SCOTTISH DAIRY SUPPLY CHAIN GREENHOUSE GAS EMISSIONS

Transcription

1 SCOTTISH DAIRY SUPPLY CHAIN GREENHOUSE GAS EMISSIONS Jan 2011 Main project report A research project to assess global greenhouse gas emissions associated with the Scottish dairy supply chain and identify main opportunities to reduce emissions while maintaining or improving economic productivity. The study is the first of its kind to estimate emissions from a whole country s dairy supply chain and apply the latest dairy footprinting methodologies.

2 Scottish Government Identifying opportunities to reduce the carbon footprint associated with the Scottish dairy supply chain Final report January 2011 i

3 Project team Lead report author: Richard Sheane (Best Foot Forward Ltd) Lead analyst: Kevin Lewis (Best Foot Forward Ltd) Farm greenhouse gas mitigation & stakeholder research: Paul Holmes-Ling, Peter Hall, Angus Kerr, Kevin Stewart (Laurence Gould Partnership Ltd) Other support: Donald Webb (DTZ Ltd) How to cite this report: Sheane, R., Lewis, K., Hall, P., Holmes-Ling, P., Kerr, A., Stewart, K., Webb, D. Identifying opportunities to reduce the carbon footprint associated with the Scottish dairy supply chain Main report. Edinburgh: Scottish Government, 2011 ii

4 Executive summary PROJECT CONTEXT In recent years the Scottish dairy supply chain has responded to acknowledged sustainability challenges by supporting a variety of global and national greenhouse gas initiatives. These include: the development of road maps 1 with environmental targets; voluntary energy efficiency agreements 2 ; the creation of environmental knowledge resources (e.g. energy efficiency guides); the funding of demonstration farms; on-farm carbon footprint research; carbon software development; product carbon labelling; and the creation of best practice guidance on product carbon footprinting 5. At the same time the Scottish Government is seeking to achieve major reductions in greenhouse gas emissions in Scotland. Targets requiring an 80% reduction by 2050 and a 42% reduction by 2020 have been agreed. Agriculture and food sectors will play a key roll in delivering these reductions. This research project also fits within the wider context of the Scottish Government s Food and Drink Policy 3 which recognises the roll that all parts of the food and drink supply chain (from primary producers, processors, retailers to consumers) can play. It is envisaged that this project will serve as an exemplar for future work on other supply chains in Scotland. PROJECT OBJECTIVES The aim of this research project was to assess global greenhouse gas (GHG) emissions associated with Scottish dairy supply chains, in order to identify the main opportunities to reduce emissions while maintaining or improving economic productivity. The specific objectives were to: Describe key inputs to and outputs from Scottish dairy supply chains Summarise methodologies to estimate GHG emissions, and scope out available data Assess GHG emissions associated with each dairy product supply chain in Scotland Identify opportunities to reduce GHG emissions across all products It is intended that the project outputs (this report, a methodology report, project website 4 and free carbon footprinting tool) will facilitate the development of emissions reductions initiatives across the supply chain. METHODOLOGY Product carbon footprints of six major Scottish dairy products were developed in accordance with the UK dairy industry s new carbon footprinting guidelines 5. Product carbon footprint results were then scaled-up to the national level by integrating with production figures for the six products (which account for 96% of milk utilisation). The emissions assessment used existing data on Scottish dairy farming and processing (i.e. only a small amount of new primary data was collected from individual businesses during the course of the project). This was an appropriate approach given project timescales and objectives. 1 Dairy Road Map 2 Climate Change Agreements Dairy UK and Dairy Co Carbon Footprinting Guidelines produced by The Carbon Trust. Download at: iii

5 EMISSIONS ASSESSMENT RESULTS Product footprints Product carbon footprints were undertaken for six major Scottish dairy products. Grass-to-farm gate emissions dominated most of the life cycles (see Figure E1), however some products had significant GHG burdens downstream of the farm stage e.g. yoghurt and ice cream. This was principally because: they use more packaging per kg of product or require significant amounts of chilling. FIGURE E1: PRODUCT CARBON FOOTPRINTS OF SCOTTISH DAIRY PRODUCTS, FULL LIFE CYCLE (PER kg) Dairy supply chain emissions Total greenhouse gas emissions associated with the production of 1.3 billion litres of milk on Scottish dairy farms in 2007 was 1.5MtCO 2 e or 1.1kgCO 2 e/kg of milk (1.2kgCO 2 e/litre of milk). Additional emissions associated with the processing, distribution and use of the six dairy products studied in this project was a further 0.25MtCO 2 e. Total cradle-to-grave dairy supply chain emissions were 1.7MtCO 2 e for the six products studied (see Figure E2 and Table E2) equivalent to 3% of Scotland s direct GHG emissions 6. This result was consistent with other estimates of national dairy emissions (Gerber, et al. 2010). 6 In 2007, the latest year for which devolved GHG accounts are available, Scotland emitted 54.5MtCO2e (AEA Technology 2009). It should be noted that not all product emissions will occur in Scotland a proportion occurs in other countries. iv

6 FIGURE E2: SUPPLY CHAIN-LEVEL EMISSIONS ASSOCIATED WITH SCOTTISH DAIRY SUPPLY CHAIN 7 Life cycle stage Milk production Dairy processing TABLE E2: EMISSIONS HOTSPOT MAP OF SCOTTISH DAIRY PRODUCTION (KTCO2E PER YEAR) 8 Emission source Milk Cheese Butter Cream Yoghurt Ice cream All Enteric fermentation Manure storage Livestock feed Parlour energy Other inputs Milk freight Packaging Energy Other sources Distribution Product transport Retail Consumer Chilling Food waste Total All sources ,657 7 Sankey diagram shows how emissions sources (black) relate to products studied (blue) and other products/coproducts (red). NB Food waste is small as this represents only the emissions associated with disposal of liquid products down public sewers and solid products to landfill/composting. 8 Does not include emissions associated with other products and co-products e.g. whey products 9 Food waste emissions are small as this arrow represents only the emissions associated with disposal of liquid products down public sewers and solid products to landfill/composting. v

7 NOTABLE FINDINGS Notable findings from the product and supply chain emissions assessments were as follows: Emissions hotspots and overall intensities were consistent with other available studies (see Figure E3). The main sources of emissions were enteric fermentation, manure storage, feed production, farm energy, dairy processing energy and product packaging. No publicly available life cycle studies of sufficient relevance or quality were found for butter, cream or ice cream. In fact, this is the first study to footprint a full range of dairy products for a national supply chain using a consistent methodology, and so enables internal comparability. FIGURE E3: COMPARISON OF RESULTS WITH OTHER PUBLISHED LIFE CYCLE STUDIES 10 The production of feeds (pasture, silage and concentrates) accounted for approximately one third of dairy farm emissions. With emissions associated with soya production (in particular land use change in Brazil and Argentina) accounting for 5% of total dairy farm emissions. The cheese manufacturing by-product, whey, contains approximately 13% of the milk dry mass produced by Scottish dairy farmers. Its fate and utilisation is currently not clear with a significant proportion potentially being disposed of as waste. Total whey production contains 8,000 tonnes of crude protein or 350,000MJ of energy. This is roughly equivalent to 15,000 tonnes of soybean meal. To put this in context, it is estimated that Scottish dairy farmers use 19,000 tonnes of soyabean meal in dairy rations each year. This was the first study to apply the new Dairy UK/DairyCo footprinting guidelines. Only one substantive methodological issue was encountered, concerning the allocation of emissions to whey by-product (see above). As a result of the issues highlighted in this report it is recommended that the Dairy Guidelines are adjusted so that, where whey is disposed of as waste, cheese be allocated all upstream emissions (this is currently not the case). 10 For data references see main report results sub-section Comparisons with other studies. It should be noted that a number of UK milk results are available, with the lowest reported being 0.7kgCO2e/kg (a Carbon Trust analysis of supermarket skimmed milk). The UK result presented above was a study undertaken for Defra on extensive, lowyielding dairy production (and was only to farm gate). The intensive dairy footprint was 1.2kgCO2e/kg. The W Europe study (from FAO) is cradle-to-retail. vi

8 RECOMMENDATIONS & CONCLUSIONS Dairy emissions are one the most analysed of all global food and drink categories. Life cycle studies are in agreement, too, about where the hotspots lie and this project was no different. Advice is also accumulating on strategies to reduce these emissions at all stages of the supply chain: whether that s nitrogen management, packaging redesign or more efficient distribution and chilling processes. The challenge, then, is not confusion over emissions sources or what can be done about them. Instead it is overcoming knowledge and economic barriers to implementing change on-the-ground: most dairy farms are not big enough to meet the investment and knowledge challenges alone. Overcoming these barriers will require collaboration vertically through the supply chain and horizontally between competitors. Good examples of this already exist and should be built on. Together the supply chain can demonstrate that their products, as a group, can be a sustainable, nutritious part of a modern diet. Summary of opportunities The opportunities recommended below represent the greatest potential for emissions reductions across the supply chain based on their significance and a review of available technologies 11. Individual businesses are encouraged to use the footprinting tool developed during this project to explore opportunities most relevant to them (available at On farm It is recommended that farm emissions should be the focus of collaborative supply chain mitigation activities if the most reductions are to be realised: Support sustainable improvements in cow productivity through health, breeding, husbandry Continue focus (though existing initiatives) on improved fertilizer and manure management Optimise and support improvements in sustainable animal nutrition Improve farm energy efficiency in particular farm vehicle diesel and parlour electricity Support new small-scale, on-farm anaerobic digestion Explore potential of setting-up supply chain-level initiatives and funds to pay for on-farm mitigation initiatives which deliver opportunities highlighted above. Processing Retail Reduce emissions associated with product packaging through lightweighting, material substitution and/or the development of novel forms of packaging system. Reduce energy consumption associated with the processing of milk to dairy products (in particular liquid milk and cheddar cheese) Fully utilise all co-products (in particular whey) to ensure as little milk dry matter is wasted and the product carbon footprints of principles products (e.g. cheese) are minimised Support research, and explore opportunities, to understand and communicate the environmental impact of dairy products in relation to nutrient density Dairy products, apart from milk, enter conventional distribution networks and so industry-wide efforts to improve freight efficiency and decarbonise chilling processes will benefit dairy products as well. 11 The quantification of reductions potentials (i.e. tonnes of emissions) was outside the scope of this project vii

9 Acknowledgments Research funding provided by The Scottish Government, Contract Research Fund. This project would not have been possible without the co-operation and input of a wide range of dairy supply chain professionals and those working in related disciplines. Lee Truelove & Fraser Brown, First Milk Gordon Hannah, Lactalis David Douglas, Wisemans Alison Edward, Grahams Dairy Tony McElroy & Ellen Gladders, Tesco Louise Welch, Morrisons Alan Wren & Ann Lovering, Dairy Crest Tom Hough, NWF Charlie Battle, AIC Wyn Morris, BOCM Matt Palmer, Harbro Ltd George Jamieson, NFUS Fergus McReynolds, Dairy UK Karen Wonnacott & Heather Wildman, DairyCo Siobhan Simpson, Mackie s of Scotland Rachel Porter, Cow Management Alison Tennant, Scottish Enterprise Marc Vissers & Peter de Jong, NIZO John Allen, Frank Wright Ltd Kathy Johnston, Caspian Richards, Thomas Sharp & Alistair McGregor, Scottish Government Stuart Martin, Scottish Organic Milk Stephen Chapman & Colin Campbell, Macaulay Land Use Research Institute Colin Glen, Caledonian Environment Centre Paulo Cruz, Sustainable Food & Drink Liz Shilton, Wheyfeed Ltd The views expressed in this report are those of the authors, and not those listed above.

10 Contents INTRODUCTION... 1 Project context... 1 Aims & objectives... 1 Project outputs... 1 RESEARCH APPROACH... 2 SCOTLAND S DAIRY SUPPLY CHAIN... 3 Farms... 3 Processors... 4 EMISSIONS ASSESSMENT... 6 Methodology... 6 Summary of results Grass-to-farm gate Dairy products Comparisons with other studies OPPORTUNITIES TO MITIGATE & INNOVATE Summary of opportunities On farm Processing Retail & distribution APPENDIX 1 DAIRY FARM SOIL CARBON STOCKS APPENDIX 2 BIBLIOGRAPHY APPENDIX 3 SUPPLY CHAIN FOOTPRINTING GUIDELINES... 55

11 Figures Figure 1: Summary of research approach... 2 Figure 2: Scotland s dairy supply chain, Figure 3: Milk flow through Scottish dairy supply chain to products (2007)... 5 Figure 4: Simplified cheese production inputs and outputs (in wet and dry mass - DM) Figure 5: How allocation decisions (by dry mass, value or mass) influence results Figure 6: Summary of dairy supply chain, with key inputs and outputs Figure 7: Product carbon footprints of Scottish dairy products, full life cycle (per kg) Figure 8: Supply chain-level emissions associated with scottish dairy supply chain Figure 9: Summary of grass-to-gate emissions, by yield class Figure 10: Detailed split of milk emissions (kgco 2 e/kg milk) for an average scottish farm Figure 11: Concentrate feed emissions - relative contribution of life cycle stages Figure 12: Adult and replacement feed emissions Per KG milk, by yield group Figure 13: Feed production emissions Per kg of milk, by feed type and yield group Figure 14: Scottish dairy farm energy emissions, by farm yield Figure 15: Dairy farm electricity emissions by end use Figure 16: Product carbon footprints of Scottish dairy products, full life cycle (per kg) Figure 17: Liquid milk emissions Figure 18: Cheese emissions Figure 19: Cream emissions Figure 20: Butter emissions Figure 21: Yogurt emissions Figure 22: Ice cream emissions Figure 23: Comparison of results with other published life cycle studies... 32

12 Tables Table 1: Milk utilisation and production tonnes (2007)... 4 Table 2: Detailed raw milk carbon footprint results (kgco 2 e/kg milk), by yield Table 3: Soya import and production emissions assumptions Table 4: Emissions hotspot map of Scottish dairy PRODUCTION (ktco 2 e per year) Table 5: Liquid milk resource use and GHG emissions (full life cycle, per kg) Table 6: Cheese resource use and GHG emissions (full life cycle) Table 7: Cream resource use and GHG emissions (full life cycle) Table 8: Butter resource use and GHG emissions (full life cycle) Table 9: Yogurt resource use and GHG emissions (full life cycle) Table 10: Ice cream resource use and GHG emissions (full life cycle) Table 11: Comparison of results with other published life cycle studies Table 12: Annual financial and CO 2 savings from energy efficiency, per farm... 39

13 Information Boxes Box 1: A new dairy footprinting dashboard for businesses of all sizes... 2 Box 2: Accounting for organic farming... 9 Box 3: Accounting for renewable electricity Box 4: The challenges in accounting for whey Box 5: Emissions associated with soy production Box 6: Advice for farmers: Farming for a Better Climate Box 7: Bioplastic sustainability Box 8: Sustainable food & drink project Box 9: Whey valorisation feasibility study Box 10: Whey as a source of livestock feed Box 11: Case study Mackies Ice Cream Box 12: FPMC Grant Scheme Box 13: Case study Wiseman Dairies...46

14 INTRODUCTION Project context In recent years the Scottish dairy supply chain has responded to acknowledged environmental sustainability challenges by supporting a variety of global and national greenhouse gas initiatives. These include: the development of road maps 12 with environmental targets; voluntary energy efficiency agreements 13 ; on-farm carbon footprinting; GHG tool development; product carbon labelling; the creation of environmental knowledge resources (e.g. energy efficiency guides); the funding of on-farm dairy research; and the creation of best practice guidance on product carbon footprinting 14. Government policy The policy of the Scottish Government is to seek to achieve major reductions in GHG emissions in Scotland and targets requiring an 80% reduction by 2050 and a 42% reduction by 2020 have been agreed. The research project also fits within the wider context of the Scottish Government s Food and Drink Policy 15 which recognises the role that all parts of the food and drink supply chain (from primary producers, processors, retailers to consumers) can play and identifies the need to exploit potential opportunities related to mitigating and adapting to climate change. It is envisaged that this project will serve as an exemplar for future work on other supply chains in Scotland. Aims & objectives The aim of this research project was to assess global GHG emissions associated with Scottish dairy supply chains, in order to identify the main opportunities to reduce GHG emissions while maintaining or improving economic productivity. The specific objectives were to: Describe key inputs to and outputs from Scottish dairy supply chains Summarise methodologies to estimate GHG emissions, and scope out available data Assess GHG emissions associated with each dairy product supply chain in Scotland Identify opportunities for each dairy product supply chain in Scotland to reduce GHG emissions Project outputs The project has four main outputs: 1. Main project report (this document), intended for use by the dairy industry and others, which summarises the research approach and highlights key results and findings 2. A methodology report which contains detailed descriptions of emissions model assumptions and data sources. The report was reviewed by the Carbon Trust as part of the quality assurance 3. A free web tool to enable farmers and dairy supply chain professionals to encourage exploration of GHG emissions and compare results with the findings of this research project (see Box 1).) 4. A project website providing an online summary of research ( Together it is intended that these outputs facilitate the development of emissions reductions initiatives across the supply chain by individual organisations and in collaboration with partners. 12 Milk Road Map 13 Climate Change Agreements 14 Guidelines for the Carbon Footprinting of Dairy Products in the UK (Carbon Trust 2010)

15 RESEARCH APPROACH The objectives of the project required that a number of techniques be used to research and describe the Scottish dairy supply chain and its emissions - and finally highlight opportunities for environmental improvement (see Figure 1 for summary of this approach). It was important that the project engage with as many supply chain participants as possible and draw on international best practice in GHG accounting. Examples of stakeholder work included: Site visits: Tesco Dairy Excellence Centre, Lactalis, Wisemans Event attendance (where project was promoted): DairyCo/Dairy UK Carbon Event (June 22 nd ); Dairy Processing Energy Efficiency workshop (June 16 th ), Highland Show (June 24 th /25 th ) Interviews & one-on-one discussions with dairy industry experts (see acknowledgements page) FIGURE 1: SUMMARY OF RESEARCH APPROACH BOX 1: A NEW DAIRY FOOTPRINTING DASHBOARD FOR BUSINESSES OF ALL SIZES To fully exploit the results and findings of this research, an interactive dashboard was designed which will enable dairy farmers and processors to undertake a scoping assessment of their greenhouse gas emissions. The tool is not intended to deliver sufficient accuracy to make environmental claims or model emissions in detail but rather encourage exploration of the key issues and emissions hotspots. It was felt that this level of tool was missing from the market place and would stimulate discussion and knowledge transfer. For those companies who wish to get more detailed environmental analysis of their operations, a next step section will show them how. The tool is free to use, download and distribute under a Creative Commons license at 2

16 SCOTLAND S DAIRY SUPPLY CHAIN 16 F a r m s Scottish milk production is concentrated in the south west of the country (where 82% of dairy cows and 74% of dairy farm holdings are located) 17. Milk production has been on a downward trend in recent years and contributes 12% of agricultural output by value (at basic prices) see Figure 2. Organic production accounts for approximately 2% of annual milk production 18. FIGURE 2: SCOTLAND S DAIRY SUPPLY CHAIN, This section summarises the Scottish dairy sector today. It should be noted that the footprint analysis draws on data from a number of years ( ), with livestock numbers being taken from 2007 (the most recent year for which a Scottish national greenhouse gas inventory was available for (AEA Technology 2009)). It was felt important to be able to compare sectoral emissions developed in this project with robust national emissions figures. 17 Scottish agricultural census summary sheets by geographic area: June Personal communications, Stuart Martin (Scottish Organic Milk) 3

17 Processors Scotland is essentially self-sufficient in liquid milk, which is mainly processed in Scotland (Weir, 2009), (DTZ, 2007). Scottish dairy processors utilize more than 1billion litres of milk and produce a variety of products. Milk intake from farms is mainly used to produce liquid milk (45% of milk intake) and cheese (46% of milk intake) see Figure 3. Six of the main dairy products were assessed (see Table 1): liquid milk 19 cream cheese butter yoghurt, and ice cream These were chosen as they represent more than 95% of milk utilization, and are well-known, consumerfacing goods (the remaining products, e.g. chocolate crumb, are mainly niche products). A summary of milk flow (volume) through the Scottish dairy supply chain is summarised in Figure 3 on the following page. TABLE 1: MILK UTILISATION AND PRODUCTION TONNES (2007) 20 Product group Milk utilization (million litres) Final product Unit Liquid milk Million litres Butter 22 10,000 Tonnes Cheese ,000 Tonnes Cream 15 15,000 Litres Yoghurt 3 3,300 Tonnes Ice cream 17 3,900 Tonnes Other Total 1, For simplicity milk was treated as a single product i.e. not separated out into whole and skimmed sub-types. This disaggregation was considered unnecessary to meet the objectives of the study. 20 Does not include transfers (39m litres) and changes & waste (3m litres). As no production statistics were found, end product mass (given to 2 significant figures) was estimated based on typical milk to product conversion ratios. 4

18 FIGURE 3: MILK FLOW THROUGH SCOTTISH DAIRY SUPPLY CHAIN TO PRODUCTS (2007) Derived from milk utilization data (2007) and typical milk conversion rates to products (from literature review). Yogurt and ice cream estimates include milk mass only i.e. no additional ingredients e.g. fruit. Figures are rounded to two significant figures. Products highlighted in yellow were studied on this project. 5

19 EMISSIONS ASSESSMENT Methodology Summary Product carbon footprints of six major Scottish dairy products were developed using the UK dairy industry s new footprinting guidelines 22. These analyses relied mainly on secondary data on Scottish farming and dairy processing 23. Product carbon footprint results were then scaled-up to the national level by integrating with supply chain-level annual production figures for the six products (see Figure 3). Additional estimates were developed on the quantity of soil carbon stocks under management by Scottish dairy farmers (see Appendix 1). Full details can be found in the accompanying methodology report 24. The footprinting approach in this project had to be capable of robustly highlighting emissions reduction opportunities across a whole supply chain by product group but still be deliverable within a relatively short time period (six months). ANALYSIS YEAR It should be noted that the footprint analysis draws on data from a number of years ( ), with livestock numbers being taken from 2007 (the most recent year for which national greenhouse gas accounts were available for Scotland (AEA Technology 2009)). The 2007 data was chosen as it was felt important to be able to compare supply chain emissions with robust national emissions estimates. AN APPROPRIATE LEVEL OF ACCURACY Before undertaking any sort of environmental assessment it is essential to consider the advantages and disadvantages of different quantification approaches, so that results meet with user expectations. Without this initial scoping stage projects run the risk of wasting time on unnecessary detail or conversely providing results which are too uncertain for the intended application (e.g. making a green marketing claim or tracking improvements over time). Given the primary objective of this project was to highlight opportunities for reduction and there was insufficient time to collect primary data from businesses, it was decided that the majority of data should be sourced from secondary sources e.g. industry publications. Only significant data gaps warranting primary data collection from supply chain businesses 25. It was also considered unreasonable to collect large amounts of new data from farmers and processors when the industry has made good efforts to collect and publish environmental data already. This approach was seen as low risk given the number of recent studies into the environmental impact of milk. Most importantly, the collection of a representative sample of new primary data from individual companies across all products from grass-to-consumer would not have improved delivery of the ultimate objective of highlighting emissions hotspots. For a discussion of different supply chain footprinting approaches see Appendix Where no Scottish-specific data was available, proxies were used e.g. UK average data 24 Method white paper on the assessment of greenhouse gas emissions from the Scottish dairy sector. 25 For example, cheddar maturation energy consumption. 6

20 LIMITATIONS OF THIS ANALYSIS It is important to be transparent about the limitations of any emissions assessment, so that results can be interpreted and communicated without fear of misinterpretation. The modelling approach chosen above means that project results should not be used to make an unqualified claim about the average emissions intensity of Scottish dairy products. As described above, this would require considerable primary data collection efforts, rather than reliance on secondary data 26. Similarly, the results of this study could not be used to say that, for instance, Scottish milk is lower/higher emissions than the UK average. Result uncertainty was not quantified as part of this work and so a claim of better performance would be difficult to substantiate. Finally, the results of this analysis could not be used for detailed tracking of supply chain emissions changes over time again due to uncertainties inherent in such a high level assessment. Changes in emissions would be better tracked via different means e.g. individual product and company GHG reporting, national GHG inventories, or an agreed programme of primary data collection by the whole industry (such as being undertaken by DairyCo 26 ). KEY REFERENCES The carbon footprinting approach draws heavily on three documents: PAS ; the Guidelines for the Carbon Footprinting of UK Dairy Products 28 (the Dairy Guidelines ); and Greenhouse Gas Emissions from the Dairy Sector - A Life Cycle Assessment (Gerber, et al., 2010). These carbon footprinting methodologies & studies have already been widely consulted on by a range of stakeholders and the use of their boundaries and assumptions enables a degree of comparability with existing and future footprint studies (see limitations section above). It is important to note that, due to the scope of the analysis, it was not possible to produce an assessment which is fully compliant with PAS2050 or the Carbon Trust Dairy Guidelines mainly because they set-out specific requirements on primary data collection. This does not devalue the analysis, given its objectives. It is also worth noting that the IDF dairy LCA guidelines 29 had not been published by the time the analysis was undertaken. 26 The Dairy Guidelines also stipulate levels of primary data collection required to be able to make such claims. DairyCo are using these guidelines in a three year project, recently commissioned, to properly benchmark dairy farm emissions. Another good example of a recent dairy emissions study which has taken this approach is the three year Innovation Center for US Dairy life cycle study: 27 PAS2050: Specification for the assessment of the life cycle greenhouse gas emissions of goods and services. BSI (2008)

21 QUALITY ASSURANCE Staff at Best Foot Forward were responsible for analysis and report quality assurance procedures i.e. a cell-by-cell checking of spreadsheet models, references, assumptions, sources, etc. The Carbon Trust reviewed overall modelling approach, key assumptions, data sources and accounting methods to ensure consistency with the draft Dairy Guidelines and footprinting best practice. This was through a face-to-face workshop at the start of the project, on-going /phone discussions and finally through a review of the final methodology paper. The Carbon Trust did not undertake a cell-by-cell check of the spreadsheet models nor were the results/models certified e.g. to PAS2050 or Carbon Trust Carbon Label (this was not an option for a high-level assessment, as explained above). In all the Carbon Trust provided 7.5 days of support to the project. This amount of time was deemed adequate considering the overall aims of the project. 8

22 Summary of method, by life cycle stage GRASS-TO-FARM GATE The GHG emissions associated with raw milk production on Scottish dairy farms were modelled for three milk yield classes: low, medium & high 30. Organic milk production was not modelled separately (see Box 1 below). The average intensity of Scottish milk production was then developed from an assumed average milk yield in Scotland of 6,427 litres per dairy cow per year in No primary data was collected from farms instead a variety of published data sources were used in the analysis, including the SAC Farm Management Handbook (McBain and Curry 2009) and custom extracts of the Scottish Farm Accounts Survey (2007/8) 32. Considerable modelling effort was invested in developing Scotland-specific livestock and manure storage emissions factors using IPCC equations (IPCC 2006). Full details can be found in the methodology report. PROCESSING Processing activities were modelled using environmental benchmark data from Dairy UK, Climate Change Agreement reports on energy use and other published sources of information on resource use and waste e.g. WRAP packaging benchmarks, published life cycle assessments. DISTRIBUTION, USE & END-OF-LIFE Downstream emissions were modelled using Carbon Trust footprinting models (which are used by industry to undertake studies). Only the retail route was modelled as it accounts for 95% of consumer sales 33. BOX 2: ACCOUNTING FOR ORGANIC FARMING There are 31 organic dairy farms in Scotland their output represents 2% of milk production and farms achieve an average yield of ca. 6,500 litres per cow per year 34. It had been originally proposed that the study model organic milk production separately, however during method development it was decided that creating an additional organic model was not the best use of project resources for the following reasons: The division of dairy farming between organic or non-organic was thought to be oversimplistic, divisive and unhelpful: the messages for all farmers, regardless of system, are the same: e.g. reduce dependence on high impact inputs, sustainably increase milk yield, etc. There was limited publicly available data on organic dairy systems in Scotland Organic milk represents a small fraction of Scottish milk supply and no other dairy farming system was modelled explicitly The broad scope of this research was not the best forum for a detailed comparison between GHG impacts of these two farming systems 30 Low (<6,500 litres per dairy cow per year); medium (6,500-8,500litres); high (>8,500 litres) these classes were taken from the SAC Farm Management Handbook. 31 In 2007: 1,272 million litres of milk were produced by 197,900 dairy cows (Sources: June Census and Scottish Agriculture Output, Input and Income Statistics) DairyCo Insiders Guide 2010: 34 Personal communications, Stuart Martin (Scottish Organic Milk) 9

23 BOX 3: ACCOUNTING FOR RENEWABLE ELECTRICITY Photo: Lammermuirs wind farm (Lisa Jarvis) Approximately 4% of electricity used by Scottish dairy processors is from renewable sources 35. In the same year, the percentage of UK electricity derived from renewables was 5.4% 36. The emissions associated with the production of 4% of dairy processing electricity are equivalent to 1,600tCO 2 e (or 0.1% of the calculated annual dairy supply chain emissions in Scotland) 37. This reduction has not been removed from the product or supply chain emission results as the quality of these renewable sources could not be established. In particular, whether the tariffs used by processors pass the additionality test (a concept which is central to being able to claim these emissions reductions 38 ). Additionality is met where carbon savings are achieved that would not have happened otherwise through legislative requirements, e.g. the Renewables Obligation 39. It is highly unlikely that green tariff suppliers to the industrial and commercial (I&C) sector will be going beyond current legal obligations 40 and so delivering these additional carbon benefits. This carbon accounting technicality is not cause for dropping support for grid renewable electricity but shows that care should be taken when making claims around reductions achieved using this approach. In other words, just because the reduction can t be included in a company s GHG accounts, support for grid renewables can still be communicated separately as a CSR achievement. NB Additionality is currently achieved by some domestic and SME tariffs where suppliers purchase good quality carbon offsets 41. These tariffs may be available to smaller dairy companies. 35 This estimate is based on 2008 Climate Change Agreement (CCA) data on Scottish dairy processing facilities. The CCA covers 17 sites in Scotland ranging from small cheese manufacturers to large cheese makers and the big liquid milk dairies. Renewable electricity is defined as any electricity that is Climate Change Levy exempt. 36 DECC. Digest of United Kingdom Energy Statistics Table 7.A 37 Assuming renewable sources are zero carbon. 38 The convention is contained within relevant GHG reporting standards e.g. Defra GHG Reporting Guidelines (Annex G) Ofgem:

24 BOX 4: THE CHALLENGES IN ACCOUNTING FOR WHEY One of the critical methodological decisions when undertaking a product footprint is how to apportion emissions between processes which have more than one output so called allocation. In dairy footprinting studies this is important as co-products occur on farm and during processing stages e.g. a significant Scottish dairy co-product is liquid whey from cheese manufacture (see Figure 4). FIGURE 4: SIMPLIFIED CHEESE PRODUCTION INPUTS AND OUTPUTS (IN WET AND DRY MASS - DM) 42 At processing stage, The Dairy Guidelines recommend that emissions are allocated on a dry mass basis (the assumption being that this is a proxy for economic value). While this simplifies calculations and works with most dairy products, the authors of this study believe that this proxy does not currently hold true in cheese production (where whey is often disposed of as a waste or as low/no value products). When the current footprint guidelines were applied to the whole industry in this study, a significant proportion of milk emissions were allocated to whey, regardless of end use (even if disposed of down public sewers). This is because, even though whey is dilute, it contains a significant quantity of dry matter in total. The net result is that, per kg, cheese had a lower footprint than might be reasonable (especially given that whey utilisation is an acknowledged waste issue 43 ). If emissions were to be allocated along the lines of economic value, however, this would incentivise the full utilisation of co-products (i.e. those companies that dispose of whey as waste would have a much higher cheese footprint). The existing system provides no such incentive and is open to criticism. FIGURE 5: HOW ALLOCATION DECISIONS (BY DRY MASS, VALUE OR MASS) INFLUENCE RESULTS For this reason (and with the agreement of The Carbon Trust), this analysis allocated whey emissions on the basis of economic value. As no data was available at an industry-level on whey utilisation, estimates were used (and so is an area for data improvement). It is recommended that the Dairy Guidelines be adjusted so that, where whey is a waste, cheese is allocated all emissions. 42 Arla foods via Danish Food LCA: 43 See Box 9 on page 38 for details of forthcoming Scottish Enterprise study into whey valorisation. 11

25 FIGURE 6: SUMMARY OF DAIRY SUPPLY CHAIN, WITH KEY INPUTS AND OUTPUTS Inputs Farm Processor Distribution Consumption End-of-life Agrichemicals Waste Consumer transport Livestock feed Other inputs Haulier Beef Supermarket Haulier Utilities Utilities Scottish dairy farming Milk Waste Waste Tanker Supermarket RDC At home Packaging materials Primary processing Waste Waste Other ingredients Haulier Milk, cream Haulier 3 ry & 4 ry processing Cleaning products LEGEND Out-of-scope Secondary processing Dairy products Sequestration Agricultural emissions Waste Whey Refrigerant emissions 12

26 Summary of results Total dairy supply chain emissions Total greenhouse gas emissions associated with the production of 1.272bn litres of milk on Scottish dairy farms in 2007 was 1.5MtCO 2 e or 1.14kgCO 2 e/kg of milk (1.17kgCO 2 e/litre of milk) 44. Additional emissions associated with the processing, distribution and use of the six dairy products studied in this project (representing 96% of Scottish milk utilization) was a further 0.25MtCO 2 e. Total cradle-to-grave dairy supply chain emissions were 1.7MtCO 2 e for the six products studied (see Figure 6) equivalent to 3% of Scotland s direct GHG emissions 45. This result was consistent with other estimates of national dairy emissions (Gerber, et al. 2010) 46. Product footprints Product carbon footprints were undertaken for six major Scottish dairy products: liquid milk; cream; cheese; butter; yoghurt and ice cream. The results, reported in kgco 2 e per kg product, are summarised in Figure 7. Total supply chain emissions are shown by product type in Figure 7 on the following page. The remaining sections of this chapter examine results in more detail; first at farm level then for additional downstream emissions by product type. Each product result is presented on a single page so that they can be easily extracted and shared. 44 Not all of these emissions are attributable to the products studied e.g. dairy beef and whey co-products are allocated a share of total dairy farm emissions. 45 In 2007, the latest year for which devolved GHG accounts are available, Scotland emitted 54.5MtCO2e (AEA Technology 2009). It should be noted that not all product emissions will occur in Scotland a proportion occurs in other countries. 46 It should be noted that a proportion of dairy supply chain emissions occur outside of Scotland e.g. some livestock & fertiliser production. 13

27 FIGURE 7: PRODUCT CARBON FOOTPRINTS OF SCOTTISH DAIRY PRODUCTS, FULL LIFE CYCLE (PER kg) Figure 8 on the following page presents supply-chain emissions as a Sankey diagram a type of chart typically used to visualise the flow of materials, energy, or in this case emissions, through a system. Importantly, the width of the arrows are proportional to the flow quantity. It is worth noting that food waste emissions are small as this arrow represents only the emissions associated with disposal of liquid products down public sewers and solid products to landfill/composting. 14

28 FIGURE 8: SUPPLY CHAIN-LEVEL EMISSIONS ASSOCIATED WITH SCOTTISH DAIRY SUPPLY CHAIN Sankey diagram shows how emissions sources (black) relate to products studied (blue) and other products/co-products (red). NB Food waste is small as this represents only the emissions associated with disposal of liquid products down public sewers and solid products to landfill/composting. 15

29 Grass-to-farm gate The average intensity of Scottish milk production was 1.17kgCO 2 e/litre of milk (1.15kgCO 2 e/kg milk). Dairy farms emit 1.49MtCO 2 e per year (excluding emissions allocated to dairy beef). Soil carbon stocks on dairy farms are c. 19MtC equivalent to 70MtCO 2 e 48 (to 30cm of soil depth). Grass-to-farm gate emissions are dominated by: enteric emissions (43%); manure storage emissions (20%), and pasture, silage & concentrate production emissions (32%). This is consistent with other studies of milk. Figure 9 below compares emissions sources for the three milk yields classes modelled in this study. It is worth noting that as yield increases, per litre emissions drop but improvements tail off with the increased use of high footprint inputs e.g. concentrates. On the following three pages summary results are presented in figures and tables. 48 This estimation of carbon stocks/pools is in line with moves to include such measures in business-level GHG inventories (e.g. World Resources Institute: Corporate GHG Inventories for the Agricultural Sector). Carbon stocks/pools are outside the scope of product footprinting standards, which deal with changes (fluxes) in emissions attributable to products. Carbon dioxide equivalent is calculated from carbon by multiplying by 44/12. 16

30 FIGURE 9: SUMMARY OF GRASS-TO-GATE EMISSIONS, BY YIELD CLASS Low (<6,500 litres per dairy cow per year); medium (6,501-8,500litres); high (>8,500 litres). See page 11 for discussion of yield classes. 17

31 FIGURE 9: SUMMARY OF GRASS-TO-GATE EMISSIONS, BY YIELD CLASS Low (<6,500 litres per dairy cow per year); medium (6,501-8,500litres); high (>8,500 litres). See page 11 for discussion of yield classes. 18

32 TABLE 2: DETAILED RAW MILK CARBON FOOTPRINT RESULTS (kgco2e/kg MILK), BY YIELD 50 Source Description Detail Low Medium High Scotland Agri Enteric Methane emissions Manure storage Methane Nitrous oxide Feed production Adult animals Grass silage Grazing Starch Protein Fibre Replacement animals Grass silage Grazing Starch Protein Fibre Hay Transport To farm Processing Concentrates only Inputs Parlour energy Electricity Fuel Other Car fuel Vet Water Silage wrap Fugitive Refrigerant Milk cooling Total Feed and parlour energy emissions are further disaggregated in the following two sections. 50 Excludes emissions allocated to dairy beef. 19

33 Livestock feed Livestock feed requirements were modelled using assumptions from the SAC Farm Management Handbook. These assumptions were combined with information on typical concentrate ingredients and feed production carbon intensities (i.e. kgco 2 e/kg feed) 51. The figures on this page summarise these emissions sources by age of animal and type of feed. Emissions include all aspects of feed production, including machinery fuel use, fertiliser manufacture, soil emissions, transport, etc. The results suggest that the pursuit of higher milk yields through use of carbon-intensive feeds (e.g. soya) needs to be done carefully (see Box 5). Additionally, as feed emissions are dominated by primary production (as opposed to feed processing and transport - see Figure 11) a low emission feed need not necessarily be from a very local source (assuming they are nutritionally equivalent). FIGURE 11: CONCENTRATE FEED EMISSIONS - RELATIVE CONTRIBUTION OF LIFE CYCLE STAGES 51 Sourced from Carbon Trust Feed Database. 20

34 FIGURE 12: ADULT AND REPLACEMENT FEED EMISSIONS PER KG MILK, BY YIELD GROUP FIGURE 13: FEED PRODUCTION EMISSIONS PER KG OF MILK, BY FEED TYPE AND YIELD GROUP 21

35 BOX 5: EMISSIONS ASSOCIATED WITH SOY PRODUCTION Natural habitat destruction associated with soy production has been highlighted as a major sustainability issue for the livestock sector by researchers, policy makers and opinion formers see Forest Disclosure Project, below. Not only does this conversion of natural forest and grassland to cropland result in significant GHG emissions, but it has wider environmental and social impacts e.g. biodiversity loss. As part of this study, the exposure of the Scottish dairy supply chain to soya land use change emissions was quantified. Based on discussions with Scottish dairy feed suppliers, and by cross-referencing with Defra statistics on animal feed 52, it was estimated that high protein (hipro) soya makes up 6% of a typical dairy blend/compound mix (by mass, as fed). This is equivalent to 11g of soya per litre of milk for a typical Scottish dairy farm (i.e. low-medium yielding). According to the project analysis, protein feeds contribute 7% of grass-to-farm gate emissions, of which 75% are attributable to soya land use change. This is equivalent to 73,000tCO 2 e/year across all Scottish dairy farms (5% of total dairy farm emissions). Soyabean meal import and production emissions assumptions are summarised in Table 3 (no Scotlandspecific data was available, so these are UK import figures). Opportunities for lowering the impact of dairy feed are explored later in the report. Source TABLE 3: SOYA IMPORT AND PRODUCTION EMISSIONS ASSUMPTIONS UK imports (tonnes of soyabean meal) 53 % of UK imports (by mass) Argentina 999,107 48% 1.14 Brazil 737,767 35% 7.91 Netherlands ,572 11% 4.51 Other 133,089 6% 0.26 Total/average 2,096, % 3.83 Soya production emissions (including LUC) kgco2e/kg 54 Forest Disclosure Project The Forest Footprint Disclosure Project 56 is a new UK initiative created to help investors identify how an organisation s activities and supply chains contribute to deforestation, and link this 'forest footprint' to their value. Soy is one of five commodities which the project focuses on. Modelled on the successful Carbon Disclosure Project, it aims to create transparency and shed light on a key challenge within investor portfolios, where currently there is little quality information. Participating companies are asked to disclose how their operations and supply chains are impacting forests worldwide, and what is being done to manage those impacts responsibly. They will also gain a better understanding of their own environmental dependencies, and how the changing climate and new regulatory frameworks could affect access to resources and the cost of doing business in the long term Data from FAOSTAT Cake of soyabeans (2007) 54 Land use change emissions for Brazil and Argentina from Gerber et al (2010). Additional production emissions have been added from the Carbon Trust feed database. 55 Netherlands import 50% of soyabean meal from Brazil and 46% from Argentina (FAO STAT, 2007)

36 Energy use on dairy farms Parlour electricity and machinery diesel consumption dominate farm energy emissions (see Figure 6). Electricity is mainly used for water heating, milk cooling & pumping. FIGURE 14: SCOTTISH DAIRY FARM ENERGY EMISSIONS, BY FARM YIELD 57 FIGURE 15: DAIRY FARM ELECTRICITY EMISSIONS BY END USE Derived from Farm Accounts Survey data (2007) 58 Farm Energy Centre (2008): 23

37 Dairy products This section summarises the main inputs and emissions for the six product groups across their whole life cycle (from cradle-to-grave). All results are presented per kg of final product. FIGURE 16: PRODUCT CARBON FOOTPRINTS OF SCOTTISH DAIRY PRODUCTS, FULL LIFE CYCLE (PER kg) Life cycle stage Milk production Dairy processing TABLE 4: EMISSIONS HOTSPOT MAP OF SCOTTISH DAIRY PRODUCTION (ktco2e PER YEAR) 59 Emission source Milk Cheese Butter Cream Yoghurt Ice cream All Enteric fermentation Manure storage Livestock feed Parlour energy Other inputs Milk freight Packaging Energy Other sources Distribution Product transport Retail Consumer Chilling Food waste Total All sources , Does not include emissions associated with other products and co-products e.g. whey products. 60 Food waste emissions are small as this arrow represents only the emissions associated with disposal of liquid products down public sewers and solid products to landfill/composting. 24

38 Liquid milk Significant sources of emissions in the life cycle of liquid milk are: milk (83%), distribution & retail chilling (5%); dairy processing energy (5%); and product packaging (4%). All of which offer opportunities for reductions FIGURE 17: LIQUID MILK EMISSIONS TABLE 5: LIQUID MILK RESOURCE USE AND GHG EMISSIONS (FULL LIFE CYCLE, PER KG) Supply chain stage Emissions source Value per kg milk Units Emissions kgco 2 e/kg % of GHG emissions Farm Raw milk 1 kg % Processing Electricity kwh 0.1 3% Fuel kwh 0.1 3% Bulk milk freight Litres diesel <0.1 1% HCFC kg <0.1 0% HFC 4.18E-08 kg <0.1 0% Packaging, of which: g 0.1 4% - Plastic (HDPE) g 0.1 4% - Glass g <0.1 0% - Carton g <0.1 1% Water litres <0.1 0% Process chemicals g <0.1 0% Trade effluent litre <0.1 0% Landfill waste g <0.1 0% Distribution Freight to retail 370 km <0.1 2% Retail storage 1 day <0.1 3% Consumer Home chilling 4 days <0.1 1% Food waste 9 % <0.1 0% Total

39 Cheese Significant sources of emissions in the life cycle of cheese are: milk (90%); processing and maturing energy (2%); packaging (2%) and retail distribution (5%) FIGURE 18: CHEESE EMISSIONS TABLE 6: CHEESE RESOURCE USE AND GHG EMISSIONS (FULL LIFE CYCLE) Supply chain stage Emissions source Value per kg cheese Units Emissions kgco 2 e/kg % of GHG emissions Farm Milk 9.84 kg % Processing Electricity kwh 0.1 0% Fuel kwh gas 0.1 1% Bulk milk freight Litres diesel 0.1 0% Packaging, of which: kg 0.3 2% - Plastic (LDPE) kg <0.1 0% - Paper kg 0.2 1% - Aluminium kg 0.1 1% Salt kg <0.1 0% Water litres <0.1 0% Trade effluent m3 <0.1 0% Landfill waste kg <0.1 0% Electricity (maturation) kwh <0.1 0% Freight to retail 370 km <0.1 0% Distribution RDC 1 event <0.1 0% Retail store 5 days 0.6 5% Consumer Home chilling 11 days 0.1 1% Food waste 9 % <0.1 0% Total

40 Cream Significant sources of emissions in the life cycle of cream are: milk (76%); packaging (7%) and distribution (15%) FIGURE 19: CREAM EMISSIONS TABLE 7: CREAM RESOURCE USE AND GHG EMISSIONS (FULL LIFE CYCLE) Supply chain stage Emissions source Value per kg cream Units Emissions kgco 2 e/kg % of GHG emissions Farm Milk 1.00 kg % Processing Bulk milk freight litres % Electricity kwh % Fuel kwh gas % Polypropylene kg % Water litres % Trade effluent m % Landfill waste kg % Distribution Freight 370 km % RDC 1 event % Retail store 5 days % Consumer Home chilling 4 days % Food waste 9 % % Total

41 Butter Significant sources of emissions in the life cycle of butter are: milk (84%); packaging (2%) and distribution (11%). FIGURE 20: BUTTER EMISSIONS TABLE 8: BUTTER RESOURCE USE AND GHG EMISSIONS (FULL LIFE CYCLE) Supply chain stage Emissions source Value per kg butter Units Emissions kgco 2 e/kg % of GHG emissions Farm Milk 2.15 kg % Processing Electricity kwh % Fuel kwh gas % Bulk milk freight litres diesel % Packaging, of which kg % - Plastic (LDPE) kg % - Aluminium kg % - Paper kg % Salt kg % Water litres % Trade effluent m % Landfill waste kg % Distribution Freight 370 km % RDC 1 event % Retail store 5 days % Consumer Home chilling 11 days % Food waste 9 % % Total

42 Yoghurt (natural) Significant sources of emissions in the life cycle of natural yoghurt are: milk (53%); processing (13%); packaging (9%) and distribution (22%) FIGURE 21: YOGURT EMISSIONS TABLE 9: YOGURT RESOURCE USE AND GHG EMISSIONS (FULL LIFE CYCLE) Supply chain stage Emissions source Value per kg yoghurt Units Emissions kgco 2 e/kg Farm Milk 0.99 kg % Processing Bulk milk freight litres diesel % Electricity kwh % Fuel kwh gas % Packaging, of which: kg % - Polypropylene kg % - Aluminium kg % - Paper kg % Water litres % Trade effluent m % Landfill waste kg % Distribution Freight 370 km % RDC 1 event % Retail store 5 days % Consumer Home chilling 7 days % Food waste 9 % % Total % of GHG emissions 29

43 Ice cream (plain, coneless) Significant sources of emissions in the life cycle of ice cream are: milk (48%); processing (13%); packaging (8%) and distribution (27%). FIGURE 22: ICE CREAM EMISSIONS TABLE 10: ICE CREAM RESOURCE USE AND GHG EMISSIONS (FULL LIFE CYCLE) Supply chain stage Emissions source Value per kg ice cream Units Emissions kgco 2 e/kg Farm Milk 4.57 kg % Processing Bulk milk freight litres diesel % Electricity kwh % Fuel kwh gas % Sugar kg % Polypropylene kg % Water litres % Trade effluent m % Landfill waste kg % Distribution Freight 370 km % RDC 1 event % Retail store 10 days % Consumer Home chilling 11 days % Food waste 9 % % Total 3.97 % of GHG emissions 30

44 Comparisons with other studies A recent meta-analysis of dairy LCA studies undertaken by the IDF found the majority of publicly available emissions research focuses on milk with a handful of studies examining cheese and yoghurt (International Dairy Federation 2009). Of the cheese and yoghurt studies, none were in the UK and most were more than five years old, and so likely based on less developed footprinting methodologies. No publicly available life cycle studies of sufficient relevance or quality were found for butter, cream or ice cream. This lack of information underlines the novel nature of this cross-supply chain study. The table and chart below summarise a selection of dairy product footprint results alongside corresponding results from this project (in bold). TABLE 11: COMPARISON OF RESULTS WITH OTHER PUBLISHED LIFE CYCLE STUDIES 61 Product Geography kgco 2 e/kg Boundaries Reference Milk Scotland 1.4 Cradle-to-grave This study Milk W Europe 1.4 Cradle-to-retail Gerber 2010 Milk UK 1.4 Cradle-to-farm gate ADAS 2009 Cheese Scotland 11.1 Cradle-to-grave This study Cheese UK 9.8 Cradle-to-grave ADAS 2009 Cheese Finland 13.0 Cradle-to-grave Nissinen 2005 Yoghurt Scotland 2.4 Cradle-to-grave This study Yoghurt Europe 2.0 Cradle-to-grave Büsser It should be noted that a number of UK milk results are available, with the lowest reported being 0.7kgCO2e/kg (a Carbon Trust analysis of supermarket skimmed milk). The UK result presented above was a study undertaken for Defra on extensive, low-yielding dairy production (and was only to farm gate). The intensive dairy footprint was 1.2kgCO2e/kg. The W Europe study (from FAO) is cradle-to-retail. 31

45 FIGURE 23: COMPARISON OF RESULTS WITH OTHER PUBLISHED LIFE CYCLE STUDIES 32

46 OPPORTUNITIES TO MITIGATE & INNOVATE The [food] industry cannot afford to pay lip service to farming, and farming is too fragile to subsidise the rest of the food chain. The world expects farmers to make an enormous transformation; to re-position our production systems to increase both their efficiency and their environmental sustainability. Globally, farming is big business, but it is not big enough to meet these challenges alone. This requires the active collaboration of all supply chain partners, from farmers and processors, to retailers and foodservice operators, and also consumers. To some, the thought of working with competitors may seem strange. However, carbon reduction must be about working together for the common good. (Ton Christiaanse, Vion UK 62 ) Dairy GHG emissions are probably the most analysed of all global food categories (although studies have tended to focus on the most common products: liquid milk and cheese). It is believed that this is the first study to footprint a full range of dairy products for a national supply chain using a consistent methodology, and so allowing comparisons within the food category. Life cycle results are in agreement, too, about where the hotspots lie and this project was no different. Advice is also accumulating on strategies to reduce these emissions at all stages of the supply chain: whether that s nitrogen management, packaging redesign or more efficient distribution and chilling processes. The challenge, then, is not confusion over where the emissions lie or what can be done about them. Instead it is overcoming knowledge and economic barriers to implementing change on-the-ground: most dairy businesses are not big enough to meet the investment and management challenges alone. Overcoming these barriers will require collaboration vertically through the supply chain and horizontally between competitors. Together the dairy supply chain can demonstrate that their products, as a group, can be a sustainable, nutritious part of a modern diet. The scope of report recommendations Due to the supply chain-wide nature of this project, advice could not be tailored to meet the needs of individual companies; instead the aim was to highlight opportunities relevant to the whole supply chain. Individual businesses are encouraged to use the ideas, information and tools developed within this project to create their own emissions reduction strategy which suits their own business goals and capabilities. It is also worth noting that it was not within the scope of the project to quantify the effectiveness of different reduction strategies (either in tonnes of emissions or financial cost). Instead the effectiveness of the opportunities are substantiated with reference to existing literature or other dairy GHG projects. In recent years a considerable amount of research has been conducted by governments, research bodies and NGOs on livestock emissions and mitigation options 63 e.g. Farming for a Better Climate (see Box 6). It was not the intention of this project to reproduce these recommendations in detail, but instead highlight opportunities across the supply chain and seek out additional options. 62 IGD Conference (London), October For example: (ADAS 2007) (Audsley, et al. 2009) (Dairy Supply Chain Forum 2008) (Dragosits, et al. 2008) (Manchester University 2007) (Hopkins and Lobley 2009) (Garnett 2007) (Hopkins and Lobley 2009) (SAC Commercial Ltd 2008) (Scottish Government 2008) (Weidema, et al. 2008) (Friends of the Earth 2010) (Newcastle University 2010) (Moorby, et al. 2007) (Jackson, et al. 2009) (Land Use and Climate Change Group 2010) (AEA 2008) 33

47 Summary of opportunities The opportunities recommended below represent the greatest for emissions reductions across the supply chain based on their significance and a review of available technologies 64. Individual businesses are encouraged to use the footprinting tool developed during this project to explore opportunities most relevant to them (available at On farm Farm emissions should be the focus of collaborative supply chain mitigation activities if the most reductions are to be realised. The concentration of supply chain emissions on-farm offers opportunities for collaboration between processors, producers and retailers good examples of this already exist. Cooperation, too, should be encouraged between different UK regions to avoid duplication of effort 65. Opportunities highlighted in this report include efforts to: Support sustainable improvements in dairy cow productivity through health, breeding, husbandry Continue focus on improved nitrogen and manure management to mitigate FYM and field emissions during the production of pasture, silage, etc Optimise and support improvements in sustainable animal nutrition through the development of tools which enable businesses to formulate diets which meet sustainability and nutritional goals Improve farm energy efficiency in particular farm vehicle diesel and parlour electricity Support new breed of small-scale, on-farm anaerobic digestion to reduce manure methane emissions, reduce fossil energy and inorganic fertilizer dependence Explore potential of setting-up supply chain-level initiatives and funds to pay for on-farm mitigation initiatives which deliver opportunities highlighted above. It is important that responsibility for providing knowledge and support to farmers in each of these areas is clearly defined and transparent and that advice is coherent and part of an overall narrative of improving dairy farm efficiency and profitability, while at the same time minimising environmental impact. Processing Retail Reduce emissions associated with product packaging through lightweighting, material substitution and/or the development of novel forms of packaging system e.g. refills. The adoption of bioplastics should be considered, but only with a full understanding of their sustainability attributes Reduce energy consumption associated with the processing of milk to dairy products (in particular liquid milk and cheddar cheese) Fully utilise all co-products (in particular whey) to ensure as little milk dry matter is wasted and the product carbon footprints of principles products (e.g. cheese) are minimised Support research, and explore opportunities, to understand and communicate the relative environmental impact of dairy products in relation to their nutrient density. Dairy products, apart from milk, enter conventional distribution networks and so industry-wide efforts to improve freight efficiency and decarbonise chilling processes will benefit dairy products as well. As a result only one dairy-specific opportunity has been highlighted that have the potential to reduce distribution emissions: UHT milk. 64 The quantification of reductions potentials (i.e. tonnes of emissions) was outside the scope of this project 65 For example, there are now separate dairy road maps for the UK, Wales and Northern Ireland. 34

48 BOX 6: ADVICE FOR FARMERS: FARMING FOR A BETTER CLIMATE In developing Farming for a Better Climate, the Scottish Government has looked at a number of practical measures that can be implemented on farm to reduce greenhouse gas emissions. The aim is to propose measures that will help farmers make more efficient use of their resources and have a positive impact on the farm business bottom line. Farmers may be able to adopt one or a number of the measures outlined, or they may have ideas and techniques of their own. The initiative s 5 Key Action Areas are: Using energy efficiently Developing renewable energy Locking carbon into the soil and vegetation Optimising the application of fertiliser and manures Optimising livestock management and FYM storage These action areas are consistent with those discussed in this report. More information including information leaflets (see example above) on a variety of dairy-relevant topics can be found on the Farming for a Better Climate website 66. It is anticipated that on-the-ground advice and support on farming emissions reductions will be delivered by a variety of channels including: Dairy processor/retailer engagement e.g. as part of farm emissions audits; SAC Climate Change Focus Farms (see Box 6); and DairyCo extension officers. Climate Change Focus Farms Staff at the Scottish Agricultural College 67 are working with dairy farmers Ross and Lee Paton of Torr Farm in Dumfries (see picture right) to demonstrate what business benefits can be gained from minimizing greenhouse gas emissions. Over the course of the three year project, and with the help of dairy experts, the dairy discussion group will look at a range of mitigation options. So far the project has had its first open meeting where 65 participants discussed topics including: ways to save on fuel bills; the use of on-farm renewables; soil management practices; increasing livestock productivity; and targeted nutrient use. Hugh McClymont, SAC Farm Manager at Crichton Royal Farm in Dumfries explained how the better use of slurry and manures could help to cut greenhouse gas emissions from routine practices - and also save money. The first farmer discussion groups meeting will tackle nutrient budgeting, soil analyses and use of PLANET Scotland software 68. For more details on the work of the group contact Gillian Reid at SAC on or by ing Gillian.Reid@sac.co.uk 66 The project website is also available at: PLANET is nutrient management software that is freely available for use by farmers and their advisers in Scotland. It has been developed by ADAS with funding and support from Defra and the Scottish Government (see for more details). 35

49 On farm 1 Increase dairy cow productivity On-farm research has demonstrated significant opportunities to improve technical efficiency on farm, this will contribute to increasing output, reducing inputs and consequently improved economics returns. Increased productivity is achieved through a variety of well-known routes, including: improved feed efficiency; improved livestock health; improved breeding/genetics; optimised milking frequency. Large and relatively quick improvements in these areas could be made through improved management and greater attention to detail. There are relatively few technical/economic constraints which prevent improvements in farm efficiency: training and knowledge transfer is key (e.g. the increased use of dairy software and benchmarking should provide farmers with the tools to monitor performance). It is important to note that, although there is significant potential to reduce per litre methane emissions from improvements in average milk yield per cow per year, the full life cycle reduction potential can be moderated by associated increases in: high-impact concentrate dependence; more widespread use of liquid slurry-based management systems; and a larger replacement herd. Care therefore needs to be exercised in the manner in which milk yields are increased. FEED & NUTRIENT USE EFFICIENCY Improving feed efficiency by maximising every litre of milk produced per kg of dry matter not only makes financial sense but also reduces the herd s carbon footprint. DairyCo have established the average FCE (Feed Conversion Efficiency) is 1.2kg of milk per kg of dry matter consumed, over 1.6 is very good. For a dairy herd averaging 8,000 litres an FCE increase from 1.2 to 1.3 will increase milk production by 8.5% with no extra feed costs just less waste. Correctly formulated & presented diets by a ruminant specialist/nutritionist can increase the efficiency of nutrient utilisation without reducing milk production. COW HEALTH & LONGEVITY Cow longevity has the greatest effect on lifetime efficiency or output. Cow longevity has decreased in recent years as selection for milk yield traits has reduced cow fertility, one of the main reasons for culling cows. However, the longer the cow is in milk, the longer it has the potential to reduce greenhouse gas emissions from the reduced number of dairy heifer replacements required to be kept. There is a strong financial benefit in increasing the longevity of the herd. Heifers cost approximately 1,000/head to rear and last for an average of 3.4 lactations; therefore rearing costs are repaid at about 300 per lactation. Poor animal health will also add economic and environmental overheads to a herd. COW FERTILITY & GENETIC IMPROVEMENT Reducing the calving interval will reduce the number of cows required to maintain herd output and the requirement of heifer replacement. It has been calculated that returning herd fertility levels to 1995 levels could reduce methane emissions by 10-11% and further improvements could reduce emissions by up to 24% 69. REDUCED HEIFER CALVING AGE Calving heifers at 2 instead of 2.5 or 3 years will reduce lifetime emissions. These development years are unproductive both economically and environmentally in that the heifer is producing methane and taking in feed without producing milk. 69 (Garnsworthy 2004) 36

50 2. Support sustainable nutrition The choice of livestock feed interacts with dairy emissions on a number of levels. Crucially a balance needs to be struck between increasing digestibility 70 and the production impact of digestible feeds e.g. soya. Feeds are generally characterised in terms of their nutritional value but not for their methane production potential. Feed manufacturers formulate feed on a least cost basis to a required nutritional specification, putting limitations on maximum/minimum inclusions of raw materials. There is therefore a need for the development of resources (e.g. an easy-to-use tool) to allow farmers and their advisers to design diets which meet the dual goals of animal nutrition and environmental sustainability. This is consistent with UK dairy road map objective of using designer diets. Animal nutrition opportunities exist in the following areas: Low impact sources of protein Additives, supplements & vaccines Improved grass, cereals and legumes LOW IMPACT SOURCES OF PROTEIN Protein is one of the most expensive and important components of an animal s diet. However it can have a large GHG burden associated with it. Consideration should therefore be given to low impact alternatives. One of the problems is that alternative home-produced protein sources (e.g. rapeseed meal) do not provide the same protein quality as soya being considerably lower in DUP levels, therefore more has to be fed to provide the same nutritional benefit. However, as a result of increasing and historic highs in soya prices in recent years feed manufacturers have developed alternative home-produced protein sources providing equally high levels of protein quality as soya but at more favourable prices. ADDITIVES, SUPPLEMENTS & VACCINES Various feed additives and supplements known as ionophores can modify rumen fermentation helping improve the digestibility of rations. Increasing the digestibility of the ration will result in greater nutrient utilisation from the same amount of feed helping improve feed efficiency. Examples include: Extruded linseed with potential to reduce methane by as much as 38% 7 Enzyme based forage additives increase digestibility by around 20% Unsaturated fats in the diet aid the digestibility of forages and raise the energy density of the diet so allowing less grain based concentrates to be fed. It is also possible to vaccinate ruminant animals against methanogenic bacteria to reduce methane output. Research has shown that up to 8% reduction in methane output has been seen in sheep although this was achieved using vaccines that targeted less than 20% of the methanogens in the rumen. IMPROVED GRASS, CEREALS & LEGUMES Forages make up a large proportion of cows diets. Therefore any advances in plant breeding to improve the utilisation of nutrients will be beneficial. Feeding of high sugar grass strains has been shown to improve protein utilisation with corresponding increases in milk yield and reduced nitrogen excretion. Cereal strains that are more efficient in utilising the nitrogen available in the soil will reduce greenhouse gas emissions. Use of white clovers in grazing pastures, red clover in silage swards and peas/lupins in wholecrop forage help add protein to the forages, offset the amount of purchased protein and minimising the requirement of inorganic fertilisers. 70 Higher concentrate levels in the diet will decrease the digestive precursors to methane production (Lovet 2006) 37

51 3. Improve manure and nitrogen management To reduce GHG emissions from soils it is essential that fertilisers and manures do not exceed plant nutrient requirements. In order to make full allowance of the manure N supply the following key points should be considered: Use a recognised fertiliser recommendation such as RB209, PLANER, MANNER and other guidance. Use manure analysis to gain a better understanding of nutrient applications and supply Keep records of mineral fertiliser and organic manure inputs to individual fields Farmers should be FACTS trained or use a professional FACTS adviser Robust recommendation systems and tools can provide a good estimate of the amount of nutrients supplied by manures. This information can then be used to determine the amount and ideal timing of additional fertiliser applications. MANURE APPLICATION TIMING This is vital not only from an emissions perspective but also in gaining maximum value from the manure and in avoiding N 2 O losses to the environment. MANURE STORAGE Storage of cattle slurry is a significant source of methane ammonia NH 3 emissions. Recent research has shown that some of the most cost effective measures to reduce on farm emissions starts with storage and can include: Allowing a crust to form on a lagoon this is a cost free option, with the general advice being to allow a manageable crust of between 20-25cm thick Physically covering slurry stores and pits. Using slurry bags this is effectively storing slurry in a sealed bag 4. Support small-scale, on-farm Anaerobic Digestion (AD) Manure storage creates oxygen-limited environments that promote the production of methane. The resultant emissions account for 20% of Scottish dairy farm emissions (0.30MtCO 2 e/year). An anaerobic digester sited on farm or centrally - converts these emissions to one with no global warming potential (biogenic carbon dioxide 71 ). There is also the displacement benefit of creating non fossil energy and fertilisers. Weiske, et al. (2006) estimated emissions reductions of up to 96% were possible when taking into account these displacement effects. However reductions will depend on a number of variables and so it is difficult to generalise. KEY BARRIERS Capital and operating costs are high, and Feed-in Tariff scheme and grants availability are low. There are various legislative requirements that need to be considered in regard to AD 72. As dairy slurry is only available during housed wintering periods. The alternative is centralised AD however it is uneconomic due to slurry transport costs. The spreading of AD digestate on farmland is impossible under some farm assurance standards. 71 The resultant CO2, as it is of biogenic origin (not fossil) is rated zero carbon for environmental accounting. 72 These include: European Nitrates Directive (NVZ); and Environmental Permitting Regulations (EPR). 38

52 A POTENTIAL SOLUTION? There is, however, potential to explore much smaller-scale on-farm AD systems which are more frequently used on the continent (e.g. Sweden) and have lower set-up and costs and are more easily maintained Support farm energy efficiency measures On farm energy use (mainly diesel and electricity) contributes approximately 6% of grass-to-farm gate emissions. Whilst relatively small in comparison to livestock and soil emissions, it is still significant from a supply chain perspective i.e. it is a larger source of emissions than dairy processing energy or dairy product packaging 74. TABLE 12: ANNUAL FINANCIAL AND CO2 SAVINGS FROM ENERGY EFFICIENCY, PER FARM 75 Energy use Efficiency measure Indicative capital cost Energy saving kwh CO 2 saving (t) Financial saving ( ) Vacuum pumping Variable speed drive 3,200 5, Cooling 5 o rise in pre-cooling 1,200 2, Hot water heating Heat recovery unit 3,500 12, Lighting Incandescent to CFL bulbs 40 4, FOCUS AREAS Energy audits The first stage for reducing energy usage and saving money is to undertake monitoring, and auditing, from there energy saving action plans are developed. Milk pumps Vacuum pumping remains a key use of energy on UK dairy units and can account for ca. 20% of annual electricity consumption on a dairy farm. A variable speed vacuum pump regulates the level of vacuum in a system by adjusting the speed of the pump motor rather than admitting air through a regulator. Image: Arla/Morrisons dairy energy guide Milk cooling Milk cooling on dairy farms also accounts for around 40% of energy usage on dairy farms. Milk pre-cooling is a relatively easy way to reduce the cooling requirement and energy consumption within the bulk tank. The Northern Ireland Department of Agriculture and Rural Development (DARD, 2008) estimates that a suitable sized plate cooler has the potential to save between 30-40% of milk cooling costs when compared with a situation where a precooler is absent. Water heating Approximately 30% of energy usage on a dairy farm is attributed to water heating. The options for improving energy efficiency with regards to water heating are not as limited as they are for milk cooling. Savings can be made from improved insulation, reducing hot water requirement and through the fitting of heat recovery units (HRU) to cooling equipment. 73 Personal communications Simon Glen, Caledonian Environment Centre. 74 Dairy farm building & machinery emissions for Scotland were estimated to be 0.09MtCO2e, whereas processing energy and packaging emissions for the six products studied totalled and respectively. 75 (Newcastle University 2010), Pg 109. Available for download from Arla: 39

53 6. Enable collaborative reductions The sustainability challenges facing the Scottish dairy industry warrant novel collaborative approaches to support farm emissions reductions in high impact areas which display significant cost or knowledge barriers. This is a message coming from many parts of the food supply chain not just dairy. Options here include financing the development of common knowledge, advisory and investment support structures which any dairy farmer can access. 7. Target carbon sequestration WOODLAND CREATION Forestry creation is a legitimate and high profile option for farmers to pursue in order to mitigate greenhouse gas emissions. And Forestry Commission Scotland expect that 650,000ha of new woodland could be added to the current national resource of 1,334,000ha by 2050 to deliver a variety of economic, social and environmental goals (including climate change mitigation) 76. The question is how far should woodland creation on dairy farms help deliver woodland creation targets? The Forestry Commission Woodland Expansion Strategy also states that the main focus of woodland creation will likely be away from prime agricultural land and on land where the benefits offered by forests are likely to outweigh the potential for agricultural production. However, the strategy document indicates that 180,000 hectares of improved grassland in Scotland (18%) could be planted with trees (it is stressed that these are indicative scenarios). This document does not propose a quantified amount however recommends caution that rebound effects are fully accounted for in afforestation feasibility studies 77. In particular, if woodland creation is done at the expense of food production and more carbon-efficient manure management, then sequestration benefits may be moderated (i.e. without any reduction in livestock numbers, farmers may have to rely on more purchased feed and hold slurry in store for longer). 76 Woodland Expansion Strategy, Forestry Commission Scotland (2009): 77 Woodland Expansion Strategy, Page 7: Research and life cycle analysis is underway to better understand the effect of different forestry practices on the carbon balance in soils, biomass and forest products. 40

54 SOIL MANAGEMENT As was demonstrated in the project analysis, the Scottish dairy supply chain is directly responsible for managing a small, but significant, amount of carbon stored in grassland and arable soils. The potential for increasing these stocks through improved soil management should be pursued in line with Farming for a Better Climate advice on locking in carbon 78. Processing PACKAGING DESIGN Dairy packaging should deliver commercial and food quality functions with minimal environmental impact. Currently packaging emissions are on-par with processing energy (ca. 4% of Scottish dairy product emissions). This is normally achieved through a variety of measures including: Lightweighting Material substitution (i.e. high impact to lower impact) Use of recycled and/or easily recyclable materials The development of novel forms of packaging system e.g. refills Current dairy industry benchmarks from Dairy UK and WRAP demonstrate that there is still considerable variation in packaging burdens per unit of dairy product for milk and cheese and that the use of recycled content is low (4.4% in Scotland in 2008) 79. Some dairy processors active in Scotland continue to experiment with novel packaging systems e.g. Dairy Crest Jugit 80 reduced packaging mass by 75%. WRAP published the results of a detailed LCA of milk packaging options including jug and refill pouch systems 81. Unfortunately the data was of insufficient quality to enable comparisons between packaging types and instead highlighted opportunities for environmental improvement within all types of system Currently the Dairy UK benchmarks do not have complete coverage of the industry. 80 For example Jugit system: 81 Life cycle assessment of example packaging systems for milk, WRAP (2010) 41

55 BOX 7: BIOPLASTIC SUSTAINABILITY Some food and drink manufacturers are exploring the potential for using plant-derived plastics (bioplastics) as part of their sustainability strategies 82. Unlike biodegradable packaging, these materials have essentially the same chemical structure as their petroleum-based counterparts, but are instead derived from renewable precursors e.g. bioethanol. Many of these first generation bioplastics are made from Brazilian sugarcane and so carry sustainability risks, like biofuels. There is limited publicly available data on the relative sustainability performance of these materials 83. A previous study undertaken by Best Foot Forward found that, from a GHG perspective, there were some limited carbon advantages in switching to bioplastics however there were considerable risks if the bioethanol was linked to natural habitat destruction 84. In conclusion, first generation crop-based bioplastics should not be viewed as a silver bullet : efforts to increase recycled content and lightweight are as important as ever. BOX 8: SUSTAINABLE FOOD & DRINK PROJECT Sustainable Food & Drink 85 helps Scottish food and drink SMEs improve their business competitiveness by managing their carbon emissions. The programme, delivered the Caledonian Environment Centre, have helped a number of Scottish dairy producers including Highland Fine. WHEY UTILISATION Whey accounts for 13% of the milk dry mass produced by Scottish dairy farmers. Its fate and utilisation is currently not clear with a significant proportion potentially being disposed of as waste 86. As the majority of dairy supply chain emissions are incurred in producing milk, it seems good environmental sense to fully utilise the nutrients in whey to produce other valuable goods. The full utilisation of whey would have the additional benefits of: Displacing the production of other higher impact protein feed sources e.g. soya (see Box 10). Reduce the per kg impact of cheese (see Box 4: The challenges in accounting for whey on page 11 for discussion of this). 82 For example Coca Cola PlantBottle TM : 83 E.g. Tabone et al. (2010) Sustainability Metrics: Life Cycle Assessment and Green Design in Polymers. This peerreviewed study has been criticized by the biopolymer industry. 84 Client confidential, No data is publicly available on the extent to which whey by-product is utilised in Scotland. For the purposes of this study it was assumed that the majority of whey is currently disposed via low-value routes (the basis for this assumption was the existence of a Scottish Enterprise study into whey valorisation (see Box 7) and through discussions with stakeholders. The estimate of dry mass wastage was derived as follows: If 40% of raw milk goes to cheese manufacture and during processing, 30% of milk dry matter ends up in whey, this is equivalent to 13% of all milk dry mass. This is an approximation, but illustrates the point. 42

56 The full utilisation of whey is of particular interest to Scotland where more than 40% of available milk goes to cheddar manufacture (for the UK the figure is 26%) 87. BOX 9: WHEY VALORISATION FEASIBILITY STUDY Scottish Enterprise 88 is funding a project to examine the potential for increasing value of the cheese by-product, whey. The first phase of the work (to be completed February 2011) will examine the economic feasibility of further whey valorisation in Scotland. This will for Scottish Creameries based on international trends and specific local circumstances of the Scottish Creameries and UK market. BOX 10: WHEY AS A SOURCE OF LIVESTOCK FEED Approximately 500,000 tonnes of liquid whey are produced by the Scottish cheese industry each year. The extent to which this whey is utilised is currently unknown (although it is the subject of investigation by Scottish Enterprise see Box 9). This quantity of liquid whey is equivalent to almost 8,000 tonnes of crude protein 89 or 350,000MJ of net energy (NE). This is roughly equivalent to 15,000 tonnes of soybean meal 90. To put this in context, Scottish dairy farmers currently use ca. 19,000 tonnes of soyabean meal in dairy rations per year. Although it is understood that there are economic and quality barriers to whey utilisation, there is a clear sustainability case for using this protein source as a feed replacement, either within the dairy industry or in other sectors, e.g. pigs. The full utilisation of whey will not only reduce disposal pollution, but additionally displace the production of primary crops elsewhere and demonstrate the supply chain is taking action on resource efficiency in a high profile area. As such it warrants investigation for example the GHG benefits of whey utilisation should be explicitly modelled in Scottish Enterprise study. PROCESSING ENERGY EFFICIENCY Milk and cheese processing energy contributes approximately 4% of dairy product emissions. A recently completed study by The Carbon Trust 91 highlighted opportunities which, if taken up by the whole supply chain, could deliver energy emissions savings greater than 25%. Good practice opportunities can be implemented more thoroughly at all sites in the supply chain: Operational staff should be made more aware of the opportunities still available Increasing pasteuriser efficiency by upgrading heat exchangers and set-up optimisation Installing hibernation controls on pasteurisers to reduce impact of unnecessary recirculation Routinely replacing separators with the most up-to-date gearless, direct-drive systems Improve the level of or implement partial homogenisation Review and optimise the set-up of existing CIP plants. 87 DairyCo milk utilisation data, Lead contact: Alison Tennant (Scottish Enterprise), alison.tennant@scotent.co.uk 89 Assuming 1.5% crude protein, source: 90 Assuming 53% crude protein, source: 91 Industrial Energy Efficiency Accelerator - Guide to the dairy sector: 43

57 Additionally: The use of high temperature hot water heat pumps on refrigeration plants may soon be a proven dairy application available commercially Companies should consider taking advantage of potential Carbon Trust support within the IEEA programme on the following topics: o Reduction in CIP water and heat usage o Alternative homogenisation techniques. BOX 11: CASE STUDY MACKIES ICE CREAM Following the construction of three wind turbines for power generation, the business is now a net contributor of electricity to the grid. The purchase of two further on-site packaging manufacturing systems will reduce transport miles, eliminate waste packaging resulting from product changes, and reduce cardboard and plastic waste by an additional 10 tonnes per year. There will also be further substantial reductions in road traffic, with a total of 85,000 road miles being removed annually. BOX 12: FPMC GRANT SCHEME Food Processing, Marketing and Co-operation (FPMC) is a grant scheme, open to the whole supply chain, designed to support sustainable economic growth of the Scottish food industry through greater cooperation and collaboration from primary production to final market 92. Some 17 awards have been made to 15 Scottish dairy companies in the last three years. These awards totalled 5.4m, though one company received an award of 3.9m alone (72%). The competitive scheme includes three elements: Capital Grants Construction of buildings and purchase of plant, equipment Non-capital Grants Market research, consultancy, product development, etc Co-operation Grants Aid co-operation, collaboration and development within the food chain

58 BOX 13: CASE STUDY WISEMAN DAIRIES Wiseman environmental initiatives targeting a number of key emissions sources: On farm All direct-supply farmers are being offered a free carbon audit to help identify opportunities to become more financially and eco-efficient. Milk transport Fleet management software has been recently upgraded to help optimise transport routes for farm uplift of milk. SAFED (Safe & Fuel Efficient Driving) training is provided to drivers and the use of Isotrak software helps improve fuel efficiency. They are also trialling limiting the speed limit of lorries by 3mph to explore the effects on fuel efficiency. Processing By 2014 three Scottish sites will have new heat pumps installed to harvest waste heat from the refrigeration units to heat the pasteurisers. This will save 40% on gas use and will pay back for itself in 1-2 years. New refrigeration systems are also being installed to replace high global warming potential gas systems with ammonia gas systems (a non global warming gas). At Bellshill in North Lanarkshire a number of recent improvements have been made including: Use of improved instrumentation to reduce reclaimed milk through product changes Installation of voltage optimisers to reduce voltage from 240v to 220v Use of ground source heat pumps Increased recycling rates through staff training/education. UNDERSTANDING & COMMUNICATING SUSTAINABLE NUTRITION To date, the environmental impact of food has commonly been expressed per unit of mass e.g. kgco 2 e/litre of milk. However mass does not fully capture the primary function of food: to deliver nutrition. New dairy-funded research in Sweden has attempted to compare the climate impacts of beverages based on nutrient density or Nutrient Density to Climate Impact (NDCI) index 93. Although the method was not without criticism, the lessons are clear: the dairy supply chain should follow developments in how measures of dairy nutrient composition can be integrated with conventional sustainability metrics. Retail & distribution The retail and distribution of dairy products is assumed to, for the most part, overlap with other retail and wholesale food logistics 94. Therefore wider attempts by companies to reduce the impacts of freight and instore chilling will also improve the life cycle of dairy products. For this reason these subjects are not reviewed here. UHT MILK This study did not assess the life cycle emissions of UHT milk production and consumption however the authors predict that overall emissions savings may be possible here because of reduced energy demands during distribution and retail phases (i.e. it is estimated that use emissions will be broadly similar to conventional milk, as UHT must be refrigerated once opened). The critical issue will be whether the emissions associated with ultra-heat treatment are greater than the savings from ambient distribution. No publicly available studies were found on this subject. Of course the barrier to UHT up-take is consumer preferences although there may be potential for marketing of product as a lower-footprint alternative. 93 Nutrient density of beverages in relation to climate impact. Food & Nutrition Research 2010, 54: DOI: /fnr.v54i With the exception of milk which does not go via regional distribution centres (RDCs). 45

59 APPENDIX 1 DAIRY FARM SOIL CARBON STOCKS This study also estimated total soil and biomass carbon stocks under direct dairy farm management in Scotland this was a departure from conventional product footprint, but is likely to be a key part of corporate GHG reporting in the coming years 95. It is important to note that these estimates relate to total stocks and do not examine potential changes which might have occurred during the study year e.g. carbon sequestration on grassland. There is considerable interest in the potential for grassland livestock systems to offset emissions through carbon sequestration 96 however considerable uncertainty remains. For this reason this study assumes agricultural land remains in carbon equilibrium over the long term. As can be seen from the figure below total soil and biomass carbon resource is a relatively small proportion of Scotland s total (ca.1%) however this still represents a significant store of carbon in the context of annual dairy GHG emissions. It is important to understand that, as these pools can be added to, this offers potential opportunities for GHG mitigation (as set out in existing advice to industry e.g. Farming for a Better Climate). Conversely, as carbon stocks are reversible, the 19MtC stored to 30cm of soil depth needs to be protected. If 19Mt of soil and biomass carbon were fully released to the atmosphere it would be equivalent to approximately 70Mt of carbon dioxide gas (40 years of Scottish dairy supply chain emissions, at current levels of production). 95 World Resources Institute: Corporate GHG Inventories for the Agricultural Sector (discussion document, 2010) 96 For example (Azeez 2009), (Soussana, et al. 2007) and (Taylor, Jones and Edwards-Jones 2010) 46

60 FIGURE: SOIL CARBON STOCKS (MtC) ON SCOTTISH DAIRY FARMS TABLE: SOIL AND BIOMASS CARBON STOCK ESTIMATES (MtC) Soil carbon stock 97 Biomass carbon stock Land type UK Scotland Scottish dairy farms Scottish dairy <1m depth <30cm depth farms Forestland Grassland 3,870 2, Cropland <0.1 Total 5,075 2, To develop these high-level estimates of dairy farm soil and biomass carbon stocks, data was needed on: the hectares of cropland, grassland and woodland on Scottish dairy farms; and the average soil and biomass carbon densities of these types land in Scotland (Bradley, et al ). 97 All figures are to 1m of depth apart from second dairy sector column which has been calculated to 30cm. 47

61 APPENDIX 2 BIBLIOGRAPHY The following references were used during the course of research some of which are referenced within this document. ADAS. An evaluation of organic farming system research needs for Scotland. Scottish Executive, ADAS Consulting Ltd. Energy use in organic farming systems. Defra, ADAS. The Environmental Impact of Livestock Production. Defra, AEA. Mitigating Against Climate Change in Scotland: Identification and Initial Assessment of Policy Options. Scottish Government, AEA Technology. Climate Change Agreements - Results of the Fourth Target Period Assessment. DECC, AEA Technology. Climate Change Agreements: Results of Fourth Target Period Assessment AEA Technology. End User GHG Inventories for England, Scotland, Wales and Northern Ireland:1990, 2003 to DECC, AEA Technology. Greenhouse Gas Inventories for England, Scotland, Wales and Northern Ireland: DECC, AEA Technology. UK Greenhouse Gas Inventory, 1990 to 2007 Annual Report for submission under the Framework Convention on Climate Change. DECC, AEA Technology. UK Greenhouse Gas Inventory, 1990 to 2008 Annual Report for submission under the Framework Convention on Climate Change. DECC, ATTRA. Comparing Energy Use in Conventional and Organic Cropping Systems. National Sustainable Agriculture Information Service, Audsley, E, M Brander, A Chatterton, D Murphy-Bokem, C Webster, and A Williams. An assessment of GHG emissions from the UK food system and the scope for reduction by WWF, Aumônier, S. Carbon footprinting - The science, challenges and benefits. Oxford Farming Conference Azeez, G. Soil carbon and organic farming. Soil Association, Bosworth, M E, B Hummelmose, and K Christiansen. Cleaner Production Assessment of Dairy Processing. UNEP, Danish EPA, Bottrill, C. Internet-based tools for behaviour change. European Council for Energy Efficient Economies Bradley, R, R Milne, J Bell, A Lilly, C Jordan, and A Higgins. A soil carbon and land use database for the United Kingdom. Soil Use and Management 21 (2005 ): British Standards Institute. Publicly available specification on assessing the life cycle greenhouse gas emissions of goods and services (PAS2050) Brunel University. Greenhouse Gas Impacts of Food Retailing. Defra,

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67 APPENDIX 3 SUPPLY CHAIN FOOTPRINTING GUIDELINES Embarking on a project to assess the emissions associated with a product, organisation or whole supply chain can be a resource-intensive process. One of the secondary objectives of this project was to examine the potential for transferring the methods and learnings developed here to other food supply chains. However the notes below are relevant to any business examining opportunities as well. Before undertaking any sort of environmental assessment it is essential to consider the advantages and disadvantages of different quantification approaches, so that results meet with user expectations. Without this initial scoping stage projects run the risk of wasting time on unnecessary detail or conversely providing results which are too uncertain for the intended application (e.g. making a green marketing claim of superior performance over a competitor). The main reasons for undertaking a footprint study are highlighted in the table below, and a commentary is provided on suggested study requirements. TABLE: STUDY REQUIREMENTS FOR LARGE SCALE FOOTPRINT STUDIES OF INCREASING ACCURACY Low accuracy Medium accuracy High accuracy Emissions assessment objective Highlight GHG hotspots (this study) Scenario development Eco-design Tracking changes Benchmarking Study requirements Environmental claims Carbon labelling Carbon trading Relies on published secondary data and assumptions about industry activities or existing (relevant) footprint studies. Preference should be given for peer-reviewed studies which examine systems of a similar age, geography and technology. No (or very limited) primary data collection is undertaken. As a result this is the fastest option (ca. 3-6 months) Analysis will likely be for a typical year as it can draw on data from a variety of timeframes. Stakeholder commitment requirement is low to deliver usable results. For benchmarking and tracking changes, high quality data is needed on significant areas. Significant areas are known from similar published studies or a preliminary scoping analysis. Primary data collection means that this approach takes 6+ months to plan and deliver. Important to consider if there are existing free or licensed GHG tools/models available to speed up the process. Also consideration is needed as to how future revisions to work will be funded & delivered. Large amounts of primary data are collected on industry processes and activities from a representative sample of businesses. This requires significant co-operation with participating businesses and need to ensure data privacy. This is highest cost option and can take up to 12 months to plan, coordinate, analyse and interpret. Important to consider if there are existing GHG tools/models available to speed up the process. Also consideration is needed as to how future revisions to work will be funded & delivered 54

68 Crown Copyright 2011 ISBN: (web only) APS Scotland Group DPPAS11244 (02/11) w w w. s c o t l a55 n d. g o v. u k