New Zealand dairy giant Fonterra embarks on a journey towards a future without coal

NEW ZEALAND – Fonterra, New Zealand’s premier dairy cooperative, is finally embarking on a journey towards a future where it does not rely on coal for its energy needs.

Fonterra said it has been working on its transition to renewable energy and said it can, and will, get out of coal, with a couple of practical constraints.

The company however admitted New Zealand’s Climate Change Commission’s pathway to ending coal use by 2037 is ambitious and will be challenging to meet.

At the moment, Nine of Fonterra’s 29 sites use coal and chief operating officer Fraser Whineray said there has been progress over the last few years to get the cooperative to a position where it can make a commitment to coal reduction.

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Moving away from coal, a significant logistical, technical and financial undertaking

Conversion or replacement of existing coal boilers to renewable energy is a significant, logistical, technical and financial undertaking, Fonterra said.

Fonterra further noted that the current and forecast gas scarcity issues in the North Island pose a significant material risk to completing transition from coal within this timeframe

The cooperative said over the past 18 months there have been disruptions in the gas market adding that if it’s unable to have certainty of gas supply, it may need to start transitioning its gas boilers and air heaters to renewable alternatives sooner.

This it says would almost certainly impact the speed at which the company moves away from coal to other environmental friendly alternatives.

The company further noted that the nature of the New Zealand dairy curve, there is only a very short period every year when the company can undertake significant changes to its manufacturing sites.

Cutting down on carbon emissions

In its submission on the Climate Change Response (Zero Carbon) Amendment Bill, the cooperative acknowledged its business produces 20% of New Zealand’s greenhouse gas emissions.

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Ninety per cent of those emissions come from its farmers’ businesses; 9% from manufacturing operations and 1% from transporting products from New Zealand to consumers around the world.

The company has however been investing on efficiencies to at least cut down on emissions even as it works to rid its operations of coal

“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,” Fonterra said.

 “More recently, we reduced the total quantity of coal we use by 10% when we converted our Te Awamutu site to burn wood pellets and this builds on our experience from converting our Brightwater site in 2018 to run on wood biomass.”

The cooperative said it supports increased electric vehicles 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.

It added the recent rollout of the Milk Vat Monitoring systems installed on farms has also created opportunities to optimize tanker pick-up schedules allowing for the budgeting of fewer tankers from next year.

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