Fonterra has brought forward its target for Scope 1 and 2 emissions reductions in its manufacturing and supply chain operations by accelerating some of its work to exit coal.
Fonterra chief executive Miles Hurrell said the co-op is targeting a 50% absolute reduction in Scope 1 and 2 emissions by 2030, from a 2018 baseline, an increase on its previous target of a 30% reduction by 2030.
“Fonterra’s Scope 1 and 2 emissions largely come from our manufacturing operations and supply chain,” Hurrell said.
“Strengthening our emissions reduction target supports our ambition to be net zero by 2050.”
Achieving the new target will require Fonterra to continue to undertake energy efficiency improvements and fuel switching to renewable energy source activities across its milk collection fleet and manufacturing sites, with a focus on the six sites where coal is used.
The projects will result in 2.1 million tonnes of earlier CO2e reductions. The reductions are the same as taking 120,000 cars off the road.
To do this, Fonterra is forecasting an investment of $790 million, including a government contribution of up to $90m through the Government Investing in Decarbonising Industry fund.
“As a co-op, Fonterra understands how we can achieve more by working together. The addition of government funding enables us to lift our 2030 ambition to reduce Scope 1 and 2 emissions by 50% and optimise our process to get out of coal by 2037.
“Our decarbonisation plan will see us explore multiple technologies to ensure the most efficient phase-out of coal and transition to renewable energy across our manufacturing sites, while building resilience into our operations.
“We are already well underway with shifting our manufacturing operations to renewable energy sources. Over the past five years, we have carried out decarbonisation projects at five different sites and we’re looking forward to continuing this momentum.”
Hurrell said Fonterra is currently assessing biomass, electrification and heat pump technology at its Clandeboye and Edendale sites.
“We see these technologies as the best solutions possible at this stage.”
“Accelerating our plans will help Fonterra continue to present our customers with the world’s lowest carbon dairy at scale. It will also contribute to New Zealand meeting its climate targets while delivering benefits across regional New Zealand, such as job opportunities in local communities,” Hurrell said.
Prime Minister Chris Hipkins said it is a hugely significant commitment that means the dairy sector will dramatically cut its coal use quicker.
“This is not just critical for our environment, but for our economy too,” Hipkins said.
“By partnering with Fonterra to reduce emissions we’re helping to maintain New Zealand dairy’s competitive edge, as international consumers and food manufacturers demand further climate commitments.
“In my recent trade missions, I’ve heard first-hand the importance of New Zealand’s climate credentials to our exports. This partnership is an investment in our future economic prosperity.”
He said the partnership “delivers a big chunk of New Zealand’s overall pollution cuts”.
Hurrell said Fonterra is currently talking with farmers about a Scope 3 emissions target, which will be announced shortly.
Fonterra’s climate targets are aligned to the Science Based Target initiative, which means they’re aligned to limiting global warming to 1.5degC. The process of seeking accreditation is underway.