Richard Clothier is managing director at Wyke Farms, the independent UK cheese producer. He’s enjoying “pockets of growth” all around the world for his cheese – from Africa to Asia. Brexit has made life tougher for exports into Europe (the French border is a nightmare) but you get the feeling this pales almost into insignificance against the threat posed to his livelihood by climate change. “We are fighting for our right to exist,” he says.
Dairy products, from milk and yogurt to cheese and cream, are saddled with a hefty environmental footprint. The lion’s share of that comes from production, and most of that from the cows, in the form of methane – a potent, but short-lived greenhouse gas that the Intergovernmental Panel on Climate Change (IPCC) recently said must be rapidly reduced.
But how? The shortcut some would like to see involves fewer cows and lower consumption of dairy products. Debate rages though on just how much dairy is possible in a net-zero world.
Some experts approached by your correspondent said ruminant agriculture is “fundamentally unsustainable” so alternatives must be found. Cue plant-based products – a vocal and increasingly sizeable slice of an overall dairy market valued at a shade under $719bn in 2019, according to data on the Statista website.
At the other end of the scale is the dairy industry, which points to lower than reported carbon footprints and techniques that could shrink them further – and fast. A business case paper, written and published by the US arm of WWF in January, suggests farm management techniques coupled with the “right policies and incentives” could make net-zero a reality for large dairies “within five years”.
The reality may lie somewhere in the middle: lower consumption and net-zero achieved before 2050. “Climate change is a huge and complex challenge, and we need to tackle it from a variety of fronts related to both food production and consumption,” explains WWFUS director Katherine Devine, who authored the paper.
But businesses, especially those reliant on livestock, have been reluctant to acknowledge consumption cuts. The big guns in the industry are all expanding their plant-based ranges, for example, but this doesn’t seem to be at dairy’s expense.
Nestlé’s businesses in the US and UK for example describe the business as dairy and alternatives rather than dairy or alternatives. This messaging may well be used to pacify producers, who are worried their customers are getting cold feet and ploughing money into plant-based alternatives.
It’s not a case of “picking one over the other”, explains Emily Johannes, the company’s senior manager for sustainable sourcing. She adds: “We believe dairy can be the low-carbon solution [and we also] want to reach customers where they are in plant-based alternatives. But plant-based are not net-zero either.”
Comparisons between the two, based on greenhouse gas emissions, have long been a bone of contention. So the argument from dairy manufacturers goes, it’s like comparing pears and poultry given the different nutritional make-up of, say, an oat-based milk and that from a cow. The carbon numbers for livestock are “far less” than those typically reported by proponents of dairy-free alternatives, claims Maple Hill CEO Carl Gerlach.
The importance of data and technology
Dairy companies have started revealing the carbon footprints of some of their products to prove this. “There’s a huge amount of value in this [data] for all of us,” explains Arla Foods chairman Jan Toft Nørgaard.
In April, the Denmark-based dairy giant published research showing that a kilo of milk produced by its European farmers results in 1.15kg of CO2e. The data came from 7,986 farms. The UN’s Food and Agricultural Organization (FAO) estimated that global milk production emitted an average of 2.5 kgCO2e per kilo of milk in 2015.
Arla’s UK farmers have an even lower footprint – 1.13kgCO2e per kilo of milk, according to a report published in August. Some 46% of this comes from ‘cow digestion’, with another 37% from feed. The data means the company believes can hone in on the emissions hotspots and drive that average footprint down by 30% come 2030.
Convincing hundreds or even thousands of suppliers to come on board won’t be easy. The big brands recognise this. In the UK, for example, Nestlé has been in talks with its suppliers to explain that expectations in relation to carbon reduction are “going up significantly”, explains responsible sourcing manager Robin Sundaram. He says 10% of farmers already “get it” and are the early adopters of new lower carbon techniques, while 10% will probably stop supplying Nestlé or leave farming altogether. The other 80% are open to change, he adds.
Incentivising, inspiring (and reassuring) the 80% could see impressive returns. For example, if all Arla’s UK suppliers matched the emissions scores of its top 10% performers, that average footprint would drop from 1.13 to 0.95kg CO2e. Unfortunately, there is no silver bullet; neither is there a one-size-fits-all low-carbon cow.
In that top 10% was “every type of farm”, a spokesperson for Arla’s UK arm says. Looking at it another way, that’s “really good news”, she adds, because “we’re providing products for a […] mixture of needs”, from those who want the affordable option to those seeking organic.
At Wyke, Clothier has also been picking through the data from his suppliers. He offers a per-litre footprint average of around 1.1kg CO2e. Milk from the family farm, as well as that from supplier Worthy Farm (home to the Glastonbury Festival), is as low as 0.6kg CO2e – which is creeping towards the kind of footprints published on-pack by Sweden-based dairy-free brand Oatly (0.31kg CO2e per kilo).
“We wanted to give farmers a better understanding of where their emissions are coming from,” says Clothier. The next step is “embracing” the existing technology, which includes everything from precision spreading of manure to anaerobic digestion – which, with the right policy support could lower on-farm emissions by 25%, he claims. “That’s a big number.”
Then there’s the new technology. Feed, in particular, is receiving a lot of attention and funding. Startups are touting everything from yeast to seaweed as additives to either enhance production or limit emissions during digestion. Mars, for example, supported Blue Ocean Barns with up to $200,000 to help develop its “minimally processed” red algae, which in small amounts can curb methane emissions “by 80%”.
Nestlé is also throwing big bucks at reducing the impact of bovine burps. Feed additives are a “huge opportunity”, says Johannes, and one of a raft of new approaches and technologies set to be deployed at Trinckler Dairy Farm in the US. Some $1.5m is being invested to reduce the farm’s emissions by 30% by 2023 and “demonstrate the economic viability of achieving net-zero emissions within the next five years”.
Indeed, brands are not just driving down emissions to save the planet – they’re doing it to save money, protect themselves from new policies and reassure increasingly anxious investors.
The New Zealand government, for example, is targeting a 24-47% reduction in biogenic methane by 2050, with a proposed agricultural emissions pricing scheme to be introduced by 2025 as the main instrument to reduce emissions. This could serve as a “litmus test” for the wider animal protein sector and its ability to navigate climate regulation, noted the investor network Fairr in a July report.
Costs would shoot up and farmers could be tempted out of dairy by schemes that pay them for sequestering carbon on their land. And the growth of plant-based dairy, in both the domestic and key international markets of China and Australia, would “further undermine the sector’s viability”.
Look at what has happened to Dean Foods and Borden Dairy in the US without carbon pricing and a question emerges: is the future of dairy really in doubt?
Inconsistency in reporting
Companies with sizeable footprints need to be prepared. However, few have published detailed net-zero plans or even data on their current footprints. Others have been working to undermine climate-related policies, according to a study published in Climate Change in March. In an assessment of the world’s 35 largest meat and dairy companies, the researchers found a mixed bag of reporting approaches, with some ignoring so-called scope 3 emissions (which come mainly from production).
The scale of emissions from dairy is thus hard to pinpoint. Arguments persist and reporting is muddled. Fonterra, for example, reckons its emissions are half those put forward in a 2020 report by the Institute for Agriculture and Trade Policy (IATP). The think tank found that among the 13 dairy corporations it assessed, just four (Fonterra, Nestlé, Saputo and Danone) report their emissions to the Carbon Disclosure Project.
Until there is consistent reporting, campaigners and academics will continue to compile their own estimates based on what’s available. That Climate Change study illustrated the scale of dairy company emissions – a table showed that New Zealand’s Fonterra, Switzerland’s Nestlé and Denmark’s Arla had emissions equating to, respectively, 74.3%, 48.5% and 42.4% of the greenhouse gases from the countries where they’re headquartered. For Nestlé and Fonterra, this could exceed 100% come 2030 if Switzerland and Denmark cut their emissions in line with their Paris Agreement and the dairy firms carried on as usual.
Few businesses will get away with doing nothing. Whether they are doing or will do enough is the current debate. For example, can companies continue to grow and achieve net-zero?
Take Nestlé: at 34.2m tonnes of CO2e, dairy and livestock account for more than half the emissions from its ingredients. By 2030, under a business-as-usual scenario, these would hit 50.6mt CO2e; the aim is not to go above 29.3mt CO2e. The lion’s share of those reductions will come from “making farms more productive”, according to the company’s net-zero plan, with regenerative agriculture techniques and reducing methane also significant.
However, cynics will point to the fact that, in ten years’ time, Nestlé’s dairy and livestock footprint will only be around 5mt CO2e lower than now. Dramatic reductions would have been achieved but the business will have become bigger. This is why the likes of IATP have suggested that emissions intensity reduction pledges, for example a 30% reduction in emission per litre of milk, allow for “greenwashing” because “total emissions continue to rise due to increases in milk production and rising numbers of animals in supply chains”.
Johannes says that’s the challenge facing successful dairy businesses beyond 2030 and towards 2050 – the ones that are selling lower carbon products that are in high demand. “How do you address all that business growth?” she wonders. “Because if we’re doing things right and we’re reaching consumers they will choose Nestlé as being a good actor in the food industry. We want that to happen and then we’ll have to address it and account for it.”