As the feed industry grapples with the implications of Scope 3 life-cycle assessments (LCAs) on production, ADM Animal Nutrition is taking proactive steps to address emissions across its entire supply chain. Milan Hruby, the company's vice president of creation design and development, revealed how ADM is making tangible progress in reducing its carbon footprint while maintaining feed quality and optimizing animal nutrition at the 2024 Feed Mill of the Future Conference.
From ingredient sourcing to distribution, ADM's comprehensive approach and collaborative efforts are paving the way toward net-zero emissions in feed production.
Transcript of the presentation by Milan Hruby, ADM Animal Nutrition's vice president of creation design and development, at the 2024 Feed Mill of the Future Conference
Milan Hruby, vice president of creation design and development, ADM Animal Nutrition: Well, thank you Jackie, and good morning. Very good to be here, thank you for the opportunity to give the keynote during the Feed Mill of the Future Conference.
As Jackie mentioned, I am a nutritionist by training. I think of myself as a formulator as well. So some of the things I’ll be talking about today in terms of emissions will be from my experience as a formulator and as a nutritionist. But as you see from the title, it will be focusing on the supply chain and emissions and how to reduce those. Just for my information, I see many people in the audience today, I know it’s early in the morning, but raise of hands, how many of you think that the profitability and sustainability can go hand in hand for enterprise?
Do we have any people in the audience who think the opposite?
Right, if we focus on profitability, we impact sustainability, and vice versa. And that’s okay. My own objective today is not to lead you one way or the other, I think my objective is more to show you where I am as a nutritionist, as a formulator, and what we can potentially do in terms of finding a way to balance that profitability with sustainability in an enterprise.
I was traveling through one of the European airports last week, and I saw in a terminal a big banner with some of the titles you see here on the slide from the United Nations 2030 Agenda for Sustainable Development. And that specific terminal and that specific enterprise have those styles maybe focusing on something they wanted to change, that they could influence very well. They were advertising it. And I think it’s the same for us for the ag businesses, right. If you look at some of these goals, we have companies stronger in some areas, we maybe have more opportunities for improvement than others. And there are some tiles we tend to focus on a little bit more closely. So, typically for many of the ag companies in the room it could be that No. 2, zero hunger. A lot of people in companies supporting that part, not just in the United States, but outside as well. Clean water and sanitation, number six. And most of those tiles on the bottom, right, climate action, life below water, life on land.
Some of those we tend to focus on more than some, because of strengths, because maybe they are a bit problematic for some of the companies and offering an opportunity for improvements.
I've mentioned that word, sustainability, a couple three times. And I thought it'd be useful to present the definition. So, sustainability is defined as meeting the needs of the present without compromising the ability of future generations to meet their own needs. And for me, I love to camp, and I always look at it as an example of going to a campsite. You are renting the campsite for a night, for two nights. When you get there, you prefer to be clean, right? Maybe not charcoal from the last night in the fire ring. And when you break your tent, the following day and packing up. You like to clean up this space the same way in found it, right? You might even have some leftover wood, you put it under the bench, or a table, because of the party after you might come there and appreciate it. Have it ready for a bonfire, especially if it was raining during the day. So finding the place the way or leaving the place the way we found it or better.
So for ag businesses, there are many steps in in that one chain where we can really influence the sustainability. For us as ag business, you know, we can start with land. And you see some examples there in terms of deforestation, or regenerative agriculture, and I'll go a little bit into details on that. Supporting communities. Transportation. We are involved in a lot of transportation, what can we do in that side in terms of, for example, greenhouse gas emissions. Processing, and now we are moving a little bit into the feed mill and looking at the co-products, their use, product portfolio, what type of products we have, right. You might have heard about climate-smart products. Some of the customers are asking for those technologies for those products. So we have to also react as businesses. Packaging, and I've already mentioned the consumer or the customer might be pushing back on us with our requirements.
So this was very generic, and I'll just show you a little bit more specific goals. If you go on any website, I want to say any ag enterprise, you will see sustainability goals. Right. I will see maybe specific ones, maybe not as specific. This is an example of ADM’s goals, in terms of sustainability. And you see some focus on greenhouse gas emissions. There are actually a couple of tiles there, one is focusing on Scope 1 and 2 emissions and the other ones focusing on Scope 3 emissions. Again, we'll cover that a little bit. Water, reduction of water usage, low carbon energy and waste, diverting waste from landfills. Right, and you can see that there are some goals, there are some percentages. I don't know if you can see that from the back. Baseline comparison for example, 2019 or 2021. And there's some timeline. 2035, internally we call it Strive 35.
Today, I know the presentation is probably 25, 30 minutes, and I've already mentioned sustainability, but really what I'm going to cover is mostly the greenhouse gas emission part of sustainability and, of course, I'm not forgetting about the other parts of sustainability. Some of it was already mentioned in those United Nations tiles, but again in the interest of time, I’ll stay with the greenhouse gas emissions. So I talked about the greenhouse gas emissions, and just give you a little bit of an idea of what I'm trying to talk about here or introduce. And some of you might be familiar with that. So Scope 1 emissions here, of course we can look at those as direct emissions, right? You might have heard that those are sometimes called the burn emissions. This is everything, all the fuels you might be burning, right, the emissions you will be producing. This might be the oil you might be using or the natural gas to heat the buildings. So those would be the Scope 1 emissions.
And of course, you can influence them as a business, right? The more efficient way those different types of sources of, for example, renewable fuel. Scope 2 emissions, indirect emissions, and sometimes we call them buy emissions. So that would be related, for example, to the electricity you buy for your enterprise. And again, as a company, you can influence that part because of course, you can buy energy from nuclear power plants, coal power plants, wind, solar, etc. So, again, indirect, but an opportunity for influence.
The last one is Scope 3. And you could see in ADM tiles, we had separation in terms of the emission into Scope 1 and 2, and Scope 3. For us, that's the biggest ambition part, right. And I think that's the same for many ag enterprises. We call them beyond or other emissions, services and products your purchase. And, for us it can be, for example, corn and soy, you know, peanuts. It can be the cost, railcars, it can be paper you're buying for your printers. So those are the emissions in that Scope 3 indirect category.
And on top are some of the gases which contribute to global warming, but thoroughly for the agriculture enterprise, we tend to focus on CO₂, or carbon dioxide, methane, CH₄, and nitrous oxide, N₂O. Typically when we look at the greenhouse gas emission, we could use that CO₂ equivalent where we transfer the values of the CH₄ and add to a warming potential into CO₂ equivalents. So, you might have seen that in many presentations. So for Scope 3 emissions. I've already mentioned that for us, as a business, and for ag businesses in general, this will be probably the largest portion, and as you can see, probably 80% of our Scope 3 emissions are related to land use, land use change, and field-level emissions. So when you buy soy, when we buy corn, peanuts, etc. Those Scope 3 emissions are coming in quite a high portion from them.
So what can we do as a business to influence those? Of course, that land is not ours. We are buying the commodity, so the raw materials, from farmers and from others, so there are a couple of programs we have in place. One is focusing on no deforestation. Deforestation or raw materials, corn, soy, from these lands do contribute quite significantly to those Scope 3 emissions. We also see some of our customers globally asking for raw materials from land which has not been deforested, so that's one of the programs, probably an easy one to explain. It's easy to understand.
The other one, and I'll go a little bit into details on that one, it's regenerative ag, right. What can we do to support farmers, to support growers? Not necessarily changing fully what they are doing, but supporting with technical advice, financial support, some of the strategies, which can produce long-term impacts. And we have that here farm profitability, soil availability, biodiversity, and watershed health, and some of the practices are mentioned here. Living roots year-round, right, you heard about cover crops. Minimize soil disturbance, tilling. Probably could have an entire conference on tilling. Always cover bare soil. How much you are taking from the land during the harvest. Maximize crop diversity. Some of them are easier to support than others, it can depend on the community, country etc. And responsible management, for example, you can get use of fertilizers, because if you look at fertilizers that CO2 equivalent emissions calculated from, for example, nitrous oxide, which is used in production, if it’s related to the production and use of fertilizers.
Regenerative ag as a business. We have about 2 million acres in this program. And the plan is in 2025 to have 5 million acres on this program. So using both ADM resource, federal resources and in some cases, also our customers who are interested in buying ADM products coming from these acres. So just to give you a little bit of an idea of a couple of two programs we are using, kind of this big scale, to influence our scope three emissions. I will change the gear here a little bit. I mentioned formulator, nutritionist, is something I love to do. If I have a little bit of time for it, I will give you a little bit of an idea what we can do on a practical basis with us formulators and nutritionists in our feed mills.
I'll talk a little bit about something called life-cycle assessment, or assessing the environmental impact of products and services, the entire chain of production, and on the feed middle level, we are talking about raw materials, corn, soy. We might be talking about feed additives we are buying and being able to evaluate what is their environmental impact? Right. So it's not only about some of the programs I've already mentioned, but what can I do at the feed mill level, potentially, to support some of these environmental goals of our enterprise.
Life-cycle assessment methods to evaluate and quantify potential environmental impacts of a product or service, right? We are looking at the whole chain and that pictorial here, kind of gives you an example of it. Raw materials, synthesis, transportation going to some plant production facility, there is more transportation, comes to a feed mill, gets to the animal, gets to the processing plant. So all that is that entire opportunity to look at the raw material feed additive in a way of the environmental impact, right, from the beginning to the end. And I think we will be asked more and more frequently this type of information. Of course, what it requires, it requires some work, and you have to quantify the inputs and outputs as a score here, and you also have to follow some recommended methodology. And there are also ways of having that reviewed in independent panels. There is even ISO-certification. So they are the steps which can help companies to look at these life-cycle assessments.
And just to give you an idea of some of those methodologies and the overall framework. When we look for example, at raw material environmental assessment on the feed mill level, we are following something called the product environmental footprint category rule. It’s a long one, PFCR. And that has some methodologies and recommendations in terms of how to assess particular materials in terms of their lifecycle. Some of these are based on specific guidelines, which have been filtered into that PFCR.
You see some like a food and agriculture organization coming in with some of these guidelines. We as a business, when we look at the raw material, environmental impact, we followed the GFLI, or Global Feed Lifecycle Assessment I nstitute database. They have a lot of information in terms of individual impact of raw materials and in terms of their sustainability impact. Sometimes we also use this one, this Eco Invent, particularly when we are looking at transportation distances or bring the raw materials into the feed mills. You see LCA models available as well, software I've already mentioned, the ISO standard verifications. There's a lot of help out there, right, if companies and individuals want to get into raw materials and feed additive at LCA.
I mentioned already this GFLI database, it is a method which is recommended by the product environmental footprint category rule, and it is recommended as a benchmark for our industry. And we as a business are the member of GFLI and we've been also part of their technical management committee, so we can have a voice since 2021 and 2022 respectively. So hopefully give you a little bit of an idea that there's a lot of help out there. They are teams. Many of these are free of charge, that information, which also helps.
So let me give you an example of one project we’ve done, looking at the feed mill level at raw material’s environmental impact. What you're seeing here are those kilograms of CO₂ equivalent per ton of an ingredient, right. And this could have been done for any feed mill in any country. But in this case, it was done for a feed mill in Germany, right. So in Germany, there are some raw materials being directly produced in that country. There will be some which have been imported. You see the first one here, crude palm oil from Indonesia. You see Brazilian soybean meal, lysine, this one was coming from China. And each of those raw materials in the feed mill have their environmental footprint evaluation in terms of CO₂ equivalent, right, from the point of producing those, growing those, and also transporting those all the way to that specific feed mill.
Again, we use the public database, that GFLI, and for some of those distances the transportation to be a little bit more precise where those materials are coming from and where they're ending up. We are using that Eco Invent database as well.
So what you see on this graph, right, you see different bars, some raw materials, for some the environmental footprint is slower, for some of them it is higher. I'm not saying it is good or bad. That's just the situation, right? I don't know if you can see that from the end. But for example, I'm still on the bottom here, sodium bicarbonate, wheat bran, and all the way to grapeseed oil and crude palm oil. So as a nutritionist, what can I do with this information? And this is what we did, just as an example. You see six diets produced based on those raw materials.
For those of you who are nutritionists, on your left side of the slide, three of those diets are for growers. On the right side, three of those are for turkeys, the color differences, each color is for the specific raw material use in producing that feed, right. So what do you see right away? You can see, OK, turkey diets seem to have more CO₂ equivalent than the grower diets, and starter diets have higher values. If we have nutritionists in the room, you typically, if I asked you what the difference between grower and turkey diets is, you might answer, well, typically it’s supporting levels, right, a little bit more protein in a turkey diets, protein, amino acids. You start to move a grower finisher, there might be a little bit more oil, or quite a bit more in turkey diets than in grower diets.
Basically, just showing a number in terms of impact of raw materials and final feed being delivered all the way to the farm. What can I do with that information? Right? We can do a lot of things with this information. It can just be information for us, right? This is where we are. This is our base. Maybe I can compare myself to different seasons. Maybe I can compare a feed mill in Germany to my feed mill in France, right, do we see any differences because of the raw material we are using? Could I make some nutritional changes which still offer optimal performance but contribute to lower CO₂ emissions from that feed.
And some of you may have gone to a conference yesterday. There are a lot of talks, for example, about amino acids. And we could do, let's say, protein levels. Can we reduce the protein level by bringing another feed grade amino acid, let's say arginine, or isoleucine. To help us still have a very good, optimal diet, which supports the profitability, but now we reduce the levels of crude protein in our diet, which seems to be contributing quite strongly to that CO₂ emission. So can the information for us from nutritionists to look at. I look at it as another line in my diet. I haven protein, lysine, energy. Now I have a line for CO2 emissions for that feed.
So one example of that. And this example is really just looking at bringing the feed all the way to the farm, right. But it is important to understand how well that feed is performing. It doesn't make sense to produce finisher diet with low CO₂ equivalent, and feeding it to young birds, right. We know that the performance wouldn't be optimal. We would probably in the longer emulation impact negatively the performance and sustainability. So in all of this emulation, we need to go to the performance, potentially even look at what's happening at the processing level. So you are not stopping in a feed mill, you continue those couple of steps.
This example is at an LCA evaluation with feed additive, right. Many of us in the feed mills don't just use corn, soy, oil, limestone, we use a lot of different feed additives, right, enzymes, botanicals, organic acids, yeast, mycotoxin control products. What this team was doing whenever trying to look at the LCA of extract base additive, plant extract, botanicals, essential oils, which you see quite a bit of use in some of the poultry and swine diets, for ruminants actually as well.
They of course, follow the methodology to do that and we talk a little bit about it earlier. And then you look at a lot of the studies and performance studies for that product, because that is important. If you just look at the LCA of your product at the feed mill level, you are adding cost, first of all, and you also add in the environmental impact, right, because it took some energy, it took some emissions to produce that feed additive. And you know, bring you up to the feed mill adding up on top of it.
So, when you are evaluating some like feed additives, you really have to look at their performance impact. And in this case, they look at 22 different comparisons or 22 different studies, so quite a big dataset, did a meta-analysis on it. They look how the LCA would be different in different parts of the world. You see some of those countries there or regions they looked at. And their outcome was they had an ISO certification, independent panel looking at it as well.
And this is what they saw. They basically saw if they spent one kilogram of CO₂ equivalent, and using that botanical in the feed at the farm level in terms of service performance, they reduce the CO₂ emissions by 75 kilograms, right. So kind of the sustainability ROI, I’m just making up the term, 75 to one. But they help actually a lot of data from processing plants. They have information about impact on yield from the product, for example, and they wanted to see, OK, is that LCA changing? Because of the impact on yield as well. And the LCA did change because there was definitely a benefit on the yield. And their conclusion was spending one kilogram of CO₂ equivalent at the feed mill level impacted or reduce a CO₂ equivalent emission by 100 kilograms of that CO₂.
So, quite powerful information, especially for those who are trying to, you know, justify in terms of sustainably of the environment, some of the use of feed additives and various ingredients in our feed mills. The terminology or methodologies that are available. Again, there's a lot of help out there. I think if you start to use some of these numbers, some of these products, do check if there was an independent verification of the procedure followed etc. So that kind of brings me to the end of my presentation this morning. Ag businesses must have sustainability goals. And when we are interacting with customers, we can always go on the website and look at their specific goals and maybe there are opportunities for cooperation or helping each other reach those specific limits.
I did spend a little bit more time today on greenhouse gas emissions. There are other parts of sustainability than just greenhouse gas. And I did talk a little bit about Scope 3, because for us as a business and again for other ag businesses, this is probably the largest emissions and typically something large like that also is an opportunity for improvement, right? It's a place where we can reduce those emissions potentially quite significantly. And I gave you a couple of examples of that. What we are trying to do. As a nutritionist, as a formulator, I think we have tools today to look at greenhouse gas emissions, and whether we can impact them on the feed mill level as well. Some of that information can be just information for us. The more we learn about it, the more we're using it to maybe start to see whether we can balance the focus on profitability, formulation with those CO₂ emissions.
And I personally think that's where I am at this point. That the profitability and sustainability can go hand in hand. And it was very encouraging to see that we had a lot of people in the audience who were thinking the same. I think it is a little bit of a balancing act too, I'm not going to say this is perfect, sustainability and profitability going hand in hand. It is a little bit of a balancing act as a formulator trying to make sure that what I'm formulating has a strong impact positively on the performance. Least cost is important as well. And I do think it is more of a balancing act than the seesaw, right, focusing on one impacting negatively the other one.
Thank you very much for your attention.
BIOGRAPHY
Dr. Milan Hruby is ADM Animal Nutrition’s vice president of creation design and development. In this position, he and a team of global animal health and nutrition experts leverage ADM’s feed additive and ingredient portfolio to develop and introduce synergistic technologies that provide cost-effective, real-time solutions in the areas of performance efficiency, sustainability, and health and wellness. Hruby joined ADM in 2019 after holding various technical, research and marketing positions in Europe and the U.S., gaining knowledge of feed enzymes technology, probiotics, electrolytes and essential oils feed additives. He has worked at Finnfeeds International, Danisco Animal Nutrition and DuPont. Hruby received a Ph.D. in poultry nutrition from the University of Minnesota.
