Fonterra to cut coal use ahead of plan
Fonterra will stop installing new coal boilers at its factories, 11 years earlier than planned.
Energy analyst Brian Cox, of the Bioenergy Association, described the move as significant, as the dairy giant shifts to biomass plants or electricity. Fonterra vies with the Huntly power station owned by Genesis as the country’s largest coal user. It says it burns about 500,000 tonnes per year, resulting in emissions of 873,000 tonnes of carbon dioxide per year. It has 32 manufacturing sites across the country, of which about 40 per cent use coal, with the remainder of its processing energy coming from natural gas, electricity and wood.
Fonterra chief global operating officer Robert Spurway warned that getting out of coal was not as easy as ‘‘flicking a switch’’ and would involve a staged approach. ‘‘For example, right now New Zealand’s energy infrastructure in some parts of the country simply isn’t set up to handle our requirements. Either there aren’t alternatives to coal available or, if there are, they are not at the scale needed.
‘‘There are also cost challenges. Transitioning to cleaner fuels will require additional investment and we need to balance this with remaining competitive,’’ Spurway said.
The coal announcement is part of a suite of measures Fonterra is rolling out. Others include a target to reduce greenhouse gas emissions by 30 per cent across all plants by 2030 and achieving net zero by 2050; reducing water use by 20 per cent at factories by 2020; creating farm environment plans for every Fonterra farmer by 2025; 100 per cent recyclable, reusable and compostable packaging by 2025; and powering its Stirling site in Otago with electricity rather than coal.
Cox said the Fonterra move to cut coal would provide the stimulus for increased biomass fuel supply.
‘‘The increased demand for renewable fuels for Fonterra plant, adds to the demand for biomass fuel already announced by the Otago and Christchurch hospitals and DB Breweries.
‘‘This will now encourage biomass fuel suppliers to increase their capacity for sourcing and delivering biomass fuel. There are adequate quantities of wood chip and wood pellets that can be delivered at short notice and potential for other short rotation fuels such as from miscanthus.’’
Coal Action Network spokeswoman Cindy Baxter welcomed the announcement but warned Fonterra should not turn to gas as an alternative, as it had almost the same carbon footprint as coal.