Asia must shift to alternative proteins to reach climate safety: report

ASIA’S protein supply chain cannot reach its climate goals without a significant shift towards alternative proteins, said sustainability-focused research firm Asia Research and Engagement (ARE) in a report.

ARE estimated that, at current business-as-usual conditions, meat and seafood consumption in Asia will grow 78 per cent from 2017 levels, to more than 400 million tonnes in 2050. The corresponding greenhouse gas emissions will rise by almost 90 per cent to 5.4 billion tonnes of carbon dioxide equivalent (CO2e) over the same period.

Mitigation gap

That growth rate will pose a challenge for the region to achieve net-zero emissions by 2050. The food, land and agriculture sector should reduce emissions by 72 per cent from base-year levels by 2050, in order to limit global warming to 1.5 deg C above pre-industrial levels, according to the Science Based Targets Initiative.

Ending deforestation – which occurs not only when land is cleared for livestock, but also to grow feed for animals – has the potential in most major Asian markets to lower the most emissions from the protein supply chain, ARE said.

But even in the best-case scenario, in which the region achieves zero deforestation and peak industrial production by 2030, protein supply chains will not be able to sufficiently reduce emissions to be “climate safe” by sticking to conventional protein, which consists of meat, seafood, dairy and eggs.

To make up for that shortfall, consumption must shift significantly towards alternative protein, ARE said. Alternative proteins comprise plant-based and fermentation-derived meat substitutes, and cultivated meat.

Take China, for instance. The world’s largest consumer and producer of proteins, China’s total annual protein consumption is expected to reach 24.9 million tonnes by 2060 under business-as-usual conditions, by ARE’s estimate. That will place China’s emissions at 17.9 gigatonnes of CO2e over what the country can afford in order to be climate safe.

The best-case scenario from deforestation, food-waste reduction and other mitigation measures apart from transitioning to alternative proteins will reduce emissions by just 13.7 gigatonnes, leaving a shortfall of 4.2 gigatonnes.

If China can switch half of its protein consumption to alternative proteins by 2050, that will reduce emissions by a further 3.8 gigatonnes, which would take the country closer to what is required to achieve net zero, ARE said.

The non-protein-transition mitigation measures were insufficient in most of a further nine Asian markets that ARE analysed: India, Indonesia, Japan, South Korea, Malaysia, Pakistan, the Philippines, Thailand and Vietnam. Given that the non-protein-transition estimates were done on a best-case basis, ARE argued that transitioning towards alternative proteins is critical for the region to hit climate targets.

Slow going

ARE said that protein companies in Asia are slow to decarbonise. Of the 158 Asia-listed protein companies reviewed by ARE, none acknowledged the risk of deforestation-linked soya in their supply chains.

While leading Chinese food companies are taking initial steps to evaluate deforestation risks in their supply chains and sourcing soya certified as “deforestation-free”, few Chinese commodity companies, animal producers, retailers and restaurants have established verified sourcing or committed to zero deforestation, ARE said.

Protein transition is still a developing space for banks in the region, ARE added. For instance, DBS has held off on committing to net-zero targets for the food and agribusiness segment, citing the lack of data and effective mitigation solutions in the sector.

“The opportunity in Asia for a first mover offering protein transition finance remains wide open”, ARE said.

Still, a gradual transition to alternative proteins could be underfoot. A report by food company Kerry Group showed that 28 per cent of consumers in the Asia-Pacific have cut their meat consumption significantly, and another 32 per cent are actively trying to.

Tasty opportunities

This could create more opportunities for alternative-protein producers. Mirte Gosker, managing director of the Good Food Institute Asia Pacific think tank, said that “plant-based meat, seafood, and dairy companies are currently best-positioned to capitalise on this market opportunity because their manufacturing infrastructure is more mature, compared to relatively nascent segments of the alternative-protein field like cultivated meat”.

“Asian consumers are open-minded when it comes to alternative proteins – but only if products match or exceed the taste, nutrition, freshness, and affordability consumers currently associate with conventional meat and seafood,” Gosker said.

Doing so will require substantially more investment from public and private stakeholders into open-access research and development, she added. This will involve extensive product localisation to cater to the diversity of flavours across Asian culinary cultures.

Rather than rushing the process and “releasing sub-par foods into the market”, she urged alternative-protein investors to provide companies with “patient capital” to sustain their research and development in the long run. This will help to build the sector’s reputation with consumers.

Nicole Lee, food-tech programme manager at venture accelerator Brinc, said non-meat proteins are not a novel idea. Plant-based products such as tofu, tempeh and bean curd have long existed in Asian cuisine. The struggle lies in letting consumers distinguish traditional “mock meat” from new alternative protein, and making these products price competitive, she said.

One relatively new area of alternative proteins worth watching is blended products, Lee said.

Blended or hybrid products refer to plant-based protein products enhanced with the technology of cultivated meat. Using cultivated animal cells helps to make the plant-based protein taste and feel more like real meat, or increase its nutritional value.

Freighter ship U-turning

However, many critical gaps remain. For one, expanding the production of alternative proteins for mass consumption requires the development of Asia’s technical talent pipeline, Gosker said.

When it comes to completely eradicating animal agriculture, Lee is skeptical: “I don’t think that’s reasonable… a lot of people’s livelihoods still depend on agriculture, but I think the reality of our current system is that too much of our meat comes from extremely industrial warehouse farms.” 

David Heng, chief executive of private equity impact investment firm ABC Impact, noted that “many farmers in Asia still rely on conventional farming methods that are resource-intensive and environmentally damaging”.

Facilitating the adoption of sustainable practices, such as organic farming, precision agriculture and agroforestry, may require extensive education, training, and technical support, he added.

To enable the protein transition, Asian banks, food companies and governments must integrate and scale up alternative proteins into sustainable business strategies.

“Reimagining Asia’s protein supply is akin to making a U-turn in a freighter ship,” Gosker said. “It’s achievable, but requires that nations collaborate to further expand regional alternative-protein manufacturing infrastructure and rapidly coordinate regulatory frameworks.”

“Failure to do so will mean that the compounding pressures of ecological and supply-chain instability will grow, resulting in a food system that falls woefully short of satisfying rising demand.”