How Asian Agri-food sector Can Cut Carbon Emissions

The Asian agri-food sector contributes significantly to carbon emissions, but it has the ability to reduce emissions by 12% by 2030, which is similar to the total amount of emissions from the entire world aviation industry in 2022. According to a report by global consulting firm PwC, there are a number of technologies and practices that can achieve a 12% decrease in emissions. Unlike the more intricate treatments for other, more difficult to abate sectors, many of these solutions are rather straightforward and readily available.

Crop rotation, precision fertilizer application, and nitrification inhibitors are among the key solutions, as are high-tech instruments that improve farm-level equipment and technology on rice and livestock farms, as well as larger investments in farming infrastructure.

Agri-food accounts for more than a third of all global emissions, with only the energy sector producing more carbon. Asia’s agri-food sector, in particular, is the source of immense greenhouse gas emissions. Agri-food can account for up to 50% of total emissions in some regions, such as South and Southeast Asia.

"The complex and fragmented nature of food and agriculture value chains makes emission measurement, decarbonisation, and green innovation in this sector particularly challenging," said Maya Hari, CEO of Terrascope and one of the report's authors.

Emissions in Asia’s agri-food Sector

In 2020, Asia was responsible for 42% of the world's agri-food CO2 equivalent emissions. Agri-food accounted for 26% of total emissions in Asia, albeit this varies substantially by location, with certain countries being more heavily oriented towards manufacturing and energy production.

Rice cultivation, fertilizers, livestock rearing, deforestation, and food loss and waste are all key sources to these emissions. Because rice is a major source of methane emissions, Asia is the worst culprit, accounting for 90% of global rice production. Cattle are another large source of emissions in Asia, with the continent housing roughly 40% of all cattle worldwide, with India housing the great majority of the stock.

Smallholders farm a huge percentage of Asia's land. That means companies have significantly less money to invest in technologies that can boost efficiency and reduce emissions. As a result, there are many hurdles in assisting isolated rural populations throughout Asia to achieve net-zero energy, but there is also much to gain from seemingly simple technology breakthroughs.

The Asian agri-food sector contributes significantly to carbon emissions, but it has the ability to reduce emissions by 12% by 2030, which is similar to the total amount of emissions from the entire world aviation industry in 2022.

According to a report by global consulting firm PwC, there are a number of technologies and practices that can achieve a 12% decrease in emissions. Unlike the more intricate treatments for other, more difficult to abate sectors, many of these solutions are rather straightforward and readily available.

Asia's agri-food sector has the potential to reduce carbon emissions by 12%

Agri-food accounts for more than a third of all global emissions, with only the energy sector producing more carbon. The agri-food sector in Asia, in particular, is a major source of greenhouse gas emissions. Agri-food can account for up to 50% of total emissions in some regions, such as South and Southeast Asia.

Emissions from the Asian agri-food sector

Possibilities for Decarbonization

Basic solutions for agri-food emissions include agricultural machinery, enhanced irrigation, and improved packaging, as well as more complex technical solutions such as high-tech greenhouses, AI-driven informatics, robotics, drones, and other such instruments.

The greatest significant reduction in emissions is predicted to be in fertilizer consumption, with a potential reduction of 39% of CO2 equivalent emissions compared to a business-as-usual scenario in 2030. Due to the relative costs and obstacles of technological adoption, as well as the predicted impact on the farmer's company in terms of costs, revenue, and profitability, livestock will have the least impact, with just a 10% reduction in emissions expected.

"One of the exciting things about the 20 technologies and practices the report identifies is the added ability to improve the profitability of businesses across the supply chain, with many of them also representing significant investment opportunities," said Richard Skinner, a partner at PwC in Singapore.

Various agri-food technology and practices are utilized all over the world, but their effectiveness is determined by elements such as crop type, local climate, infrastructure, geography, and cultural practices. Using the proper technologies minimizes carbon emissions while simultaneously benefiting farmers by cutting costs, boosting yields, and enhancing overall profitability and quality of life.

Certain technologies may not be suitable in particular parts of Asia due to issues such as the prevalence of smallholder farms and supply chain architecture. While some practices, such as those applicable to rice paddies, are region-specific, there is still the possibility to implement many various types of technologies over significant regions of Asia, solving key emission concerns.

Investing in Agricultural and Food Technology

Investment in agri-food technologies fell dramatically in 2022, owing largely to a pattern of general overvaluation in technology in 2021, which resulted in an inflated value of roughly $53 billion that 2022 could not equal. The reduction in investment in 2022 is partly related to the general discomfort in the global economy as a result of factors such as inflation, geopolitical conflicts, and ongoing supply chain challenges, all of which have forced investors to be more conservative.

Despite a decline in investment in agri-food technology last year, the total amount of investment remains higher than in 2019, demonstrating that investors remain interested in the area. However, in order to reach the $125 billion listed in the report as a requirement to revitalize rice production on the continent, investment will undoubtedly need to increase once more.

"The investment opportunity comes from the technology and infrastructure these practices require, such as micro-irrigation to support changing rice cultivation practices, technology to support the variable rate application of farming chemicals, and storage infrastructure with continuous cold chain," Skinner said. "There is further opportunity in the emergence of digital platforms, which are enabling farmers to access new markets and better inputs," he added.