A transformational resource efficiency program for Brazil’s beef supply chain

Presentation of final results

12 April 2016

Opening remarks

Simon Retallack – Latin America Director, Carbon Trust

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We employ our integrated service offering to support clients around the world

Our employees work around the world from offices in the London, Beijing, Johannesburg and Mexico City

We fully reinvest our profits into advancing our mission to accelerate the move to a sustainable, low carbon economy

Carbon Trust has accelerated sustainable, low carbon development for 15 years

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What we do

Advice

We advise businesses, governments and the public sector on their opportunities in a sustainable, low carbon economy

Footprinting

We measure and certify the environmental footprint of organisations, products and services

Technology

We help develop and deploy low carbon technologies and solutions, from energy efficiency to renewable power

What we have achieved

Customer cost savings Carbon savings

Helped customers save $8bn

Helped customers save 54m tons of C02

170+ staff working for our clients globally

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London

Beijing

Johannesburg

Mexico City

Carbon Trust office

Geographical scope of recent client work

Rio de Janeiro

We have delivered 14 projects to date in Brazil

›Time of use electricity pricing assessment

›Electricity system resilience assessment for Rio Olympics

›Energy efficiency leadership by the public sector› Impact assessment manual and training course for energy policy appraisal›Distributed energy policy

›Best practice in energy efficiency finance

›National low carbon technology innovation strategy

›Building performance labelling

ORGANISATION PROJECT TOPIC

›Designing a Product Footprinting and Certification Scheme

Climate Smart Agriculture in India and Kenya

› We examined climate-smart agriculture (CSA) in India and Kenya, and highlighted the differences between agriculture and other clean-technology sectors and the main challenges facing the two countries.

› Agriculture is a major employer and source of economic activity in developing countries but faces many environmental, institutional, financial, and behavioural challenges that are exacerbated by climate change and rural poverty.

› Climate-smart agriculture is an approach that aims to integrate social, economic and ecological objectives to increase agricultural yields, boost profits, reduce local pollution, address poverty, enhance climate resilience and reduce greenhouse gas emissions.

› CSA differs from other clean technology sectors because it tends to rely on donor and government involvement and depends heavily on behaviour change, education, and institutional reform, but nevertheless represents a commercial opportunity for SMEs.

› Drip irrigation, food storage, and agroforestry are three innovative agricultural activities

profiled in this case study; there are many other SME opportunities that align with CSA goals.

› http://www.infodev.org/infodev-files/green-industries.pdf

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Policy

Incentives for Cogeneration in Colombia’ssugar cane industry

› Capacidad: 40MW

› Factor de planta: 55%

› Horas de operación: 4800

› Deuda: 65%, término de 15 años

› Tasa de interés: 11,4%

› Costo de capital: 8,5%

› WACC: 7,9%

› ENFICC: 0%

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Policy

We footprint products & services

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Footprinting

› Developed world’s first footprinting standard – PAS 2050

› 27,000 products measured

› 6,000 certified footprints with combined sales of $5bn per annum

We have footprinted and certified a range of international agricultural products

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The first Irish dairy company to receive the Carbon Trust Standard

Company Product

Aldi Australian olive oil

ABF Kingsmill Bread

British Sugar, Tate and Lyle Sugar (China & UK)

Coca-Cola Coke cans/bottles

Colors Fruit

Premier foods Hovis Bread

Innocent Smoothies

Mehadrin Tnuport Oranges, Grapefruit

New Zealand Wine Company Mobius Marlborough wine

PepsiCoTropicana, Quaker Oats, Walkers crisps,

R Wines French wine

Co-operative Strawberries

Marks and Spencer Asparagus and chocolate

Sainsbury's Various

TescoOrange juice, milk, bread, tomatoes, potatoes

Footprinting

Bord Bia, Irish Food Board We provided tools to help farmers and processors identify carbon hotspots, enabling Bord Bia’s beef carbon footprint to fall from 23kg CO2-e per kg of liveweight to 14.4kg CO2-e. Beef production reduced its GHG output by an equivalent of 9.4% every decade

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Our experience in the agriculture sector

Carbon management

Designing and implementing large-scale best practice technology deployment programmes

Lack of funds

Lack of awareness

Lack of confidence

Advice - Energy saving expertise

Energy efficiency finance scheme

Common barriers How we help

Implementation Support

Energy efficiency

made easy

Programmes

Carbon Trust’s UK 0% interest energy efficiency scheme

› Launched in 2003 and managed by the Carbon Trust, channels funds from the Departmentof Energy and Climate Change (DECC)

› One of the most successful dedicated energy efficiency finance schemes in the UK

› $300 million to date to 7,000+ businesses through a revolving fund (capital replenished by repayments for re-investment)

› Will save UK businesses over 2MtCO2 and $560 million on energy bills

› Eligibility: any non-domestic business with <250 employees; credit score above a certain threshold

› Payback time limit: 4 years

› Min. loan size: $4,600 and Max. loan size: $600,000 in NI, $300,000 in Wales

› Accompanied by a national awareness raising, marketing campaign and advice scheme.

Programmes

We are adapting lessons learnt from the UK experience to the design of schemes internationally

› Programme we have designed, secured funding for and are helping implement:

› South Africa: Private Sector Energy Efficiency Programme - $13 million

› Programme we have designed and secured funding for:

› Mexico: SME Energy Efficiency Programme - $126 million

› Programme we have designed and are securing funding for:

› Peru: Private Sector Energy Efficiency Programme - $65 million

› Programmes we are designing now:

› Panama – Secretaria de Energia

› India – Bureau of Energy Efficiency, Ministry of Power, Ministry of Finance

Programmes

Resource efficiency in Brazil’s beef sectorProject origins

› Working with Brazilian public and private stakeholders, we identified the beef supply chain in Brazil as the greatest opportunity for resource efficiency and carbon emission reductions in Brazil

› We found that a resource efficiency technical assistance & finance programmerepresented the best way of realizing this opportunity

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15Fonte: (SEEG, 2013); (INPE, 2010) indica que 572 MtCO2 das 813 MtCO2 emitidaspor mudanças de uso da terra em 2008 podem ser atribuidas à pecuáriia.

Mudanças no usoda terra

Pecuária de corte

Indústria

Resíduos

Energia

Agricultura -pecuária de corte

The beef supply chain contributes to about 42% of Brazilian emissions (directly and indirectly)

Brazil’s beef production represents the largest opportunity to reduce GHG emissions in Brazil, and at a low cost per ton.

Brazilian beef output is expected to increase from10.2 Mt in 2013 to13.6 Mt in 2023

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Source: Adapted from (ABIEC, 2014) and (Abreu, 2011). Note: The value of the internal market is an estimate which assumes the same value/kg proportion seen in beef exports

Inaction will lead to larger impacts

Global consumers are becoming more concerned about the impacts of the products they buy

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To remain globally competitive Brazil’s Beef Supply Chain has to become more GHG efficient

Project aims

Design a scalable resource efficiency programme for Brazil’s beef supply chain leading to:

› Large scale implementation/acceleration of best practice across the chain

› Increased productivity/competitiveness for players in the chain

› Increased market for low carbon technologies in Brazil and globally

› Improvement of the image of Brazilian beef globally

› Significant GHG emission reductions – helping Brazil fulfil its NDC

Pilot Phase

Kick-start delivery across a sample of the supply chain in a specific region.

Test the programme’s

effectiveness and learn how to optimize the

delivery

Programme design phase

Set-up Phase

Establish institutional

arrangements

Prepare all physical and technical structure that

allows us to start the pilot

Scale-up

Incorporate lessons and expand the

programme offer of finance and TA

to a wider audience.

Leverage permamentcommercial sources of

funding

Design Phase (in delivery)

1. Consulting all relevant stakeholders to:

› Analyse current situation

› Best practice solutions

› Major barriers limiting adoption

› Existing measures to overcome barriers

› Identify interventions that would add most value

2. Estimate the cost and benefits of a programme

3. Test proposition with local stakeholders

4. Build the business case for international financiers

Stakeholders consulted

Whilst reasonable steps have been taken to ensure that the information contained within this publication is correct, the authors, the Carbon Trust, its agents, contractors and sub-contractors give no warranty and make no representation as to its accuracy and accept no liability for any errors or omissions. All trademarks, service marks and logos in this publication, and copyright in it, are the property of the Carbon Trust (or its licensors). Nothing in this publication shall be construed as granting any licence or right to use or reproduce any of the trademarks, services marks, logos, copyright or any proprietary information in any way without the Carbon Trust’s prior written permission. The Carbon Trust enforces infringements of its intellectual property rights to the full extent permitted by law.The Carbon Trust is a company limited by guarantee and registered in England and Wales under company number 4190230 with its registered office at 4th Floor Dorset House, Stamford Street, London SE1 9NT.Published in the UK: 2016.© The Carbon Trust 2016. All rights reserved.