Govt partners with Fonterra in new $800 million investment plan to ditch coal by 2037

Govt partners with Fonterra in new $800 million investment plan to ditch coal by 2037

Fonterra unveiled a robust plan to significantly reduce its carbon footprint on Thursday morning. 

The company is now aiming for a 50% absolute reduction in Scope 1&2 emissions by 2030, building on its previous target of 30% reduction by the same year. This ambitious move will be achieved by expediting its efforts to phase out coal.

Miles Hurrell, the CEO of Fonterra, emphasized that a major portion of the company's emissions stems from its manufacturing operations and supply chain. By intensifying the emissions reduction targets, Fonterra is aligning itself with its long-term goal of becoming net-zero carbon by 2050.

The implementation of the new target will entail a range of initiatives, including ongoing improvements in energy efficiency and the transition to renewable energy sources across milk collection and manufacturing sites. Notably, the focus will be on the six locations where Fonterra currently relies on coal for its operations.

To make this ambitious vision a reality, Fonterra has committed to investing $790 million, with an added Government contribution of up to $90 million through the Government Investment in Decarbonising Industry (GIDI) fund. The collaboration with the government allows Fonterra to elevate its 2030 ambition, aiming for a complete phase-out of coal by 2037.

Fonterra has already made significant progress in this area, having undertaken decarbonisation projects at five different sites over the past five years. Moving forward, the company is actively exploring multiple technologies, including biomass, electrification, and heat pump technology at its Clandeboye and Edendale sites.

By accelerating its decarbonisation plans, Fonterra intends to not only offer customers the world's lowest carbon dairy at scale but also contribute to New Zealand's climate targets. The transition will also bring positive economic impacts to regional New Zealand, generating job opportunities within local communities.

Moreover, Fonterra is currently in discussions with farmers to establish a Scope 3 emissions target, which will be unveiled soon.

Fonterra's climate targets align with the Science Based Target initiative, reflecting the company's commitment to limit global warming to 1.5 degrees Celsius. 

The accreditation process is already underway to validate its efforts.