Climate strategy 2040

Scope 1+2: 50% reduction by 20230|31

In July 2021, AGRANA joined the Science Based Targets initiative (SBTi). Under this initiative, companies commit to setting emission reduction targets in line with the Paris Climate Agreement. In November 2022, the Group submitted its science-based targets to the SBTi for validation. The process of validating these targets began at the end of May 2023 and was complete at the beginning of September 2023.

Under its verified science-based targets, AGRANA commits to reducing emissions from its production operations (Scope 1 and 2) by 50% by 2030|31 (relative to the base year 2019|20) and lowering emissions from the upstream and downstream value chain (Scope 3) by 30% over the same period. The company’s long-term goal is to be able to report net-zero emissions in its own production activities (Scope 1 and 2) by 2040 and net-zero emissions across the entire value chain by 2050 at the latest.

The emission reduction path for the company’s own manufacturing (Scope 1 and 2) calls for the continual transition from fossil fuels to renewable energy sources in order to achieve net-zero emissions by 2040. This involves, for example, the following:

• Ongoing energy savings and efficiency screening in all business segments
• Implementation of a package of measures for switching to electricity from renewable sources and, where technically feasible and economical, the electrification of processes
• Phase-out of coal as an energy source at the AGRANA Group’s last remaining coal-fired production site, in Opava, Czech Republic, by 2025|26
• Energy recovery from agricultural residues (biomass)

AGRANA follows the principle of complete raw material utilisation to make core products and by-products (the latter being mainly animal feed and fertilisers). In the stage from 2026|27 at the latest, energy recovery from low-protein raw material residues is to be added to the existing direct material use in order to continue to utilise all raw material components not just completely, but also optimally in terms of climate protection. At AGRANA’s Hungarian sugar factory in Kaposvár, beet pulp and other beet residues have already been used for biogas production for a number of years  However, as the biomass utilisation for energy recovery cuts into feedstuff revenue, the right business conditions are required for it to be implemented economically. What is urgently needed in order to achieve the transformation to a low-emission society and facilitate companies’ investment decisions to this end is a comprehensive emissions trading system that transparently reveals the CO₂ footprint of every consumer decision in the areas of food, housing, mobility and leisure behaviour and allows carbon-intensive lifestyles to be identified by their higher costs. In total, based on current assumptions, AGRANA would have to invest about € 576 million by 2040 to avoid the greenhouse gas emissions (Scope 1 and 2) generated in its production operations during the processing of raw materials used; the specific projects included in this value are limited to those contained in the Group’s internal five-year plan, while projects and cost estimates included beyond the five-year time horizon are to date based only on modelling.

Scope 3: Emission reduction in the up- and downstream value chain

At about 78%, the main contribution to the Scope 3 portion of the AGRANA Group’s corporate carbon footprint comes from the production of the agricultural raw materials processed by the company. Reducing emissions generated in agricultural production is thus the focus for AGRANA’s efforts to cut Scope 3 emissions.

In 2022|23, measures were therefore developed in several expert workshops on how and to what extent greenhouse gas emissions can be reduced “in the field”. Important approaches are, for example, the creation of greater transparency in the procurement of raw materials, especially from overseas, in order to reduce emissions from land use changes (by, among other things, ensuring freedom from deforestation); the use of emission-reduced fertilisers in crop production; and the introduction of regenerative agricultural practices at suppliers. The reduction of emissions or, more specifically, the achievement of net-zero emissions in agriculture, will depend to a large extent on the – thus far lacking – scientific guidance and regulatory specifications for carbon storage/sequestration in agriculture (carbon farming).

In the course of these workshops, a closer analysis of the emission factors for agricultural raw materials used in the calculation of the corporate carbon footprint, taken from international databases, revealed that the composition of these factors often does not correspond to the agricultural practices of the Group’s raw material suppliers assumed by AGRANA experts. For this reason, a project was launched in 2022|23 to collect primary data for the most important raw materials in the individual business segments in order to calculate AGRANA-specific emission factors. These primary data were collected from a representative number of growers of sugar beet, starch potatoes and corn (maize) in Austria, apples in Hungary and strawberries in Mexico for crop production in 2022. The results and experience from the pilot project were used in a project started in 2023|24 for the future annual primary data collection, which aims to enable suppliers to capture data as quickly and easily as possible with the help of software, using established systems to the extent possible. This is also intended to generate all the relevant data that food producers will need in future to calculate their own raw material-specific emission factors.