He never expected to do business with FrieslandCampina in this way. Lambertus de Bruin (60), dairy farmer, had been a member of the dairy cooperative for many years and knew it well. But he had not foreseen that he would ever sell his ‘nitrogen space’ to the group in addition to milk. “We give them a warm heart, so it’s not a problem in that regard.”
FrieslandCampina announced this month that it had gathered enough nitrogen space for the expansion of its dairy factory in Veghel in Brabant. To do this, the company bought 27 tons of emissions space through intermediaries from fifteen farmers, who are stopping their businesses in all corners of the province.
The transaction is a remarkable example of the lively trade in nitrogen rights. The fact that FrieslandCampina found the necessary nitrogen space required complex calculations and months of research for suitable farms. In doing so, the company calculated exactly to the meter which nature reserves would suffer from the emissions of the new factory.
The agreement between the company and farmers is in order according to the law, but the practice of nitrogen trading can count on resistance. The agricultural world is afraid of contraction, because nitrogen space flows to other industries. And experts fear that in the current, tight nitrogen market, it is mainly parties with money that can realize projects. They are also critical that, while nitrogen emissions are still far too high, the space of discontinuing companies is being reused.
The agricultural world fears contraction as nitrogen space flows to other industries
It does not say how much FrieslandCampina paid the farmers. On websites such as ammonia rights.nl, intermediaries offer nitrogen space for 5 to 500 euros per kilo. Prices vary by region. The closer to a vulnerable nature reserve, the higher the price.
For De Bruin, who has since disposed of his cows and focuses on arable farming (in the same place in Reek in Brabant), the yield is disappointing. Laughing: “I can buy a new car, but it is of little use in terms of investment in my new arable farm.” After decades between the cows, it was time for a “slightly less strenuous” profession, he says.
Affected region
The factory that FrieslandCampina is expanding makes medical food based on caseinates: proteins from fresh milk. Demand for it is increasing worldwide, according to the dairy company. But the expansion also increases the plant’s nitrogen emissions. Developing new business activities in the southeast of North Brabant is complicated in any case. The region is one of the most nitrogen-affected areas in the Netherlands, mainly due to the many pig farms – good for about five million pigs. And that while the province must have halved its nitrogen emissions from the government by 2030.
In search of a solution, FrieslandCampina approached agricultural consultancy DLV Advies more than a year and a half ago. This links sellers of nitrogen space to parties that are looking for this space. Farmers regularly report to DLV Advies who are considering stopping, who want to stop or who have recently terminated their business and hope to earn some money from the sale of their nitrogen rights.
Jacob Sleutels (54) from Heusden, municipality of Asten, has since stopped working as a dairy farmer and only wants to keep a few horses. The dairy farm that he ran as the third generation could no longer manage with ninety cows. The expansion of the nearby nature reserve would also force him to keep even fewer cows. That’s why he got rid of the animals. “They’ve been gone for two years now, and I still miss them every day.” He sold his nitrogen space to FrieslandCampina.
Read more about the trade in nitrogen rights: For sale: farmers offer thousands of kilos of nitrogen space online
Bringing together the demand for nitrogen space and its supply is complicated. Expansion of the FrieslandCampina factory would cause ‘nitrogen emissions in all directions’, says Jos de Groot, who arranged the agreements with the farmers at DLV Advies. That required a lot of puzzling. Where are suitable farmers located, where do their emissions fall?
Striking: De Groot advised FrieslandCampina to buy more space than is theoretically required. The case law on nitrogen trading is constantly changing and is extremely complex; There are several lawsuits pending on this legislation. It is possible that a rule will soon be passed in court, which also means that nitrogen that precipitates further than 25 kilometers from the ejector. That is why FrieslandCampina bought extra space. De Groot: „We have said: it is good to safe to play.”
Some make easy money with this trade. That doesn’t make reducing emissions any easier
Vulnerable nature
The nitrogen trade in which FrieslandCampina participated is the only way for companies to expand in areas with a high nitrogen load. But there is also another side to it, wrote NRC before.
Quitting farmers sell allowances that they usually got for free when they applied for their permit. Anyone who is now in an area with a lot of demand for those rights is a big deal. Experts find it legally doubtful that the space released will not go to vulnerable nature.
“It is clear that some are making easy money with this trade. That does not make reducing emissions any easier,” says Raoul Beunen, associate professor at the Open University and an expert in nitrogen policy. According to him, you can also read the law in such a way that all nitrogen space released must go to nature, as long as it is in poor condition.
Beunen points out that in theory the precipitation of nitrogen on nature reserves could also increase. For example, at some farms from which space is being taken over, the cows have been gone for some time. And then there is still the chance that parties with the deepest pockets will run off with the nitrogen space.
In the agricultural sector, the ‘loss’ of nitrogen space to other sectors is a sensitive issue. Mark van den Oever, leader of the militant farmers’ group Farmers Defense Force, already called farmers who sell nitrogen space to other sectors “Judas” and “weak links”.
According to Jos de Groot of DLV Advies, the idea that the ‘deepest pockets’ win is not entirely valid. “At the moment I have more supply of nitrogen than demand.”
According to FrieslandCampina, the purchase of nitrogen rights “only comes into the picture as an option when there are no other options”. The company points out that only rights ‘that are already offered on the market by farmers’ are used. “Obviously we want to structurally reduce the ammonia emissions released during this production. But it takes several years to determine and implement the best solution for this.”
A version of this article also appeared in the October 19, 2022 newspaper