- CBH is Australia's Largest Exporter of Grain and as a Co-op is owned by 3,900 farmers.
- Wide Open Agriculture is a West Australian Regenerative Food and Farming Company.
- The market demand, logistics and feasibility assessment will be undertaken during the 2020-21 Southern Hemisphere grain growing season.
The momentum behind carbon neutral agriculture production continues to build, with yet another major announcement of large-scale agriculture companies exploring carbon neutrality.
Wide Open Agriculture (WOA), announced on the ASX today that it has signed a Non-Binding Memorandum of Understanding (MoU) with the CBH Group (CBH) to explore certification, marketing and global distribution of carbon neutral grain.
CBH is Australia's largest exporter of grain with end-to-end operations across grain storage, handling, transport, marketing and processing. CBH is 100% owned and controlled by Western Australian grain growers, had revenue of more than AUD$4 billion in 2019 and operates offices across Australia, Japan and Hong Kong.
CBH handled 16.4 million tons of grain in the 2018-19 growing season.
CBH Chief Marketing and Trading Officer, Jason Craig said “Australian grain continues to rightly benefit from a strong reputation as a clean and green grain producer. We are also seeing growing demand for sustainably produced grain, so we look forward to working with WOA to explore the market opportunity for carbon neutral grain in the international marketplace.”
Wide Open Agriculture (WOA) is Australia’s leading ASX-listed regenerative food and agriculture company. The Company’s innovative Dirty Clean Food brand markets and distributes food products with a focus on conscious consumers in Australia and South-East Asia. Products are chosen based on their market potential and the positive impact they deliver to farmers, their farmland and regional communities.
Under the agreement, WOA and CBH will explore the feasibility of sourcing, certifying, marketing and distributing carbon neutral oats, barley and lupins from Western Australia. The project will also consider the potential for regenerative farming practices to support this goal.
If successful, the project could lead to one of the world’s first carbon neutral certified products for buyers seeking more sustainable grain alternatives.
The Specifics of the CBH and WOA Carbon Neutral Grain Project:
The intent is to execute this project in line with the 2020-21 southern hemisphere grain growing season with the following core objectives;
- Supply: Identify the potential available supply of commercial quantities of oats, barley and lupins that meet carbon neutral specifications. Work with five leading Western Australian grain growers to test the feasibility of supplying to a carbon neutral grain program.
- Process & Costs: Investigate the potential processes and costs related to providing carbon neutral certification support services, carbon reduction programs, regenerative farming transition support and carbon offsetting services.
- Market Opportunity: Understand the potential market opportunity, demand and price that CBH export customers could be willing to pay for this differentiated product.
- Positive Impact: Facilitate a framework for positive environmental outcomes on-farm, alongside direct economic benefits for participating growers.
So what is Carbon Neutral Certification and how does it work?
In it's simplest terms Carbon Neutral Certification involves four steps:
- Measure: Quantifying the greenhouse gas footprint (converted to tons CO2 equivalent) of an organisation or product. The scope of the assessment varies between industries and products, generally for agricultural products it will cover all emissions from farm-to-fork.
- Reduce: A strategy must then be developed to reduce emissions in on-farm production and the broader supply chain.
- Offset: To offset the remaining greenhouse gas footprint, certified carbon credit units are purchased.
- Certify: The concluding step is appropriate auditing and certification for a product or organisation to be formally recognised as Certified Carbon Neutral.
The Global Greenhouse Gas Protocols Guidance on Agriculture based emissions provides an in-depth explanation of how Carbon Neutral Certification would apply to agricultural products and supply chains. The Australian Governments Climate Active Certification is one of the third-party organisations that can certify products as Carbon Neutral in Australia. Carbon neutral certification has been identified by WOA and CBH as a possible verification tool to support and differentiate Western Australian grain products.
How does it relate to regenerative agriculture?
The general consensus in the regenerative agriculture community, is that some recognised regenerative farming practices have the potential to reduce the carbon emission footprint of agricultural production systems. We recently profiled a McKinsey Study showcasing 25 Farming Practices that reduce greenhouse gas emissions, which references regenerative farming practices such as No-Till Cropping.
The momentum seems contagious:
Australian Grain Growers Association made its own pledge this month relating to reducing carbon emissions in Australian Grain farming. In the last few weeks we have seen a flood of large multi-national companies such as Adidas, General Mills, Unilever and Cargill all making firm steps towards regenerative farming, carbon farming and lowering supply chain carbon emissions.
Where will this announcement lead?
If both parties agree that the certification, marketing and distribution of carbon neutral and regeneratively grown grain is feasible, WOA and CBH may progress to a commercialisation phase.
WOA Managing Director, Dr Ben Cole said “WOA have developed a deep understanding of regenerative farming systems and are transitioning the company towards carbon neutral certification across all products. Developing grain products with a clear understanding of their environmental impact from farm-to-customer could provide new market access and potential premiums for growers”
This recent announcement closely follows a successful AUD $3 million dollar capital raise by Wide Open Agriculture, largely centred around securing a licence for a Lupin based protein technology, as well as the expansion of it's Dirty Clean Food brand.
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Disclosure: Wide Open Agriculture is a minor shareholder in Farmfolk Services Pty Ltd, the parent company of Regen Farming News.