In the high-stakes world of corporate sustainability, Orbia is making waves with an innovative approach to rice cultivation. The global powerhouse, with operations in over 50 countries and annual revenues exceeding $8 billion, launched the world's first carbon credit program for rice cultivation. This groundbreaking initiative, which began in Venice, Italy in 2022, is now expanding to India and Turkey.
At its core, the program incentivizes farmers to adopt precision irrigation methods, slashing methane emissions while boosting long-term income. Carbon credits, essentially permits that represent reduced greenhouse gas emissions, are generated when farmers switch to more sustainable practices. With rice contributing over 10% of global methane emissions, the potential impact is staggering. Industry experts suggest that if just 10% of paddy rice farmers adopt drip irrigation, the emissions reduction would equate to removing 40 million cars from the road.
Tania Rabasa Kovacs, VP of Sustainability and Corporate Affairs, explains the program's inception, "Orbia's Precision Agriculture business Netafim created the first carbon credit program for drip-irrigated rice in the world in 2022. The program aims to dramatically reduce methane emissions from rice cultivation to almost zero, while providing additional long-term income to growers."
Italy, as Europe's largest producer of rice and a signatory to the global methane pledge, provided an ideal testing ground. Kovacs describes the process and results: "The La Fagiana Farm in Venice, Italy was our first adopter in 2022. Since Italy is signed up to a global methane pledge it was a natural fit – and Italy is Europe's largest producer of rice, particularly risotto rice."
The results were impressive. "We monitored the farm for a full season – it's essential to have the full season of data to ensure that measurements are accurate," Kovacs explains. "We found that drip irrigation technology in Italy out-produces paddy cultivation while using 70% less water, 30% less fertilizer, and 36% less energy while reducing methane emissions to nearly zero."
Building on this success, Orbia has expanded the program to more farms within Italy and broadened its scope to include other crops and countries, including Israel, India, and Turkey. These programs will be offered commercially once the growing seasons end and Orbia has accurate data on their positive environmental impact.
Despite clear benefits, adoption faces challenges. Kovacs acknowledges, "Making the investment to switch to sustainable practices is hard for farmers, particularly smallholders that lack resources and operate with tight margins."
The program faces unique obstacles, especially in regions where water costs are not a factor for farmers. Kovacs elaborates, "One of the largest challenges for our rice program is that farmers typically do not pay for water, so it's more difficult for them to initially see the business benefit. To address this, we are working with local governments to incentivize the switch to more efficient methods of irrigation."
Orbia's strategy extends beyond just highlighting water conservation. Kovacs emphasizes the multifaceted benefits of adopting drip irrigation: "There are many benefits to switching to drip irrigation other than just methane and water reduction – from increased crop yields and improved soil health to a reduction in energy and fertilizer use. If it can become more affordable to farmers through the carbon credit program, then there is a lower barrier to entry."
As carbon credits gain traction in corporate sustainability strategies, Orbia's experience offers valuable insights. Kovacs emphasizes the importance of rigorous verification: "Right now, the biggest challenge for widespread carbon credit adoption is the lack of a standardized verification system and accreditation."
Orbia partners with Regrow Ag for Measurement, Reporting, and Verification (MRV). Kovacs explains, "We work with them to measure and verify the environmental impact of traditional rice-production methods compared to Orbia Netafim's drip-irrigation system. We then use carbon-offset verifier Verra to secure the carbon credits. We found their approach to agriculture was the most accurate and scientific."
To address the growing global food demand sustainably, Orbia is investing in cutting-edge agricultural technologies. The company has invested in startups like Tortuga AgTech, Seetree, and Greeneye Technology, which use innovative approaches like harvesting robots, tree health monitoring, and AI-driven precision chemical application.
Digital farming solutions represent another key area of focus, enabling real-time control and monitoring of farm operations. These technologies aim to make farming more sustainable, efficient, and resilient in the face of climate change.
As the agricultural sector faces mounting challenges from climate change and increasing global food demand, Orbia's approach represents a growing trend in the industry. While the long-term impact of these initiatives remains to be seen, they highlight the potential for innovative solutions in addressing food security and environmental concerns.
However, carbon credit programs are not without critics. Some argue that they may allow companies to continue polluting while offsetting elsewhere. Others question the long-term viability of such programs in truly reducing global emissions.
As the global community grapples with these pressing issues, the agricultural sector's ability to balance profitability with environmental stewardship will be crucial. Orbia's efforts, along with those of other industry players, may well shape the future landscape of sustainable agriculture, but continued scrutiny and refinement of these programs will be essential to ensure their ongoing effectiveness in combating climate change.
