Fonterra has committed to reducing its coal reliance and is looking to have 100 per cent recyclable, reusable and compostable packaging by 2025.
Robert Spurway of Fonterra said today the company will lower its coal reduction target by 11 years. The company's targets include reducing emissions of manufacturing operations by 30 per cent by 2030 and becoming net zero by 2050.
The company wants to drop water use by 20 per cent at manufacturing sites by 2020, create an environment plan for all of its farmers by 2025 and to radically change its packaging.
It also wants its site in Stirling, Otago to be powered by electricity, not coal. Fonterra has stopped installing new coal boilers.
"We want to step up our efforts to help New Zealand transition to a zero-carbon economy," Mr Spurway said.
"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 some of those challenges include parts of the country's current energy infrastructure was not up to handling the requirements of Fonterra.
“There are also 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."
Currently, about 40 per cent of Fonterra's 32 manufacturing sites are powered by coal, with natural gas, electricity and wood powering the remainder.
The commitment was welcomed by Government, with Climate Change Minister James Shaw saying Fonterra was "one of the largest users of coal in New Zealand, after the Huntly Power Station, so moving to immediately stop installing new coal boilers and start to convert existing boilers to renewable energy sources is a great step".
Energy Minister Megan Woods said Fonterra's previous pledge was to not install new coal boilers from 2030, "so bringing forward that deadline provides certainty and potentially saves an increase in emissions".
"Fonterra’s move serves as a practical example to other industry of the action required to transition from fossil fuels to renewable sources of energy for industrial heat."
New Zealand's Bioenergy Association hoped Fonterra's commitment would encourage biomass fuel suppliers to increase capacity for sourcing and delivering fuel.
"Transitioning from use of coal and gas for process heat needs to be done in an orderly manner so that fuel suppliers have time to grow their capacity," Brian Cox of the association said.
"These signals from Fonterra will encourage forest owners to see the opportunity for collection and sale of forest harvest residues now that they are having difficulties in selling logs to China."