Fonterra invests US$39M to slash emissions by 9% with boiler conversion

The initiative is projected to reduce Fonterra’s total emissions by 9%, eliminating 155,000 tonnes of CO2e annually—an impact comparable to removing 64,000 cars from New Zealand’s roads.

This milestone aligns with the Co-operative’s long-term strategy to phase out coal use by 2037 and achieve a 50.4% reduction in absolute Scope 1 and 2 emissions by 2030 from a 2018 baseline.

The project, supported through a partnership with the Energy Efficiency and Conservation Authority (EECA), underscores Fonterra’s drive to accelerate sustainability goals across its operations.

According to the EECA, this partnership is expected to deliver cumulative coal-related emissions reductions of approximately 1.2 million tonnes of CO2 this decade.

This progress has enabled Fonterra to raise its emissions reduction target for 2030 from the earlier 30% to a more ambitious 50%.

Anna Palairet, Fonterra’s Chief Operating Officer, highlighted the strategic importance of the Clandeboye initiative in advancing the cooperative’s decarbonisation ambitions.

“This conversion project at Clandeboye is another demonstration of our Co-op’s commitment to sustainability and climate action. In making our largest decarbonisation investment to date, we’re reducing our environmental impact while securing operational resilience,” said Palairet.

The transition to wood pellets at Clandeboye also brings broader economic benefits, particularly to the South Island’s renewable energy sector.

As reported by Conrad Harle, Site Operations Manager for Cheese and Protein, the move will stimulate local supply chains, strengthening regional resilience and fostering opportunities for similar conversions across Fonterra’s other sites, including Darfield, Studholme, Tākaka, and Edendale.

Harle noted the team’s pride in advancing sustainable practices that support both the region and Fonterra’s long-term goals.

This initiative builds on Fonterra’s successful conversions at its Te Awamutu and Hautapu sites.

In addition to the boiler upgrades, the Clandeboye site recently installed a heat recovery system in its lactose plant, which reduces steam usage by 2.5 tonnes per hour, cutting annual carbon emissions by 3,000 tonnes.

The conversion of the two coal boilers is scheduled for completion by September 2025, with Fonterra outlining plans to transition its remaining boilers to renewable energy as part of its broader decarbonisation roadmap.

EECA Chief Executive Dr. Marcos Pelenur emphasized the significance of the project, stating, “It is a milestone that highlights the central role of biofuel in the clean energy transition and demonstrates the impact of clever technology on energy efficiency.”