Fonterra pares energy bill by 5 per cent

As adverse climate conditions continue to reduce the global dairy supply, processors are coming under greater pressure to reduce the impacts their operations are having on the environment, while ensuring they remain competitive.

Fonterra said it focused on initiatives ranging from heat conservation and more efficient equipment use, to simply turning off unused lights.

The company claims to have reduced average energy use at its plants by five per cent.

The savings made by the campaign occurred over three months and were equivalent to a 700 tonne reduction in carbon emissions, according to Fonterra's energy efficiency project manager Doug Watson.

He added that the savings were particularly significant for the company due to the high energy needed during the winter season.

"While winter is a quiet time for milk collection, it is a busy time for our sites with maintenance and repairs performed during these months," he stated .

"Because winter is also traditionally a period when electricity demand peaks and places strain on our national supply, we saw an opportunity to continue some of the work we have been doing with our energy efficiency programme."

The seasonal reductions continue the group's full year focus on energy reduction.

Earlier this year, Fonterra said it had cut its annual energy use by about 1.8 peta joules (PJ), accounting for 150,000 tonnes of carbon dioxide emissions.

The amendments to the company's processing capabilities arrive on the back of the launch of other initiatives by Fonterra for sustainability in its production cycle.

In June, the group announced it would develop new technologies to not only reduce the impact of its own operations on climate change, but those of its farmers and suppliers too.

Barry Harris, chairman of Fonterra's Sustainability Council said that businesses needed to be aware that they can take greater care in how they are affecting climate change, without losing out financially.

"Climate change affects every sector of the economy - including agriculture - and Fonterra is playing a leading role in tackling the issue and working with Government and other pastoral industries to find practical solutions," he stated.

Harris stressed that if done correctly, environmental drives needed come at financial loss to companies.

"There are also opportunities for any breakthrough research in reducing methane emissions to have the potential to be sold overseas," he added.

The comments follow findings released this year by the Sustainability Council of New Zealand, which claimed that new technology like nitrification inhibitors could help the dairy industry meet its emission targets, and increase profitability.

According to government estimates, 49 per cent of New Zealand's emissions stem from livestock farming.

By cutting these emissions, the country could achieve savings of over $550m, at the current carbon credit value of $30/tonne, the sustainability council said.

The council pointed to technology known as nitrification inhibitors to better achieve this aim.

The inhibitor is claimed to drastically cut emissions when sprayed on pasture, while also improving prevention of nitrogen runoff that has been linked to polluting waterways.

Methane emissions currently account for two thirds of livestock emissions linked to affecting climate change, with the other third coming from nitrous oxide N2O. By shifting focus to cutting N2O instead of Methane, the technology could grant a new avenue for the dairy industry to work on cutting its emissions. "

Assuming all the nation's dairy pasture were treated in this way and savings were in line with trials across the country, some 3.7 megatonnes of carbon equivalent emissions would be saved each year," the council stated in the report.

Fonterra backed the council's findings, suggesting a greater focus on encouraging the use of products like nitrification inhibitors, rather than punishing farmers over going green should be adopted in the country.

"We believe measures that encourage behavioural change in farmers, such as incentives to encourage the uptake of nitrification inhibitors will be more effective than punitive penalties such as fertiliser taxes," stated Harris.

The company added that trails of nitrification inhibitors had boasted a 30 per cent to 70 per cent reduction in nitrous oxide emissions.

The same testing had also found a 15 per cent increase in pasture productivity.

There were limitations in the testing though, with a questions mark remaining over their potential in different soil types.

Though encouraged by the development of nitrification inhibitors, Harris believes a multi-faceted solution will still be required to win the battle against climate change.

"We welcome the development of new technologies like nitrification inhibitors that help reduce emissions, he stated.

But it is too simplistic to say a single, silver bullet answer will reduce our on-farm carbon emissions, as this is likely to evolve over time."

The company claimed that it would continue to invest in a number of solutions designed to cut its emissions.

Harris pointed to the company's existing work, as an example of this focus.

"More than $15 million is currently being spent on this research and most of it coming from the dairy sector," he stated.

"Fonterra also invests separately in areas like research into pastoral genomics, which aims to increase pasture digestibility and reduce animal emissions."