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Pablo Barrera – One of the greatest humanitarian creations of all time is also one of the largest greenhouse gas emitters. Here’s how we fix that.

Jul 9, 2021

Between 40 to 50% of our population is alive on this planet today thanks to fertilizers. However, fertilizers are also one of the largest greenhouse gas emitters and when managed poorly, can also contribute to the nutrient pollution of lakes, rivers and streams. 

This week, we sat down with Pablo Barrera Lopez, Executive Vice President of Strategy and Communications at Yara International, a leading Norwegian agribusiness and chemical company on the forefront of the sustainable and ethical production of several types of fertilizer. Lopez takes us through the history of the fertilizer industry (hint, modern fertilizers were invented at Yara), how the invention of fertilizer prevented mass hunger, and the complicated relationship of the life-saving product with climate change. Lopez also walks us through the top innovations taking place in the industry to mitigate its impact on climate including everything from renewable-energy fueled fertilizer plants and high-tech precision application tools to better farmer education.

In addition, Lopez works with the World Economic Forum, where he promotes corporate sustainability and works with global youth to help them develop talents and skills to be responsible forces for good in their communities.

For more information: https://www.yara.com/

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TRANSCRIPT

Borna (ClimateAi) 

This is agriculture adapts by Climate AI. We are a team of climate scientists and agricultural entrepreneurs on a mission to make agriculture more resilient, sustainable and profitable in the face of a changing climate. This podcast is our journey as we speak with industry leading executives, farmers and thought leaders to uncover the challenges and opportunities that lie ahead for the industry that feeds the world. I’m your host born Portia Connie. Welcome to agriculture adapts. Hello and welcome agriculture adapts listeners. Today’s topic is about one of the most critical sub segments of the agriculture sector, which so happens to also be one of the biggest greenhouse gas emitters. Today we’ll be talking about fertilizer. Fertilizer is one of the most important scientific discoveries of the past century and is often credited with enabling our food system to feed our growing population. Scientists estimate that somewhere on the order of 40 to 50% of our population is alive on this planet today. That’s right because of fertilizer. Now, when we talk about fertilizer, many of you might be thinking of manure, that is one kind of fertilizer, but there’s only so much cow poop we can harness. The fertilizer we’re talking about today is primarily synthetic or mineral fertilizer derived from chemical reactions. And we’ll go into this a little bit further in the episode. It’s derived from chemical reactions to create primarily NH four or ammonia. Since its inception in the early 1900s. synthetic fertilizer has boosted crop productivity dramatically. But as always, it’s not all sunshine and flowers. It’s no secret that fertilizer has a seat in the limelight for its reputation as a fairly large greenhouse gas emitter. Agriculture, Forestry and land use accounted for about 24% of global greenhouse gas emissions and of those emissions. A sizable portion is coming from fertilizers, which are basically releasing emissions during production and releasing specifically and to our nitrous oxide, when applied in fields and, and to was a greenhouse gas that is, unfortunately 300 times more potent than carbon dioxide. On top of the climate impacts, excessive and poorly managed fertilizer use can lead to fertilizer runoff into waterways, which can lead to eutrophication, or dead zones. Basically, the fertilizer leaks into waterways and runs into large bodies of water feeds algae, which blooms uncontrollably, and then it kind of pulls out the oxygen from the water and it kills a lot of a lot of animal life. We see this challenge here in the US most notably in the Mississippi River emptying into the Gulf of Mexico. So here we have something that is literally a pillar of modern survival of our species, one of the greatest inventions of our time, and simultaneously it is a fairly large contributor to climate change. As always, with challenge comes opportunity and with us today to discuss this opportunity and how their company is actually leading the charge to create a more sustainable fertilizer internationally in a scale is Pablo Barrera Lopez, an executive vice president at Yarra, one of the largest fertilizer companies in the world and a Pace Setter in the industry for focusing on boosting farmer profitability, minimizing climate impact and driving progress in agriculture sustainability, through both innovation and collaboration. Pablo has a master’s degree in economics and has served in leadership at Yarra across various teams including strategy, business development, supply chain communications, corporate affairs and procurement. It’s quite a lot. And Pablo is also a young global leader at the World Economic Forum. And he is determined more broadly to transform how large companies act as corporate citizens to promote sustainability as an untapped potential rather than a threat, and establishes collaborative efforts with other companies to solve some of the key challenges that the world faces. Additionally, over the years, Paulo has focused on establishing arenas where teenagers and young adults can nurture their talents and develop into responsible forces for good irrespective of their background. Paulo, this is an extremely hot topic today, we’ve got tons of requests to hit on this exact topic from our listeners, and I can’t think of anyone better to help steer the ship on this episode than you. Thank you for joining us.

Pablo Barrera

Thank you for having me. It’s great to be invited to the podcast. And I’m super excited to be here.

Borna (ClimateAi) 

Alright, so before we go straight into the heart of the fertilizer discussion here, Pablo, quickly, just tell us about your your background, your current focus era, and specifically what gets you so excited and passionate about food?

Pablo Barrera

Yeah, so I was born and raised here in Norway, in a small town on the West Coast, called Harrison. And my parents, they are from Chile. As you can hear from my name, it’s not a typical Norwegian name. So my parents came to Norway in the end of the 60s and stayed here ever since. And this is where I grew up. The reason why I’m so passionate about food and food production is actually many of the things that you touched on in your intro reduction. You mentioned the impact food has on the environment 25% of greenhouse gas emissions come from agriculture. And we know therefore that if we are to achieve the sustainable development goals, food will be at the center of that it will be at the center of many of these goals. And that is why I’m so passionate about food.

Borna (ClimateAi) 

The history of fertilizers specifically is inextricably linked from yarn as history itself. So give us the history of fertilizer, the history of era, and tell us why fertilizer is such an important component of agriculture today.

Pablo Barrera

So you also had some interesting statistics about fertilizer. So roughly half, almost half of the food we consume today is consumed thanks to or is produced, thanks to fertilizer. And this all started back in the beginning of the 1900s, when Europe was on the brink of famine, and we needed to find a way to produce more food to feed a growing population. And what happened in 1905, was that the founder of Yara found a way to harness nitrogen from the air and turn it into a solid form, so that the plant can use it as nutrition to grow. Nitrogen is the most important nutrient for the plants in terms of the growth. But the challenge with nitrogen is that even though we have it in abundance in the air, the majority of plants can’t take that nitrogen from the air and convert it into nutrition for themselves. So it needs to come in a different form. And that is what our founders managed to solve. In the beginning of the 1900s, they found a way to extract that nitrogen from the air, using hydropower, to tie the nitrogen molecule to hydrogen molecule, and then go from there to fertilizer. That was the beginning of what we today know as a miracle fertilizer. And it is actually the invention that has saved the most lives throughout the whole history. So there are estimates saying that fertilizer has saved close to 3 billion lives. That’s very impressive.

Borna (ClimateAi) 

I mean, without it, we would, we would not be able to produce nearly nearly enough food. And we’re at around 7 billion right now growing the 10 billion. And it’s it’s clearly a very important part of the discussion. And we’re expected

Pablo Barrera

To need roughly 50% More food between 30 and 50%, depending on how you count it. So mineral fertilizer and crop nutrition will need to be a part of the solution to feed the growing population going forward.

Borna (ClimateAi) 

Absolutely. When we talk about fertilizer, nitrogen is the main component of it, obviously, and you’ve hit on the point that, you know, our air is wet, like 70 to 75% Nitrogen, but the code that was cracked was being able to pull it out of the air and turn it into a useful form for the plants. But fertilizer today is not just nitrogen, it also has phosphorus and potassium. Right? And so just give us a little bit of a background not all of our listeners are, you know, farmers or agriculture, you know, supply chain, folks. So give us some background on when you’re applying fertilizer. Is it you know, the same thing that you’re applying on all these plants? Or is there different concentrations of these three? Are there different types of fertilizer you’re applying what’s how are we choosing what’s being applied?

Pablo Barrera

Very good question. Let me start by saying that I’m not an agronomist. So, if there are a problem is the listening out there, please bear with me. So we typically divide nutrients into different categories. So you have the primary nutrients, which are nitrogen, phosphate, and potassium. And then you have secondary nutrients, which, for example, are sulfur and calcium and magnesium I believe, and then you have the micronutrients, think, boron, manganese, and other types of nutrients and all these nutrients that the plant needs, but depending on what plant we’re talking about, the needs differ. So some plants need for example, more nitrogen, while other plants, relatively speaking need more potassium, or more phosphorus, because of the properties of the plant, but it can also be due to the soil the plants are grown in. So in certain soils, you need to compensate because the soil might have a deficiency on for example, phosphorus. So then you apply a fertilizer which has a bit more phosphorus to compensate for the soil having that deficiency. Similarly, you can apply micronutrients like sink, or boron to The account for deficiencies and the nutrients, they affect the plant in different ways. As I mentioned, nitrogen is important for growth. But the nutrients are also important for protein levels for shelf life, for the quality, and can also be important for the taste and the nutritional value of the plant for us as humans. So it’s also important to ensure that the food is nutritious, so that we get the nutrients we need.

Borna (ClimateAi) 

So it’s basically whatever is the limiting factor for optimizing that crop that plants growth, we want a little bit more of that to try to balance it and give it the nutrients it needs. So it can reach you know, achieve its optimal productivity. And we see this in rice with increasing carbon dioxide emissions, we see a lower nutrition profile, because, you know, the study is assumed that the nitrogen will be deficient and the carbon dioxide will outpace the nitrogen and so there’ll be more growth, but less nutrition. And this is a problem that fertilizer can help tackle. And just give us a sense, how is how is this being applied to plants, you know, there’s irrigation is being sprayed, what are the different options that farmers have in applying this,

Pablo Barrera

The most common way of applying fertilizer is by spreading it on the field. And you could either spread it manually, or you can do it with a spreader that you latch on to your tractor. There is also the possibility of applying it through irrigation, what we call fertigation. And what you do then is that you take fertilizers that are water soluble, you mix them with water, and then you apply them at the same time that we apply water at the same time that you irrigate the crops. That is something we often see in fields with fruit, for example, where you have a drip irrigation system, then you would often apply fertilizers through that irrigation system that is water efficient. And it’s an efficient way of ensuring that the nutrients are taken up by the plant.

Borna (ClimateAi) 

Yeah, we see this a lot specifically in California with a lot of the specialty crops that were growing here. Exactly. And fertilizer, obviously is a critical component in feeding the world. We’ve already kind of touched on that. But we’ve also mentioned that it’s a large greenhouse gas emitter, and it has this issue with runoff that can lead to dead zones. You and your team are quite frankly leading the cutting edge of sustainability on this front and doing pretty amazing work. What do you see as the main pillars of an eco friendly fertilizer? How do we achieve an eco friendly? Or an increasingly eco friendly fertilizer?

Pablo Barrera

Yeah, I think there are a couple of elements to let’s say, eco friendly use of fertilizer. One is the practice. So how do you use it? Meaning how much when? And how do you apply it? What we work a lot on in Yarra since we have been in the game for more than 100 years is to spread knowledge around how you should use fertilizer. And if you look at our product range, you will typically find quite a lot of different types of fertilizers for specific crops so that we are sure that we recommend the right type of fertilizer for that crop. And then we coupled that with the knowledge to the farmer about how to use it. So I think a lot can be done on improving how we use fertilizer. We know that there are issues with over fertilization in several parts of the world. And we as Yarra we are extremely focused on having the farmers that we work with apply the right amount, not too little, and not too much, but the right amount. And sometimes that can mean that the farmer buys less fertilizer from us. And that’s fine. We want the right amount to be applied. So application and use of fertilizer, that’s one element. And then another element is of course, the fertilizer itself and the properties of that fertilizer. So you have some fertilizers that have less nutrient runoff. And in the majority of our nitrogen portfolio, you will find fertilizers that are nitrate based and nitrate based fertilizer has less runoff than a urea based fertilizer as one example and why is that that has to do with how the plant absorbs the nutrients. So when it’s in a nitrate form when the nitrogen is in a nitrate form, it’s more easily available for the plant than when it is in a urea form.

Borna (ClimateAi) 

And how widespread is that? Is that common in the industry? Is that unique to Yarra?

Pablo Barrera

There are other producers of nitrate based fertilizers in the industry. No doubt. This is actually varying a bit by geography. So in some geographies, it’s much more common to use the urea based fertilizer. And in some geographies, it’s more common to use nitrate based fertilizer and nitrate based fertilizer can be more expensive but also has a higher efficiency.

Borna (ClimateAi) 

That’s I was going to ask is it cheaper to produce the urea and urea is lost access

Pablo Barrera

Is more accessible for farmers in general, because there is a much bigger production of urea globally, nitrate based fertilizers. So I think it’s those two things, it has to do with how you use it. And it has to do with the properties of the fertilizer itself. And I think when it comes to the properties of the fertilizer itself, that will continue to evolve and improve, and we will get fertilizers that have less runoff. At the same time, I’m also convinced that we will see the practices improving, as we also advance on, for example, precision agriculture and everything that now is going into making agriculture more sustainable.

Borna (ClimateAi) 

Yeah. And when we talk about like the practices and how, how to apply fertilizer to reduce the environmental impact, you touched on two pieces that I think are really critical. One of them is education. So teaching people how to use it requires a lot of boots on the ground. But there’s a lot that can be done now with precision agriculture, in terms of measurements, exactly how much is needed. You know, how much should we be applying and aware? Specifically, can you speak a little bit more to how you guys are leveraging Precision Ag to have better timing be more targeted, less waste.

Pablo Barrera

We have worked on precision agriculture for many, many years. One of the earliest examples we have where we started to use tools is a sensor for a tractor, the end sensor, so we developed a sensor that you could place on top of your tractor,

Borna (ClimateAi) 

and being nitrogen, correct.

Pablo Barrera

yes, and being nitrogen, thank you. So you place it on your tractor, and then that sensor can measure in real time, the nitrogen level in your field in the crops. So that information gets then fed back into an algorithm, which then defines how much nitrogen you should apply through fertilization. So as you’re driving down your field, the center will read how much nitrogen you have in the field, it will play it back into an algorithm and then that algorithm will instruct your spreader on how much nitrogen to apply into different parts of the field. So that is one technology that we developed. Of course, it’s not every farmer that can afford to have a big sensor on their tractor. It’s not every farmer that has a tractor. So that has now evolved. And now we have sensors like this, that you can use to go out in the field in a handheld format. So a small kit that you can click on to, for example, a smartphone, and then you can use that to go in the field and measure the nitrogen content in the plant. And by that do a mapping of how the nitrogen levels are in your field. However, it’s not super practical to walk around if you have a huge field. So what we’ve also done the last three years is to develop a solution where you can use satellite based imagery. So then you will get satellite readings on the nitrogen levels in your field. And then that is fed back into an algorithm which then you can use to tell your spreader in which parts of the field to apply certain quantities of nitrogen. So that’s one example where we have for many, many years worked on developing tools and algorithms to help the farmers apply the precise level of nitrogen in their field.

Borna (ClimateAi) 

And you guys are an international company, you guys are all over the world. How does the adoption or implementation of these things differ? By region? Like is it is it purely just related to the average wealth of the farmers? Like, can they afford the tractor? Can they afford the sensor? And then in the in the more poor regions? It’s primarily focused on one on one education with an agronomist? Is that kind of how it how it scales? Or is the phone sesor? Like pretty, pretty cheap and can be can be used by everyone?

Pablo Barrera

Yeah, I think you’re hitting the mark on several points here. So what we see in agriculture in general is that where it’s most advanced is where you have more developed economies and where the farmers have a larger scale. So Europe, US, Brazil, Argentina, typically markets where you will find quite advanced agricultural practices. They have the capital to be able to invest in these practices. But also those practices are available. So there is enough critical mass to make it profitable for companies to offer these precision it either tools or products. If you go to, for example, Asia, that’s much more smallholder driven, there is much bigger variety and types of crops. And there, you will see that some of these tools that a farmer that has maybe 100,000 hectares in Brazil uses can’t be used the in a small 345 hectare farm in Asia, focusing on cabbage. And in those markets, what we do there is, as a starting point, work much more on the knowledge. So you will see that in developed markets, it’s more about tools and helping good farmers become excellent farmers, whilst in the developing markets where we have more smallholders, it’s about helping them get up to a good level, and then trying to build them from good to great over time. But the gap is so big, from getting to where they are to good that we spent a lot of, as you said, boots on the ground, but now also using more digital channels to bring that knowledge to these farmers, from us to them, but also to start connecting them with each other so that they can exchange knowledge amongst them through communities, digital communities,

Borna (ClimateAi) 

Tell us a little bit about how weather and timing of these applications matters, and how it’s actually being integrated into the decision making process today, because, you know, if you apply fertilizer, then it rains immediately after it’s getting washed away. That’s a lot of money that you might lose. So how is how are we integrating the weather into these decisions today,

Pablo Barrera

We launched a couple of years back an application called farm weather together with IBM, where we give the farmers so called hyperlocal weather data hyperlocal in this sense, means that you have a precision of about three kilometres, roughly four kilometres a radius of four kilometres. If you compare it to, for example, your iPhone or other weather services that are easily accessible to you and I, the position could maybe be 30 kilometers. Yeah, so So here, you get weather data, which is much more precise. And that’s important. Like you said, if you apply fertilizer, just before a monsoon rain, you will wash away the investment. But similarly, if you apply it and there’s no rain coming for a long, long time, then the roots will struggle to take up that nutrition. So finding the right timing is extremely important, both for applying the fertilizer but for also for other activities that you have on the field when you are to harvest a crop or plant the seeds, etc. So many activities on the field throughout the year depends on the weather. We launched that application. And we now I believe have more than 3 million downloads on that application. Oh, wow. And I can share another fun factor is when it comes to weather. I worked as a country manager in chiller for a year and a half running our commercial operation there. And I was visiting a farmer in the field. And he sees he said, Oh, yeah, you from Norway. I’ve used your application. And I was like, you used our application. What do you mean? Yeah, you know, and, or whatever. And I was like a lot, whoever. Okay, yeah, the weather application. So there is a there is a weather application in Norway, which is for free, which is developed by the metrological Institute, which has a fairly good precision when it comes to precipitation. And I didn’t know this, but is used quite a lot by farmers in Chela to see when it will rain and when it will not rain. So that was when I first realized actually the importance of weather.

Borna (ClimateAi) 

Did you think that he was talking about the weather app at first or is is that offered in Chile?

Pablo Barrera

It’s not offered in Chile, and it hadn’t been launched at that time. It was in the making.

Borna (ClimateAi) 

Yeah, that’s funny, but I mean, four kilometer resolution is fairly high for those that that don’t have the scope. That’s that’s a fairly high resolution to be able to offer. So that’s pretty impressive. And I want to go to the production side of, you know, fertilizer for a moment, because you guys are doing very interesting stuff there. But before we do you mentioned that uh big piece of this is how can we be more precise with how we’re doing things? That’s what precision agriculture is? How can we be more precise? And you mentioned that that might mean that we’re applying Less and More okay with that? How does that play out from like a business sense, you guys informing folks and offering tools to, to improve their precision with these applications would inherently mean that they’re reducing the volumes of that they’re consuming? And you would think that that would be bad for the business? How do you how do you make this pencil out from a business standpoint,

Pablo Barrera

You wouldn’t think it’s bad for business. But we we firmly believe that, if we do what’s right for the farmer, over time, we will grow our business. If not, the farmers will choose to leave us and, and buy from others. So we believe that it’s about showing the farmer how we can bring value to the farmer. And if value is brought to the farmer by the farmer using less fertilizer, then we are okay with that. Because we believe that that is what’s right for that individual farmer. Now, that being said, we don’t see our customer base as being static. So we have very high growth ambitions. And we believe that we actually can grow because of our philosophy of bringing knowledge to the farmer, and helping the farmer optimize their practices according to their needs. So by having this farmer centric approach to it, we think that we will grow,

Borna (ClimateAi) 

It’s not a one to one relationship at all, I totally agree with what you’re saying volumes will be down, but you know, adoption will likely go up because you guys are providing awesome value to them. And also the population is going up. So it’s a long term game playing this. And, you know, just at the end of the day, being the best provider is the way to win in the long term.

Pablo Barrera

Yeah and farmers are our business. Persons also, right. So they, they want to do what gives them a good business case. And over time, we want them to do the same. Because if not, it’s a customer that we we will lose. And we want to build lasting relationships with these farmers, because that’s when we see that we can bring the most value to them.

Borna (Climate Ai)

Yeah, equitable value creation is the way to bring everyone money. Absolutely. Let’s go to the production side of this. You guys are working on something that you’re calling green ammonia. Can you tell us about that? And how widespread is green ammonia today?

Pablo Barrera

Yeah, so today, green, ammonia is not very widespread at all, what we are working on is to electrify parts, or all of the ammonia production in some of our plants. So we can use that green ammonia coming from Green hydrogen to produce green fertilizer. And why is this interesting? Nitrogen fertilizer, as I mentioned, as we know it today, is made by taking nitrogen from the air and combining that with hydrogen. And the way that’s normally done today, is by getting that hydrogen molecule from a hydrocarbon. So you use the hydrocarbon to tie quote, unquote, the nitrogen molecule. Now, you can use, for example, electrolysis to do the same, but it requires a lot of energy. And that’s why that technology was replaced in the beginning of the 1900s. Because a more energy efficient solution, which was to use hydrocarbons came along. Now what we see is that there is a potential to use renewable energy to produce these green fertilizers. And by doing that, we can eliminate between 15 and 30%. Of the co2 footprint in, for example, a loaf of bread. Oh, wow. So if you take a loaf of bread, and you calculate how much of the co2 footprint of this loaf of bread is due to fertilizer, it can be between 50 and 30%, depending on the fertilizer, and by then, using a carbon neutral fertilizer, you would remove that. That is why we think this is super exciting. There are not many companies working on this today. But as you know, the green hydrogen space is booming green ammonia will undoubtedly do the same. But we believe that there is a fantastic opportunity here to decarbonize food, through decarbonizing fertilizers.

Borna (Climate Ai)

That’s amazing opportunity to be able to leverage. So basically what’s happening is that right now, you know, we have this nitrogen piece that’s coming from the air and we are pulling hydrogen from a hydrocarbon or from like a fossil fuel based source. So it’s not exactly the most clean process, but through this process, it’s called electrolysis. We can basically run an electric current through the water, which then splits the water into oxygen and hydrogen. And then we can use hydrogen and the oxygen just becomes air. And then we have a clean a clean system. This is a huge high leverage opportunity. What will it take to get this to scale? What if we were to have all the fertilizer that we’re using today? Be green ammonia based? How much more expensive? Would it be? Like? Are we? Does it only really pencil out? If, you know, if we start to get a really high carbon tax in certain locations? That doesn’t make sense at some point in the future? How do we get it to make sense?

Pablo Barrera

I think that’s an excellent question, because what we see is that the technology is there. So it’s not a technology question. But it’s expensive. Building a green ammonia facility versus a conventional one, cost about twice as much. And then, depending on the price of power, the price of the input into that ammonia production can be between two and four times as expensive as with the conventional way of doing it, which is using natural gas. So there’s no doubt that there is a big cost hurdle here. But if I’m to be optimistic, I see several things go in favor of this being viable, in the not so distant future. One is that you see governments being eager to invest in these technologies through subsidies. So II, you and the different national innovation funds are making funds available now for companies like us and others that want to develop green production. So that’s one thing that makes me optimistic. Another thing that makes me optimistic, which you mentioned, is that the price of carbon will go up. So I think over time, we will, in the price of the goods we buy have to pay for the externalities of those goods. And that will be done through a higher carbon price, I believe. Last but not least, I also see a willingness on the consumer side to overtime, pay more for more carbon friendly, more environmentally friendly products. So if we can get support from governments to invest in these technologies, and the price of renewable energy comes down, as we build more and more renewable capacity, and you get a better price for, for example, a green fertilizer, then the combination of that will facilitate this transition,

Borna (Climate Ai)

Why not make some sort of like green label like this bread was grown using green fertilizer. And that says anywhere between 20 and 40, or 50%, whatever less emissions, because that’s something that you guys are considering there’s a lot of labels being used today as a pathway to you know, as a bridge, basically to regulation or this is a way to, to get premiums on products that would otherwise be kind of sold as a commodity,

Pablo Barrera

definitely labeling is something being discussed, labeling is important because it helps us as consumers make conscious decisions. So one thing we are discussing is, is labeling and they are the food companies play an important role. But to enable that labeling, we also need traceability and transparency in the food value chain in terms of how that food is grown. So that is also something we are working on. Because today we lack that traceability and transparency. So we need to work on getting a credible way of measuring and verifying that yes, indeed, this is a product which has less carbon, so that we as consumers believe in that and have trust in that that is correct, and therefore are willing to pay more.

Borna (Climate Ai)

Yeah, and you guys basically did something like that almost amounts to a pilot or a test run of this, right? Like when when COVID happened, you set up this fully traceable system that allows you to do some of these, some of these things. I remember you briefly telling me about this last time, it was a separate initiative, but it sounds like the things that you implemented would be a similar path to what we would need to do to get full traceability. No?

Pablo Barrera

Yeah, in one way. You could you could say that. So basically, what we did one COVID broke out was that we started to discuss, okay, how can we do something to help society in the situation we are in now, beyond just complying with the requirements put forth by local authorities in terms of sanitary measures, social distancing, etc. But how can we also play an important role and we quickly saw that one of the most important things that we can do is To make sure that we keep our value chain running, because as we discussed, through fluid, which we eat, today, half of it is grown with the help of fertilizer. So if our value chain were to break down, that could have a big impact on food available. So we said, okay, it means we need to keep our value chain running. However, we also know that because of COVID, many parts of the world will have challenges when it comes to access to enough food. And we were super inspired by a talk that David Beasley the head of the World Food Program, gave to the UN Security Council where he basically said that we are potentially facing a famine of biblical proportions, because of COVID. And he painted a picture which was quite bleak in terms of the number of people that could be pushed into extreme hunger. Today, we have roughly 800 million people that go hungry to bed. And I believe we have between 150 and 200 million people that live in extreme hunger. And that number could almost double due to COVID. So we were super inspired by that, then our CEO also spoke with him and to see it, and he told the CEO, the most important thing you can do is help us make sure we produce enough food. So what we then did was to donate 40,000 tons of premium fertilizer from our facility in Norway to help grow maize in seven countries in southeastern Africa. However, we said, it can’t only be about a fertilizer donation, you can’t only just give the fish you need to give the fishing rod. So what we also did was that we said, this fertilizer donation needs to come with a digital connection. So that we can provide knowledge to the farmers receiving this fertilizer, on how to use it so that we are sure that it’s used in a proper way. And hopefully, through that digital connection, we can then continue to stay in touch with these farmers, and continue to provide them with the knowledge and information that could be useful for them, and potentially then link in other companies that want to do similar efforts. And to then come back to the point you made about traceability. What we did, in order to make sure that we were able to connect to the farmer receiving this in the other end. And that was about 250,000 farmers was that we had traceability points along the full value chain. So we registered the fertilizer as it was leaving Norway, when it arrived in the port when it went to the wholesaler when it went to the retailer and when it was delivered at the farm. So we could follow that fertilizer through all the main steps and know where it arrived in the end. In the end, we managed not only to register the 250 that received the fertilizer, but we actually got more than 2 million people registering a while on this platform. And we can then use that platform to connect to others that want to donate. So for example, another Norwegian startup donated solar lamps to 1000s of farmers. So we could use that connectivity to have traceability and we can then say that, yes, maize grown on the farm by this farmer was grown using this fertilizer, and we can even put it down to the specific bio fertilizer. And that’s the kind of traceability and transparency that we will need going forward. So we as consumers, we will want to know I believe in the future. The coffee I’m now drinking, where is it grown? How is it grown? What type of inputs went into this production? What’s the carbon footprint, etc. So where today we have labels showing nutritional content on food, we will have labels showing content on environmental parameters.

Borna ( Climate Ai)

Like that’s amazing. But the level of transparency that needs to be rolled out to accomplish that sounds like it’s a huge lift. Is that like, when you guys ran that that system? Did you realize okay, this is going to be extremely difficult to do for our entire supply chain? Or was it like, you know what, this is actually pretty feasible. We can maybe roll this out.

Pablo Barrera

I think the first reaction to the team that had to work on this was Oh, my God, how are we going to manage this in such a short amount of time? We actually we did this in like three, four months. From inception, I believe from inception of the idea until we had the first fertilizer on the ground. The first chip, it took a bit more than three months. And during those three months, we had to develop these applications and the system of tracing this. So our team of developers they were quite stressed, but super triggered by The idea, and I think that is something we’ve seen in COVID. But something we also see every day in the era that what we do helping provide enough food for a growing population in a sustainable way, which is nutritious that that is a fantastic inspiration. So the team, they said, Okay, this is a big undertaking, but what the hell, let’s roll up our sleeves, and we will get it done. And they actually managed to get it done. But it was a big challenge, and also just the how just to get the QR codes for every bag and do that in a proper way, etc. So it was a lot of nuts and bolts that needed to fall into place.

Borna (Climate Ai)

Yeah. And that’s awesome. That’s good to hear. So we’ve touched on on two main drivers of sustainability and fertilizer, one of them is precision agriculture are kind of smart applications. And the other is the production side. But what about the farm management practices outside of just precision agriculture? Like, you know, one approach is, how can we manage the fertilizer better? The other is to say, Okay, we have these farm advisors, we have these digital tools allow us to communicate with farmers, they don’t only need to reduce emissions through the fertilizer, like what if we just offset the emissions by them putting in cover crops or them doing these other practices that might sequester carbon to make them like net lower carbon producers? What’s sort of happening on that front,

Pablo Barrera

I guess you will have heard about regenerative agriculture. And there is a very interesting movie, which I recommend everybody to watch, which is Kista. Ground. There are of course, like with all these movies, there are things that you could debate on how correct they are or not. But I think the the gist of the movie is very interesting. And the work we’re doing now through what we call the zero carbon Alliance, which is a venture we’re setting up is to address exactly what you say here. So we think that there is a lot of potential on the field to sequester more carbon. And that you can do through no till practices, cover crops, being much more conscious of what type of inputs you use, etc. So that can help harvest more, or harvest more co2 on the field. But also, you can do other things on the field to emit less co2, like, for example, the machinery you use, if you use electric tractors, instead of diesel run tractors, could you apply fertilizer through irrigation, rather than through spraying so that you get the less co2 released in the air when the fertilizer is consumed by the or by the soil, etc. So you can on the one hand side, do things to store more carbon, and then you can, on the other hand side do more things to release less carbon. So almost everybody now has zero emissions targets, right? Yeah. And one way of do reaching that is, of course, to work on reducing as much as you can your own emissions. But for for some, you will get to a point where, where it’s just not possible for you to physically reduce the emission. And then you need to think alternatively, and one way of solving the problem when you get to that point is through buying offsets. And what we are seeing is that more and more companies are interested in what they call inserting, which is then buying offsets, but offsets that come from their own value chain. So if you are a coffee producer, we could for example, work with the farmers, so that the farmers have a practice that absorbs more carbon, and ideally emits less carbon. And then the food company could take that absorb carbon from one of their coffee farmers and use that as an offset or what we call an inset because it would be within their own value.

Borna (Climate Ai)

You’re almost just like displacing where the carbon is coming from in some regard.

Pablo Barrera

So I think it’s good that even even offsets I think can be good because it’s better than nothing, right? I agree. However, as a consumer, I will be even more thrilled when I buy a low carbon product, if I know that it’s low carbon because they reduce the emissions in that value chain. Versus if it’s low carbon because they have offset.

Borna (Climate Ai)

It’s also harder to do, it’s harder to change the way that you’re doing things. And so when I see a company that’s doing that, what to do when they’re doing insetting when they’re offsetting emissions and their own supply chain. It shows me that that company really cares about what they’re doing. And it almost builds trust, like it makes me think, okay, I now trust this brand more, because I know how they’re doing the offsets rather than them just claiming to be carbon neutral. Absolutely. Like the trust then goes beyond just the question of carbon into other questions as well. Where I just have built a level of, of loyalty to the Brand. Exactly. On the topic of regenerative agriculture, you know, it’s kind of interesting because many folks in regenerative agriculture will talk about, you know, we need to ditch agro chemicals and synthetic fertilizers. And we need to go back to sort of these more primary organic methods, like, you know, we need to have cover crops, and we need to go low till, and we need to integrate livestock. What’s the response to that? And how does fertilizer interface with the regenerative movement? You touched on kind of the drive? And it makes sense that these things can can kind of like go along together? But are they? How do those two things interface? How does how does fertilizer interface with regenerative movement?

Pablo Barrera

The way I see it, the proper use of mineral fertilizer is not in conflict with regenerative AG. Because what you do when you use mineral fertilizers is that you’re putting back into the soil, what you take out of the soil in a way. So when you harvest the crop, the crop is taking with it, the nutrients that the crop took from the soil to begin with. So proper fertilization is about ensuring that the soil has the nutrients it needs for the plants to grow. So I don’t think that there is a conflict there. What I do think, though, is that we have to work much more on the practices, like I mentioned. So I do think that there is a lot of all fertilization out there. And working on then going from using as much as fertilizer as possible for some farmers to optimizing it much more is the way to go. Yeah. And it is it is slightly different from other input factors, because we’re talking about the minerals and and not chemical substances in that sense. So I personally don’t see a conflict there. But I know that there are differing opinions. And I know that regenerative agriculture as a concept is quite new. So it’s also a bit in the making. But many experts would argue that the mineral fertilizer is a natural part of regenerative right. But it depends on the use. Yeah, you need to use it in the proper way.

Borna ( Climate Ai)

The last point in the regenerative piece here, because this is really interesting to me, is some folks might think, Well, why don’t we just you know, when I’ve seen this organic farm, or I’ve seen I’ve seen this movie, and they just have cows or goats come through, and they poop and they push the poop into the ground. And then it’s, we’re good to go. Why is it not that simple for the entire world, like what’s what’s being missed in that picture?

Pablo Barrera

I think what we miss, and we need to be careful to not paint too rosy picture of, for example, organic farming. So we mentioned that roughly 25% of greenhouse gas emissions come from agriculture, and about half of that is from land use change. And we know that we will need more food to feed a growing population quite a lot of more food, actually. So if you were to, for example, eliminate fertilizer, completely mineral fertilizer completely, you would potentially then eliminate almost half of the food you’re producing, right, because half of the food we eat today is produced thanks to fertilizer. So feeding and growing population in a sustainable way it needs to be done with proper fertilization practices somehow, and the world will not be able to feed that population. If we go 100% organic. However, I do think that there is a big potential in using the available nutrients in a better way. And like I said, having better practices, more optimal practices to the conditions on that field. And that is where I think that technology will make available information to the farmer and tools to the farmer that they didn’t have before to help the farmer fertilize in a more proper way.

Borna (Climate Ai)

I dream of the analysis that would show us you know, if the world were to be grown under regenerative is a not super well defined term right now. But if the world was to produce food 100% regenerative, how close would we be to be able to produce the amount that we produce? today? I don’t think that analysis exists. But if any listeners know that, please send it to me. But I’ve been looking for this for a long time because it does seem like it’s it would be extremely difficult. And we need like we’ve developed these technologies to be able to do what we’ve we’re doing now. And I do think that to a certain extent. Some types of these technologies and pesticides and fertilizer application has become a steal for folks. It’s enabled a lot of the industry in general to relax a little bit on other farming practices that are critical to producing a good crop because they have these strong tools they can use Use? I do think that’s a problem. But I also think that as it stands today, there’s I don’t think there’s any way that we can feed the world with 100% regenerative.

Pablo Barrera

Definition in place yet, what is regenerative? So I think, as we go forward, now, we will get a better and a more unified definition of what that is, and then you can start to make those calculations. I think, if you were to do it with organic, it would be very evident that we would be far far far away from being able to feed the world’s population with those practices, and the gap would be massive. Why is that? Basically, because you wouldn’t be able to use as one example, mineral fertilizer. So a purely organic practice, in many countries would not allow mineral fertilizer. And you could, you could, of course, debate, how correct is that, again, going back to the fact that mineral fertilizers are basically nutrients being put back in the ground, but that’s how it’s defined. In many, many countries.

Borna (Climate Ai)

Obviously, the type of animal would differ by country, but how many like cows and chickens and all these other animals would be required to produce the amount of manure? And what is the cost associated? Because obviously, it’s far more expensive than producing mineral fertilizer. If someone ever does this analysis, and it to me, I would love to see it. Hopefully, it’s not just a back of the napkin calculation, but I’ll take a look at that, too. If you send that to me. One other thing I want to get into, and we kind of just touched on this is, Yara is doing amazing work. And I feel like I’m throwing you hardball questions here. But that’s because I think that these are questions that I genuinely have. And I think our listeners have posed them as well. Another criticism that fertilizer industry in general gets, is that it creates a system where farmers can grow dependent on the fertilizer. And I mentioned, like, you know, there are these situations where the agriculture community still to self up on these technologies that we’ve built, rather than using them as supplemental, there’s situations where people might not be tending to the soil as much and the soil degrades or becomes unhealthy, or it’s lacking in microbes. And then they need the fertilizer to grow, because they’re basically growing on a desert floor. And there’s no, there’s no nutrients in there. I mean, this is a this is a kind of an over exaggerated picture that I’m painting here. But do you see this as a real and present and sort of widespread issue? And if so what’s, you know, how do we tackle this?

Pablo Barrera

I think it depends and varies quite a lot from crop to crop. And in many of the markets where we are present, we work with farmers that rotate crops, for example. So you can have different types of broadacre crops per season, in order to avoid the so called mono cropping. So it’s difficult to get one universal answer to it. I know it is an issue many places that you grow dependent on fertilizer, and that you can have a negative impact on the conditions in that soil. At the same time i i think and again, I’m not an agronomist. But my impression is that it’s more about having the right practice than not using fertilizer in a way. So if you if you use it in a proper way, and you take into account what type of soil you have, and what deficiencies that soil has done that can be factors that are positive for your practice.

Borna (Climate Ai)

Yeah, that makes sense. I mean, I don’t have the answer to I have no clue. I was just curious if you have thoughts on it, but it’s a tough question.

Pablo Barrera

I haven’t gotten far enough in my agronomy, please. One thing we haven’t touched on, which I also think is quite interesting is a nutritional content, right. So I mentioned that through nutritional content, you can, for example, get the right level of protein in in wheat, we have examples from Finland, where they applied C cesium, which is also a nutrient through the fertilizer to lift the Selenium level in the population. So by applying it to the fertilizer, it would then be a part of the grass that would be used to feed cows would eat it, it would come in the four form of milk then to the Finnish population, which would lift selenium levels. We’ve also seen similar things with a sink. If you have a sink deficiency in a population. You can also try to avoid that by improving sink levels in the crops you grow. And what we see more and more is that the nutritional value of food has decreased. And one way of countering that is to having a much more conscious view of what type of nutrition do you apply to the crop through fertilization to counterweight some of those deficiencies?

Borna (Climate Ai)

Yeah, absolutely. And I mean, we touched on this in the beginning but rising co2 emissions leads An imbalance in the system which can trigger huge problems that we can, I think we’re expected to have significant challenges with protein, zinc and iron concentrations in in rice and a lot of parts of the world, which is problematic primarily for developing countries where if rice is two thirds of the food that you’re consuming, and it’s no longer holding these nutrients that you need to survive, namely pregnant women who need you know, zinc and iron in their pregnancy, it’s it becomes a very difficult issue and being able to supplement it is, is quite as critically important. So there’s no, there’s no doubt in my mind about that.

Pablo Barrera

And it’s much better to get it through the food, then having to take supplements in the form of appeal.

Borna (Climate Ai)

Yeah, absolutely. I want to wrap it up here, you’ve been extremely generous with your time, but you do a lot of work with the World Economic Forum, and you’re kind of in this leadership role at yarn. So I want to take the time to, to ask you how the role of big corporates has really changed over the last 50 years. In the Food and Ag space.

Pablo Barrera

I go back to when I was studying business, we learned that the role of businesses business in a way. So Mason Friedman basically said that businesses they should focus on on businesses, as long as it’s legal what they do that it’s fine. It’s about profits. We believe in era. And I also think that society around us has pushed corporates in a direction where it’s not only about profits, but it’s actually about contributing in a positive way. You need to contribute with taxes with jobs, you need to have a low impact on the environment on the climate. You need to treat your people well, that’s not given in many companies. But you see an increasing expectation of how people are treated employees have much bigger expectations towards their employers now than what they did many years ago. So the role of corporate for me it has evolved from being an entity that is purely focused on profits to being good corporate citizens, and taking a broader responsibility beyond just the bottom line. So what we are seeing now is that corporates, consolidate alone, governments consult alone, we need to work together. And that’s why, for example, the World Economic Forum is an interesting place to be active, because there you’re connected with other corporates, and governments to gather, try and solve many of these issues. And I think that’s at least my expectation to the company I work in and I know is the expectation of people that work in Yara and our customers that we, as Yara take a more holistic view on what value creation is. I’m trying to work then with the players in our value chain to bring a positive change, and not only a positive bottom line.

B9rna (Climate Ai)

Yeah, I love that. Before we wrap up, what is your view on ag Tech Tech? Not we touched on precision agriculture. But what is your view on ag tech and technology adoption in general? How do you how do you choose the right partners? How do you make the right decisions? How do you choose the right technologies to deploy to farmers era

Pablo Barrera

We are technology optimists, I would say so what what I mentioned earlier in our conversation is that we have focused quite a lot on the farmer and the farmer needs, what decisions does the farmer need to make and how we can how can we help the farmer make better decisions? We’re also doing the same for other players in the value chain like different companies for example, how can we help make help them make better decisions and to facilitate that we are looking then in technology at all steps along that value chain and we will partner up with companies that we feel can then bring something to us that we don’t have today or that we don’t think we can develop ourselves for example there have done investments into smaller ag tech companies and I believe that we will continue to do so in order to close gaps we see we have within our own portfolio.

Borna (Climate Ai)

Pablo, this has been an amazing episode. I’ve learned a ton I’ve I’ve had a lot of these questions for a long time and to be able to go through them with you has been has been really an honor. How can people support Yarra as well as just your own efforts in general?

Pablo Barrera

I think the most important thing you can do to support Yara and our efforts is to be conscious of what you eat, how it is grown and continue to advocate for sustainable farming for having more adoption of sustainable farming practices. As I’m doing that in a science based way, I think what we see now is that there is a lot of opinions about what you should do and what you should not do as a farmer. But my main encouragement will be based on science based on the agronomy on what the soil needs to plant needs, and make sure that decisions are based on on facts.

Borna (Climate Ai)

Awesome Pablo. Thank you for joining us.

Pablo Barrera

Thank you so much for having me.

Borna (Climate Ai)

All right, everyone. Thanks for listening. If you liked the episode, please rate us and give us a review on Apple Stitcher, Spotify or Google Play. And if you really liked the episode, or if you just want to help push forward the climate resilience movement, share the episode with friends and family. If you have any feedback, or you’d like to add your own two cents on the topic discussed today, feel free to shoot me an email at media@climate.ai. I do respond to all emails. At its core. This podcast is a way for us to learn and to share our learnings as we go. So we’re always open to building on these conversations and hearing more perspectives. Thanks for your support. See you next time.

Guest:

Pablo Barrera Lopez

Pablo Barrera Lopez

Pablo Barrera Lopez is the Executive Vice President of Strategy and Communications at Yara International.

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