Agriculture plays a hugely significant role in Australia’s economy; at the same time, it’s also a major contributor to our greenhouse gas emissions. But farmers are at the forefront of finding new ways to drive sustainability.
David Statham, co-owner and director of the Sundown Pastoral Company, talks to Jennifer Duke about his family’s efforts to improve the sector, including Sundown’s partnership with Hiringa Energy to build a major new green hydrogen plant in NSW.
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Jennifer Duke: Welcome to the Fear and Greed Business Interview. I’m Jennifer Duke.
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Jennifer Duke: Agriculture plays a hugely significant role in Australia’s economy. But
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Jennifer Duke: at the same time, it’s also a major contributor to
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Jennifer Duke: our greenhouse gas emissions. There’re some pretty exciting things happening
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Jennifer Duke: within the sector though, with operators embracing technology and new
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Jennifer Duke: ways of working to help decarbonize Australian agriculture. One of
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Jennifer Duke: those technologies is green hydrogen, which brings me to today’s interview.
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Jennifer Duke: There’s a joint project between green hydrogen company Hiringa Energy
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Jennifer Duke: and Australian Agricultural Enterprise, the Sundown Pastoral Company, and has
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Jennifer Duke: received almost $ 36 million in funding, and that’s to help
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Jennifer Duke: construct and operate a major facility in Northern New South Wales.
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Jennifer Duke: David Statham is the Co-owner and Director of the Sundown
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Jennifer Duke: Pastoral Company. David, welcome to Fear and Greed.
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David Statham: Thank you, Jen. Thanks for your time.
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Jennifer Duke: We’ll get to hydrogen in a little bit, but I
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Jennifer Duke: wanted to learn more about the company first. So this is
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Jennifer Duke: your family’s business and it grew from a single farm.
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Jennifer Duke: Can you take me through the history of how this
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Jennifer Duke: all came about?
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David Statham: I’ll try and keep it brief, but it’s a long
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David Statham: history. My father started in agriculture. He started in the
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David Statham: steel business in Newcastle in the ’50s, a company called
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David Statham: Ranbuild. A lot of his clients were rural farmers, obviously
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David Statham: richest people in Australia were the wool producers in the
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David Statham: 1950s and ’60s where wool was a pound to pound. They were buying a lot of sheds. He met a
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David Statham: lot of people through that process. He bought his first
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David Statham: farm in 1964 in the New England Tablelands, a property called Sundown
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David Statham: Valley, and then Sundown Pasture Company grew from that point.
We
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David Statham: had about four properties in the New England Tablelands and Keytah,
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David Statham: which is the main property we’re on now, was purchased
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David Statham: in 1984, which is the year I left school. And
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David Statham: today Keytah is the main property and a property called
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David Statham: St. Ronans in Far North Queensland where we also have
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David Statham: converted a lot of country into farming and subsequently into irrigation.
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Jennifer Duke: That’s pretty incredible. Were you always going to be involved
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Jennifer Duke: in the business? Was that always your plan?
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David Statham: Yes, I had an opportunity. I had no idea what I
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David Statham: wanted to do. I studied agriculture at school. I had
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David Statham: a lot of mates that were boarders, and I spent
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David Statham: a lot of my youth at Sundown Valley with my friends
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David Statham: and doing all sorts of sheep work and cattle work.
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David Statham: I was weaned off sheep really early. I didn’t have
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David Statham: the passion for sheep that what I did for cattle,
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David Statham: but having that exposure to agriculture, growing up as a
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David Statham: young kid certainly had an influence on the opportunity that
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David Statham: I took when Dad through it my way the year
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David Statham: I left school.
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Jennifer Duke: So, when did your focus shift to sustainability? What was
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Jennifer Duke: the trigger that caused that?
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David Statham: What happened by default, Western Moree, we’re in a low
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David Statham: rainfall area. Obviously, the change in practices, technology with machinery,
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David Statham: we were a hundred percent focused on water conservation and
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David Statham: all farming practices that led to retaining moisture in your
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David Statham: soil. And when you do that, you just so happen
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David Statham: to have something in your soil test called soil carbon.
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David Statham: And having the right people come down and understanding what
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David Statham: you had, and told us how by applying our farming
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David Statham: practices for moisture conservation, we’re also building soil carbon. And
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David Statham: that sort of led into a project my wife and
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David Statham: I started mostly driven by her where she wanted to …
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David Statham: She had a desire and a passion to wear the
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David Statham: clothes that she had in the field and with insurety
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David Statham: instead of greenwashing and that led us to FibreTrace. And that
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David Statham: led us to dealing with brands all around the world
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David Statham: and understanding what they required going forward.
And they really
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David Statham: need to pull the carbon through the supply chain from
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David Statham: farmers to their balance sheets and in particular the European brands.
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David Statham: So that’s been our journey. And we’ve marketed our cotton,
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David Statham: Good Earth Cotton. We’re marking that cotton at our gin
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David Statham: with a company called FibreTrace, which is a rare earth
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David Statham: pigment, which we add to the cotton, and we’ve built
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David Statham: a blockchain around that. So you get full traceability from
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David Statham: farm to someone’s shirt. Obviously, we did a recent promotion
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David Statham: with Country Road here in Australia, promoting Australian growing cotton
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David Statham: and sustainable.
So I take you through that story and
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David Statham: I’ll tell you that story for one reason. The reason
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David Statham: is that people just didn’t want one story of Australian
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David Statham: cotton. They wanted the sustainability story, they wanted the carbon
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David Statham: story to tell to their consumers. And they obviously through
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David Statham: legislation what’s happening in Europe, these big operators and the
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David Statham: biggest brands in the world are all based in Europe.
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David Statham: The legislation there by 2025, they need to have full
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David Statham: transparency of their supply chain and a carbon score on
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David Statham: each garment. And that’s where it puts farmers in the
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David Statham: box seat because a lot of these brands are coming
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David Statham: to us directly and transacting with us directly because they
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David Statham: want the carbon from the farm.
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Jennifer Duke: Stay with me, David, we’ll be back in a minute.
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Jennifer Duke: I’m talking to David Statham, the Co-owner and Director of
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Jennifer Duke: the Sundown Pastoral Company. So when these brands come knocking,
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Jennifer Duke: I mean that can be quite challenging for farmers shifting
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Jennifer Duke: towards that greener future. Can you run us through what
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Jennifer Duke: some of those difficulties are and how you kind of
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Jennifer Duke: overcome that thought process, I suppose, because this would’ve been
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Jennifer Duke: quite different to you when the opportunities popped up?
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David Statham: It did, they didn’t come knocking on our door, we
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David Statham: were knocking on theirs to start with because we knew
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David Statham: we had a traceable product with FibreTrace. We knew we could
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David Statham: actually deliver our cotton from our farm to their shelves.
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David Statham: So that was the first thing. And then we knew
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David Statham: that the climate change debate around the world is getting
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David Statham: bigger and bigger and bigger and legislation in Europe is
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David Statham: such a driver for these companies. They either pay tax
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David Statham: on the garment or they can pay a farmer. So
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David Statham: one of the biggest things that I’d like to get
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David Statham: across is that we are in a very fortunate position
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David Statham: having come from the steel industry into agriculture because I
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David Statham: did work in the Ranbuild business for over 15 years. Data
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David Statham: records was critical. We had 20 years of soil tests,
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David Statham: every field, every second year in the same GL location
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David Statham: we had a record of and we had a record
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David Statham: of every field for the last 20 years of every
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David Statham: past chemical, fertilizer, the rates, the machinery passes on each
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David Statham: field.
So that allowed us to tell a story probably
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David Statham: a lot earlier than most because we had the sequestration
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David Statham: story in the records because we’re measuring soil carbon underneath the
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David Statham: soil and we could also measure our emissions through our fuel
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David Statham: purchases, our electricity, the fertilizer and chemical use. And that’s
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David Statham: all calculated and it gives you a net result. You’re
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David Statham: either sequestering carbon or you’re emitting carbon as a farmer.
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David Statham: And to be able to measure it, record keeping is
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David Statham: probably the biggest thing that most people aren’t in the
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David Statham: position of doing, but they had to tell their story
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David Statham: going forward, it’s not just about the brands, it’ll be
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David Statham: about, I think banks are going to be soon valuing
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David Statham: it. Land valuation companies will be soon making a point
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David Statham: of it. So I think it’s going to come very
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David Statham: fast and it rewards those farmers that are doing positive
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David Statham: farming practices, looking after their soil, leaving better than what
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David Statham: they found it and they get a reward for it economically. That’s the goal.
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Jennifer Duke: It is exciting to see farmers kind of on the
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Jennifer Duke: forefront of this. And one of the things, I think
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Jennifer Duke: I mentioned this in the intro, is that Good Earth
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Jennifer Duke: Green Hydrogen and Ammonia Project, which received some funding to
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Jennifer Duke: help with the construction of the facility. Can you explain
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Jennifer Duke: to us what that does and how that’s going to
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Jennifer Duke: help this vision?
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David Statham: Well, sitting out on a journey to build my own
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David Statham: solar farm to run our own gin, understanding our emissions
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David Statham: over the last four or five years, obviously the ginning
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David Statham: process uses a lot of electricity. So as of today,
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David Statham: we’ve built a 9 megawatt solar farm and we’ve invested
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David Statham: heavily in batteries. So we’re getting from seven o’clock in
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David Statham: the morning till 10 o’clock at night towards the end
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David Statham: of the season up until 11 o’clock at night through
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David Statham: the solar farm and the batteries, which is pretty extraordinary. So
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David Statham: it’s over 66% of the power is coming from renewable energy.
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David Statham: During the process of building that solar farm, I was
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David Statham: introduced to Hiringa, which has got the skillset and we
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David Statham: discussed and talked about going into a project and having
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David Statham: to build our own hydrogen, anhydrous ammonia. After talking to them,
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David Statham: these technologies exist today mostly in the European countries again,
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David Statham: and it’s a matter of bolting them together, putting them
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David Statham: in place.
And we capitalized on the New South Wales
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David Statham: government’s hydrogen fund to promote technologies like this and to
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David Statham: bring them forward. Obviously, our project is on a small
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David Statham: scale, that’s why it needs funding. But they’ve done that
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David Statham: for a reason to try and kickstart the discussion. And
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David Statham: I think that it’s more than feasible for these bigger
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David Statham: plants. Our project is only 10 ton a day, so
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David Statham: there are commercially viable plants running in other parts of
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David Statham: the world at 60 tons a day and they’re only
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David Statham: three times the cost. So those projects could be rolled
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David Statham: out into quite a few other valleys to make a complete
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David Statham: green circular economy for farmers, supplying their own fuel and
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David Statham: fertilizer back to farmers.
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Jennifer Duke: The farming community’s pretty tight. Do you see a lot
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Jennifer Duke: of appetite from other farmers for this type of tech?
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Jennifer Duke: Are they as innovative as you are?
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David Statham: I think there is. I think you’ve got enormous amount
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David Statham: of corporates in agriculture today. The corporates are going to
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David Statham: have the biggest … Corporate companies are having more pressure on
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David Statham: their balance sheet in regards to carbon moving forward than
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David Statham: what private families will. So they’ve got the capital to
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David Statham: deploy. Some of them have got the land area to
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David Statham: deploy. So a lot of the ginning companies, it’s perfect
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David Statham: for some of the bigger ginning companies in Australia, the
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David Statham: cotton ginning companies, they’ve already got the land, they’ve got
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David Statham: a customer, being the gin for the electricity and they’ve
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David Statham: also got customers that bring their cotton into them that
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David Statham: now require the fuel and the fertilizer.
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Jennifer Duke: David, that was absolutely fascinating. Thank you very much for
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Jennifer Duke: talking to Fear and Greed.
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David Statham: Thank you very much for your time.
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Jennifer Duke: And that was David Statham, the Co-owner and Director of
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Jennifer Duke: Sundown Pastoral Company. This is the Fear and Greed Daily Interview.
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Jennifer Duke: Join us every morning for the full episode of Fear
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Jennifer Duke: and Greed, Australia’s best business podcast. I’m Jennifer Duke, economics
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Jennifer Duke: correspondent for Capital Brief and filling in for Sean Aylmer.
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Jennifer Duke: Have a great day.