Managing Our Carbon Emission Opportunities Now, to Minimise the Risk of High-Cost Solutions in the Future

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Managing Our Carbon Emission Opportunities Now, to Minimise the Risk of High-Cost Solutions in the Future Environment & AMPC Report — November 2019 Sustainability Visual snapshot for members Report Emission reduction pathways and opportunities for the Australian red meat processing sector Managing our carbon emission opportunities now, to minimise the risk of high-cost solutions in the future. Pathway 1 Pathway 2 Pathway 3 2005 2010 2015 2020 2025 2030 Current Policy2035 Paris Goals2040 Carbon Neutral2045 2030 • Current national emission • Based on 1.5 to 2°C • Based on the broader reduction target for 2030 temperature range industry goal of carbon referenced in the neutrality by 2030 1.5M • Headline reduction in Paris Agreement emissions of 26-28% • 100% reduction from from 2005 levels • This targets a 63% 2005 levels (Effective target of 16%3) reduction from 2005 levels • Risk of future drastic mandatory measures Current Emissions Red Meat Processing Sector Capital1 $12-27m Capital1 $435-625M Capital1 $2.2-3.6B 432kg CO2e/t HSCW 3,071,000 t NPV2 $15-17M NPV2 $175-194M NPV2 $600-720M 2018 Emission Intensity 2018 Annual Emissions Technologies Technologies Technologies 1M 1,330 44% 56% Efficiency Efficiency Efficiency ktCO2e/year Scope 1 — Scope 2 — indirectly improvements improvements improvements Annual Carbon produced produced from electricity e Emissions on site purchase & use 2 Biomass boilers Biomass boilers Behind-the-meter wind and solar of CO Tonnes or Biomass Embracing technology to meet industry’s CN2030 commitment. cogeneration or 0.5M Red meat processors have actively taken steps to reduce emissions — our sector’s emissions have been trending down for over a decade. However, the combination of prolonged domestic Renewable PPA policy uncertainty, new opportunities to access low emissions technologies, and growing international Purchase adoption of the Paris Agreement framework all indicate that our sector cannot simply maintain the residual offsets status quo — future statutory emission limits could be extremely costly and disruptive. Three emission pathways for policy situations were evaluated to determine potential impacts for processing plants. Far more action is required to achieve the Paris Goals and Carbon Neutral by 2030 pathways. 1 Estimated minimum capital required for on-site projects 2 Estimated NPV of all on-site projects with shadow carbon price of $25/tonne 3 Counting Kyoto Protocol carryover credits toward the target 0 Decarbonising our sector Recommendations to Australian meat processors After implementing efficiencies, emission reduction can be found in renewable energy generation projects, with biomass / biogas boilers and solar PV giving the best NPV. Large-scale processors have more Know your Prepare for opportunity to reduce carbon emissions where economies of scale emissions Prioritise policy changes Plan ahead Collaborate can be applied (eg. transitioning from natural gas to biogas where Develop systems to Identify key first Use a shadow carbon Develop a long-term Leverage the AMPC as significant emissions are attributable to rendering operations). measure, monitor, and actions using AMPC price to help weight plan to progressively a central coordinator actively manage your tools and guides to projects with the reduce your emissions for knowledge sharing, emissions so you can determine which greatest potential. and prepare for policy project development, Aggregated Power Purchase Agreements and energy efficiency track changes to your emissions you should Monitor changes in grid changes, particularly funding and buying are opportunities for small-scale processors. emissions profile. address first. electricity emissions when funding assistance aggregation (eg. Power and renewable energy becomes available. Purchase Agreements). approaches. Achieving Carbon Neutral 20304 Biomass Grid decarbonisation cogeneration 202.4kt Reductions kt 274.2 Efficiency $170/t improvements 108.8kt $8,350/t Working towards our decarbonisation goals The Net Saving Energy NPV 2020 AMPC understands the Energy Emissions trilemma and has projects underway to help our members. $/tonne Solar Emissions hot water Trilemma 3.6kt Aggregated waste to energy Wind & other $4,880/t Reliability Cost renewables Abatement Investigating the techno-economic feasibility for larger plants 301.4kt opportunities Biomass boiler to combine waste to energy processes from our members’ $227/t kt communities and supply chains, reducing fossil fuel consumption. kt CO2e 360.5 $4,247/t Solar PV kt 201.0 Biogas boiler $2,199/t Refrigeration energy efficiency 17.8kt conducting workshops with small, medium and large plants $3,370/t to help uncover new energy efficiencies within refrigeration and thermal energy operations. Electricity Processor emissions 1044.6kt kt CO e Biogas 2 flaring Gas kt 64.7 360.5kt Energy & water benchmarking Hydrogen & Biomass providing workshops with a tool for plants to compare Investigating the techno-economic their energy and water use, while discovering action-based feasibility for plants to utilise clean hydrogen opportunities to improve productivity and reduce emissions. Abatement opportunities vary for plant sizes & biomass across transport, supply chains Assisting with PIP-funding and directing to state-based grants. and reducing fossil fuel consumption. Rendering typically occurs in large facilities, leading to greater gas consumption, and thus greater savings and abatement opportunities in fuel combustion and thermal efficiency. Large Small Plant Gas 5 Plant Gas 5 Start measuring your energy, water and waste today. [email protected] 24.7% 17% 4 Low grid decarbonisation scenario of total emissions of total emissions 5 Metrics based on typical small and large plan Contact AMPC for help and advice on which technologies are right for you. (02) 8908 5500.
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