Insights May 2024

In a recently released report, CSIRO drew out several key threats to farm productivity, resilience, and sustainability. These threats are already impacting primary industries.

These growing threats include:

• climate change,
• emissions reduction targets,
• supply chain disruptions,
• workforce access,
• changing consumer preferences and market access; and
• medium-term innovation timelines that favour short term adaptation. Long-term innovation timelines are required to support the transformation in agriculture that will be necessary to respond to the threats above.

In 2021 ABARES estimated that changes in seasonal conditions over the period 2001 to 2020 reduced annual average farm profits by 23 per cent below their potential. This uses a reference era of 1950 to 2000. These impacts have been most pronounced in south-western and south-eastern Australia. The higher rainfall coastal zones and northern Australia are less affected.

In the 20 years since 2000, climate variability doubled the risk of years with very low farm returns. That risk increased from a 1 in 10 frequency to more than 1 in 5, compared to the same reference era. Some projections estimating that these growing threats could cause profitability decline in some areas by up to 50 per cent by 2050.

The report characterises four scenarios:

1. Regional AgTech Capitals,
2. Landscape Stewardship,
3. Climate Survival, and
4. System Decline.

Please refer to the Ag2050 Scenarios Report for more information.

There were two takeaway messages both underscoring their view that adaptation strategies are useful in the medium term, but transformation is probably essential in the long term:

1. Australia will need to accelerate the transformation of its current farming systems to respond to these complex and whole-of-sector challenges.
2. There is a need for whole-of-system planning that provides the agricultural innovation system with achievable stepping stones towards long-term transformative system change.

It is surprising how quickly the long term arrives as the present.

Climate Smart Agriculture – Small Grants

The Australian Government is inviting organisations to apply to deliver projects under the Climate-Smart Agriculture Program – Small Grants Round 1.

Small Grants are for small-scale projects at the grassroots and community level that will support farmers and land holders to adopt sustainable agriculture best practices, as well as facilitate and implement practice change. The grants will improve management of our natural resources and increase sustainable on-farm productivity and resilience to climate change.

The grants allow for a wide range of projects and initiatives, providing opportunities for information delivery and extension as well as scaling up of existing local initiatives. New or innovative, as well as tried and tested, climate-smart, sustainable agricultural practices are in scope.

Visit the governments GrantConnect website for more information.

Closing date: 4 June 2024.

Largest carbon removal deal ever is signed

Direct carbon extraction is maturing.

Swedish company Stockholm Exergi has environmental approval for a new bio-energy plant with carbon capture and storage (BECCS). This has enabled the signing of the largest carbon removal deal in the world to date between Stockholm Exergi and Microsoft.

Microsoft has a 10-year offtake agreement with Stockholm Exergi for a total of 3.3 million tonnes of carbon removal certificates.

The planned carbon removal plant will be a combination of a heat and power plant and a carbon capture and storage facility. The power plant uses residues from forestry, sawmill and pulp and paper production. The carbon capture facility extracts carbon dioxide (CO2) from the flue gases of the power plant. It cools and compresses the CO2 into liquid form. It is then stored permanently below the bottom of the North Sea. Over time, the liquid CO2 mineralises into insoluble carbonates. The final investment decision on the facility is expected in Q4 2024, and the construction to start in 2025.

At completion, the plant should sequester 800,000 tonnes of carbon each year.

Visit the ESG Today website for more information.