Fonterra is receiving up to $2.5 million in government co-funding to convert two coal boilers at its Hautapu site to wood pellets.
The support comes from the Government Investment in Decarbonising Industry (GIDI) Process Heat Contestable Fund, which will also provide the co-operative up to $425,000 to install a heat pump at its Palmerston North milk processing site.
The heat pump at the Palmerston North site will convert wasted heat from the refrigeration system into a heat source, reducing the amount of natural gas needed for process heat.
The site will also generate additional heat via a solar plant.
Fonterra also announced that it would be firing up a wood biomass boiler at its Stirling site for the first time on Friday, reducing annual carbon emissions by 18,500 tonnes – the equivalent of taking about 7,700 cars off the road.
A similar boiler is due to be operational in November, which will reduce annual carbon emissions by about 48,000 tonnes, while the Hautapu site will further reduce emissions by 15,785 tonnes per annum when it is completed early next year.
Fonterra chief operating officer Fraser Whineray said the latest GIDI co-funding would bring forward completion of the projects.
“It will help us continue to make progress towards our target of reducing emissions by 30% across all our manufacturing operations by 2030 (from a 2018 baseline), on the way to net zero by 2050, and transition out of coal by 2037.”