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Ciaran Black – The EU Green Deal and the Push for Sustainable Ag

January 28, 2021

Europe has seen a 25% reduction in emissions with around 60% growth in the economy during the same period over the last 20 to 25 years.

The European Union Green Deal is an ambitious plan to help Europe become the first carbon-neutral continent by the year 2050. Ciaran Black, an independent strategy and innovation consultant, discusses how farmers are adapting to eliminate greenhouse gas emissions, what new business opportunities are arising as a result of the consumer demand for product sustainability and what the implications are globally for more sustainable food production.

The following is an edited transcript of the Ag Future podcast episode with Ciaran Black hosted by Tom Martin. Click below to hear the full audio or listen to the episode on Apple Podcasts or Spotify.

Tom:                          Welcome to Ag Future, presented by Alltech. Join us as we explore the challenges and opportunities facing the global food supply chain and speak with experts working to support a planet of plenty.

                                    I’m Tom Martin, and I’m joined from Dublin, Ireland, by Ciaran Black, an independent strategy and business innovation consultant.

                                    Ciaran’s expertise is in leading new growth programs, creating new value propositions and challenging existing business models in large corporations as well as startups. And we want to get his take on the European Union Green Deal and what it means for food production and farming in the EU, as well as the implications for the global food chain in 2021 and beyond.

                                    Welcome to Ag Future, Ciaran.

Ciaran:                       Thanks, Tom. It’s great to be here.

Tom:                          And if you would, first, refresh us on the goals of the EU Green Deal.

Ciaran:                       Yes. The EU Green Deal is a very ambitious plan to become the first continent in the world to become carbon neutral by 2050. And, really, what it tries to do is decouple economic growth with a move toward greater sustainability and, really, the target of change recently to a much higher level — this 2050 target of carbon neutrality.

                                    And what we’re seeing is that, in the last 20 years or 25 years or so, we’ve seen a 25% reduction in emissions in Europe. But along that period of time was also about 60% growth in the economy, so the view is that economic prosperity and sustainability can go hand in hand. But the change here, really, is that the ambition of the target is much higher. So, in the next ten years to 2030, we’re looking to move from the position of around of a 25% reduction up to 55% reduction and then on toward full neutrality by 2050.

So, we’re really seeing a radical transformation of the economy and society in Europe.

Tom:                          What would be the consequences of inaction? Is there a sense of urgency?

Ciaran:                       Yes, there certainly is. I mean, I think, you know, most people and most countries recognize that climate change, you know, is a huge challenge for the planet, and it must be addressed. So, it’s not only Europe that’s pushing toward this level of ambition. We’ve seen China recently commit to climate neutrality by 2060, and I think, you know, President Biden already has signed back up to the Paris Agreement. So, I think we’ll see new targets on the way from the U.S. as well.

                                    And also, you know, in the private sector, companies like Microsoft and Amazon and Unilever are all setting themselves big targets in this regard. So, I think that the consequences of inaction are, on the one hand, trying to address really important questions for the planet, but also, there’s a competitive situation, whereby, if it’s inevitable that countries are going to be going in this direction, then delaying is not a good strategy. And also, that there are huge opportunities — if you take the first move and then start to develop new technologies and new approaches that will help meet those targets, then you’re in a much stronger position.

Tom:                          So, a goal of no net emissions of greenhouse gases by 2050. Is this viewed as a realistic goal by the European agricultural and food production sectors?

Ciaran:                       Well, I think there’s a little doubt about the direction of travel. You know, agriculture and food production, we want to become more sustainable and more innovative and produce more with less resources. You know, that’s good business, after all, so there is real interest in moving that direction.

                                    I think there is some skepticism around how fast the sector can move, and can it do these, kind of, levels of changes within a short timeframe. But I don’t see anyone that is necessarily opposing the goals; it’s more — it’s more the phase of change. And I think the real debate is around how much can be done voluntarily within the sector, and how much the legislation or regulation (will) push the phase.

Tom:                          What is happening? How is farming adapting to eliminate greenhouse gas emissions?

Ciaran:                       Well, in Europe — and the way it works is vast — the European Commission assessed these lofty ambitions for 2030 and for 2050, and then, each country, each member state, has to develop its own strategic plan in relation to agriculture. It’s called the CAP, the Common Agricultural Policy. It develops its own strategic plan about how it will transition to that objective. So, it means that each country will have its own individual and tailored plan for how the nation will meet those overall targets. So, it means that the agriculture companies within each country will have different sets of targets, but all toward this common goal.

                                    And I think there’s a growing awareness of, you know, how seriously Europe is moving toward this target and how they have to adapt their business toward that. So, I think every company in Europe that’s involved in the agriculture and food industry really understands that they need to adapt and are already progressing a long way toward being ready for that.

Tom:                          Well, a big, ambitious initiative like this, with targeted goals, can have a way of influencing the development of innovative new businesses. Are you seeing that happen at this stage?

Ciaran:                       Yeah, absolutely. I think what’s — as I mentioned with each of these strategic plans for each country, those start to have specific targets, and those specific targets drive specific innovation. So, we’re already seeing lots of activity around those, those areas.

                                    And another EU-wide basis and a huge amount of funding is going to go into incentives to increase the level of research and development and innovation across all of those sectors. So, we’re seeing a huge impact, but it’s very much driven around the specifics of what the targets are.

Tom:                          Ciaran, can you give us some examples of some of the new businesses that are emerging in response to the Green Deal?

Ciaran:                       Well, I mean, I think we’re still in the early stages, but in general, virtually all the new startups in the sector all have some kind of sustainability play. And it is right across the crops and livestock sectors, so we’re seeing that right across the board.

                                    And I think, really, what we’re seeing is that there’s a real mindset shift toward including sustainability in every decision that companies are making. So, that means that they’re really stitching sustainability into the value propositions that they’re developing. And I think we’re seeing the phase of that really gathering now, is people be can clearer and clearer about what they need to do to be able to meet these targets.

Tom:                          You mentioned earlier that a key goal of this strategy is to decouple economic growth from resource use. So, does that require a wholesale transition to renewable energy?

Ciaran:                       Well, the energy sector is a huge part of the emissions profile in Europe. So, about 75% of emissions all come from the energy sector, so it is key to the target, and this will mean much more renewable down the system, so a lot more green energy. And we’re also seeing a lot more electrification to move us away from fossil fuels as an energy source. So, things like, you know, electric vehicles moving away from fossil fuel as the source.

We’re also seeing that where electrification is not possible, a big drive for clean fuel, such as hydrogen, is every important. And overall, I think the energy sector itself has to really increase its efficiency (and strive for) a greater level of interconnection, integration and digitization of that. But it has been very clear that this sector was going to be the focal point for many years. So, I think there’s a huge amount of progress that’s already been made in relation to energy.

Tom:                          But we don’t get change of this scale and scope without debate, without controversy, without a lot of anxiety. Are you seeing those things emerge as the EU moves toward these goals?

Ciaran:                       Yes. So, certainly, yeah, you’re right, I mean, controversy is always going to be there with the level of transformation that’s there. I see the two levels. One is, you know, on the big picture, which is really to do with international trade, you know, I think (is) where the most controversial things would be — what’s called the border carbon adjustment, which is, you know, how much you can influence adding tariffs to imports that are coming into Europe that are of a lesser standard, in terms of environmental sustainability, than others. I think that would be very controversial and will have a real impact in terms of trade negotiation.

                                    Within the agriculture and food sector themselves, I think what we’re seeing is some discussion around initiatives like the increase in organic farming. There’s an objective to have 25% of farmland be organic by 2030. And (there’s) also a movement toward what’s called carbon farming, whereby the produce coming from farming is not milk and meat and crops; it’s about sequestering carbon. And, actually, how that works in practice is going to be quite controversial, and the degree to which the sector can make a transformation in that kind of fundamental sense, I think, is going to be quite difficult.

                                    And, also, I mean, I think there’s a push toward changing diets to more plant-based over meat-based diets, and I think that will be quite controversial, too.

Tom:                          Hmm. Interesting. The strategy calls for action to reduce the use and risk of chemical and more hazardous pesticides by 50%. How is this imperative, spurring innovation in pest control?

Ciaran:                       I think we’ll see a lot more innovation around integrated pest management. So, it’s not just the innovation around the pesticides themselves but, also, around the new innovative agricultural services that will, you know, monitor the growth of pathogens and, you know, help find exactly the right time when different pesticides should be used and how they’re applied.

                                    So, I think we’re going to see a much more integrated approach, which, rather than just one product, will hit a whole range of different pathogens. It will be a much more selective and intelligent use of those interventions. So, I think it’s going to be very interesting, but that obviously means that the use of data and services becomes much, much more important in the sector.

Tom:                          The plan also calls for reducing nutrient losses by at least 50% while ensuring no deterioration of soil fertility. But the plan also calls for reducing fertilizer use by at least 20%. What are the implications of this?

Ciaran:                       Yeah, those are pretty ambitious targets, but nutrient losses are bad for everyone, really — that, you know, the farmer loses, and the environments (do), too.

So, this is primarily around nitrogen efficiency, and this is quite a complex system, especially in relation to livestock farming. So, the implications are that we need to take a more holistic view; it’s not just about fertilizer itself. So, we need to have improved efficiency in areas like feed intake, make sure that that’s of high quality, and how the animal processes that feed internally is another area where we can innovate and improve efficiency. And then, also, how we manage manure and how we spread fertilizer on the land are also other areas that are important.

So, this gives, you know, a really significant scope to innovate across all the sub-systems, and the key, really, (is) to coordinate and integrate those approaches so that the sum of all those interventions delivers a really significant impact.

Tom:                          The strategy includes something called the “Just Transition Mechanism,” and between this year and 2027, this program is to pump billions in financial support and technical assistance to help those who are most affected by the move toward the green economy. Are farming and food production or elements of the sector eligible for this kind of assistance?

Ciaran:                       Yeah. I mean, the intention is that all sectors that are negatively impacted are eligible for this transition mechanism.

                                    So, in the case of agriculture, initiatives like I mentioned, around carbon farming, may help ease that transition. So, this will be a case where maybe a farmer who had traditionally been a dairy producer or a beef producer or going crops will find that situation where, because of the change toward a more sustainable future, might mean that it’s difficult for them to have an economic business in their traditional farming. So, they might migrate to things like carbon farming, which might be forestry, or different initiatives that will increase either biodiversity or the sequestration of carbon into their soils.

                                    So, mechanisms that will support that shift and that transition are certainly areas that are going to be very applicable to agriculture and food production. But there’s a lot of detail that’s still required to work out for that to work in practice. And I think this will take, you know, some quite considerable time before that becomes clear. But the intention is that the sector will be eligible for these mechanisms.

Tom:                          I saw that in detailing its Green Deal proposal on its website, the European Commission says the plan for making the EU economy sustainable involves turning climate and environmental challenges into opportunities. In what important ways can this be achieved by the food production industry?

Ciaran:                       Well, sustainability is a product attribute that customers want more and more. I mean, I think there’s a growing awareness of the importance of it, and customers are interested in that, so that’s nothing exclusive to the food and agriculture sector. So, the better companies are able to provide sustainability, the better it is for their businesses, so that’s where — that’s where the opportunity arises.

                                    Now, whether this means a widespread willingness to pay higher prices for food and produce remains to be seen, or whether there’ll be different mechanisms to support that. But I think the consumer preference is certainly there, and this creates an opportunity for producers to differentiate themselves in how they meet that. So, things like local sourcing of food and produce, you know, may increase opportunities for those local producers, etc.

                                    So, I think it’s not all about restricting practices; it’s also an opportunity to be able to differentiate and hold yourself up above competition, so there’s certainly lots of opportunities there.

                                    And also, on a more global basis, I think the global food industry will be demanding more and more sustainable produce, so if Europe is able to produce the products that fall into that category, well, then that’s good business for EU producers.

Tom:                          Is it relevant or important to the success of the EU Green Deal that, under President Biden, the United States has now re-entered the Paris Climate Accord?

Ciaran:                       Yes. I think it’s very important. You know, a broader coalition between major political powers and continents is going to be a very important aspect of meeting the global challenge of climate change.

                                    And in fact, a key component of the Green Deal strategy is what they call Green Deal Diplomacy, which is to try and get all major powers to help and support the drive toward greater sustainability, so that we can, we can meet those targets. And, you know, a key ally — having the U.S. be part of the Paris Climate Accord is going to be essential for Europe, so that they can move forward together to meet the targets, rather than having a more risky situation of playing this alone.

Tom:                          And how is this for you, Ciaran, in your line of work, of independent strategy business innovation consulting? This must be an exciting time.

Ciaran:                       Yeah, it certainly is. I mean, I think I focus on strategy, and especially around business model — and companies really need to reevaluate, actually, how they do business today and recognize that, in the future, this is going to be a pretty big transformation.

And I often think of it as, in 10 or 15 years’ time, we’ll look back, in the same as we’re looking back now — on “How did we ever do business before, without cellular phones or the internet?” — and we’ll be thinking around, “How did we ever make decisions on the business basis without building in sustainability into our overall evaluation?”

So, it’s very exciting, from my perspective, to be able to help companies advance those new opportunities or those new business models to avail of those opportunities.

Tom:                          That’s going to be fascinating to follow. And maybe we’ll check back with you down the road a little bit to see how things have progressed.

Ciaran:                       That will be great, Tom. I really enjoyed our chat.

Tom:                          Yes. Ciaran Black, an independent strategy and business innovation consultant based in Dunboyne, Ireland. We spoke with him from Dublin, and we thank you for joining us, Ciaran.

Ciaran:                       Thanks, Tom.

Tom:                          Join us for the rest of the series as we reflect on how the agriculture industry adapted in 2020 and speak with experts on what’s in store for agri-food in 2021.

                                    Thank you for joining us. Be sure to subscribe to Ag Future wherever you listen to podcasts.