Poultry – Carbon inventory introduction

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Presenter/s names hereThis is an AgriFood Skills Australia Ltd project developed in partnership with Energetics Pty Ltd and funded by the Australian Government under the Clean Energy and Other Skills Package

• Climate change • Resource depletion

– Energy– Water– Materials

• Increased emissions, contamination & waste

• Reduced air quality • Loss of biodiversity

2

What is the problem?

How is economic activity affected by climate change?

Agriculture, tourism and insurance•Directly affected - more droughts, floods and bush fires.

Carbon taxes, energy tariffs and emissions trading.•To address climate change, emissions must be reduced

Impact upon other sectors•Energy sector costs flow through to energy intensive sectors – mining, manufacturing

Other indirect impacts include •Reduced demand for products

•Disruption to business activities

•Potential litigation

•Brand and reputation risk

Longer term global impacts potentially:•Large scale refugee movement

•Political instability •Social unrest.

Risks specific to Australia

Access to Water • Australia is the driest

continent on earth • Many industry sectors

are dependent on access to water for operation.

Market related risks• Climate change risks in

other countries may differ remarkably – regulations, consumer behaviour

Energy pricing• Low energy costs, greenhouse

intensive coal sources• Costs to increase – oil prices,

carbon, lack of investment, drought conditions

Regulatory uncertainty• Carbon Price and Emissions

Trading.• Uncertainty - difficulty in long-

term infrastructure/ asset planning.

Things to consider when managing carbon – organisational boundariesDecisions must be made as to how emissions will be aggregated. Three approaches include:•Equity share•Financial control•Operational control

Operational control is default boundary! – required for reporting to Australia’s National Energy and Greenhouse Reporting System (NGER)

What is operational control? Defined in Australian law as the right to introduce or implement operating, health and safety or environmental policies

Things to consider when managing carbon – operational boundaries

Scope 3 “Emissions from services You use and products You

produce”Nat GasPetrol

Process emissions

LPG

Scope 2 “Fuel burnt for You”

Scope 1“Fuel You Burn”

Electricity

Reporting / reduction programs

• NGER (Australian) – Mandatory reporting of national energy consumption and production and greenhouse gas emissions above legislated thresholds.

• EEO (Australian) – Mandatory identification of energy efficiency opportunities by energy users above thresholds.

• CDP (International) – Voluntary requests for greenhouse and energy disclosure from over 2,500 organisations. CDP acts on behalf of 534 global institutional investors

NB: No longer considered “voluntary” for Australia’s top 200 companies

The business case for carbon management– emissions & profit

Figure 8: Carbon intensity by sector (VicSuper Carbon Count 2009)

The business case for carbon management – carbon labeling

uk carbon trust

.

Aldi – first company in Australia to introduce

Carbon Reduction Labels.

Suppliers now required to• report GHG emissions

• commit to GHG reductions

Woolworths and the Australian Food and Grocery Council conducting study on benefits of carbon

labeling

The business case for carbon management – carbon trading

• Japan – currently designing ETS that is likely to be implemented in 2011

• NZ – ETS started 1 July 2010• China - likely to have an ETS• EU – existing ETS may legislate a 30% reduction target• UK Coalition - setting a floor price for carbon• US – multiple regional ETS’

From 1 July 2012 – Australia has a price on carbon set at $23 per tonne of CO2-e – following a number of other

countries

NB: Emissions trading works: EU verified emissions showed a decrease of 11% in 2009

The business case for carbon management – carbon price

Q: Who pays the Carbon price?

Some pay directly eg. Large users of coal such as coal fired power stations

Some pay indirectly eg. Consumers of electricity / smaller users of fuelsThink petrol excise – you pay, but payment collected upstream

The business case for carbon management – what level of price?

What might a carbon price be?

Interim tax$23

Introduced 1 July 2012

Permit price5% reduction

target for 2020= $25 in 2013

Transition to trading scheme

(variable price)= $20 - $35 in

2015

Regulationeg. ban on all

coal - fired generators

(incl. boilers)

NB: Very costly for some

Costs spread across the economy

Risk and opportunity identificationThese include:• Physical – damage to functioning of assets / take advantage of shifting climatic

zones

• Regulatory – exposure to / seize opportunities around:

- current and future requirements;

- administrative burden;

- direct and pass-through carbon price costs • Litigation – CEO liability or opportunity (NGER and EEO)

• Competitive – business environment will change – advantage or risk?• Reputational – information is in public domain

The business case for carbon management

Experience shows that sustainability makes good business sense

• Embedding sustainability within an organisation’s broader business strategies frequently results in organisational and technical innovations that generate both top- and bottom-line returns.

• Reducing inputs to a business, due to a carbon-constrained economy, reduces costs.

• Reducing inputs requires new or improved products or even new business lines.

Additional slides for management presentation

• Insert following slides as required

Summary graph from baseline tool

Insert summary graph from baseline tool

Energy Cost Tonne CO2 -e

$48,135

$300,844 $2,465

$29,664

$906,400

$7,334

$5,771

$186,875

$399$229,441

Financial Year 2012 Energy Usage, Resources Cost and GHG Emissions

Natural Gas Electricity Diesel Water

The size of your footprint

Insert summary graph 1 from inventory

012345678

Total annual emissions (kt CO2-e)

Scope 1 v scope 2 emissions

Insert Summary graph 2 from inventory

Scope 1 emissions

24%Scope 2 emissions

76%

Energy use by emissions source

Insert summary graph 3 from inventory

0102030405060

Annual energy consumption (TJ)

Carbon price impact

• Insert summary slide 4 from inventory

Scenario 1 Tax ($10/tCO2-

e)

Scenario 2Permits: 5%

target ($23/tCO2-e)

Scenario 3Permits: 25%

target ($32/tCO2-e)

Scenario 4 Regulation

without price

$-

$50

$100

$150

$200

$250

$300

$350

Carbon liability under 3 pricing scenarios

Indirect liabil-ityDirect liabilityTotal

Unknown financial impact without further and site specific analysis