Dairy customers, brands and retailers have set ambitious greenhouse gas (GHG) reduction goals, including targets to reduce GHG emissions of their entire supply chain beginning at the farm level, in response to pressure from consumers, non-governmental organizations (NGOs), investors and regulators to contribute to rapid action on climate change.

Nicole Ayache
Chief Sustainability Officer / National Milk Producers Federation

To demonstrate progress, a company must quantify its GHG footprint in accordance with complex, globally recognized accounting rules that guide what facilities to include, how to select emissions factors and more. Beyond corporate GHG accounting rules, there are other protocols and frameworks that guide on-farm GHG quantification.

The request for farm-level GHG data and reductions, coupled with the complexity of accounting rules and difficult-to-access financial or technical support can be a source of stress. But there are opportunities as well to use aggregate data to prove dairy’s environmental story and for farmers to leverage this current interest in GHG reductions to partially or fully fund on-farm practices and technologies that benefit both the business and the environment.

The National Milk Producers Federation (NMPF) and other dairy organizations are actively working in the space of GHG measurement – from corporate accounting rules down to scientific research that powers on-farm GHG modeling – to make these systems work better for our industry and offer more opportunities for dairy farmers.

Key takeaways

  • Companies face pressure to demonstrate action on climate change. One implication of that is the need to quantify their GHG footprint, including at the farm level.
  • The rules that govern corporate GHG accounting are undergoing review. NMPF is advocating for a seat at the table to ensure revisions are practical for the dairy sector.
  • On-farm emissions are estimated using models that are governed by their own sets of standards.
  • U.S. dairy is investing in the next generation of on-farm emissions modeling to power FARM Environmental Stewardship to better serve dairy farmers, cooperatives and processors.

Corporate GHG accounting, disclosure and goal setting

A company’s GHG inventory is an accounting of its emission sources and amounts. GHG Protocol standards provide the globally recognized methods for establishing a corporate GHG inventory. Farm-level GHG emissions are only one piece of a food company’s GHG inventory, albeit an important piece for dairy companies.

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Companies may voluntarily report their GHG emission information through their corporate sustainability report or other initiatives, such as CDP, which scores a company’s disclosure and environmental performance. In some countries, including U.S. dairy export marketplaces, climate disclosures are mandated. Such regulations often leverage established frameworks, like that of the Task Force on Climate-related Financial Disclosures (and soon, the recently issued standards from the International Sustainability Standards Board).

Beyond accounting and reporting, companies from all sectors – including major dairy buyers – are setting GHG reduction goals through the Science Based Targets initiative (SBTi), which emphasizes reduction goals in line with the Paris Agreement and includes reduction targets for the company’s supply chain.

Dairy’s engagement

The GHG Protocol standards underpin the array of disclosure and goal-setting frameworks. They are conducting a review and update of their accounting standards which is expected to take two years to complete.

NMPF, along with a variety of U.S. dairy companies and organizations, was proactive in submitting a response to the GHG Protocol’s survey to collect initial feedback. NMPF’s goal is to open dialogue, collaborate to improve the practical useability of the standards and address challenges the current protocols present for the agricultural sector.

Farm-level GHG accounting

Farm-level GHG emissions are estimated using scientific models. Models take input data – like herd demographics and manure management – and run them through calculations to generate the GHG footprint. Models are used because direct measurement is not feasible at scale.

U.S. dairy has a long history of supporting the science of on-farm GHG emissions and developing robust on-farm quantification tools, enabling the industry to be a leader in showcasing its sustainability journey to dairy customers and consumers. Through the Innovation Center for U.S. Dairy’s leadership, the U.S. dairy Life Cycle Assessment (LCA) 2013 research led to the model that powers the National Dairy FARM Environmental Stewardship (ES) platform. With some small deviations, the dairy LCA and FARM ES are aligned with relevant standards like ISO 14040:2006 and 14044:2006, the International Dairy Federation’s guidance, and the GHG Protocol’s Scope 3 Standard.

Quantifying GHG reductions from specific interventions (e.g., use of a feed additive or alternative manure management practice) is guided by other protocols, such as those from Verra, Gold Standard or the California Low Carbon Fuel Standard. Often the same data collected in FARM ES can be used in such reduction protocols, but the calculations may vary slightly. Carbon reduction credits and projects also require monitoring and verification beyond the scope of FARM ES.

Dairy’s engagement

Quantifying farm-level emissions helps prove dairy’s collective environmental achievements and gives farms information as they evaluate opportunities to participate in carbon reduction projects.

U.S. dairy continues to be at the leading edge of farm-level climate science by supporting the Ruminant Farm System (RuFaS) model, an initiative involving researchers from across the country to build a new, process-based model for estimating on-farm emissions. By using RuFaS, the next version of FARM ES will offer decision-making insights to farmers through scenario analyses of practices and technologies, while also helping to address growing customer requests and interests. Through this upgrade, FARM ES will be positioned to better support dairy community efforts to achieve 2050 environmental stewardship goals.

Moving forward

U.S. dairy farmers have an incredible track record of environmental stewardship. GHG accounting and measurement is a daunting field of complex rules – but one that dairy must stay actively involved in because it directly impacts the asks coming from customers and the opportunities that may be available to dairy farmers.