Article summary: To curb Scope 3 carbon and greenhouse gas emissions, Fonterra and Nestle partnered with Dairy Trust to develop, build and run a demonstration farm in Taranaki. Through better farming practices and support programmes, this farm will educate NZ Dairy farmers to implement sustainable farming strategies to collectively reduce the carbon footprint left by agriculture, one of the most environmentally challenging sectors in battling climate change. This project is part of the nation’s plans to reach net zero in ten years.


In recent New Zealand dairy news, Fonterra, New Zealand's largest milk processor, is collaborating with Nestle, its biggest ingredients customer. What are they planning? They are working together to create the country's first dairy farm with net zero carbon emissions in Taranaki.

The project will be based at a 290-hectare farm near Fonterra's Whareroa site on the western side of the North Island. Run in partnership with Dairy Trust Taranaki; the farm pilot aims to reduce emissions by 30% by mid-2027 and reach net zero carbon emissions within ten years. 

In early 2022, Fonterra announced its intention to set targets for Scope 3 carbon emissions. The zero-emissions farm forms one part of this program.  

The organisation publicly stated upon launch that it risks losing customers and encountering trade barriers in international markets if it does not meet sustainability expectations. Through its collaboration with Nestle, both companies' R&D strength will help both achieve their goal of net zero emissions by 2050.

It will start with one farm, rolling out to fifty as part of the pilot over three years.

How will the NZ dairy industry benefit from this zero-emissions farm?

The Taranaki site will be set up as a demonstration farm, sharing open days with farmers and educating them on sustainable ways of farming so that they can implement them independently. The program strongly focuses on sustainability, but all processes it demonstrates will also benefit farmers and animals and lift dairy production rates. It is this combined ethos that both companies hope will transform the dairy industry in the southern hemisphere.

Other benefits proposed through the partnership between Fonterra and Nestle includes:

  • The introduction of a farmer support programme around greenhouse gas awareness. Fonterra is providing additional support to enrolled supplier farms to help them implement changes to reduce their on-farm emissions. This support will assist these farms in making the necessary adjustments to lower their emissions.

  • Improved feed management solutions

  • Improved pasture management solutions

  • Solutions to enhance milk production efficiency.

What are Scope 3 emissions?

Scope 3 emissions are greenhouse gas emissions generated from a facility's activities but come from sources not owned or controlled by the facility's business. These indirect emissions occur outside the facility, in contrast to Scope 2 emissions, which are direct emissions from the facility's own energy consumption.

Scope 3 is categorised by the types of emissions generated by industry:

  • fuel and energy-related activities

  • purchased goods and services

  • capital goods

  • transportation and distribution

  • waste generated in operations

  • employee commuting

  • business travel

  • leased assets

The industries with the greatest greenhouse emissions are:

  • Energy (which includes electricity, heat and transport): 73.2%

  • Direct Industrial Processes: 5.2%

  • Waste: 3.2%

  • Agriculture, Forestry and Land Use: 18.4% 

These percentages are correct for 2016 and published by Climate Watch in 2020.

Examples of Scope 3 emissions in agriculture are:

In order of greatest rate of greenhouse gas emissions:

  • Livestock & manure – this mostly concerns enteric fermentation, where microbes break down food in the ruminant's digestive system. Methane is produced as a byproduct, leaving beef and lamb with a high carbon footprint. It is recommended that eating less is effective in reducing methane emissions.

  • Agricultural soils – where nitrous oxide, a poisonous and strong greenhouse gas, is prevalent in certain topographies.

  • Crop burning – where leftover rice, sugar cane, wheat, and other crops are burned to prepare land for resowing. This practice emits carbon dioxide, methane and nitrous oxide.  

  • Deforestation – changing forestry cover affects carbon stores from forests and forest soils.

  • Cropland – farmers may lose carbon via their soils or biomass depending on how farms manage crops. This, in turn, affects carbon dioxide emissions.

  • Rice cultivation – flooded paddy fields produce methane through anaerobic digestion, which occurs when organic matter in the soil is converted to methane due to the low-oxygen environment in flooded rice fields. The ideal conditions for this process to take place are created when paddies are flooded, allowing for the production of methane.

What is the current status of emissions from NZ farming?

2022 research from Headlands Consultancy suggests that the Kiwi dairy sector can reduce its emissions without suffering significant negative consequences. The research indicates that the government's emission pricing plan, which has caused concern for the future of New Zealand's largest export sector, can be adjusted on a farm-by-farm basis to minimise negative impacts. 

In addition, the Kiwi dairy sector can achieve better outcomes in terms of reducing the carbon footprint of milk, greenhouse gas emissions, nitrogen leaching, and the number of dairy cows and land used while maintaining total milk production and increasing on-farm profit. Farms will be able to make these improvements through systematic refinements and the inclusion of moderate amounts of concentrate feed for fewer, higher-quality cows. This dramatically reduces total feed requirements per farm while maintaining total milk production and improving feed conversion efficiency. 

However, under the government's proposed greenhouse gas calculator, farmers can only reduce total milk production, ignoring the potential gains of increasing feed conversion efficiency. The research suggests that the dairy sector can build a system that meets or exceeds the 2030 climate change and greenhouse gas targets, improves animal welfare, and maintains profitability and total production.

From little things, big things will grow

Fonterra and Nestle believe collaborating with partners is the best way to develop innovative solutions to local and global industry challenges. Both companies believe that by working together, they can come up with more effective and creative ways to address these challenges. 

They believe that to reduce their Scope 3 emissions, they must work with dairy farmers and their communities. Both companies have over 100 pilot projects with partners worldwide, with 20 farms already working towards net zero. 

Building on the Taranaki farm site is yet to begin.

Until we meet again, Happy Dairying!

- The Dedicated Team of, 2022-12-27