Fonterra has announced a lift in its decarbonization ambition with a new Scope 1&2 emissions reduction target, which will be achieved by bringing forward some of its work to get out of coal.

Fonterra chief executive officer Miles Hurrell says the Co-op is targeting a 50% absolute reduction in Scope 1&2 emissions by 2030, from a 2018 baseline, an increase on its previous target of a 30% reduction by 2030.

“Fonterra’s Scope 1&2 emissions largely come from our manufacturing operations and supply chain. Strengthening our emissions reduction target supports our ambition to be net zero by 2050,” says Hurrell.

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 where it uses coal.

To do this, Fonterra is forecasting an investment of $790 million, including a government contribution of up to $90 million through the  Government Investment in Decarbonizing Industry (GIDI) 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&2 emissions by 50% and optimize our process to get out of coal by 2037.  

“Our decarbonization 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 decarbonization projects at five different sites and we’re looking forward to continuing this momentum."

“We’re currently assessing biomass, electrification, and heat pump technology at our 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,” says Hurrell.

The Co-op is currently talking with farmers about a Scope 3 emissions target, which will be announced shortly.

Fonterra’s climate targets are aligned with the Science Based Target initiative, which means they’re aligned to limiting global warming to 1.5 degrees.  The process of seeking accreditation is underway.