Decarbonisation & the Paris Agreement: What Food Manufacturers Need to Know Now
In September 2025, Australia submitted its third Nationally Determined Contribution (NDC) under the Paris Agreement: a commitment to reduce national emissions by 62–70% below 2005 levels by 2035. Alongside it came a Net Zero Plan, six sector emissions reduction plans, and a $5 billion Net Zero Fund explicitly designed to help industrial facilities decarbonise. Most Australian food and grocery manufacturers read those headlines, noted them as future problems, and went back to running their lines. Pete Taitoko has been watching this and is increasingly direct in his message: the next five years of carbon policy will reshape every facility capex decision being made today, and most manufacturers are underestimating how fast that pressure will arrive.
What Australia's 2035 Target Actually Means for Manufacturing
The 62–70% target is not aspiration — it's a UN-lodged commitment with a multi-year carbon budget across 2031–35. It sits on top of Australia's existing 43% by 2030 target and the legislated net-zero-by-2050 goal. The mechanism delivering it for industrial facilities is the Safeguard Mechanism,, which already requires Australia's largest emitters to keep their direct emissions below baselines that decline 4.9% every year to 2030.
The Safeguard Mechanism directly covers around 219 facilities — those emitting more than 100,000 tonnes CO2-e per year. Most are mining, heavy industry, gas, and large-scale manufacturing. Very few mid-tier food and grocery manufacturers sit directly inside that net.
But that's where most operators stop reading and that's the mistake.
The Real Pressure Comes Through the Supply Chain
Even if your facility isn't a Safeguard Mechanism facility, your customers very likely supply someone who is. And every major Australian retailer, foodservice group, and multinational FMCG parent now has Scope 3 emissions targets that cascade down to suppliers. The mechanism is simple:
Retailers and foodservice. Coles, Woolworths, ALDI, and the major foodservice groups all have public net-zero commitments with interim targets between 2030 and 2035. Their Scope 3 emissions are dominated by what their suppliers manufacture. They have already begun requiring emissions data and reduction commitments from grocery suppliers — and that's only going to intensify.
Multinational FMCG parents. If you contract-manufacture for a multinational, you're already inside their global carbon disclosure regime. Mars, Nestlé, Unilever, and PepsiCo all have aggressive Scope 3 targets and are increasingly putting carbon performance into supplier scorecards.
Banks and financiers. Sustainability-linked loans now make up a large share of corporate debt in Australia. The covenants increasingly tie interest margins to decarbonisation progress. If you're funding a facility expansion with debt, your bank may already be asking about emissions performance.
Export markets. The EU's Carbon Border Adjustment Mechanism is already living in a transitional phase. Other markets are following. If you're exporting Australian-made food and grocery products, embedded emissions will increasingly be priced into market access.
The mid-tier food manufacturer not directly regulated by the Safeguard Mechanism still faces the same operational pressure — just routed through customers, financiers, and export buyers instead of arriving from the regulator.
Why This Is a Capex Question, Not an Operations Question
Most decarbonisation conversations focus on operational fixes — switching to renewable electricity contracts, installing solar, swapping diesel for electric forklifts. These matter and they're real. But they're not where the biggest emissions reductions sit for food and grocery manufacturers.
The largest single emissions source in most food manufacturing facilities is process heat — the steam, hot water, and direct heat used in cooking, pasteurisation, sterilisation, cleaning, and drying. Most of it currently comes from natural gas. Decarbonising that load is fundamentally a food process engineering question — heat pumps, electric boilers, heat recovery, process redesign — and it has to be designed into the facility, not retrofitted afterward.
This is where process improvement manufacturing intersects directly with decarbonisation. If a facility is being designed today without considering the next decade of carbon cost trajectories, it's being designed obsolete. The capital invested is locked in for 20–25 years. Carbon policy moves faster than that.
What Decarbonisation-Ready Facility Design Looks Like
RMR Process's approach to food and facilities management has always treated production-system efficiency as a capex protection mechanism. The same discipline now becomes a decarbonisation mechanism. Specifically:
Electrification-ready utilities. Designing electrical infrastructure, switchboards, and main supply with sufficient headroom to convert gas-fired loads to electric over the facility's life — without ripping out and rebuilding.
Heat integration and recovery. Mapping the facility's thermal flows so waste heat from one process becomes useful heat for another — the highest-leverage emissions reduction in most food plants.
Process redesign before equipment replacement. Many decarbonisation gains come from rethinking the process itself — not just swapping fuel sources. This is core process engineering, and it's where the gains compound.
Capex staging that captures grant funding. The $5 billion Net Zero Fund and related programmes are explicitly designed to support industrial decarbonisation. Facilities planned to capture these incentives reduce net capex meaningfully — but only if the design supports the funding criteria.
Brownfield decarbonisation. Existing facilities can often be repurposed and upgraded for decarbonisation outcomes at lower capex than new-build. Our piece on repurposing existing facilities covers the broader case.
Talk to RMR Process
A facility designed today without a decarbonisation pathway will face one of two outcomes by 2030. Either it absorbs rising operational carbon costs as policy tightens, or it requires a second round of capex to retrofit — usually at 2–3x the cost of designing it originally. Neither is a good outcome.
The manufacturers building facilities in 2026 that will still be performing in 2046 are designing for that horizon now. If you'd like to discuss how decarbonisation-ready design can be built into your next facility expansion or upgrade — or how it fits into a broader scaling plan — we'd be happy to talk. The first conversation is always free.