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          How can investment help feed 8 billion people?

          The complexity of our (creaking) food system means bold and blunt attempts at change often don’t yield the desired results. But human ingenuity and investment in the right forward-thinking businesses can create a more optimistic future for our planet.

          A global food crisis is building. The tug-of-war between feeding our growing global population and the urgent need to reduce human impact on the planet is intensifying.

          Against a backdrop of conflict-induced food shortages, surging prices and extreme weather events ravaging crops, it is not surprising to see food-related concerns reaching boiling point in many regions.

          In the past week, we have seen Dutch farmers protesting in the streets against a new government action plan to drastically reduce nitrogen (read: ammonia) emissions from agriculture. But what is ammonia and why is it being targeted?

          Ammonia is the single-most used fertiliser in the world. It’s also largely synthetic. Around 2% of the world’s energy is used to make it.[1] And 85% of the ammonia we make goes into producing the food we eat.[2]

          It is produced using the Haber-Bosch process invented in the early 20th century. Without it, we wouldn’t be able to grow the food we (humans) need. In fact, Earth’s biocapacity limits us to feeding about four billion people per year, while the current global human population is nearing eight billion.[3] So in short, we need it.

          The problem is that ammonia, when left in soil for too long, volatilises, binds with oxygen and turns into nitrous oxide, a greenhouse gas. Nitrous oxide is 300 times more virulent than CO2.[4] It also stays in the air for much longer, and absorbs more heat, contributing to global warming.

          In the case of the Netherlands (the world’s third-largest exporter of dairy) the primary source of the ammonia is cattle, rather than fertiliser.[5] They have a lot of cows packed into a small country, with an inescapable bi-product being ammonia-dense urine.

          Different source, same issue.

          Leaving aside the rashness of the Dutch government’s decision — from a lack of warning signs, to failing to consider how this would instantly wipe out the livelihoods of Dutch farmers, to not using a phased approach — we believe these events will bring a conversation about food to a head in Europe.

          This is hopeful. We urgently need to tackle the negative externalities of food in Europe.

          Our Sustainable Future of Food theme is built around our conviction that humans can address negative externalities in food using technology. Much in the same way human innovation gave us the Haber-Bosch process to help feed the world in the 20th century, we believe human ingenuity will prevail this time too and give us the technologies to address today’s food challenges.

          Already, there are publicly listed companies around the world incubating all kinds of incredible technologies from (1) those seeking to fix nitrogen directly into crops using gene edited microbes to (2) those seeking to use soil-sensors to understand variability in soil nitrogen levels to (3) those seeking to grow key calorie producing foods in bioreactors and other controlled environments (as opposed to on land).

          All of these things give us great optimism. We are confident that from today’s crisis will come new ways to make our food system more resilient and sustainable and also more adaptive and innovative.

           

          Related ETF

          FOOD: Rize Sustainable Future of Food UCITS ETF

           

          References:

          [1] Science, “Ammonia—a renewable fuel made from sun, air, and water—could power the globe without carbon”, July 2018. Available at: https://www.science.org/content/article/ammonia-renewable-fuel-made-sun-air-and-water-could-power-globe-without-carbon

          [2] Johnson Matthey Technology Review, “Ammonia and the Fertiliser Industry: The Development of Ammonia at Billingham”, 2018. Available at: https://www.technology.matthey.com/article/62/1/32-47

          [3] Thomas Hager (Author), The Alchemy of Air, Introduction, page xiii, 2008.

          [4] Inside Climate News, “What Is Nitrous Oxide and Why Is It a Climate Threat?”, September 2019. Available at: https://insideclimatenews.org/news/11092019/nitrous-oxide-climate-pollutant-explainer-greenhouse-gas-agriculture-livestock/

          [5] Darigold, “Third largest dairy producing country embraces sustainability”, July 2021. Available at: https://www.darigold.com/third-largest-dairy-producing-country-sustainability/

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