Top Global Agricultural Commodity Companies Announce Net-Zero Emissions Plans

Ten of the world’s largest agricultural commodity companies have released a joint statement pledging to accelerate efforts towards net-zero emissions globally by 2050. This group of companies reportedly makes a combined revenue of USD 500 million in key commodities such as palm oil and soy, and comprises ADM, Amaggi, Bunge, Cargill, Golden Agri-Resources (GAR), JBS, Louis Dreyfus Company (LDC), Olam International, Wilmar International, and Viterra. To that end, a roadmap will be presented at COP27 next year in line with current climate plans to limit global warming to 1.5°C.

This announcement is timely. According to the IPCC report on climate change published in August, an estimated 23% of global greenhouse gases (GHG) emissions is associated with land use, 11% of which are from deforestation and forest land conversions. With current temperature trends indicating that it is entirely possible for human-driven global warming to reach 1.5°C by 2040, managing climate change is an urgent, all-hands-on-deck situation, making this net-zero emissions pledge a much welcome coarse of action.

For palm oil, we can expect more methane capture at mills as a key route to the transition. At the moment, several companies have already begun taking steps to manage emissions generated throughout their supply chain. Wilmar, for example, has methane capture facilities installed at its Indonesian and Malaysian mills to reduce GHG emissions generated from palm oil mill effluents (POME). According to its website, a single methane capture facility is capable of reducing a mill’s emission by 90%; as of 2020, Wilmar reported that it has successfully avoided nearly 600,000 tCO2e of GHG emissions using 25 of these facilities.

Indonesia Ends Cooperation with Norway on Emissions Reduction Plan

After more than 10 years in effect, Indonesia has terminated its 2010 Letter of Intent (LOI) with Norway, ending the countries’ collaborative efforts under the REDD+ initiative, i.e. reducing greenhouse gas (GHG) emission from deforestation and forest degradation. According to the Indonesian Ministry of Foreign Affairs, the termination was due to the “lack of concrete progress on the implementation of the obligation of the government of Norway to deliver the results-based payment for Indonesia’s achievement in reducing 11.2 million CO2eq greenhouse gas emissions in 2016/17.” Indonesian Deputy Minister for Environment and Forestry Alue Dohong similarly cited a lack of payment from Norway—despite agreeing in 2019 to remit approximately USD56 million—as a possible reason behind the termination.

Norway has since responded by reaffirming its support to Indonesia in latter’s efforts to protect its forests and peatlands.

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Our comment

This new development has certainly led to some raised eyebrows. Recent data shows that Indonesia has been making headway in forest protection, recording a steadily declining deforestation rate in the last four years.

Together with the Singapore Institute of International Affairs (SIIA), Segi Enam Advisors has explored Indonesia’s success story in the Haze Outlook 2021. Indonesia lost 115,459 hectares to deforestation in 2020, a historic low considering the millions of hectares lost in the previous years as well as the generally increasing trend of deforestation happening globally despite the Covid-19 pandemic. The archipelago’s achievement meant it slipped from its regular top three place for primary forest loss countries to fourth in the World Research Institute (WRI)’s global forest review for the first time since 2000.

From SIIA/Segi Enam Advisors (2021): “Official deforestation rate for Indonesia and forward targets, 1990-2030. Note: Forest areas refers to zones that should legally be maintained as forests, while non-forest areas are zones that lack such legal status (but may still have tree cover). The spikes in deforestation correspond to previous severe transboundary haze incidents, linked to weather conditions and economic factors such as the Asian Financial Crisis and growing demand for vegetable oils (including for biofuels). Source: Official data and targets (annualised), KLHK.”

As for GHG emissions, agriculture, forestry, and other land use (AFOLU) typically generates at least half of Indonesia’s annual emissions, recording approximately 67% in 2015 and approximately 50–60% in a more normal year). Official data puts average emission levels from the forestry sector between 2000–2018 at about 439.9 million tonnes of carbon dioxide equivalent (CO2e); the level is 214.0 million tonnes of CO2e if emissions from peat fires are excluded.

To get more perspective, we spoke to a specialist on regional climate change policy. “Indonesia received some payments. But we have been hearing about their dissatisfaction.” It looks like payments have been significantly below the headline figure, were there issues on milestones or other? “It seems to be about the use of payments.”

From SIIA/Segi Enam Advisors (2021): “Indonesian national GHG emissions (including peat fires), 2000-2016. Note: Graph tracks Industrial Process and Product Use (IPPU), Forestry and Other Land Use (FOLU), and other sources of emissions. Source: UNFCCC.”

research@segi-enam.com | 13 Sep 2021, 3 p.m.

Moo-re Carbon? Emissions from Dairy Giants Exceed Major Carbon Polluters

A recent study by the Institute for Agriculture & Trade Policy (IATP) has revealed interesting information: in 2017, 13 of the globe’s largest dairy corporations emitted more greenhouse gases (GHG) combined than BHP and ConocoPhillips, the two major carbon polluters of the world. The report stated that the total combined emissions released by big names in dairy industry, such as Group Lactalis, Saputo, Danone, and Amul, increased by 11% between 2015 and 2017. What is worrying is that while there is evidence to suggest that the food system is responsible for about 37% of global emissions, there is little public attention on the meat and dairy industry, unlike the mounting scrutiny received by the fossil fuel corporations.

Source: Sharma (2020)

Unsurprisingly, the meat and dairy industry have denied these claims. The European Dairy Association (EDA) has called the findings “an insult… to any rational thinking”, arguing that six of the named 13 dairy companies were based in Europe and, as such, are “fully subscribed to the EU Green Deal with [a] shared ambition to make Europe the first climate neutral continent by 2050.”

The IATP study makes a good opportunity to revisit our post on the ASEAN Vegan Map, which shows online interest in the subject of veganism across Southeast Asia. The piece compliments our previous preliminary survey findings that suggest a rise of plant-based diets, particularly among young professionals.