NZ Herald Agribusiness Feature | 17 August 2023
This article first appeared in the NZ Herald AgriBusiness and Trade Report.
A world-first agricultural investment fund, AgriZeroNZ, backed by six of the industry’s influencers, is working on developing a toolkit for farmers to reduce gas emissions on their land.
With a 50-50 share of funding from the Government and private sector, AgriZeroNZ has $165 million to invest in emissions-reduction solutions over the next three and a half years — with the promise of further support over this decade.
AgriZeroNZ executive director Wayne McNee says the joint venture fund is undertaking targeted investments and actions to accelerate the development and commercialisation of tools that will be used by New Zealand farmers and others to significantly reduce biogenic methane and nitrous oxide emissions, while maintaining productivity and profitability.
“There is nothing on the market here at present, though one product, Bovaer, has been internationally approved but not for use in New Zealand,” says McNee.
“We want all farmers to have equitable access to affordable and effective solutions (for sheep, cattle, and deer), with a goal of supporting a 30 per cent reduction in emissions by 2030 and near zero by 2040.
Methane from ruminant animal digestion makes up 40 per cent of the total agricultural emissions. The agriculture industry in turn produces almost half of the country’s greenhouse gas emissions while providing 75 per cent of the total goods exports.
The Centre for Climate Action Joint Venture, established as a limited liability company in February, was renamed AgriZeroNZ and the new branding was launched at Fieldays near Hamilton in June. “The first name was bit of a mouthful and some people thought we were a lobby group,” says McNee. “It wasn’t clear that we were involved with the agriculture industry and investments.”
Dairy companies Fonterra and Synlait Milk; meat processors Silver Fern Farms and ANZCO Foods; fertiliser producer Ravensdown; and rural financier Rabobank — together having access to 70 per cent of New Zealand’s farms — are partnering with the Crown, through the Ministry for Primary Industries, on a 50-50 shareholding basis in AgriZeroNZ.
Sir Brian Roche, leading professional director and government adviser, is chairing the AgriZeroNZ board and is joined at the table by AgResearch director Jessie Chan; renowned technology entrepreneur and investor Sir Neville Jordan; executive director strategic growth at Auckland UniServices Greg Murison; and former Fonterra chief operating officer Fraser Whineray.
AgriZeroNZ Board of Directors
AgriZeroNZ has formed a team of 11 staff and is busy identifying innovative companies to invest in and assessing whether their technologies and solutions will work in New Zealand. It has already made three investments. AgriZeroNZ took a $1.8m stake in Waikato-based Ruminant Biotech, which is developing a slow-release, biodegradable methane-inhibiting bolus for livestock.
The bolus, or ball, with active ingredients is swallowed by the animal and sits in the stomach for up to six months. The ingredients are released over time and have the effect of reducing methane emissions. Initial trials show a 70 per cent knockdown of methane over six months. Ruminant Biotech is aiming to launch it as a commercial product in 2025.
Global production of methane from ruminant animals equates to 200 mega tons per year, and the company aims to have 100 million cows around the world using the bolus by 2030, representing about 10 mega tons of emissions reduction annually.
AgriZeroNZ has provided $2.5m funding towards the methane vaccine and inhibitors programme run by the New Zealand Agricultural Greenhouse Gas Research Centre at Massey University in Palmerston North. McNee says the vaccine has international interest and could be used in Africa and India but it requires more research.
The methane inhibitors or feed additives provide an opportunity to lower emissions by reducing the activity of methane-producing microbes (methanogens) in the digestive systems (rumen) of ruminant livestock.
The third investment is $4m towards a $17.7m methane measurement facility on Massey University land. The facility will include 12 respiration chambers — big enough for the animals to eat and move around in — and become the gold standard for capturing and measuring all the methane emissions, says McNee. Lactating dairy cows walk inside and are individually monitored with different feed additives, which could include boluses.
There are plenty of other developments to consider overseas, but McNee says their value in New Zealand’s unique pasture-based system needs to be evaluated.
London-based Zelp, incubated at the Royal College of Art, has developed a harness that fits comfortably on a cow’s nose and around the head and captures the methane gas. The device doesn’t change the animal’s movement, feeding patterns, rest and activity periods.
As the cattle exhales, the methane travels through a catalyst where it is oxidised then released into the air as carbon dioxide and water vapour.
The technology accurately tracks methane reduction and provides key data for farmers on welfare, efficiency and fertility.
The Bovaer feed additive, developed by a Dutch multi-national chemicals company, has European Union Member States marketing approval, as well as in Brazil and Chile. The product is made from two ingredients — nitrate and bio-based alcohol.
After suppressing methane production in the animal’s stomach, Bovaer is broken down into the same natural compounds again, which are already present and processed by the cow’s normal digestive and metabolic processes.
The product has been shown to reduce emissions by 27-40 per cent depending on the cow’s ration and amount of methane inhibitor added to the feed — just a quarter teaspoon is effective.
There’s also asparagopsis seaweed, which could be used in a bolus and fed to the animals to reduce their methane emissions.
McNee says AgriZeroNZ will invest in start-ups and facilities and make sure the research is undertaken.
They will also work with the companies and regulators to get the required approvals and make the products commercially available.
He Waka Eke Noa proposes a levy or tax of $110 per ton of methane in 2025 and increasing to $170-$350 a ton by 2030.
The levy is expected to reduce the amount of methane New Zealand’s livestock release into the atmosphere by up to 47 per cent by 2050. But some farmers would need to reduce their herds to meet those targets which they fear would drive them out of business.
On the international front, food giants such as Nestle, Mars, Danone and the big supermarket chains Sainsbury and Tesco want to see lower emissions on dairy and meat products.
Nestle has set a target of 20 per cent reduction in emissions from customers and suppliers by 2025 and 50 per cent by 2030. Mars has a 27 per cent target by 2025 and Danone 30 per cent reduction in methane emissions by 2030.
McNee says New Zealand’s global customers are setting ambitious reduction targets for greenhouse gases and, if we can’t meet them, then export revenue that has underpinned our living standards will be under threat.
“We must confront this reality and work together with farmers on practical solutions to meet this challenge,” he says.
“I’m confident that by 2030 there will be a range of tools for the farmers to choose from and be able to significantly reduce methane and nitrous oxide emissions and build resilience to climate change.”
Asked if AgriZeroNZ was competing with LIC and CRV’s methane research programme, McNee says: “No, we are adding to the tools and technologies available. The more the merrier.
“It’s great if emissions are reduced through genetics but that’s just one of many traits in animal breeding ability,” says McNee, who is the former chief executive of LIC.