Fonterra announces climate plans for the future

86% of Fonterra’s emissions come from on-farm, and the new target is seeking to reduce emissions intensity by tonne of FPCM (fat and protein corrected milk) collected by Fonterra. 

In making the announcement at the Co-operative’s Annual Meeting, Fonterra CEO Miles Hurrell said New Zealand farmers are some of the most emissions-efficient suppliers of dairy at scale, but work needs to continue to maintain this position.

“There is a lot of activity to reduce emissions across other markets, and the Co-op needs to keep making progress to make sure it doesn’t fall behind. 

“As a dairy partner to many of the world’s leading food companies, we’re responding to growing sustainability ambitions from our customers and financial institutions, along with increasing market access, legal and reporting obligations. 

“Our collective efforts to reduce emissions – from on farm, across our operations and by our R&D teams – will help future proof Fonterra, supporting our ambition to be a long-term sustainable Co-op for generations to come,” says Mr Hurrell.

“At the other end of the supply chain, as a large part of our customers’ Scope 3 emissions, today’s announcement further demonstrates to them that we are committed to being their sustainable dairy partner of choice both now, and into the future.” 

Fonterra expects this new target will be achieved through a number of ways:

• 7% reduction through farming best practice such as feed quality and improving herd performance
• 7% reduction through novel technologies that we’re developing through AgriZeroNZ, the joint venture between agribusiness and Government working to find a solution to methane, and other partnerships 
• 8% reduction through carbon removals from existing and new vegetation
• 8% from historical land-use change conversions to dairy.

Fonterra Chairman Peter McBride says that the Co-op's overall on-farm emissions reduction target would affect each farm differently.

“There is significant variation within and across farming systems when it comes to emissions intensity. We are confident that we can make solid progress towards our target by working together and sharing information farmer-to-farmer.

“There’s no one solution to reducing on-farm emissions. It will require a combination of sharing best farming practices and technology to reduce emissions – it’s both our biggest opportunity and our biggest challenge,” says Mr McBride.  

“We have deep empathy for the challenges our farmers are already dealing with. The Co-op’s approach will be to work alongside farmers, not against them, as we collectively make progress towards our target, including investing in methane reduction technologies.” 

Fonterra says the target comes after close to a year of discussions with farmers about why it is needed and how the Co-op will work with them to achieve it. It says the methodology will continue to evolve alongside the science that supports the changes. 

Fonterra also launched its Climate Roadmap. The roadmap is a plan that outlines the actions the Co-op will take towards its 2030 targets and ambition to be net zero by 2050.

Earlier this year, Fonterra lifted its emissions reduction targets for its manufacturing and operations. This new target completes the package.

Mr Hurrell says having a full suite of targets and a plan to achieve them will provide high-value customers with the confidence to continue buying dairy from Fonterra, as well as protect its reputation as being one of the most emissions-efficient suppliers of dairy at scale.

In addition to this, the Co-operative has voluntarily released its first Climate-related Disclosure report. This report identifies risks and opportunities related to climate and helps the Co-operative plan for the future. 

New Zealand is the first country in the world to pass a law introducing mandatory climate-related risk reporting, with it becoming mandatory next year for around 200 New Zealand companies, including Fonterra. 

Mr Hurrell says he’s proud of the steps the Co-op is taking to address the challenges it faces when it comes to climate. 

“Today’s announcements are not just important for Fonterra. They will also help the country achieve its 2030 targets set under the Zero Carbon Act. We know we play a significant part in New Zealand’s emissions profile, and it’s up to all of us to work towards helping New Zealand achieve its climate targets,” says Mr Hurrell. 

* The 2030 targets are aligned to the Science Based Target initiative (SBTi), which means they’re aligned to limiting global warming to 1.5degrees. We are currently in the process of submitting the following 2030 targets to SBTi for validation:

• Fonterra commits to reduce its Scope 1 and 3 FLAG GHG emissions from dairy by 30% per tonne of Fat and Protein Corrected Milk by FY30 (from a FY18 baseline); and
• Fonterra commits to reduce its absolute Scope 1 and 2 GHG emissions by 50% by FY30 (from a FY18 baseline).
   

Note to editors:
Fonterra provides a range of tools and services to farmers to help them understand their emissions footprint and is investing in technologies to find a solution to methane production. 

Refrigeration units
This month we’ve announced a new partnership that enables farmers to lease state-of-the-art milk chilling units, which include fourth generation refrigerants that have shown a reduction in CO2e of around 80% compared to those used in older systems. This new offering, known as Pay-As-You-Save (PAUS), is a result of a partnership between Fonterra, Cool Group Limited, Purpose Capital, Cool-Safe and New Zealand Green Investment Finance. Previously farmers would have had to purchase the systems outright. Benefits include electricity savings, reduced emissions, hassle-free maintenance and more. For further details farmers can call 0800 65 65 68. 

Net zero carbon farm
Fonterra and Nestlé are working with co-partner Dairy Trust Taranaki to test solutions on a Fonterra-owned farm in Taranaki to see if, over the next 5-10 years, it can become the first commercially viable net zero carbon dairy farm in New Zealand. The idea is to use this as a demonstration farm whereby farmers can see what works and what doesn’t, and then more easily apply successful tools and practices on their own farms. 

Insights reports
In 2020 we began using the data available to us to provide all Fonterra farmers with unique greenhouse gas (GHG) emission reports. We were the first dairy company in New Zealand to do this at scale. This is now just one part of our comprehensive Farm Insights Reports, which give farmers a unique view of their own farm’s performance in three key areas – milk, animals and the environment – including benchmarking their farm against other similar farms. Now into its third year, the farm-specific report identifies potential opportunities to fine-tune efficiencies for better productivity, profitability, and sustainability. It looks at everything from milking efficiency and production per cow, to fertiliser use and a breakdown of the farm’s emissions. We’ve also got a team of experts across the country who are on-hand to help farmers get the most out of the Farm Insights Reports. 

On-farm emissions booklet
In May 2023 we published a new on-farm emissions booklet online. In November 2023 we released a second edition, including publishing a printed version for farmers to be able to refer to easily. The first half of the booklet covers insights around on-farm emissions, why it’s so important to reduce them, the approach our Co-operative is taking and how we can work together to get to where we need to be. The second half of the booklet details on-farm actions our farmers can take that may improve efficiencies and result in reduced emissions on farm. 

AgriZeroNZ – An industry and Government partnership that’s working to find a solution to methane.

Asparagposis seaweed – We’re partnering with Australian group Sea Forest to look at the viability of using seaweed to reduce methane. 

Kowbucha – We’re using dairy cultures to create new fermentations which could potentially switch off the bad bugs that create methane in cows.  

For further information contact:
Anna Johnstone
Fonterra Communications
Phone: +64 21 458831