Fonterra (NZX: FGC), Nestlé to set up NZ’s first net-zero dairy farm

Fonterra and Nestlé entered into a partnership on Wednesday (30 November 2022) to develop New Zealand’s first net-zero dairy farm.

The company release said that the partnership sought to reduce NZ’s on-farm emissions. The release said that the project, spread over five years, will examine all aspects of farm operations to reduce carbon emissions by 30% by mid-2027 and reach a net-zero carbon emissions status in 10 years.

The pilot project will be on the 290-hectare property, and the results will be shared with other farmers so that they can adopt practices best suited to their farms. However, as per the release, the practices are expected to be economically viable.

New Zealand’s Dairy Emissions

• According to reports, the agriculture industry makes up 48% of New Zealand’s overall emissions. Methane, nitrous oxide, and carbon dioxide are the main emission elements of the agri industry.
• Last month, New Zealand took a step in this direction by levying a tax on farmers for emissions produced by their cows.
• Despite that, dairy contributes about 50% of the country’s agricultural livestock emissions.

According to Fonterra's chief executive, Miles Hurrell, New Zealand provides some of the most sustainable nutrition in the world through its pasture-based dairy system. However, according to him, this partnership will look at ways to further reduce emissions, increasing the country’s low-emissions advantage.

This New Zealand pilot scheme will hopefully be the first of many global projects. The dairy farm project will help Nestle and Fonterra achieve their climate goals. Both of them aim to achieve net-zero emissions by 2050.

Nestle’s view

CEO of Nestle, New Zealand, Jennifer Chappell, said that the farm would help build on Nestle’s work around the world to transform the entire diary industry. She pointed out that the dairy industry could achieve net-zero status in the future.

Chappell said that a net-zero farm entails looking at all aspects of the farm, from cow nutrition to separating carbon. Further, she said that what is learned on the journey across the dairy industry will be shared with all farmers with the aim of widespread adoption of on-farm practices.

The partnership between the two dairy companies also includes a greenhouse gas farmer support pilot program to help farmers implement changes to lower their emissions.

The pilot program is expected to start with 50 farms and is likely to be scaled up over next three years.