Scottish Dairy Supply Chain Greenhouse Gas Emissions: Main ... · A research project to assess global greenhouse gas emissions ... Dairy emissions are one the most analysed of all

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.

Scottish Dairy Supply Chain Greenhouse gas Emissions

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Scottish Government

Identifying opportunities to reduce the carbon footprint associated with the Scottish dairy supply chain

Final report

January 2011


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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


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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 maps1with environmental targets; voluntary energy efficiency agreements2; 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 footprinting5.

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 Policy3 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 website4 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 guidelines5. 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 3 http://www.scotland.gov.uk/Publications/ 4 www.dairyfootprint.org 5 Dairy UK and Dairy Co Carbon Footprinting Guidelines produced by The Carbon Trust. Download at: http://www.dairyuk.org


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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 1.5MtCO2e – or 1.1kgCO2e/kg of milk (1.2kgCO2e/litre of milk). Additional emissions associated with the processing, distribution and use of the six dairy products studied in this project was a further 0.25MtCO2e.

Total cradle-to-grave dairy supply chain emissions were 1.7MtCO2e for the six products studied (see Figure E2 and Table E2) – equivalent to 3% of Scotland’s direct GHG emissions6. 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.


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FIGURE E2: SUPPLY CHAIN-LEVEL EMISSIONS ASSOCIATED WITH SCOTTISH DAIRY SUPPLY CHAIN7

TABLE E2: EMISSIONS HOTSPOT MAP OF SCOTTISH DAIRY PRODUCTION (KTCO2E PER YEAR)8

Life cycle stage

Emission source Milk Cheese Butter Cream Yoghurt Ice

cream All

Milk production

Enteric fermentation 284 250 32 27 02 03 598

Manure storage 136 119 15 13 01 02 285

Livestock feed 214 188 24 20 01 02 450

Parlour energy 24 21 03 02 00 00 51

Other inputs 05 04 01 00 00 00 10

Milk freight 03 01 00 00 00 00 04 Dairy processing

Packaging 35 15 01 06 01 01 59

Energy 53 11 01 00 01 02 67

Other sources 04 02 00 00 00 00 07 Distribution Product transport 13 02 00 00 00 00 16

Retail 23 33 10 12 02 04 83 Consumer Chilling 07 04 01 01 00 01 13

Food waste9 00 01 00 00 00 00 01 Total All sources 806 657 89 82 8 16 1,657

7 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. 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.


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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 STUDIES10

• 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, 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.


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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 technologies11. Individual businesses are encouraged to use the footprinting tool developed during this project to explore opportunities most relevant to them (available at http://www.dairyfootprint.org).

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

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

Retail

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


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.


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 ................................................................................................................................. 13 Grass-to-farm gate ............................................................................................................................... 16 Dairy products ........................................................................................................................................ 24 Comparisons with other studies ........................................................................................................... 31

OPPORTUNITIES TO MITIGATE & INNOVATE.................................................................... 33 Summary of opportunities .................................................................................................................... 34 On farm ................................................................................................................................................... 36 Processing ................................................................................................................................................ 41 Retail & distribution ............................................................................................................................... 46

APPENDIX 1 – DAIRY FARM SOIL CARBON STOCKS ....................................................... 47

APPENDIX 2 – BIBLIOGRAPHY .......................................................................................... 49

APPENDIX 3 – SUPPLY CHAIN FOOTPRINTING GUIDELINES ............................................ 55


Figures

Figure 1: Summary of research approach ................................................................................................................... 2 Figure 2: Scotland’s dairy supply chain, 2005-2009 ................................................................................................ 3 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) ................................. 11 Figure 5: How allocation decisions (by dry mass, value or mass) influence results ........................................... 11 Figure 6: Summary of dairy supply chain, with key inputs and outputs .............................................................. 12 Figure 7: Product carbon footprints of Scottish dairy products, full life cycle (per kg) .................................... 14 Figure 8: Supply chain-level emissions associated with scottish dairy supply chain .......................................... 15 Figure 9: Summary of grass-to-gate emissions, by yield class .............................................................................. 17 Figure 10: Detailed split of milk emissions (kgCO2e/kg milk) for an average scottish farm .......................... 18 Figure 11: Concentrate feed emissions - relative contribution of life cycle stages ........................................... 20 Figure 12: Adult and replacement feed emissions Per KG milk, by yield group .............................................. 21 Figure 13: Feed production emissions Per kg of milk, by feed type and yield group ..................................... 21 Figure 14: Scottish dairy farm energy emissions, by farm yield .......................................................................... 23 Figure 15: Dairy farm electricity emissions by end use .......................................................................................... 23 Figure 16: Product carbon footprints of Scottish dairy products, full life cycle (per kg) ................................. 24 Figure 17: Liquid milk emissions ................................................................................................................................... 25 Figure 18: Cheese emissions ......................................................................................................................................... 26 Figure 19: Cream emissions .......................................................................................................................................... 27 Figure 20: Butter emissions ........................................................................................................................................... 28 Figure 21: Yogurt emissions .......................................................................................................................................... 29 Figure 22: Ice cream emissions .................................................................................................................................... 30 Figure 23: Comparison of results with other published life cycle studies ............................................................ 32


Tables Table 1: Milk utilisation and production tonnes (2007) ............................................................................................. 4 Table 2: Detailed raw milk carbon footprint results (kgCO2e/kg milk), by yield ............................................. 19 Table 3: Soya import and production emissions assumptions ................................................................................ 22 Table 4: Emissions hotspot map of Scottish dairy PRODUCTION (ktCO2e per year) ....................................... 24 Table 5: Liquid milk resource use and GHG emissions (full life cycle, per kg) .................................................. 25 Table 6: Cheese resource use and GHG emissions (full life cycle) ....................................................................... 26 Table 7: Cream resource use and GHG emissions (full life cycle) ........................................................................ 27 Table 8: Butter resource use and GHG emissions (full life cycle) ......................................................................... 28 Table 9: Yogurt resource use and GHG emissions (full life cycle) ........................................................................ 29 Table 10: Ice cream resource use and GHG emissions (full life cycle) ................................................................ 30 Table 11: Comparison of results with other published life cycle studies ............................................................. 31 Table 12: Annual financial and CO2 savings from energy efficiency, per farm ............................................... 39


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 ............................................................................................................. 10 Box 4: The challenges in accounting for whey .......................................................................................................... 11 Box 5: Emissions associated with soy production ...................................................................................................... 22 Box 6: Advice for farmers: Farming for a Better Climate ...................................................................................... 35 Box 7: Bioplastic sustainability .................................................................................................................................... 42 Box 8: Sustainable food & drink project ................................................................................................................... 42 Box 9: Whey valorisation feasibility study ............................................................................................................... 44 Box 10: Whey as a source of livestock feed ............................................................................................................ 44 Box 11: Case study – Mackies Ice Cream ................................................................................................................. 45 Box 12: FPMC Grant Scheme ...................................................................................................................................... 45 Box 13: Case study – Wiseman Dairies ..........................................................................................

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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 maps12with environmental targets; voluntary energy efficiency agreements13; 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 footprinting14.

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 Policy15 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 (http://www.dairyfootprint.org) 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 http://www.defra.gov.uk/environment/business/products/roadmaps/milk.htm 13 Climate Change Agreements http://www.decc.gov.uk/en/content/cms/what_we_do/lc_uk/ccas/ccas.aspx 14 Guidelines for the Carbon Footprinting of Dairy Products in the UK (Carbon Trust 2010) 15 http://www.scotland.gov.uk/Publications/

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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 22nd);

Dairy Processing Energy Efficiency workshop (June 16th), Highland Show (June 24th/25th) • 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 www.dairyfootprint.org

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SCOTLAND’S DAIRY SUPPLY CHAIN16

FIGURE 2: SCOTLAND’S DAIRY SUPPLY CHAIN, 2005-2009

16 This section summarises the Scottish dairy sector today. It should be noted that the footprint analysis draws on data from a number of years (2007-2009), 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 2007 18 Personal communications, Stuart Martin (Scottish Organic Milk)

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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 production18.


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 milk19 • cream • cheese • butter • yoghurt, and • ice cream

These were chosen as they represent more than 95% of milk utilization, and are well-known, consumer-facing 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 549 550 Million litres

Butter 22 10,000 Tonnes

Cheese 565 59,000 Tonnes

Cream 15 15,000 Litres

Yoghurt 3 3,300 Tonnes

Ice cream 17 3,900 Tonnes

Other 50 - -

Total 1,220

19 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.

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EMISSIONS ASSESSMENT

Methodology

Summary

Product carbon footprints of six major Scottish dairy products were developed using the UK dairy industry’s new footprinting guidelines22. These analyses relied mainly on secondary data on Scottish farming and dairy processing23. 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 report24.

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 (2007-2009), 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 businesses25. 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 3.

22 http://www.dairyuk.org 23 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.

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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 data26. 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 DairyCo26).

KEY REFERENCES The carbon footprinting approach draws heavily on three documents:

• PAS205027; • the Guidelines for the Carbon Footprinting of UK Dairy Products28 (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 guidelines29 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: http://www.usdairy.com/Sustainability/ 27 PAS2050: Specification for the assessment of the life cycle greenhouse gas emissions of goods and services. BSI (2008) 28 http://www.dairyuk.org/ 29 http://www.idf-lca-guide.org

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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 e-mail/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.

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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 & high30. 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 200731.

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 sales33.

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 year34. 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 over-simplistic, 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) 32 http://www.scotland.gov.uk/Publications/2009/04/ 33 DairyCo Insiders Guide 2010: http://dairyco.net/library/ 34 Personal communications, Stuart Martin (Scottish Organic Milk)

9


BOX 3: ACCOUNTING FOR RENEWABLE ELECTRICITY

Photo: Lammermuirs wind farm (Lisa Jarvis)

Approximately 4% of electricity used by Scottish dairy processors is from renewable sources35. 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 1,600tCO2e (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 reductions38).

Additionality is met where carbon savings are achieved that would not have happened otherwise through legislative requirements, e.g. the Renewables Obligation39. It is highly unlikely that green tariff suppliers to the industrial and commercial (I&C) sector will be going beyond current legal obligations40 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 offsets41. 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 2009. 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) 39 http://www.scotland.gov.uk/Publications/2010/09/06152625/1 40 Ofgem: http://www.greenenergyscheme.org/index.php?page=FAQS/index#q27 41 http://www.greenenergyscheme.org/index.php?page=about/objectives

10

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 issue43).

If emissions were to be allocated along the lines of economic value, however, this would incentivise the

42 Arla foods via Danish Food LCA: http://www.lcafood.dk/processes/industry/cheeseproduction.htm 43 See Box 9 on page 38 for details of forthcoming Scottish Enterprise study into whey valorisation.

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.

full utilisation of co-products (i.e. those companies that dispose of whey as waste would have a much


11

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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 1.5MtCO2e – or 1.14kgCO2e/kg of milk (1.17kgCO2e/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 0.25MtCO2e.

Total cradle-to-grave dairy supply chain emissions were 1.7MtCO2e for the six products studied (see Figure 6) – equivalent to 3% of Scotland’s direct GHG emissions45. 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 kgCO2e 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


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.

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Grass-to-farm gate The average intensity of Scottish milk production was 1.17kgCO2e/litre of milk (1.15kgCO2e/kg milk). Dairy farms emit 1.49MtCO2e per year (excluding emissions allocated to dairy beef). Soil carbon stocks on dairy farms are c. 19MtC – equivalent to 70MtCO2e48 (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.

48This 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


FIGURE 9: SUMMARY OF GRASS-TO-GATE EMISSIONS, BY YIELD CLASS49

49Low (<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.

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TABLE 2: DETAILED RAW MILK CARBON FOOTPRINT RESULTS (kgCO2e/kg MILK), BY YIELD50

Source Description Detail Low Medium High Scotland

Agri emissions

Enteric Methane 0.55 0.47 0.44 0.49

Manure storage Methane 0.15 0.14 0.14 0.14 Nitrous oxide 0.11 0.08 0.08 0.09

Feed production

Adult animals Grass silage 0.10 0.08 0.07 0.08

Grazing 0.13 0.09 0.05 0.09 Starch 0.02 0.03 0.04 0.03 Protein 0.05 0.07 0.09 0.07

Fibre 0.00 0.01 0.01 0.01 Replacement animals

Grass silage 0.02 0.02 0.02 0.02 Grazing 0.04 0.03 0.03 0.04

Starch 0.00 0.00 0.00 0.00 Protein 0.01 0.01 0.01 0.01 Fibre 0.00 0.00 0.00 0.00

Hay 0.00 0.00 0.00 0.00 Transport To farm 0.01 0.01 0.01 0.01 Processing Concentrates only 0.01 0.01 0.01 0.01

Inputs Parlour energy Electricity 0.04 0.03 0.03 0.03 Fuel 0.02 0.01 0.01 0.01

Other Car fuel 0.01 0.01 0.00 0.01

Vet 0.00 0.00 0.00 0.00 Water 0.00 0.00 0.00 0.00 Silage wrap 0.00 0.00 0.00 0.00

Fugitive Refrigerant Milk cooling 0.00 0.00 0.00 0.00 Total 1.28 1.12 1.07 1.15

Feed and parlour energy emissions are further disaggregated in the following two sections.

50 Excludes emissions allocated to dairy beef.

19


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. kgCO2e/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


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


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 feed52, 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 73,000tCO2e/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 Scotland-specific data was available, so these are UK import figures). Opportunities for lowering the impact of dairy feed are explored later in the report.

TABLE 3: SOYA IMPORT AND PRODUCTION EMISSIONS ASSUMPTIONS

Source UK imports (tonnes of soyabean meal)53

% of UK imports (by mass)

Soya production emissions (including LUC) kgCO2e/kg54

Argentina 999,107 48% 1.14

Brazil 737,767 35% 7.91

Netherlands55 226,572 11% 4.51

Other 133,089 6% 0.26

Total/average 2,096,535 100% 3.83

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.

52 http://www.defra.gov.uk/evidence/statistics/foodfarm/food/animalfeed/index.htm 53 Data from FAOSTAT ‘Cake of soyabeans’ (2007) http://faostat.fao.org/site/537/DesktopDefault.aspx?PageID=537 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) 56 http://www.forestdisclosure.com/page.asp?p=4724

22


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 YIELD57

FIGURE 15: DAIRY FARM ELECTRICITY EMISSIONS BY END USE58

57 Derived from Farm Accounts Survey data (2007) 58 Farm Energy Centre (2008): http://www.ruralni.gov.uk/energy_efficiency_dairy.pdf

23


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)

TABLE 4: EMISSIONS HOTSPOT MAP OF SCOTTISH DAIRY PRODUCTION (ktCO2e PER YEAR)59

Life cycle stage

Emission source Milk Cheese Butter Cream Yoghurt Ice

cream All

Milk production

Enteric fermentation 284 250 32 27 02 03 598

Manure storage 136 119 15 13 01 02 285

Livestock feed 214 188 24 20 01 02 450

Parlour energy 24 21 03 02 00 00 51

Other inputs 05 04 01 00 00 00 10

Milk freight 03 01 00 00 00 00 04 Dairy processing

Packaging 35 15 01 06 01 01 59

Energy 53 11 01 00 01 02 67

Other sources 04 02 00 00 00 00 07 Distribution Product transport 13 02 00 00 00 00 16

Retail 23 33 10 12 02 04 83 Consumer Chilling 07 04 01 01 00 01 13

Food waste60 00 01 00 00 00 00 01 Total All sources 806 657 89 82 8 16 1,657

59 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


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 kgCO2e/kg

% of GHG emissions

Farm Raw milk 1 kg 1.2 83%

Processing Electricity 0.0800 kWh 0.1 3%

Fuel 0.2077 kWh 0.1 3%

Bulk milk freight 0.0035 Litres diesel <0.1 1%

HCFC 0.0020 kg <0.1 0%

HFC 4.18E-08 kg <0.1 0%

Packaging, of which: 0.0228 g 0.1 4%

- Plastic (HDPE) 0.0178 g 0.1 4%

- Glass 0.0025 g <0.1 0%

- Carton 0.0025 g <0.1 1%

Water 1.0145 litres <0.1 0%

Process chemicals 0.0020 g <0.1 0%

Trade effluent 0.0010 litre <0.1 0%

Landfill waste 0.0040 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 1.43

25


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


% of GHG emissions

Farm Milk 9.84 kg 9.9 89% Processing Electricity 0.0928 kWh 0.1 0%

Fuel 0.5980 kWh gas 0.1 1%

Bulk milk freight 0.0169 Litres diesel 0.1 0%

Packaging, of which: 0.0643 kg 0.3 2%

- Plastic (LDPE) 0.0225 kg <0.1 0%

- Paper 0.0121 kg 0.2 1%

- Aluminium 0.0297 kg 0.1 1%

Salt 0.0200 kg <0.1 0%

Water 1.3676 litres <0.1 0%

Trade effluent 0.0013 m3 <0.1 0%

Landfill waste 0.0047 kg <0.1 0%

Electricity (maturation) 0.0580 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 11.1

26


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


% of GHG emissions

Farm Milk 1.00 kg 4.24 76%

Processing Bulk milk freight 0.0127 litres 0.04 1%

Electricity 0.0062 kWh 0.00 0%

Fuel 0.0036 kWh gas 0.00 0%

Polypropylene 0.0947 kg 0.41 7%

Water 0.1923 litres 0.00 0%

Trade effluent 0.001 m3 0.00 0%

Landfill waste 0.005 kg 0.00 0%

Distribution Freight 370 km 0.02 0%

RDC 1 event 0.01 0%

Retail store 5 days 0.80 14%

Consumer Home chilling 4 days 0.04 1%

Food waste 9 % 0.02 0%

Total 5.58

27


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


% of GHG emissions

Farm Milk 2.15 kg 7.43 84%

Processing Electricity 0.064 kWh 0.04 0%

Fuel 0.086 kWh gas 0.02 0%

Bulk milk freight 0.022 litres diesel 0.07 1%

Packaging, of which 0.013 kg 0.14 2%

- Plastic (LDPE) 0.000 kg 0.00 0%

- Aluminium 0.011 kg 0.14 2%

- Paper 0.002 kg 0.00 0%

Salt 0.013 kg 0.00 0%





RDC 1 event 0.01 0%



Food waste 9 % 0.02 0%

Total 8.87

28


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


% of GHG emissions

Farm Milk 0.99 kg 1.251 53%

Processing Bulk milk freight 0.0037 litres diesel 0.011 0%


Fuel 0.4466 kWh gas 0.099 4%

Packaging, of which: 0.0539 kg 0.218 9%

- Polypropylene 0.0382 kg 0.165 7%

- Aluminium 0.0019 kg 0.024 1%

- Paper 0.0139 kg 0.030 1%

Water 1.8938 litres 0.002 0%




RDC 1 event 0.007 0%



Food waste 9 % 0.015 1%

Total 2.361

29


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


% of GHG emissions

Farm Milk 4.57 kg 1.93 49% Processing Bulk milk freight 0.0058 litres diesel 0.02 0%


Fuel 0.0162 kWh gas 0.00 0%

Sugar 0.1500 kg 0.05 1%

Polypropylene 0.076 kg 0.33 8%



Landfill waste 0.0452 kg 0.01 0% Distribution Freight 370 km 0.02 1%

RDC 1 event 0.06 1%

Retail store 10 days 0.97 25% Consumer Home chilling 11 days 0.13 3%

Food waste 9 % 0.02 0% Total 3.97

30


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 STUDIES61

Product Geography kgCO2e/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 2009

61 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


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

32


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 UK62)

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 options63 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 2010 63 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)

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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 technologies64. Individual businesses are encouraged to use the footprinting tool developed during this project to explore opportunities most relevant to them (available at http://www.dairyfootprint.org).

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. Co-operation, too, should be encouraged between different UK regions to avoid duplication of effort65. 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

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.

Retail

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.

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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 website66. 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 College67 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 software68. For more details on the work of the group contact Gillian Reid at SAC on 01387 261172 or by e-mailing [email protected]

66 The project website is also available at: http://www.sac.ac.uk/climatechange/farmingforabetterclimate/ 67 http://www.sac.ac.uk/climatechange/farmingforabetterclimate/ccfocusfarms/ 68 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 http://www.planet4farmers.co.uk/ for more details).

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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)

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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 digestibility70 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)

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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 N2O losses to the environment.

MANURE STORAGE Storage of cattle slurry is a significant source of methane ammonia NH3 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 (0.30MtCO2e/year). An anaerobic digester – sited on farm or centrally - converts these emissions to one with no global warming potential (biogenic carbon dioxide71). 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 AD72. • 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).

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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 maintained73.

5. 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 packaging74.

TABLE 12: ANNUAL FINANCIAL AND CO2 SAVINGS FROM ENERGY EFFICIENCY, PER FARM75

Energy use Efficiency measure Indicative capital

cost

Energy saving kWh

CO2 saving

(t)

Financial saving (£)

Vacuum pumping Variable speed drive £3,200 5,475 2.9 £478

Cooling 5o rise in pre-cooling £1,200 2,200 1.2 £188

Hot water heating Heat recovery unit £3,500 12,395 6.5 £992

Lighting Incandescent to CFL bulbs £40 4,380 2.3 £429

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 pre-cooler 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: http://www.afmp.co.uk

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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 studies77. 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): http://www.forestry.gov.uk/pdf/ForestExpansion.pdf/$FILE/ForestExpansion.pdf 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.”

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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 Jugit80 reduced packaging mass by 75%.

WRAP published the results of a detailed LCA of milk packaging options – including jug and refill pouch systems81. 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.

78 http://www.sac.ac.uk/climatechange 79 Currently the Dairy UK benchmarks do not have complete coverage of the industry. 80For example Jugit system: http://www.jugit.co.uk/ 81 Life cycle assessment of example packaging systems for milk, WRAP (2010)

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BOX 7: BIOPLASTIC SUSTAINABILITY

Some food and drink manufacturers are exploring the potential for using plant-derived plastics (bioplastics) as part of their sustainability strategies82. 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 materials83. 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 destruction84. 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 & Drink85 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 waste86. 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:

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 PlantBottleTM: http://www.thecoca-colacompany.com/citizenship/plantbottle.html 83E.g. Tabone et al. (2010) Sustainability Metrics: Life Cycle Assessment and Green Design in Polymers. This peer-reviewed study has been criticized by the biopolymer industry. 84 Client confidential, 2009 85 http://www.sfd.org.uk/ 86 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.

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• Displacing the production of other higher impact protein feed sources e.g. soya (see Box 10).


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 Enterprise88 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 protein89 or 350,000MJ of net energy (NE). This is roughly equivalent to 15,000 tonnes of soybean meal90. 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 Trust91 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, 2009 88 Lead contact: Alison Tennant (Scottish Enterprise), [email protected] 89 Assuming 1.5% crude protein, source: http://www.wheyfeed.co.uk/ 90 Assuming 53% crude protein, source: http://www.wheyfeed.co.uk/ 91 Industrial Energy Efficiency Accelerator - Guide to the dairy sector: http://www.carbontrust.co.uk/emerging-technologies/current-focus-areas/ieea/pages/dairies.aspx

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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 co-operation and collaboration from primary production to final market92. 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.

92 http://www.sears.scotland.gov.uk

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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. kgCO2e/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) index93. 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 logistics94. Therefore wider attempts by companies to reduce the impacts of freight and in-store 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: 5170 - DOI: 10.3402/fnr.v54i0.5170 94 With the exception of milk which does not go via regional distribution centres (RDCs).

BOX 13: CASE STUDY – WISEMAN DAIRIES

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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 years95.

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 sequestration96 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)

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FIGURE: SOIL CARBON STOCKS (MtC) ON SCOTTISH DAIRY FARMS

TABLE: SOIL AND BIOMASS CARBON STOCK ESTIMATES (MtC)

Soil carbon stock97

Biomass carbon stock

Land type UK Scotland Scottish dairy farms Scottish dairy

farms <1m depth <30cm depth

Forestland 467 295 2 1 0.5

Grassland 3,870 2,349 26 16 0.3

Cropland 738 114 2 1 <0.1

Total 5,075 2,758 30 19 0.8

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. 2005 ).

97 All figures are to 1m of depth – apart from second dairy sector column which has been calculated to 30cm.

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APPENDIX 2 – BIBLIOGRAPHY The following references were used during the course of research – some of which are referenced within this document.

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Lovet, D K. “A system approach to quantify greenhouse gas fluxes from pastoral dairy production as affected by management regime.” Agricultural Systems, 2006.

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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

• Environmental claims • Carbon labelling • Carbon trading

Study requirements

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, co-ordinate, 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

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© Crown Copyright 2011 ISBN: 978-0-7559-9988-0 (web only) APS Scotland Group DPPAS11244 (02/11)

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