How to decarbonise rice 🌾
Cutting emissions of the world's top staple food
Note: I'm expanding this newsletter to cover more climate, food, and agri-tech topics. Hope you'll keep reading and sharing with others.
For a few years, I lived in Indonesia in a house surrounded by rice fields.
Despite being literally right next to it, I was clueless about the climate impact of rice cultivation.
Only recently did I learn that rice growing contributes up to ~2% of all global greenhouse gas emissions. While it may not sound like much, it is on par with the entire aviation sector. And more than all of Germany's emissions.
Rice is responsible for ~10% of man-made methane emissions - a shorter-lived but very potent gas with 80 times the warming power of CO2 over 20-year period.
In Vietnam, one of the top rice producers, the crop adds more emissions than the country’s entire transport sector combined.
At the same time, changing climate is already affecting rice farmers. One study found that yields at over 200 farms observed across Asia decreased by 10-20% as a result of rising temperatures and decreasing solar radiation in recent decades.
There are an estimated 150 million smallholder rice farmers in Asia, and more than half a billion people rely on it as a source of income.
As the International Rice Research Institute (IRRI) says, rice production is both a victim and a contributor to climate change.
The good news is that there are solutions, some surprisingly simple and scalable, to decarbonise rice and help farmers adapt to climate change.
I wanted to understand it better, so I talked to rice farmers, experts, and startup founders working in this space to unpack the problem and the opportunity.
Let’s dive in 🍚
Sources of emissions
Most rice is grown in paddy fields submerged in water, largely to help manage weeds.
Even if you have never been to a rice-growing region in Asia, you have probably seen charming photos of flooded rice terraces.
Those water-filled paddies create low-oxygen conditions in the soil. Bacteria that thrive in that environment break down decaying plant material and release methane as a byproduct.
Methane is then transported from the soil to the atmosphere primarily through rice plant stems and leaves or via "methane bubbles" that float up to the surface and burst.
Here is a simplified visualisation of that process (source):
Methane accounts for the vast majority of rice-related emissions.
What about the remaining part?
Burning the straw after harvest to clear the land for the next season is a common practice, releasing CO2 and other gases into the atmosphere and contributing to air pollution.
Even if the straw is left on the surface or plowed into the soil, its decomposition will still release methane (when submerged) or CO2 (when dry).
Other contributors are nitrous oxide - also a very potent gas - from fertiliser application and fossil fuels used for farm machinery. The latter obviously depends on the level of farm mechanisation, which is often still limited in many top growing markets in Asia.
Transport and packaging add relatively few emissions, especially since ~90% of rice is used for local consumption, not exported.
There are also one-off emissions related to converting forests and wetlands to new rice paddies due to releasing the carbon stored in soil and plants.
Scale of the problem
All these various emission sources add up to a significant carbon footprint: from 1.5 to 2.5 kg CO2 equivalent for every 1 kg of rice.
And then there is the huge scale of production and consumption: around 500 million metric tons of milled rice annually (growing 3x in the last 60 years), supplying ~20% of calories consumed worldwide, with an annual gross value of over $330 billion, the highest among all crops and animal products.
Production is expected to continue to increase by at least 10% by 2035.
That combination of footprint and scale translates into as much as 1 gigaton of CO2 equivalent - or between 1.5% and 2% of all global annual greenhouse gas emissions.
For context, this is more than each of the following:
Entire global aviation
Entire global maritime shipping industry
Entire global air conditioning
It is also higher than the total emissions of most individual countries, like Germany, Saudi Arabia, or Canada, and more than the UK and France combined!
Rice is contributing 48% of total GHG emissions in global croplands.
It also has a high “water footprint”, ranging from 800 to 5,000 liters per kg.
Again, the sheer scale of production leads to rice cultivation using more than 1/3 of the global irrigation water, according to IRRI. In top rice-producing countries like India or Vietnam, it is closer to 2/3 of water.
Solutions
I initially assumed there was no obvious fix to rice emissions.
I was surprised to discover a range of proven solutions, some of which are relatively simple and scalable - but not without challenges.
In this piece, I am mostly talking about alternate wetting and drying - or AWD for short.
Done right, AWD can help reduce methane emissions by nearly 50%.
It is not hard to guess from the name what it is about: instead of keeping the paddy flooded, farmers go through several wet and dry cycles.
How does it help?
You may remember that flooded paddies create perfect conditions for methane-producing bacteria. Drying the field from time to time suppresses the activity of those organisms, dramatically cutting emissions. It also helps save water.
AWD is generally not very complicated or expensive to implement.
Farmers dig a measuring pipe in a corner of a paddy and allow the water level to drop 15 cm below the soil surface. At that level, roots are still submerged. Then, the field is flooded again to approximately a 5 cm level. The cycle is repeated several times during the vegetative stage of rice growth.
So AWD reduces methane emissions and saves water. But for farmers, the crucial question is the yield.
Mr. Kim Minh Tuan, a smallholder farmer in Tieu Can district in the Mekong Delta, often called the "rice bowl" of Vietnam, also leads a local farmer cooperative.
“The most important thing [in introducing AWD] is to assure farmers they can maintain their productivity” - he told me1.
Farmers have practiced continuous flooding techniques for generations and are worried that drying fields would simply make the crops die.
"It is a huge unknown factor, because they are not used to it," says Mr. Tuan.
Other practical challenges include managing rats and controlling weeds, as continuous flooding prevents weed overgrowth.
Prof. Paul Teng, author of a paper on rice's climate impact, told me that most evidence shows AWD does not meaningfully reduce yield, and in some cases, has increased it. Other rice experts I talked to also believe there is no "yield penalty" in AWD.
A meta-analysis of 56 studies by Carrijo et al. (2017) found that AWD reduced yields on average by 5.4% compared to continuous flooding. However, so-called "Safe AWD," where water levels were not allowed to go below 15 cm, had no reduction in yield.
Could alternate wetting and drying potentially increase yield? Some believe it prompts rice roots to grow deeper into the soil during the drying phase, resulting in better nutrient absorption, hence better growth and better yield. Trials are being conducted by some companies to test this hypothesis.
Implementing AWD may, however, lead to extra costs for farmers:
Herbicide to fight weeds. Fencing for pests. And additional labor required for monitoring and alternating wet and dry cycles.
The meta-analysis I mentioned earlier also shows an average 23% water use reduction. That would suggest lowering costs. But in many cases, farmers either do not pay for water at all or only pay a fixed fee, regardless of the amount used. In Mr. Tuan's area, it is about US$50 per farmer per season. He estimates AWD might increase the fee by ~5% to help pay for extra pumping required to wet the field after each drying cycle.
So with no guaranteed yield increase and some costs related to infrastructure, inputs, and labor, farmers need an extra incentive to implement AWD.
This is where startups come in.
Startups
In the last few years, several companies were created and started working directly or indirectly with farmers across Asia, incentivizing them in various ways to introduce AWD and other climate-friendly techniques2.
Rize is a Singapore-based company created by climate venture builder Wavemaker Impact, Temasek (and its subsidiary GenZero), and Breakthrough Energy Ventures.
The business is led by Dhurv Sawhney, who exited his food tech startup in India to Zomato. He previously worked at PayPal, Dell, and agri platform nurture.farm.
Rize buys seeds, fertiliser, and other inputs in bulk with wholesale discounts and sells them to farmers who implement AWD - cheaper than local farm stores, saving farmers 8-10% per season, according to Dhruv.
The company recently announced a $14M Series A, raised from the same group of founding investors.
Rize is currently testing their model with farmer cooperatives in Indonesia and Vietnam, covering about 2,500 hectares. The company is planning to expand to other areas in Asia and ultimately build a broader platform or "operating system" for decarbonising rice.
AgriG8 is a startup co-founded by David Chen and Joshua Tan, also based in Singapore, with Trendlines incubator as an early investor.
David has worked in the rice ecosystem for over 15 years and previously co-founded Golden Sunland, partnering with smallholder farmers in Myanmar to produce high-quality rice using responsible practices and paying them above the market rate.
AgriG8 is using lending as a way to incentivize farmers to implement AWD and other emission-reducing solutions. Most rice farmers need to borrow money each season for seeds and inputs. AgriG8 works with financial institutions to offer more attractive credit terms, allowing farmers to save on interest while decarbonising their production.
To help introduce and monitor the impact of AWD and other sustainable practices, AgriG8 developed an Android app called CropPal, designed specifically for smallholder farmers and meant to replace traditional paper logbooks (David told me the app is often used by younger, more tech-savvy family members). It is piloting the solution in Thailand and Vietnam.
MittiLabs (India/US) and CarbonFarm (France) are offering a different set of incentives - building solutions for carbon credits in rice farming. The startups recently raised $3M and $2.6M seed rounds respectively.
They are betting on the growth of the carbon market, with various companies purchasing credits to offset their emissions - but also on food companies and rice buyers willingness to decarbonise their value chains.
Both startups work with local project developers like agribusinesses, rice millers, grassroots NGOs and others with access to and trust of farmers. They also partner with third party carbon registries, like Verra and Gold Standard, to verify quality of carbon credits.
They are aiming to return at least 70% of carbon credit revenues back to farmers.
The critical part of their solutions is MRV (measurement, reporting and verification), to ensure farmers are correctly introducing AWD and other practices and it has a desired carbon reduction.
CarbonFarm is relying primarily on remote sensing - which means satellite images. MittiLabs is also working on the ground, using a small 1-meter cube to measure gas concentration (co-founder Devdut told me they tried soil sampling, which is cheaper, but not precise enough).
Satellites can help track wet and dry cycles of AWD, but it requires relatively high image resolution - according to some founders, too expensive to make it profitable with the current carbon offset prices. Startups try to use software and machine learning to help “decode” lower resolution satellite images.
AgriG8 is also using satellites as part of MRV for their lending partners. Dhurv from Rize told me they are planning to do so in the future, already talking to “every major satellite image provider”. Both startups explore carbon credits as part of their business model and additional incentive to farmers to adopt sustainable practices. AgriG8 recently submitted a proposal to Gold Standard for new, broader carbon methodology that includes not just AWD, but also “methods such as the use of high-yielding seeds and improved fertiliser management”.
Other startups begin to work in this space and given the scale of the problem and the opportunity, I expect many more to be launched in the coming years.
More solutions
AWD might be the best, but not the only tool in a rice decarbonisation toolkit.
IRRI published a list of 10 other solutions, including:
Direct Seeded Rice (DSR): Instead of transplanting seedlings from a nursery bed, seeds are sown directly into the main field; it requires less water, hence reducing methane emissions; a combination of AWD + DSR can lead to methane reduction of up to 90%
Challenges: higher seed cost and/or extra equipment, weed growth, increased herbicide use, extra labor, learning and adapting new practices
Laser land leveling (LLL): Laser-guided technology is used to level fields by removing soil from high points and depositing it in low points of the field; saves emissions by reducing cultivation time and improving input efficiency; by optimizing field level, it can help reduce potential yield reduction of AWD.
Challenges: cost of devices and learning curve
Rice straw and husk management: The straw leftover after harvest is often burned to prepare the field for the next season, releasing greenhouse gases and causing air pollution; most climate-friendly solutions are off-field - these include turning it into biochar to improve soil productivity or mushroom production; there are even some projects to convert rice straw and husk into construction materials
Challenges: cost of collecting, transporting, and processing straw and husk
Fertiliser management: More efficient use of fertiliser, including mechanical instead of manual spreading, reducing nitrous oxide emissions.
Challenges: upfront cost of equipment and training
New rice varieties: IRRI developed several new varieties optimised for methane-saving farming practices, e.g., Sahod Ulan, which is more suitable for AWD cultivation but also drought-resistant, helping farmers adapt to climate change; seed companies like Bayer also work on varieties better suited to direct seeding.
Researchers also work on new rice types using genetic modification.
One example is SUSIBA2, carrying a gene introduced from barley. The studies have shown the methane reduction potential between 22 and 51%. Despite first being introduced in publications in 2015, it has not been commercially adopted, mostly due to GMO regulatory challenges. It also has a different cooking and taste profile given its higher starch content, which would require changing consumers' habits (never easy!).
Market drivers
What are the key drivers for low-carbon rice?
Primarily, it's the decarbonisation goals and net zero targets of companies and organisations involved in the rice value chain - as well as governments of top rice-producing countries.
Mars, the owner of Uncle Ben's (recently rebranded as Ben's), arguably the most recognisable consumer rice brand in the Western world, has already started working with some of the startups I mentioned earlier.
Bayer, a seller of seeds and inputs to rice farmers, launched DirectAcres program, providing farmers with seeds, crop protection, and technologies to transition to direct-seeded methods. It aims to work with 2 million farmers in India and expand the program to the Philippines next year.
My contact at Bayer said that the company's main motivation in pushing for DSR and AWD is to help achieve their own net zero goals. It is also about "empowering growers to produce more rice with less water and labor." And Bayer likely sees a commercial opportunity in providing new seeds as well as more herbicide required for those climate-friendly farming practices.
The government of Vietnam has committed to cutting 8-25% of its agriculture emissions by 2030 to fulfil the targets of the Paris Agreement. Rice accounts for 50% of the country's agriculture emissions, so the government is supporting pilot projects like VnSat, which helped reduce 1.58 million tons of GHG.
Another driving force is carbon project developers and the voluntary carbon market. With recent controversies around forest-based carbon projects, companies will need to ensure high quality of rice-based credits.
What about consumers - are they willing to buy and pay a premium for low-carbon rice, creating an extra driver and incentive?
I talked to Amru, a Cambodian rice producer and exporter. They export organic rice to Western markets, mostly to Europe. Jonathan Lim told me some consumers in affluent parts of Europe are willing to pay more for organic rice, driven mostly by health. Sustainability matters for them, but mostly from the perspective of being "gentle on the land" and farmers getting their fair share of the price. Awareness of the carbon footprint of rice is still low among consumers.
In the UK, a company called Nice Rice is selling premium basmati rice grown in India using AWD, claiming "49% lower CO2-eq emissions." It also says it is "better tasting rice."
But according to folks I talked to, this is unlikely to make a significant impact in Asia, where over 90% of rice is consumed.
The vast majority of rice consumers in our region are very price sensitive and treat it as a staple, and are unlikely to pay even the smallest premium for a low-carbon version.
So it is up to governments and rice producers to fast-track rice decarbonisation.
Rice might be a low-hanging fruit of food and agri decarbonisation - it is not without challenges, but rarely do I come across proven and scalable solutions with such a significant emission reduction opportunity in this space.
I am hoping to see even more innovative startups and projects to support rice farmers and drive the sector's decarbonisation. Expect me to feature them in future newsletter issues.
Events
Here are some climate, agri, and food events I am attending and speaking at.
Let me know if you are there - it will be "rice to meet you" (couldn't resist at least one rice pun!).
HackSummit, Lausanne, Switzerland (June 13-14th)
Leading climate tech event in Europe
Includes a dedicated rice decarbonisation session with some of the founders mentioned in this piece!
I will be speaking about climate investing in emerging markets and interviewing APAC agri-food tech founders
Asia-Pacific Agri-Food Innovation Summit, Singapore (November 19-21st)
Top agri-food event in Asia Pacific
In previous years, included rice topics in the agenda
Early bird tickets available until August 29th
Thank you to all the folks who helped me with the research for this piece, patiently answering my questions, including Prof. Paul Teng (NIEI), Dhurv Sawhney (Rize), David Chen (AgriG8), Devdut Dalal (MittiLabs), Jonathan Tan (Amru Rice), Greg Michel (Cell Capital), and more.
The quote was sourced via one of the startup founders working in that area
Disclaimer: Better Bite Ventures, which I am founding partner of, may hold positions in some of the startups mentioned in my newsletters, at the time of publication or in the future. If possible, I will disclose specific investments.