Agriculture and land use - The UK Governments Net Zero progress to date

Agriculture and land use - The UK Governments Net Zero progress to date (including a reminder of other reporting requirements)

Government Net Zero progress to date

A report by the UK Climate Change Committee (CCC) has warned that there are still significant gaps in the UK government’s Net Zero policy, including sustainable land use and the energy efficiency of buildings. Detailed plans and strategies are still required for waste management, agriculture and achieving full decarbonisation of electricity generation by 2035, the CCC said.

15% of Agriculture and Land Use net anthropogenic emissions of GreenHouse Gases (GHGs) are derived from food consumption and approximately half of this comes from imports. Consistent with the Rural Policy Group, the UK government has not invested in measures that can help address imported carbon emissions from the agricultural products we import. Another key source of substantial GHGs Emissions is the consumption, production and transportation of fertilizers.

The UK government has set an ambitious target to reduce emissions in this sector which may create a significant amount of carbon leakage.

Carbon leakage occurs when there is an increase in greenhouse gas emissions in one country as a result of an emissions reduction by a second country with a stricter climate policy. For example, If the emissions policy or environmental regulations of the UK raises operational expenditure, then another country with a more relaxed policy may have a trading advantage and the UK company may move its manufacturing production to this country with lower environmental and labour standards.

The trade and emissions reduction report to the CCC, provided an overview of a catalogue of trade policies to manage carbon leakage from agricultural products and deforestation from the imports of deforestation risk commodities. These commodities identified by the study were as follows:

We recommend reading the report provided by Ricardo PLC to the CCC as this includes an overview of potential policy tools (such as CABM, Carbon Tax and ETS) that can be implemented to support the UK government ambitious target of becoming Net Zero by 2050.

Reporting requirements reminder! Environment Act 2021 & Plastic Packaging Tax (“PPT”) returns submission!

The Environment Act 2021 addresses overseas deforestation by prohibiting large UK businesses from using commodities associated with wide-scale illegal deforestation (i.e produced on land illegally occupied or used). UK businesses in scope will be required to undertake a due diligence exercise on their supply chain and report this assessment annually. Non compliance can lead to fines and penalties of up to £250,000.

Government standard on plastic packaging (“PPT”) is now in full swing with the first mandatory reporting period responses required to be submitted from 1st July 2022, 3 months after introduction. For food and agriculture this has not been a small impact. Whilst silage packaging was successfully lobbied to be exempt by the NFU and accepted by the government, PPT is still payable on plastic packaging components which contain less than 30% recycled plastic. A business will still be required to register for PPT if it:

• expects to import into the UK or manufacture in the UK 10 tonnes or more of finished plastic packaging components in the next 30 days; or
• has imported into the UK or manufactured in the UK 10 tonnes or more of finished plastic packaging components since 1 April 2022.

Businesses must register within 30 days of triggering the registration requirement. Groups of companies can register and submit PPT returns as a group by appointing a UK-established representative member. It is important to note that each company in the group must individually trigger PPT registration requirements.

Once registered, businesses or groups can submit their PPT returns through the government gateway.

To complete the return, a business liable to PPT will need records to show the total weight (in kilograms) of any finished plastic packaging components that, in the period, it:

• manufactured in the UK;
• imported into the UK;
• directly exported or that it expects to directly export in the next 12 months (to cancel or defer a liability);
• manufactured or imported for use in the immediate packaging of licenced human medicines, that were not and will not be directly exported (to claim an exemption); and
• manufactured or imported packaging that contained at least 30% recycled plastic content, that will not be directly exported (to claim an exemption).

Businesses can also claim credit for PPT paid in a previous accounting period that another business in the supply chain has later converted or exported, although not on its first return. Failure to comply with the requirements of PPT – including failure to register, file or pay a return – could lead to a fixed penalty of £500, with an additional daily penalty of £40 for each day the business continues not  comply.

Three sectors that produce the food and materials that are fundamental to humanity’s survival are being supported to take account of their impacts, following the publication of a new GRI Standard.

Whilst the essential role of the agriculture, aquaculture and fishing sectors in feeding the world is clear to see, clarity on their impacts is not. Use of lands and seas face ever-competing demands, while biodiversity loss and the urgency of climate adaptation demonstrate why greater transparency is essential. In addition, with 2.5 billion people relying on the sectors for their livelihoods, their impacts on economic development and human rights should not be underestimated.

GR13 Sector Standard for Agriculture, Aquaculture, and Fishing (“AAF”)

‘Business as usual’ by companies will not result in the sustainability transformation required in the AAF sectors. Shining the spotlight on the most significant impacts of organizations involved in food manufacture, crop cultivation, deforestation, animal production, fishing or aquaculture has been prioritised with the launch of the Global Reporting Initiative (GRI) 13.

This is planned to bring the clarity and consistency needed to inform responsible decision making. From considering the safeguarding of migrant workers to tackling overfishing, cutting emissions to halting deforestation, The timing of this new standard in AAF plays an important role in charting the pathway to a sustainable future for these sectors.

The new GRI13 standard is the first global and holistic sustainability reporting standard for all companies in the upstream production of crops, animals and seafood, setting expectations for disclosure of their shared and distinct impacts. The topics likely to be material for any agriculture, aquaculture or fishing organization, based on the impacts of these sectors, are;

• New disclosures on food security, land and resource rights, living wage and income, natural ecosystem conversion, animal welfare, soil health, and pesticides use;
• The multiplying effect of the sectors when it comes to the SDGs – supporting companies to make the connections between their impacts and all 17 Global Goals;
• Policy implications for responsible business, based on international frameworks – as set by the UN Food and Agriculture Organization (FAO), International Labour Organization (ILO), International Maritime Organization (IMO) and next 17 global groups.

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