Why should the dairy industry manage its carbon emissions?

Increasing Greenhouse Gases (GHG) emissions chiefly due to anthropogenic activities is what leads to climate change. The dairy industry also has a significant share in contributing towards GHG emissions right from the production of milk in farms to its final processing, storage and distribution. The global dairy sector contributes 2.7% to the total global anthropogenic GHG emissions. This figure includes emissions associated with milk production, processing and transportation of milk and milk products only. The average global emission from milk production, processing and transport is estimated to be 2.4 CO₂e per kg of FPCM (Fat and protein corrected milk) at farm gate (Source: FAO). As seen from the emission figures, the share of dairy industry in total anthropogenic GHG emission is considerable. Proper management of resources and implementation of GHG emission reduction activities can help to reduce these emissions significantly.

Greenhouse gas sources at dairy production process

Roughly, in a typical dairy industry GHG emissions result from – (1) Animal farming/Livestock management at farms, (2) Consumption of fossil fuels in transportation and other purposes, (3) Consumption of electricity, (4) Use of chemicals at various processes that released GHGs, (5) Refrigerant loss from the cooling systems, (5) Wastes disposal and management that produce GHG emissions. The following schematic shows the process of dairy production;

During milk production at animal farms, GHG emission occurs through various agricultural processes such as  growing of feed-stock for cattle involved uses of various fertilizers (Nitrogen based fertilizers, etc) that releases GHGs, various farming processes use  fuel and electricity, transportation. All these activities contribute in GHG emissions.  In addition, enteric fermentation by the livestock also contributes to the net GHG emissions.

At the processing end, emission mostly occurs during steam production in boilers (fossil fuels consumption by boilers such as use of furnace oil, diesel, natural gas, etc), electricity consumption by production equipments, cooling system and lightings. In addition, dairy industry also has a huge chillers/cooling system. Such system uses HFC (R-134a, R-22, etc gases) based refrigerants that have a higher global warming potential.

What should dairy company do to measure their carbon emissions?

Carbon footprint is a more recent term linked with global warming and climate change. Carbon footprint refers to the total greenhouse gas (GHG) emissions associated with an organization, product or service. Several standards serve as guidelines on how to perform a carbon footprint of organization, product or services.

ISO 14064 and GHG protocol are key standards which describe how the carbon footprint can be quantified at organization level. Companies can also go for product carbon footprint by using PAS 2050. It specifies certain technical requirements with regards to the carbon footprint measurement of the product.  However, under ISO 14064 based GHG quantification and management; the company will be able to measure, monitor, track, reduce, and communicate the carbon footprint as a result of its operations.

What benefits Dairy Company can draw from GHG management system?

ISO 14064 provides industry with a set of tools to develop programs aimed at reducing GHG emissions. A number of companies in India and abroad are measuring and managing their carbon profile and disclosing the same to stakeholders including government agencies, regulatory bodies, investors, etc. through annual reports, sustainability reports and the Carbon Disclosure Project (CDP). They have benefited in number of ways from carbon profiling and management. Following are the key drivers and relevant benefits of GHG management at Dairy industry;

1. Customer requirements: Customers are increasingly seeking to purchase products from companies that are taking care of our environment. Climate change and carbon reductions are major drivers of individual purchasing decisions and important components of corporate responsibility programs. ISO-14064 certification is a meaningful, transparent way for the company to provide environment friendly products to the customers.
2. Cost Savings: Managing carbon allows organizations to monitor the energy usage source wise. The largest carbon emission sources are also the most energy intensive. GHG management system helps monitor the energy source and identify carbon footprint reduction projects internally, which can lead to cost saving for the organization. Example of such projects include – Use of alternative fuel such as Bio-fuel or Natural gas that replaces furnace oil in the boilers, energy efficiency measures in high energy intensive operations, use of renewable energy such as wind, renewable biomass, solar energy, etc.
3. Compliance: Government of India has introduced National Action Plan on Climate Change (NAPCC) in year 2008. Under this plan, various national missions have been introduced to minimize the impact of climate change. Major emphasis is given to increase the use of renewable energy and energy efficiency in the existing operations. By implementing GHG management system, companies can comply with these regulations such as energy and environmental regulation for continuous business operations. Examples are Renewable Purchase Obligations, Perform Achieve and Trade scheme, mandatory CSR programs by the GOI, etc.
4. Communication: Status reports on carbon emissions when published along with the annual report make a strong statement to stakeholders that the company manages its businesses responsibly. These reports can be presented at various forums depending on company’s target stakeholders e.g. investors, lenders, and governments.
5. Branding: GHG reports and other communication materials on the GHG management initiatives help in enhancing brand image of company. In addition, Bombay Stock Exchange (BSE) launched CARBONEX – the first-of-its-kind Carbon Indexing Project in association with CDP, on November 30, 2012. Only companies that manage their carbon emissions, and risks and opportunities induced by climate change are indexed at BSE CARBONEX.

Investors are also seeking information on an organizations’ effort towards carbon emission accounting, reduction and reporting through Carbon Disclosure Project (CDP) reporting. Quantification of organizational level GHG inventory of the company according to ISO 14064-I will help to meet current and future regulatory requirements and stakeholder’s (e.g. investor) expectations.

Image credit: Holstein Friesian Cow