:41.710 nitrous oxide would be less proportionately. But you would argue 0:16:41.740 --> 0:16:45.310 that if that system is never saturated, it wasn't producing 0:16:45.310 --> 0:16:46.990 nitrous oxide in the first place. 0:16:47.020 --> 0:16:48.970 I love that you've got all this information in your 0:16:48.970 --> 0:16:50.920 head and I've just got access to it. I'm really 0:16:50.920 --> 0:16:54.850 loving this. My second question around what you were saying 0:16:54.880 --> 0:16:58.390 in regards to numbers, you were talking numbers and how 0:16:58.420 --> 0:17:01.600 farmers could give the value chain their numbers. Explain to 0:17:01.600 --> 0:17:03.160 me more about these numbers, Richard. 0:17:03.160 --> 0:17:06.640 So there's two types of targets for greenhouse gas emissions. 0:17:06.640 --> 0:17:09.940 There's absolute targets, which is what governments set and say 0:17:09.940 --> 0:17:12.550 we want to be zero by 2050. That's not what 0:17:12.550 --> 0:17:15.700 the farmer is facing. The supply chain and value chain 0:17:15.700 --> 0:17:18.340 can only buy on the basis of emissions per tonne 0:17:18.369 --> 0:17:21.250 of grain. And that's what we call emissions intensity. It's 0:17:21.250 --> 0:17:24.220 quite different because you might not be able to shift 0:17:24.220 --> 0:17:27.010 the greenhouse gas emissions, but you can increase the efficiency 0:17:27.010 --> 0:17:29.770 of the grain production. And so if you were a 0:17:29.770 --> 0:17:32.230 farmer that is in a low rainfall region and you 0:17:32.260 --> 0:17:34.570 are putting on, say, 50 kilos of nitrogen and getting 0:17:34.570 --> 0:17:37.379 a three tonne grain crop, you could be a lower 0:17:37.380 --> 0:17:40.350 number than someone who's putting on 100 kilos and only 0:17:40.350 --> 0:17:44.850 getting three tonnes. It gives farmers a direction to move to, say, 0:17:44.850 --> 0:17:47.550 in the emissions intensity metric for grains, we can go 0:17:47.550 --> 0:17:51.600 from 0.15 to 0.5 tonnes of emissions per tonne of 0:17:51.600 --> 0:17:55.080 grain just by being more efficient with nitrogen fertiliser. 0:17:55.109 --> 0:17:59.580 I think that's that crucial point, probably of our conversation. 0:17:59.580 --> 0:18:01.680 I'm actually going to get you to repeat that. Can 0:18:01.680 --> 0:18:05.070 you tell me again about numbers and why it's so 0:18:05.070 --> 0:18:06.810 important that we know our numbers? 0:18:06.810 --> 0:18:10.020 So the importance of knowing the number is if you're 0:18:10.020 --> 0:18:12.990 a grain buyer and you have a target, there's no 0:18:12.990 --> 0:18:17.070 incentive for you to buy a higher emissions farming system 0:18:17.070 --> 0:18:20.730 grain supply than a lower. But the metric on which 0:18:20.730 --> 0:18:24.149 they can buy is emissions per tonne of product. So 0:18:24.150 --> 0:18:27.780 that's greenhouse gas emissions per tonne of grain. And if 0:18:27.810 --> 0:18:31.619 you are a less efficient farmer then you're 0.5. In 0:18:31.619 --> 0:18:34.550 other words, 0.5 tonnes of emissions per ton of grain 0:18:34.550 --> 0:18:39.050 if you better. With nitrogen fertilizer efficiency, you're a 0.15. 0:18:39.080 --> 0:18:41.929 In other words, an order of magnitude lower than the 0:18:41.930 --> 0:18:44.359 high emitting farmer. So if you're a buyer and you 0:18:44.359 --> 0:18:46.520 have a 30% target, you're going to buy all the 0:18:46.520 --> 0:18:50.389 0.15 first, because you'll meet your quota with the 0.15, 0:18:50.480 --> 0:18:53.600 you won't bother with the 0.5, because if you buy 0:18:53.630 --> 0:18:56.929 all 0.5, it costs you more in carbon credits to 0:18:56.960 --> 0:18:59.210 achieve your target. You suddenly have to go buy carbon 0:18:59.210 --> 0:19:01.460 credits to get to your target, whereas if you only 0:19:01.460 --> 0:19:05.179 bought the 0.15, you would probably meet your 2030 target 0:19:05.180 --> 0:19:09.139 just by preferentially buying low emission or low emissions intensity 0:19:09.170 --> 0:19:10.040 farms first. 0:19:10.130 --> 0:19:13.399 I feel like you've just completely flipped the script on 0:19:13.400 --> 0:19:18.170 this conversation and this whole discussion, because farmers are all 0:19:18.170 --> 0:19:22.310 about being more efficient. BCG is all about helping farmers 0:19:22.340 --> 0:19:25.520 be more efficient. We are focusing on all the time 0:19:25.520 --> 0:19:29.389 how we can improve efficiencies, improve yields. And so I 0:19:29.390 --> 0:19:33.250 think it's a really positive way to look at all this. 0:19:33.280 --> 0:19:37.270 If we can think about it rather than, oh, I've 0:19:37.270 --> 0:19:41.680 got to do this, and I'm just looking at doing 0:19:41.680 --> 0:19:44.590 what I'm already doing, and there's some more strategies and 0:19:44.590 --> 0:19:46.960 there's some more tools out there that can help me 0:19:46.960 --> 0:19:51.100 achieve that. I think that's actually really exciting. Now, I 0:19:51.100 --> 0:19:55.119 picked up that you mentioned carbon credits there, Richard. And 0:19:55.119 --> 0:19:59.140 for a start, can you just explain what are carbon credits. 0:19:59.140 --> 0:20:03.250 So carbon credits are a represent one. Carbon credit is 0:20:03.250 --> 0:20:08.050 one tonne of carbon dioxide equivalents turned into a financial instrument. 0:20:08.050 --> 0:20:09.670 So you can think of a carbon credit just like 0:20:09.700 --> 0:20:13.060 a BHP share certificate. It doesn't have value until you 0:20:13.060 --> 0:20:16.240 choose to monetize it, but you can generate it. And 0:20:16.240 --> 0:20:18.490 the reason why it's an equivalent because if you reduce 0:20:18.490 --> 0:20:22.359 nitrous oxide by a tonne of carbon dioxide equivalent, that's 0:20:22.359 --> 0:20:25.689 one carbon credit. If you can store one tonne of 0:20:25.720 --> 0:20:29.139 soil carbon as a one tonne of CO2 equivalent as 0:20:29.140 --> 0:20:32.560 soil carbon, that's one carbon credit. If you sell your 0:20:32.560 --> 0:20:34.960 animals early for market and there's a ton of methane 0:20:34.960 --> 0:20:37.450 less as a result, that's one carbon credit. 0:20:37.450 --> 0:20:39.490 So how are they currently being used. 0:20:39.520 --> 0:20:43.060 At the moment? There's voluntary markets around the world. And 0:20:43.060 --> 0:20:46.480 these compliance markets will be called government markets. Not many 0:20:46.480 --> 0:20:50.590 government markets mainly in Alberta for farmers and in Australia, 0:20:50.619 --> 0:20:54.250 the carbon farming initiative was the market. It's now morphed 0:20:54.250 --> 0:20:58.119 into other things. But Australia is probably the biggest carbon 0:20:58.119 --> 0:21:01.000 compliance carbon credit market in the world. And they have 0:21:01.000 --> 0:21:04.659 a currency called an Australian carbon credit unit, which has 0:21:04.660 --> 0:21:07.600 a approximate value if you sell it on the free 0:21:07.630 --> 0:21:11.590 market at the moment of about $35 per carbon credit. 0:21:11.619 --> 0:21:15.130 Do you think that the interest in carbon credits will 0:21:15.130 --> 0:21:19.090 increase with this push for net zero? 0:21:19.119 --> 0:21:21.670 So the flow in carbon credits, the way I see 0:21:21.670 --> 0:21:24.369 it is it makes it too easy for the big 0:21:24.369 --> 0:21:28.420 emitters to avoid doing serious action. It makes it easier 0:21:28.420 --> 0:21:30.090 for them to just go to the market and buy 0:21:30.090 --> 0:21:32.580 their way out of trouble. Because for a farmer, paying 0:21:32.609 --> 0:21:37.709 $35 a tonne for carbon is expensive. For a mining giant, 0:21:37.710 --> 0:21:41.639 it's spare cash. And so for the mining giants to 0:21:41.670 --> 0:21:43.980 buy their way out of trouble, buying carbon credits from 0:21:43.980 --> 0:21:46.500 the land sector is the easy way out of trouble. 0:21:46.500 --> 0:21:48.990 Which gets you back to the net zero versus carbon 0:21:48.990 --> 0:21:52.139 neutral argument. So they're heading for net zero, but they 0:21:52.140 --> 0:21:55.020 won't be carbon neutral because they've done nothing about their emissions. 0:21:55.020 --> 0:21:57.270 If you just buying your way out of trouble, what 0:21:57.270 --> 0:21:59.399 you do is you affect land use change in the 0:21:59.400 --> 0:22:03.420 land sector. And that's unfortunately what we're seeing is the 0:22:03.420 --> 0:22:05.670 big end of town can afford to buy up agricultural 0:22:05.670 --> 0:22:08.729 land and plant trees. That's not in the interests of 0:22:08.730 --> 0:22:12.689 farmers or the agriculture sector. And so we see some 0:22:12.690 --> 0:22:15.930 skewed behaviour from carbon credits instead of actually taking real 0:22:15.930 --> 0:22:19.409 action that affects the environment. A carbon credit doesn't actually 0:22:19.410 --> 0:22:23.970 change the environment much. It just means the emission reduction 0:22:23.970 --> 0:22:26.280 occurred on your farm. You sold it to a mining 0:22:26.280 --> 0:22:29.659 giant who continues to pollute and the net position of 0:22:29.660 --> 0:22:30.980 the atmosphere doesn't change. 0:22:31.010 --> 0:22:34.669 You worked on the net zero policy with government, and 0:22:34.670 --> 0:22:38.030 as part of that, this was supposed to not happen. 0:22:38.060 --> 0:22:42.110 Well, if you map all sectors to their own net 0:22:42.109 --> 0:22:46.520 zero target by 2050, the demand for carbon credits is massive. 0:22:46.550 --> 0:22:50.660 But if you just map the agricultural industries, each industry, 0:22:50.660 --> 0:22:53.899 individually wheat, you know, the grains industry separate from the 0:22:53.900 --> 0:22:57.830 cotton industry, dairy using known technologies to get to net 0:22:57.830 --> 0:23:00.409 zero by 2050. We need to keep all our carbon 0:23:00.410 --> 0:23:04.220 credits within agriculture. We'll need every single offset we can 0:23:04.220 --> 0:23:06.590 get to actually achieve. And then we still don't get 0:23:06.590 --> 0:23:09.230 to net zero. So this notion that there's all this 0:23:09.230 --> 0:23:11.570 spare carbon in agriculture that we can flog off to 0:23:11.600 --> 0:23:15.109 the mining industry, short term gain, but long term pain, 0:23:15.109 --> 0:23:19.010 because it means agriculture steadily makes its own target almost 0:23:19.010 --> 0:23:20.330 impossible to achieve. 0:23:20.359 --> 0:23:22.820 And that's a really good point, I think. But you 0:23:22.820 --> 0:23:26.380 could also apply that to the ag industry. You could 0:23:26.380 --> 0:23:30.310 also say that you would be recommending farmers are thinking 0:23:30.310 --> 0:23:34.270 about focusing on their scope rather than saying, well, I'll 0:23:34.270 --> 0:23:36.250 just plant a heap of trees. For example. Would you 0:23:36.280 --> 0:23:37.450 say that? Yeah. 0:23:37.480 --> 0:23:40.660 Right now, because of the metric that we were talking about, 0:23:40.690 --> 0:23:43.899 the emissions intensity metric, the best action you can take 0:23:43.930 --> 0:23:47.169 is just to lower that number. Planting trees isn't actually 0:23:47.170 --> 0:23:49.960 required at this stage. You could get the lower number. 0:23:49.990 --> 0:23:52.000 So say you were a 0.5 and you didn't want 0:23:52.030 --> 0:23:54.970 to change your nitrogen fertilizer strategy. You could plant trees 0:23:54.970 --> 0:23:57.430 and then offset that number to get a lower number. 0:23:57.430 --> 0:24:00.159 But in the long term, the trees will grow up 0:24:00.160 --> 0:24:02.919 and you won't get any more carbon out of them. So, 0:24:02.950 --> 0:24:05.440 you know, we've got we've got examples like the Jigsaw 0:24:05.440 --> 0:24:08.949 Farms example where, you know, carbon neutral for a period 0:24:08.950 --> 0:24:11.500 of time, but eventually the day of reckoning comes where 0:24:11.500 --> 0:24:14.230 the trees grow up and the soil saturates and you 0:24:14.260 --> 0:24:18.430 no longer are getting more carbon sequestration. The emissions remain. 0:24:18.430 --> 0:24:21.040 So in the end, we come back to the same equation. 0:24:21.040 --> 0:24:24.490 Unless you reduce your scope one emissions, that's ultimately the 0:24:24.490 --> 0:24:25.210 long game. 0:24:25.210 --> 0:24:28.750 So that's where you would recommend farmers focus their energy. 0:24:28.780 --> 0:24:31.870 Definitely. If you're in the grains industry, the main one 0:24:31.869 --> 0:24:35.980 is looking forward to a future of insulating your urea 0:24:35.980 --> 0:24:39.790 from the fossil fuel price, which regardless of greenhouse gas emissions. 0:24:39.790 --> 0:24:42.040 That's a good idea, because three years ago we saw 0:24:42.040 --> 0:24:44.560 the urea price shoot through the roof. I think it 0:24:44.590 --> 0:24:46.900 went up three fold just because of the petrol price 0:24:46.900 --> 0:24:50.260 went up. We've got to disconnect that regardless of fossil 0:24:50.440 --> 0:24:54.639 of greenhouse gas emissions. So on farm generation or some 0:24:54.640 --> 0:24:57.970 way of generating passive ammonia to feed our crops in 0:24:57.970 --> 0:25:00.699 the future is going to be essential. But then separate 0:25:00.700 --> 0:25:02.890 to that is what can we do about being more 0:25:02.890 --> 0:25:06.310 efficient with converting nitrogen? You'll never get the grains industry 0:25:06.310 --> 0:25:10.510 away from using nitrogen fertilizer. It's essential to grain, protein 0:25:10.510 --> 0:25:12.940 and to plant growth. But what we can do is 0:25:12.940 --> 0:25:16.390 look to a future of using more efficient nitrogen and 0:25:16.390 --> 0:25:18.250 more benign sources of nitrogen. 0:25:18.250 --> 0:25:20.590 Which farmers want to do anyway. And if they have 0:25:20.590 --> 0:25:22.750 more control of it because they can make it themselves, 0:25:22.750 --> 0:25:25.890 that's probably going to make them more profitable anyway. Would 0:25:25.890 --> 0:25:26.430 you say? 0:25:26.460 --> 0:25:29.700 Most definitely. In the long term. In the short term, 0:25:29.700 --> 0:25:32.700 there's a bit of hiccup in in renewable energy, technologies 0:25:32.700 --> 0:25:35.250 are expensive when they first start and then suddenly solar 0:25:35.280 --> 0:25:39.390 becomes the cheapest technology in town. Even the international reviews 0:25:39.390 --> 0:25:42.480 are stunned at how the price per kilowatt of solar 0:25:42.480 --> 0:25:44.880 when it first came out. Compared to now, no one 0:25:44.880 --> 0:25:47.610 would have predicted it would drop in the price as 0:25:47.609 --> 0:25:50.129 much as it did. So I think that's the general 0:25:50.130 --> 0:25:53.580 rule for all renewable energy technologies. Is they expensive at 0:25:53.580 --> 0:25:56.790 the start? But once you through that initial adoption curve, 0:25:56.790 --> 0:25:59.399 they become cheaper than any other form of energy. 0:25:59.400 --> 0:26:01.920 That is a really positive message. Now I just want 0:26:01.950 --> 0:26:06.210 to jump back to you talking about trees. How long can. 0:26:06.240 --> 0:26:09.090 So if I plant a tree today, how long will 0:26:09.090 --> 0:26:12.119 I be able to claim carbon credits on that? Before 0:26:12.119 --> 0:26:14.669 you say it's just not, it's not making any more. 0:26:17.310 --> 0:26:21.600 Compliant chemical storage sheds are important infrastructure for cropping enterprises 0:26:21.600 --> 0:26:25.370 from a safety point of view and for a sustainability certification. 0:26:25.400 --> 0:26:29.450 BCG gold sponsors action. The Big Shed people have developed 0:26:29.450 --> 0:26:31.790 a range of standard chemical shed designs to help you 0:26:31.790 --> 0:26:34.970 meet these requirements. The designs include details such as lock 0:26:35.000 --> 0:26:39.770 up storage areas, bonded concrete floors, ventilation and sprayer bays. 0:26:39.800 --> 0:26:44.179 Head to action steel. Com.au to learn more about the designs, 0:26:44.180 --> 0:26:45.830 sizes and prices. 0:26:48.109 --> 0:26:50.540 So trees differ depending on what you plant. If you 0:26:50.540 --> 0:26:54.770 take the Jigsaw Farms example again, the environmental plantings or 0:26:54.800 --> 0:26:57.679 wattles wattle only lives for 20 years and then it dies. 0:26:57.680 --> 0:27:00.530 So you'll get your maximum rate of sequestration at about 0:27:00.530 --> 0:27:03.709 five years old when the annual growth rate is at 0:27:03.710 --> 0:27:06.560 its peak. But it's curving from then on. It's slowing 0:27:06.560 --> 0:27:08.750 down from then on, and by 20 years you're in 0:27:08.750 --> 0:27:12.379 second generation, you're getting natural seeding taking place and the 0:27:12.380 --> 0:27:16.310 second generation coming up. But your carbon sequestration has flattened out. 0:27:16.310 --> 0:27:18.919 If you plant something like a long lived eucalypt or 0:27:18.920 --> 0:27:22.450 spotted gum, it will grow for 80 years, but its 0:27:22.450 --> 0:27:26.050 peak is in the first 15 years. So after 15 years, 0:27:26.050 --> 0:27:29.379 you've got that tree there, but it's not peaking at sequestration. 0:27:29.380 --> 0:27:32.530 What we would like to see eventually is harvest, replant 0:27:32.530 --> 0:27:34.810 where we turned it, instead of a locked up area 0:27:34.810 --> 0:27:37.689 of land that you can't ever harvest and generate profit from, 0:27:37.690 --> 0:27:40.960 you turn it into a agroforestry operation, because we know 0:27:40.960 --> 0:27:43.120 that if you harvest it at that spot at Gum, 0:27:43.150 --> 0:27:46.930 at 25 years, 40% of that could be locked away 0:27:46.930 --> 0:27:49.810 in construction timber as a permanent carbon credit. And then 0:27:49.840 --> 0:27:52.570 you replant on the same area. So the same area 0:27:52.570 --> 0:27:55.210 of land gets used over and over as revenue, as 0:27:55.210 --> 0:27:58.930 timber generation, as well as carbon offset. That's a workable 0:27:58.930 --> 0:28:00.490 model that we've put to government. 0:28:00.520 --> 0:28:04.149 So if I had a paddock of Bush on my farm, 0:28:04.180 --> 0:28:06.280 how does that work? Or is that just those trees 0:28:06.310 --> 0:28:08.350 are too old, they don't count anymore. 0:28:08.380 --> 0:28:11.500 If it's what we call remnant vegetation, then there's nothing 0:28:11.500 --> 0:28:15.910 you've done to change the carbon stored in that remnant vegetation. 0:28:15.910 --> 0:28:18.790 What we also, when farmers ask us about that, we 0:28:18.790 --> 0:28:21.720 say put that Bush into our calculator and tell us 0:28:21.720 --> 0:28:24.390 it's 100 years old. And then the calculator says there's 0:28:24.390 --> 0:28:28.229 zero carbon change because it's stable. And that kind of 0:28:28.230 --> 0:28:32.070 answers the question if it's remnant vegetation that's been there 0:28:32.070 --> 0:28:34.650 for 100 years or more, well, it's not changing much. 0:28:34.650 --> 0:28:37.290 It's just weather cycles that change it. So there's no 0:28:37.290 --> 0:28:40.410 sequestration there. There's a stock of carbon that was the 0:28:40.410 --> 0:28:44.490 avoided deforestation methodology was paying farmers not to clear that land, 0:28:44.490 --> 0:28:47.880 but that didn't actually help the atmosphere, because if you 0:28:47.880 --> 0:28:51.240 didn't intend to clear it, then the atmosphere doesn't benefit 0:28:51.240 --> 0:28:53.610 at all by not clearing the land. 0:28:53.610 --> 0:28:58.470 That's really interesting. Can you quickly explain what you mean 0:28:58.470 --> 0:29:00.330 by carbon sequestration? 0:29:00.420 --> 0:29:04.410 Carbon sequestration is is that process of photosynthesis? If you 0:29:04.410 --> 0:29:06.660 think about all organic material around you, even the wood 0:29:06.660 --> 0:29:09.660 in front of us on the table, all that wheat stubble, 0:29:09.660 --> 0:29:14.880 it's all 50% carbon, 45% of all organic material is carbon. Inherently, 0:29:14.910 --> 0:29:18.120 we are all carbon farmers. Anything we do that captures 0:29:18.120 --> 0:29:21.210 photosynthesis is capturing carbon dioxide out of the atmosphere, putting 0:29:21.210 --> 0:29:24.660 it in a plant and putting it into some use. 0:29:24.660 --> 0:29:29.760 That is sequestration. What we talk about true carbon sequestration 0:29:29.760 --> 0:29:32.400 in the long term is, well, what is the fate 0:29:32.400 --> 0:29:34.830 of that carbon? Because the carbon in your stubble gets 0:29:34.830 --> 0:29:37.200 eaten by sheep and belched out as CO2, and it 0:29:37.200 --> 0:29:39.870 goes back to the atmosphere. It's the carbon that goes 0:29:39.870 --> 0:29:43.979 into the soil, into long term storage that we call sequestration. 0:29:43.980 --> 0:29:46.890 It's now sequestered. It's locked away from the environment for 0:29:46.890 --> 0:29:49.860 at least 100 years. It's the carbon in that tree 0:29:49.860 --> 0:29:52.560 that is going to now grow for 100 years. That 0:29:52.560 --> 0:29:55.320 spotted gum, that 100 years later, there's carbon. You can 0:29:55.320 --> 0:29:58.920 see it. It's standing in the tree. That's sequestration. We 0:29:58.920 --> 0:30:02.460 can't call it sequestration if it's just photosynthesis going into 0:30:02.460 --> 0:30:04.890 grass that is eaten by a cow and belched out, 0:30:04.920 --> 0:30:07.980 we can't call it sequestration if it's carbon going into 0:30:07.980 --> 0:30:11.160 photosynthesis in a wheat crop, that then within the 12 0:30:11.160 --> 0:30:13.890 months is eaten by humans and released back to the atmosphere. 0:30:13.890 --> 0:30:15.570 That's just a neutral cycle. 0:30:15.570 --> 0:30:19.610 So back to the numbers and knowing your numbers. How 0:30:19.610 --> 0:30:22.040 do I know my numbers on my farm? 0:30:22.070 --> 0:30:24.350 Yeah. So fortunately we've been working on this for a 0:30:24.350 --> 0:30:27.230 long time. I always say I developed carbon accounting tools 0:30:27.230 --> 0:30:30.590 in Australia before anyone cared. Now everybody cares and wants 0:30:30.590 --> 0:30:33.980 to know how to get the number. Lucky you. He's 0:30:34.010 --> 0:30:36.860 a bit too much workload there, but we've produced a 0:30:36.860 --> 0:30:39.530 number of simple Excel spreadsheets that can give you your 0:30:39.530 --> 0:30:43.430 number for a cropping operation. It's a case of choose 0:30:43.430 --> 0:30:45.920 a crop that one of sort of 5 or 6 0:30:45.920 --> 0:30:49.040 crops that you're growing on the property. Tell us what area, 0:30:49.040 --> 0:30:52.160 what the crop annual grain yield was, how much nitrogen 0:30:52.160 --> 0:30:55.370 you applied, how much diesel electricity you used, and how 0:30:55.370 --> 0:30:58.400 much glyphosate you put on. Once you've got that, you've 0:30:58.400 --> 0:30:59.120 got your number. 0:30:59.150 --> 0:31:01.490 So that's pretty much what every farmer would have anyway 0:31:01.490 --> 0:31:02.960 for their cost of production. 0:31:03.080 --> 0:31:05.630 That's what we're trying to do is bury these tools 0:31:05.630 --> 0:31:09.200 behind existing farm software. And so we've been working with 0:31:09.200 --> 0:31:13.880 Agriculture Innovation Australia to develop the environmental accounting platform, which 0:31:13.880 --> 0:31:17.200 is an engine, not a tool. We don't want farmers 0:31:17.200 --> 0:31:19.989 to put their data in. Again, if you belong to 0:31:20.020 --> 0:31:23.500 a software house that has all your production data sitting 0:31:23.500 --> 0:31:26.860 in it, it's what we call API. We get that software, 0:31:26.860 --> 0:31:28.930 your farm software, to talk to, this engine to get 0:31:28.930 --> 0:31:30.850 the result and to bring it back seamlessly in the 0:31:30.850 --> 0:31:34.390 background and give you your carbon number. So that's the 0:31:34.390 --> 0:31:36.550 plan at the moment. We're quite well down the track 0:31:36.550 --> 0:31:37.720 on that plan at the moment. 0:31:37.720 --> 0:31:40.570 So you're talking about this software. What kind of software 0:31:40.570 --> 0:31:42.160 plugs into your engine? 0:31:42.340 --> 0:31:44.410 Well, all we do with the engine is declare what 0:31:44.410 --> 0:31:46.360 we call an API. An API is just a set 0:31:46.360 --> 0:31:49.570 of instructions. It says if you've got software, we need 0:31:49.570 --> 0:31:52.780 to know annual yield of the grain. We need to 0:31:52.810 --> 0:31:56.650 know the annual urea applied and non urea applied. We 0:31:56.650 --> 0:31:59.590 need to know the annual fuel required. So it just 0:31:59.590 --> 0:32:03.640 tells the software your software what unit and time step 0:32:03.640 --> 0:32:06.250 to feed out to get the right result for the 0:32:06.250 --> 0:32:08.860 input to the engine and to send back the right result. 0:32:08.890 --> 0:32:11.170 Then it tells your software what the result that come 0:32:11.200 --> 0:32:14.070 back will be, and it'll be tonnes of emissions. Scope 0:32:14.070 --> 0:32:17.220 one tons of emissions, scope two. And so you know 0:32:17.220 --> 0:32:19.860 how to then represent that in your software. So it's 0:32:19.860 --> 0:32:21.600 just a set of writing instructions. 0:32:21.630 --> 0:32:23.790 How long would it take for a farmer that had 0:32:23.820 --> 0:32:27.900 2500 hectares in mixed cropping. 0:32:27.930 --> 0:32:31.200 Well, you just introduce a complexity with the livestock if 0:32:31.200 --> 0:32:33.600 it's cropping and you knew the numbers that needed to 0:32:33.630 --> 0:32:36.510 go in the calculator, you could do it in ten minutes. 0:32:36.510 --> 0:32:39.209 If it's livestock, it's a bit more difficult because we 0:32:39.240 --> 0:32:41.610 need to know how many animals in each period of 0:32:41.610 --> 0:32:43.650 the year and when they were born, and what their 0:32:43.650 --> 0:32:44.490 growth rate was. 0:32:44.490 --> 0:32:47.490 It's always more difficult with livestock, Richard, much more difficult. 0:32:47.910 --> 0:32:50.219 And especially as you go further north in Australia where 0:32:50.220 --> 0:32:52.200 they don't even know where they are. So what we 0:32:52.200 --> 0:32:54.960 envisage eventually is, is that number comes out as a 0:32:54.960 --> 0:32:57.810 QR code, just like we started to buy everything with 0:32:57.810 --> 0:33:00.150 QR codes. It's a way of locking down that number 0:33:00.150 --> 0:33:02.550 and all the information is stored in a QR code, 0:33:02.550 --> 0:33:04.890 and then we just send it through secure transaction like 0:33:04.890 --> 0:33:08.880 a blockchain technology from the farmer directly to the supply 0:33:08.880 --> 0:33:11.810 chain or the value chain, who then says, well, okay, 0:33:11.840 --> 0:33:13.940 we'll queue up all those blockchains and start with the 0:33:14.240 --> 0:33:17.750 ones first. We'll buy all those first because they now 0:33:17.750 --> 0:33:19.850 have a mechanism to say why? Why would they buy 0:33:19.850 --> 0:33:22.430 the ones? Well, we've got a 30% target we've got 0:33:22.430 --> 0:33:24.830 to meet. So we'll buy all the QR codes that 0:33:24.830 --> 0:33:26.450 are zero point ones, and then we'll buy the 0.2 0:33:26.570 --> 0:33:29.510 and then the 0.3. And that's how we drive change. 0:33:29.600 --> 0:33:33.110 That's amazing. I feel like grace that I felt like 0:33:33.110 --> 0:33:35.840 when we came into this conversation, I was thinking, oh 0:33:35.870 --> 0:33:38.270 my goodness, I'm going to have to do all these things. 0:33:38.270 --> 0:33:40.640 It's going to be really hard. And now I feel 0:33:40.640 --> 0:33:43.430 like you've done all this stuff for us, and all 0:33:43.430 --> 0:33:47.450 I really need to do is get the engine and 0:33:47.480 --> 0:33:50.480 or input my figures into a spreadsheet to go into 0:33:50.480 --> 0:33:53.420 this engine, get my numbers. That's the first thing that 0:33:53.420 --> 0:33:57.470 I'm thinking that I need, and then start thinking about 0:33:57.470 --> 0:34:01.280 this commercial. I like the idea of this commercial urea 0:34:01.310 --> 0:34:04.910 factory on my place with my very small solar farm. 0:34:04.910 --> 0:34:08.540 But what I am thinking about in this engine is 0:34:08.570 --> 0:34:11.900 what about this year, Richard? So this year I thought, yep, 0:34:11.930 --> 0:34:15.290 going to have a good crop. Not so good last year. 0:34:15.320 --> 0:34:18.350 Great crop. How doesn't that mean that my numbers are 0:34:18.350 --> 0:34:19.730 going to change every year? 0:34:19.760 --> 0:34:23.630 Entirely correct. So it's bigger again in the livestock industries 0:34:23.630 --> 0:34:26.629 because you've got climate variability you're dealing with, which means 0:34:26.630 --> 0:34:29.480 six tonne grain crop two tonne grain crop could be 0:34:29.480 --> 0:34:32.569 in successive years and your nitrogen could even be out 0:34:32.600 --> 0:34:36.109 of kilter with that. You might have overinvested underinvested in 0:34:36.110 --> 0:34:39.350 the high rainfall year and got your six tonne, but 0:34:39.350 --> 0:34:42.109 you actually eroded soil nitrogen in the process. So next 0:34:42.110 --> 0:34:44.419 year you've got to compensate by upping the nitrogen and 0:34:44.420 --> 0:34:47.060 being less efficient. So what we tend to do is 0:34:47.060 --> 0:34:50.330 take a running mean error in cropping. It's at least 0:34:50.330 --> 0:34:53.060 one full cropping cycle when it comes to sequestration. We 0:34:53.060 --> 0:34:55.850 think it's even more fair to take a ten year 0:34:55.850 --> 0:35:00.170 running mean at it, because soil carbon can vary wildly 0:35:00.170 --> 0:35:03.200 with rainfall. And so we kind of fool ourselves if 0:35:03.200 --> 0:35:05.899 we measure in short time steps. So if you take 0:35:05.900 --> 0:35:08.870 a series of samples once every five years and you 0:35:08.870 --> 0:35:11.049 you do a ten year running average on that. It 0:35:11.080 --> 0:35:13.780 actually smooths out those bumps a lot better. And so 0:35:13.780 --> 0:35:16.360 to get around that variability, I think the future is 0:35:16.360 --> 0:35:19.030 at least only every five years. It's the running mean 0:35:19.060 --> 0:35:21.609 average that we're going to use. Now it comes to 0:35:21.640 --> 0:35:24.279 how does the supply chain then use that. The supply 0:35:24.280 --> 0:35:27.399 chain can't do a bottom up audit of every firm. 0:35:27.400 --> 0:35:30.279 So when they selling internationally they're going to take a 0:35:30.280 --> 0:35:33.129 running average. They're going to say all the grain farmers 0:35:33.130 --> 0:35:36.609 in the northwest of Victoria are about a 0.2. And 0:35:36.610 --> 0:35:39.490 that's the grain we sell on the global market. So 0:35:39.489 --> 0:35:43.390 everything gets normalized as you go further up the supply 0:35:43.390 --> 0:35:46.390 chain to where the banks have to deal with the 0:35:46.390 --> 0:35:50.380 international monetary market, where the supply chain have to deal 0:35:50.380 --> 0:35:54.280 with shareholders on greenhouse gas emissions exposure. And then the 0:35:54.280 --> 0:35:56.410 whole of the Wimmera mallee becomes a 0.2. 0:35:56.440 --> 0:36:00.969 It's interesting because I was thinking that farmers might think 0:36:01.060 --> 0:36:03.310 I'm just going to be lumped in with everybody else, 0:36:03.340 --> 0:36:07.680 what's the point? However, if farmers want to be profitable 0:36:07.680 --> 0:36:09.870 and they want to remain efficient, then they're going to 0:36:09.870 --> 0:36:12.239 be focusing on these things anyway. So it's really not 0:36:12.270 --> 0:36:15.030 one or the other. It's really just about would you 0:36:15.060 --> 0:36:15.780 say that? 0:36:15.780 --> 0:36:18.780 I think that's the key point. Key point is the 0:36:18.780 --> 0:36:22.170 metric that they're buying on is an efficiency metric in itself. 0:36:22.170 --> 0:36:25.500 So emissions intensity is just another way of measuring your 0:36:25.530 --> 0:36:29.160 overhead costs relative to your output. And you might not 0:36:29.160 --> 0:36:31.440 be able to reduce the greenhouse gas emissions, but we 0:36:31.440 --> 0:36:33.750 sure can push that output a little bit better. If 0:36:33.780 --> 0:36:35.580 you take a view of trees and you say it's 0:36:35.580 --> 0:36:38.009 a carbon credit, then it's a square block on the 0:36:38.010 --> 0:36:40.290 worst part of your farm at the back of the farm, 0:36:40.290 --> 0:36:44.160 if you take the view that trees, the co-benefits have 0:36:44.160 --> 0:36:47.460 their own merit, in other words, land survival, then you 0:36:47.460 --> 0:36:49.890 plant rows of trees on the western boundary of every 0:36:49.890 --> 0:36:52.650 paddock and you get shade and shelter. Now that will 0:36:52.650 --> 0:36:56.610 pay more than carbon credits. It's taking that holistic view 0:36:56.610 --> 0:36:59.250 of how do we improve farm efficiency and address an 0:36:59.250 --> 0:37:04.380 animal welfare and animal health issue, get better land survival 0:37:04.380 --> 0:37:07.910 and carbon credits. Then it changes fundamentally how you view 0:37:07.940 --> 0:37:09.049 trees on the farm. 0:37:09.080 --> 0:37:15.260 Can you explain, Richard? I hear the term offsetting and insetting. 0:37:15.260 --> 0:37:19.280 So a good point. Offsets are generally a carbon credit. 0:37:19.280 --> 0:37:21.800 So it's saying I'll generate a carbon credit and I'll 0:37:21.800 --> 0:37:24.860 sell it to the mining giants so they can use 0:37:24.860 --> 0:37:28.160 it to counterbalance. So they've got, you know, 100 million 0:37:28.160 --> 0:37:29.780 tonnes to meet. If they can buy them all as 0:37:29.780 --> 0:37:33.200 carbon credits, they can claim to have met zero targets, 0:37:33.200 --> 0:37:35.960 which is not actually true. But that's the game that 0:37:35.960 --> 0:37:38.960 we play. When you talk about inset, you're saying, let's 0:37:38.960 --> 0:37:42.319 not sell that, because actually my value chain, my bank, 0:37:42.350 --> 0:37:48.319 my advising firm, my buyer, they want that carbon credit. 0:37:48.320 --> 0:37:53.029 So it's actually socializing that carbon credit inset within the 0:37:53.030 --> 0:37:57.890 family the value chain family. Now important caveat here. If 0:37:57.920 --> 0:38:00.710 you're dealing in an offset it has to be a 0:38:00.710 --> 0:38:03.830 monetary unit called a carbon credit. So that it actually 0:38:03.830 --> 0:38:07.370 is like a share certificate, so it gets traded. Whereas 0:38:07.370 --> 0:38:10.070 if you're in setting, you actually don't need a carbon credit. 0:38:10.100 --> 0:38:13.339 You just need to socialize your QR code of your 0:38:13.340 --> 0:38:17.210 farm audit within the value chain. And that's in setting. 0:38:17.210 --> 0:38:20.509 So a really important distinction is an inset doesn't require 0:38:20.540 --> 0:38:24.080 a carbon broker to actually generate a financial unit called 0:38:24.080 --> 0:38:27.140 a carbon credit. You can actually just bypass that entire 0:38:27.140 --> 0:38:29.509 market and say, I'm just going to socialize my QR 0:38:29.510 --> 0:38:33.230 code of my farm with my value chain. And if 0:38:33.230 --> 0:38:36.470 I'm the most efficient farmer, they will value that. And 0:38:36.469 --> 0:38:38.660 that's where the revenue lies for me. And being first 0:38:38.660 --> 0:38:40.970 in the queue to sell down the value chain. 0:38:40.969 --> 0:38:44.120 So there'd be some people out there, Richard, that would 0:38:44.120 --> 0:38:49.940 say net zero climate change and maybe, perhaps roll their eyes. 0:38:49.940 --> 0:38:52.100 What would your advice to them be? What would you 0:38:52.100 --> 0:38:56.150 say to people that are questioning whether climate change is real? 0:38:56.180 --> 0:38:58.640 Well, that's where a few colleagues and I came up 0:38:58.640 --> 0:39:01.580 with this, because go back a decade and the reception 0:39:01.580 --> 0:39:04.600 on the farming community wasn't nearly what it is now. 0:39:04.630 --> 0:39:06.730 If things have changed quite a lot. And so we 0:39:06.760 --> 0:39:09.640 came up with this way of getting around that hurdle, 0:39:09.640 --> 0:39:12.580 and we called it the three P's of Climate Change. 0:39:12.580 --> 0:39:14.560 And what we meant is the first P was the 0:39:14.560 --> 0:39:17.739 physical effects. In other words, hotter, drier, all those scenarios, 0:39:17.739 --> 0:39:22.240 the doomsday scenarios. And we're not dealing with that in 0:39:22.239 --> 0:39:25.300 this concept we're talking about. The second P is the 0:39:25.300 --> 0:39:29.110 policy implications. They real. You can't say that we don't 0:39:29.110 --> 0:39:32.290 have a greenhouse gas emission target in Australia. You can't 0:39:32.290 --> 0:39:34.330 say the Paris agreement didn't set us on a course 0:39:34.330 --> 0:39:36.969 to net zero. That policy environment is tangible. It's real. 0:39:36.969 --> 0:39:40.210 It's there. So you can ignore the first P of 0:39:40.210 --> 0:39:42.969 the physical environment. But the policy environment is with us. 0:39:42.969 --> 0:39:46.540 So it raises the question. Ignoring the first one doesn't 0:39:46.540 --> 0:39:48.490 mean say you can ignore the second one, and then 0:39:48.489 --> 0:39:50.920 the third one is the people or peripheral impacts of 0:39:50.920 --> 0:39:55.090 climate change, which is why do shareholders care? Why are 0:39:55.090 --> 0:39:58.629 we seeing shareholders in boardrooms around the world? Care? Well, 0:39:58.630 --> 0:40:01.030 they care about what the future customer wants from your 0:40:01.050 --> 0:40:05.250 agricultural system. And so we start seeing the supply chain, 0:40:05.280 --> 0:40:08.879 setting targets to insulate themselves from the risk of greenhouse 0:40:08.880 --> 0:40:12.750 gas emissions. That's real. Those targets are real. They are there. 0:40:12.750 --> 0:40:15.330 Every supply chain has got one. All the banks have 0:40:15.330 --> 0:40:18.989 got them. You'll find new coal ventures are struggling to 0:40:19.020 --> 0:40:20.730 get capital out of the banks. The banks won't lend 0:40:20.730 --> 0:40:24.180 them money. That's real. So that's how you get around it. 0:40:24.180 --> 0:40:28.200 You can say, well, you can be a climate change cautionary, 0:40:28.530 --> 0:40:30.600 I'll call it. I don't like the word skeptic because 0:40:30.630 --> 0:40:33.900 that implies you can say, I don't really appreciate the 0:40:33.900 --> 0:40:36.509 science on climate change. I don't think it's real. That 0:40:36.510 --> 0:40:38.640 doesn't absolve you of the second P or the third 0:40:38.670 --> 0:40:41.609 P if you're in business, because the second P policy 0:40:41.610 --> 0:40:45.180 is real and the third P people is real. And 0:40:45.180 --> 0:40:47.610 if you don't respond to that, you'll find yourself left 0:40:47.610 --> 0:40:49.290 out of the pack in the future. Okay. 0:40:49.320 --> 0:40:53.370 So coming back to sort of more bigger picture and 0:40:53.370 --> 0:40:58.200 what farmers can do, if I had 200,000 to spend 0:40:58.200 --> 0:41:01.279 and I thought I'm going to put it into bringing 0:41:01.280 --> 0:41:05.569 my number down. What would you say farmers could do 0:41:05.570 --> 0:41:07.730 with that money? What would you recommend? Well, that's a 0:41:07.730 --> 0:41:08.630 difficult question. 0:41:08.630 --> 0:41:12.020 If you're a livestock operation, you'd say getting yourself into 0:41:12.020 --> 0:41:15.080 a better position with fencing and water points and getting 0:41:15.080 --> 0:41:19.040 more consistent grazing management across your property would probably be 0:41:19.040 --> 0:41:22.190 the best way to get your emissions intensity down. If 0:41:22.190 --> 0:41:25.070 you're a cropping property. Putting yourself in a position for 0:41:25.070 --> 0:41:28.160 better precision agriculture would probably put yourself in the strongest 0:41:28.160 --> 0:41:31.490 position to be more efficient knowing how to spatially apply nitrogen, 0:41:31.489 --> 0:41:34.759 for example, rather than just a blanket application across the field. 0:41:34.790 --> 0:41:37.730 Those kind of precision technologies would probably be the best 0:41:37.730 --> 0:41:40.820 investment where if you're looking at saying, well, it's not 0:41:40.820 --> 0:41:43.370 just about carbon, it's about efficiency as well. It's about 0:41:43.370 --> 0:41:45.830 the bottom line. If I had to invest, you'd invest 0:41:45.830 --> 0:41:49.759 in reducing emissions intensity, because right now the planting of 0:41:49.760 --> 0:41:52.310 block of trees to get yourself to neutral isn't actually 0:41:52.310 --> 0:41:54.379 what's being required of you at this stage. 0:41:54.410 --> 0:41:57.740 That makes sense. Now moving on to so I want 0:41:57.770 --> 0:42:00.250 to get my number. Is there only one system that 0:42:00.250 --> 0:42:02.680 I can put my numbers into, or are there different 0:42:02.680 --> 0:42:05.830 systems that create different numbers for me? 0:42:05.860 --> 0:42:08.560 So that's an important point because we see countries around 0:42:08.560 --> 0:42:12.279 the world with multiple tools. New Zealand, UK have multiple 0:42:12.280 --> 0:42:15.460 tools that give different numbers. And the moment you have 0:42:15.489 --> 0:42:19.180 a policy environment that restricts emissions like New Zealand, you've 0:42:19.180 --> 0:42:21.490 got to lock it down to. It's like having the 0:42:21.489 --> 0:42:25.570 tax office have multiple calculators owned by private sector. You 0:42:25.570 --> 0:42:28.120 can't have that. We convinced the Australian government they needed 0:42:28.120 --> 0:42:30.310 to lock it down. They needed to say this is 0:42:30.310 --> 0:42:33.160 the only methodology. So between now and the end of 0:42:33.160 --> 0:42:36.520 the year, we're working on developing a national standard for 0:42:36.520 --> 0:42:39.969 carbon accounting in agriculture. Then we don't care how many 0:42:39.969 --> 0:42:42.759 software tools emerge after that. We just ask the question, 0:42:42.790 --> 0:42:46.029 does your tool 100% comply with the standard? Yes or no? 0:42:46.060 --> 0:42:48.250 Which means if you run this tool versus that tool, 0:42:48.250 --> 0:42:50.500 you get the same number. We've got all the Excel 0:42:50.500 --> 0:42:53.890 versions on the website, but over time we've shifted in 0:42:53.890 --> 0:42:57.400 our position from these are the definitive tools, the greenhouse 0:42:57.400 --> 0:43:01.150 accounting framework. Tools to being. Here's an Excel spreadsheet that 0:43:01.150 --> 0:43:04.210 is transparent, unlocked, and you can go and have a 0:43:04.210 --> 0:43:06.340 look at how we've done all the calculations. So there's 0:43:06.340 --> 0:43:09.130 no black box involved. And we've got a note next 0:43:09.130 --> 0:43:11.440 to every calculation as to where we got the number from. 0:43:11.440 --> 0:43:14.110 So there's no making up stories. We now see them 0:43:14.110 --> 0:43:16.990 not as the definitive tool, but as a representation of 0:43:16.989 --> 0:43:19.750 the standard. In other words, if you are a software 0:43:19.780 --> 0:43:22.150 provider and you want to put the right standard into 0:43:22.150 --> 0:43:24.580 your tool, go and hack into our tools and get 0:43:24.580 --> 0:43:26.770 all the calculations out and put them into your tool. 0:43:26.770 --> 0:43:29.830 So it's more a transparent representation of how to do 0:43:29.830 --> 0:43:33.130 the calculation rather than the only tool available. 0:43:33.130 --> 0:43:37.540 I think transparency is so important, particularly when it's something new, 0:43:37.540 --> 0:43:42.729 because I feel like new things change always creates. It's 0:43:42.730 --> 0:43:45.550 just reality. It makes people feel uneasy. So I think 0:43:45.550 --> 0:43:49.000 having that transparency is really important. Grace, can you talk 0:43:49.000 --> 0:43:52.239 a little bit more about the Carbon Outreach Program and 0:43:52.239 --> 0:43:55.780 how that links into what Richard's been talking about? Yeah. 0:43:55.800 --> 0:43:58.350 So through the Carbon Outreach program, a lot of these 0:43:58.350 --> 0:44:00.810 questions that we've discussed today, that's what we're wanting to answer. 0:44:00.810 --> 0:44:03.450 We want it to, as you say, be really transparent 0:44:03.450 --> 0:44:06.000 for farmers. We know that knowledge is power. And a 0:44:06.000 --> 0:44:08.160 lot of this is quite unknown. So hopefully over the 0:44:08.160 --> 0:44:10.020 next 18 months, we'll be able to roll out a 0:44:10.020 --> 0:44:13.290 number of different activities that help increase that awareness level 0:44:13.290 --> 0:44:14.220 for growers. 0:44:14.219 --> 0:44:19.920 So big question, Richard, are all these policies, these things 0:44:19.920 --> 0:44:23.130 that are coming in, is it actually going to affect 0:44:23.130 --> 0:44:24.330 our atmosphere. 0:44:24.360 --> 0:44:27.960 The way we've put it forward? It will eventually help. 0:44:27.989 --> 0:44:32.850 There's no question that the biggest emission sources are fossil fuel. 0:44:32.880 --> 0:44:37.410 So coal fired power stations and diesel consumption in road transport, 0:44:37.440 --> 0:44:39.630 if you get those under control, you've got a good 0:44:39.630 --> 0:44:43.920 way forward. Agriculture is a very small part of the equation. 0:44:43.950 --> 0:44:47.939 So it used to be 14%. But recently we've seen 0:44:47.940 --> 0:44:51.300 what we always feared is that because the fossil fuel 0:44:51.300 --> 0:44:54.300 sector has started reducing its emissions, the transport sector started 0:44:54.390 --> 0:44:57.960 reducing its emissions and agriculture stayed the same. Suddenly this 0:44:57.960 --> 0:45:01.110 year we're not 14% like we were last year, we 17% 0:45:01.110 --> 0:45:03.930 it's a percentage game. So what's going to happen over 0:45:03.930 --> 0:45:06.870 time is if agriculture does nothing, we'll become the only 0:45:06.870 --> 0:45:09.660 sector of greenhouse gas emissions while all the other sectors 0:45:09.690 --> 0:45:12.839 go to zero. So from an appearance point of view, 0:45:12.840 --> 0:45:15.299 from a visual point of view it doesn't look good. 0:45:15.660 --> 0:45:17.850 So all sectors are going to have to do their 0:45:17.850 --> 0:45:21.360 bit towards the future, whether carbon credits exist in the future. 0:45:21.390 --> 0:45:24.540 My personal view is no because they are just a 0:45:24.540 --> 0:45:26.760 cheap way of getting out of jail. It's a cheap 0:45:26.790 --> 0:45:29.040 way of buying your way out of trouble, and the 0:45:29.040 --> 0:45:32.610 atmosphere doesn't really benefit from that from a carbon crediting scheme. 0:45:32.610 --> 0:45:34.799 If you think about the models we've talked about of 0:45:34.800 --> 0:45:38.969 reducing emissions from farm production, eventually that will drive through 0:45:38.969 --> 0:45:41.489 the supply chain in a shared arrangement. We'll all get 0:45:41.489 --> 0:45:45.030 down to some lower number. Will it be zero? Unlikely 0:45:45.030 --> 0:45:47.700 for agriculture, because there's no way you can use nitrogen 0:45:47.700 --> 0:45:51.420 on soils and not have any greenhouse gas emissions. You'd 0:45:51.420 --> 0:45:53.529 have to sterilize the soil to do that, and we're 0:45:53.530 --> 0:45:57.550 not about to intervene at that level. Will the northern 0:45:57.550 --> 0:46:00.100 livestock industries ever get to zero when we don't even 0:46:00.100 --> 0:46:02.140 know how many animals there are or where they are? 0:46:02.170 --> 0:46:05.020 Probably not. But there are sectors that can get to 0:46:05.050 --> 0:46:06.580 zero and will get to zero. 0:46:06.610 --> 0:46:11.800 You've highlighted some huge points there, Richard. I think focusing on, 0:46:11.800 --> 0:46:16.060 because that's another thing, I think that people sometimes think, oh, 0:46:16.090 --> 0:46:19.270 this other country, they're producing all these emissions or this industry, 0:46:19.270 --> 0:46:21.580 they're producing all these emissions. Why do we have to 0:46:21.580 --> 0:46:25.030 do something? But what you're saying in regards to that 0:46:25.030 --> 0:46:27.910 pie chart is that if we actually don't do anything 0:46:27.910 --> 0:46:30.580 in agriculture, our slice of the pie is going to 0:46:30.580 --> 0:46:34.930 get bigger. And again, if we do try and reduce 0:46:34.930 --> 0:46:37.090 that piece of the pie, we're actually going to be 0:46:37.090 --> 0:46:37.870 more efficient anyway. 0:46:37.900 --> 0:46:40.600 And that's why we focused on emissions intensity, because it 0:46:40.780 --> 0:46:44.230 empowers farmers to do something today so we can do 0:46:44.230 --> 0:46:47.140 things to make our farms more efficient. Get that number 0:46:47.140 --> 0:46:51.280 down from 0.5 to 1.10 .15. Then how do we 0:46:51.280 --> 0:46:53.410 get to zero? That's what's still got to come out 0:46:53.410 --> 0:46:56.529 of research. Cost effective options to drop that number to zero. 0:46:56.560 --> 0:46:59.680 Is that ever possible? That's still sitting in research. We 0:46:59.680 --> 0:47:02.739 don't want farmers to be stressing about being absolute zero 0:47:02.739 --> 0:47:06.610 when the technology that lets them get there cost effectively, 0:47:06.610 --> 0:47:08.469 isn't currently in the marketplace. 0:47:08.500 --> 0:47:10.719 Is there a lot of money going into research in 0:47:10.719 --> 0:47:11.799 this space? Richard? 0:47:11.830 --> 0:47:16.060 We've just had the net zero agriculture CRC commissioned by 0:47:16.060 --> 0:47:18.460 the government. And to give you some idea, it's the 0:47:18.460 --> 0:47:22.089 biggest CRC in Australia's history. So I think it's about 0:47:22.090 --> 0:47:27.219 $167 million and 73 commercial partners. So the biggest number 0:47:27.219 --> 0:47:30.850 of commercial partners have signed up to the CRC, which 0:47:30.850 --> 0:47:33.550 gives you some idea of how big the problem is 0:47:33.550 --> 0:47:36.940 being perceived. If out of all the cooperative research centres 0:47:36.940 --> 0:47:40.390 in Australia's history, net zero agriculture is the biggest that's 0:47:40.390 --> 0:47:43.419 ever formed with the biggest number of partners, it does 0:47:43.420 --> 0:47:45.730 send a very strong message saying we're looking for research 0:47:45.730 --> 0:47:48.130 solutions here. The other thing to remember is we're not 0:47:48.130 --> 0:47:51.509 alone in the world. New Zealand puts millions of dollars 0:47:51.510 --> 0:47:54.779 into this research. So it means we can rationalize what 0:47:54.780 --> 0:47:57.930 we do because New Zealand is doing a methane vaccine program. 0:47:58.020 --> 0:48:00.810 There's no point in Australia repeating that. So at the 0:48:00.810 --> 0:48:03.390 moment let them come up with a methane vaccine. We 0:48:03.390 --> 0:48:05.250 don't have to do that work. I sit on a 0:48:05.250 --> 0:48:08.640 couple of EU committees that commission millions of euros into 0:48:08.640 --> 0:48:11.219 this type of research in the European Union, Canada, the 0:48:11.219 --> 0:48:15.029 United States, even Brazil. So we're not alone. 0:48:15.719 --> 0:48:18.120 If you love the podcast and would like to show 0:48:18.120 --> 0:48:21.570 your support, please rate us five stars. Wherever you listen 0:48:21.570 --> 0:48:24.330 to your podcasts and share it with your friends. We'll 0:48:24.330 --> 0:48:25.500 catch you again soon. 0:48:25.530 --> 0:48:29.759 BCG drives the prosperity of Australian farmers, communities and landscapes 0:48:29.760 --> 0:48:33.660 through applied research, innovation and events. To find out more 0:48:33.660 --> 0:48:36.569 about what we're up to, our team and events near you, 0:48:36.600 --> 0:48:42.299 visit BCG. Wargo. 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