Fonterra plans to stop using coal by 2037. Photo: RNZ / Rebekah Parsons-King
Fonterra says the government's $90 million contribution to cut emissions in the dairy sector will help the company to achieve its ambition to be net zero by 2050.
Earlier this year, Labour launched a $140m decarbonisation project to help NZ Steel to transition away from burning coal.
Photo: Supplied / Fonterra
It has now reached a major deal with Fonterra to cut coal use at six dairy factories and halve manufacturing emissions by 2030.
The government will co-fund up to $90m from the Government Investment in Decarbonising Industry Fund, which is paid through the Emissions Trading Scheme.
Prime Minister Chris Hipkins said reducing emissions would help to maintain New Zealand dairy's competitive edge.
In a statement, Fonterra chief executive Mike Hurrell said its emissions come largely from manufacturing and its supply chain.
Fonterra would look at multiple technologies to phase out coal and transition to renewable energy, focusing at the six manufacturing sites where coal is used, he said.
"We are already well underway with shifting our manufacturing operations to renewable energy sources. Over the past five years, we have carried out decarbonisation projects at five different sites and we're looking forward to continuing this momentum."
The government's addition to its forecast $790 million investment, would accelerate the company's plan to stop using coal by 2037, he said.