By Rebecca Howard
July 18 (BusinessDesk) - Dairy giant Fonterra Co-operative Group said it is shaving 11 years off its coal target, putting an immediate stop to installing any new coal boilers or increasing capacity to burn coal.
“One of the emerging themes in our strategy review is that sustainability will be at the heart of everything we do. As part of this, we want to step up our efforts to help New Zealand transition to a zero-carbon economy,” said Robert Spurway, chief operating officer for global operations.
The Interim Climate Change Committee this week recommended the government set a clearly defined timetable to phase out fossil fuels in existing manufacturing sites, with the phase-out of coal a priority. The committee was set up in early 2018 to recommend how New Zealand should transition to a net-zero emissions economy by 2050.
Fonterra, which is trialling coal and wood blends and electrification as alternatives, had previously announced plans to build no further coal-fired plant from 2030.
Spurway said getting out of coal is not as easy as flicking a switch.
“Transitioning Fonterra’s sites away from coal requires a staged approach. We’re determined to go as fast as we can, but there are a number of practical challenges we have to overcome," he said.
Among other things, the energy infrastructure in some parts of the country isn’t set up to handle Fonterra's requirements.
"Either there aren’t alternatives to coal available or, if there are, they are not at the scale needed," he said. He also said there are cost challenges.
"Transitioning to cleaner fuels will require additional investment and we need to balance this with remaining competitive. It’s right to take a staged approach."
Fonterra reiterated its targets are to reduce emissions by 30 percent across all its manufacturing operations by 2030 and achieve net-zero by 2050. It aims to reduce water use by 20 percent across manufacturing sites by 2020, will have a tailored Farm Environment Plan for every Fonterra farmer by 2025 and have 100 percent recyclable, reusable and compostable packaging by 2025.
It will also power its Stirling site in Otago with electricity rather than coal. In a submission on the government's proposed Zero Carbon bill published this week it said it was progressing with that electrification and, by moving to electricity, coal use will be reduced by about 10,000 tonnes a year.
Fonterra has 32 manufacturing sites across the country, of which about 40 percent of its current processing energy is from coal. The rest is from natural gas, electricity and wood.