April 5, 2021


Fonterra works to become coal-free


Fonterra has been working on its transition to renewable energy for some time and has an intention to move away coal, with a couple of practical constraints, the dairy cooperative said.


Nine of Fonterra's 29 sites use coal. According to its chief operating officer, Fraser Whineray, there's been a lot of progress over the last few years to get the cooperative to a position where it can become coal-free.


"With customers in more than 140 countries, we have global insights and long-term trends supporting these actions, which have been in progress for some time, Whineray said. "Last year, we achieved our target of a 20$ reduction in energy intensity from a 2003 baseline after making thousands of improvements across sites here in New Zealand. Lifting energy efficiency is a valuable pre-requisite to larger investments.


"More recently, we reduced the total quantity of coal we use by 10% when we converted our Te Awamutu (New Zealand) site to burn wood pellets and this builds on our experience from converting our Brightwater site in 2018 to co-fire on wood biomass.


"We've built a lot of capability in-house and with partners in New Zealand and internationally and this provides us with comfort that solutions are sustainable. It's important to us that New Zealand continues to be at the forefront of sustainable food production – and getting out of coal is one way we can help with this."


Whineray added: "We already have the lowest carbon footprint among major milk producers around the world and we want to continue to build on this competitive advantage.


"While we're working on this transition, we need to make sure we can deliver on our customers' needs and process our farmer owners' milk. There is only a small window between each milking season when we can undertake the necessary engineering work to make key changes on the remaining sites.


"We'll also need to make sure we can get the right specialist skills and equipment into the country at the right time, beyond the extensive local capabilities. And we'll need to have a secure gas supply for our existing gas-fired boilers."


Fonterra said the Climate Change Commission's recommendations are broadly in line with the steps the cooperative is taking to put sustainability at the core of everything it does.


The cooperative also expresses support of increased electric vehicles (EV) and use of low carbon fuels and is implementing a new policy that will see a third of its light fleet transition to EVs and more charging stations installed at its sites.

The recent roll out of the Milk Vat Monitoring systems that have been installed on farms has created opportunities to optimise Fonterra's tanker pick-up schedules allowing it to budget for five fewer tankers from next year.


The Climate Change Commission's recommendations align very closely with the steps that Fonterra is already actively working towards through The Co-operative Difference.


Additionally, Fonterra is supportive of developing a long-term plan for research and development working with the government and industry on the methane challenge.


Nevertheless, the cooperative is concerned that some of the productivity assumptions underpinning the commission's modelling, that show a maintenance of current milk production, are very ambitious and will be difficult to meet.


- Fonterra