VegNET Tasmania Regional Update

Under the Greenhouse Gas Protocol, carbon emissions that are generated can be broken into three different categories referred to as Scope 1, 2 and 3 emissions. They are used as one indicator to measure a company’s environmental impact.

As the new reporting requirements regularly reference the different emission categories, it is valuable to understand the category definitions:

• Scope 1 Emissions could be referred to as ‘direct’ emissions and are generated as a result of activities that occur at facilities/properties directly owned by a business.
• Scope 2 Emissions could be referred to as ‘indirect emissions’ and are emissions that are generated through the production of electricity, steam, heat or cooling that are not directly generated by the facility/property, however the energy is purchased for the operation of the facility/property.
• Scope 3 Emissions are commonly referred to as ‘value chain emissions’, occurring outside of the facility/property. However, they are a result of business actions of the facility/property. These may be generated upstream (e.g. emissions generated in the production of purchased inputs) or downstream (e.g. transport for product).

Scope 3 emissions can be harder to categorise than the others. They can contribute more to a business’s carbon footprint than the other two. One reason is that they are broad and not yet well defined, and can even things such as your employees fuel usage on the way into work.

Introduction of mandatory GHG reporting

From early 2025, the reporting of emissions by companies that are ‘controlling corporations’ under the National Greenhouse and Energy Reporting Act, as well as those that meet two of the below requirements, will become mandatory. This is determined by the climate-related financial disclosure (CRFD) requirements that have been adopted in parliament.

Reporting is compulsory by companies that fulfill two of the below criteria:

• Have over 500 employees
• A value of consolidated gross assets is $1 billion or more
• Consolidated revenue is $500 million or more.

For businesses that meet the above requirements, reporting of Scope 1 and 2 emissions will commence from January 2025. Many of the Tasmanian agricultural processors will have to report on their emissions. The Scope 3 emissions they need to report on are emissions generated by their suppliers, including growers.

For growers who are supplying food processors, retailers or wholesalers that need to report, it is important to be aware that in the first year of the reporting requirements there is a relief on the reporting of Scope 3 emissions for these larger businesses. However, reporting of emissions generated by contracted growers will become compulsory from early 2026. This means that if you as a grower supply a retailer, wholesaler or processor they may require this information from you. Importing countries may ask for an emission statement before January 2026.

Currently the guidance provided by the GHG Protocol is insufficient to support appropriate GHG reporting for agricultural supply chains. In the absence of a National Greenhouse and Energy Reporting Scheme (NGERS) methodology for agriculture, there is no formal Australia-specific guidance that reporting entities could follow.

Identifying on-farm sources of GHG emissions on vegetable farms

Greenhouse gas cycles in agriculture. Courtesy of Vic DEDJTR, used under CC, adapted from original, Making cent$ of carbon and emissions on-farm, 2016, Tasmanian Government & Tas Farming Futures.

Despite unclear guidance, becoming aware of sources of GHGs within your operation and maintaining accurate records of activities that require energy or release GHG are ways that you can be prepare for the reporting requirements.

The most common sources of GHG’s in vegetable production include carbon dioxide (CO2) and nitrous oxide (N2O). Many vegetable farms may also run livestock which generate methane (CH4).

Common sources of these GHG on farm include:

• Carbon dioxide (CO2): Released through the breakdown of organic materials by microbial activity in soils, tillage as it leads to organic matter breakdown, using fuel and or electricity in farm machinery and equipment.
• Nitrous oxide (N2O): Released through application of nitrogen fertilisers and soil disturbance (tillage).
• Methane (CH4): Generated from ruminant livestock

A recent workshop with vegetable growers, facilitated by the Resilient Farming Tasmania Program in Ulverstone, Tasmania, highlighted that the attendees had varying levels of knowledge about GHG emissions. However, there was uncertainty regarding the lack of information about the reporting requirements they might face.

Sam Bye of AgSam Consulting, who facilitated the ‘Carbon without the Jargon’ session in Ulverstone, said: “Carbon accounting seems extraordinarily complex, but we really have just two tasks to focus on—reducing emissions and increasing sequestration wherever we can.”

Sam emphasised that most farms already engage in these practices, but growers could be asking themselves, ‘Are these records good enough for independent review?’.

“You can understand your emissions sources more deeply for free with good, simple calculators. My favourites are the Ag Innovation Australia Environmental Accounting Platform and HortCarbon Info from the Queensland government,” Sam added.

When discussing the primary sources of emissions on farms, Sam noted: “Most of the emissions produced in agriculture come from methane emitted by livestock and the production and use of fertilisers. Lesser contributors include diesel and electricity generated from coal-fired sources. Reducing all these while producing an agricultural commodity really means making your operation more efficient and cost-effective, so it’s a win-win.”

Preparing for reporting

Without a current understanding of exactly what information will be required by growers to report on, here are some tips on how to prepare to help make the transition easier:

• Identify sources of on farm GHG that are in your production system.
• Record relevant information by crop and ensure this data is easy to access for future reporting requirements. Most growers are collecting this data already.
• Have discussions with customers who will have to report around what information they may require and expected timelines.
• Be ready to report livestock emissions where applicable by keeping good records of herd size and composition so that default values can be used.
• Get help to generate a baseline of emissions for your operation.
• Be prepared that customers may want to see the emissions reduce against a baseline over time and review management practices that lower emissions and that should also contribute to improved profitability over time. Find examples here: shorturl.at/XtHP7.

Looking ahead and establishing a baseline

The transition to mandatory GHG reporting represents both a challenge and an opportunity for Australian vegetable growers.

When asked what a good next step growers might take and how best to prepare, Donna Lucas who specialises in carbon farming and accounting from RM Consulting Group said: “Emissions
reporting is relatively new and can be somewhat confusing. I encourage farm businesses to perform a calculation now to understand the required data and the process. The initial calculation may have some inaccuracies, but it will help identify the necessary data to maintain. By calculating now, it can alleviate the stress when you are eventually asked for your emissions data.”

Regarding the timeline for change, Donna said: “Most farm businesses will fall below the size threshold for mandatory reporting. However, the companies that these farm businesses supply will start requesting this information over the next one to two years, with some already making these requests.

Growers are encouraged to stay informed and participate in workshops and programs that can help establishing a GHG baseline and robust data recording, if required. This will ensure a smooth transition to reporting on Scope 3 emissions to larger business they supply from early 2026.

REFERENCES

• Australian Farm Institute (2024) Occasional Paper Agriculture and the reach a of mandatory GHG reporting. See: farminstitute.org.au/publication/occasional-paper-agriculture-and-the-reach-of-mandatory-ghg-reporting.
• Soil Wealth and Integrated Crop Protection Project (2022) The Carbon Series. See: soilwealth.com.au/2022/01/the-carbon-series-part-1-carbon-farming-and-its-relevance-to-australian-vegetable-growers.
• Tasmanian Government, Tas Farming Futures (2016) Making cent$ of carbon and emissions on-farm. See: static1.squarespace.com/static/65e5361fbe37916a7b4347cb/t/666108ad80e5b01154dca41c/1717635278087

FIND OUT MORE
Please contact Tayla Field, on 0429 391 538 or email taylaf@rmcg.com. Tayla will be able to link you up with staff from the Hort Innovation Project VN23001 which will use onion production as an example of assessing emissions on vegetable farms to give you a good understanding of how emissions are calculated and what you can do to minimise them.