Fonterra will use a urea-based solution made locally to help cut emissions from its large fleet of milk trucks.
Ballance Agri-Nutrients last week launched GoClear, which will be made at its Kapuni ammonia-urea plant.
The liquid is held in a small tank and injected into the exhaust system of diesel engines where it reacts with gases as they pass through a catalytic converter, turning nitrogen oxide emissions into water vapour and nitrogen.
Ballance chief executive Larry Bilodeau said nitrogen oxide was a potent greenhouse gas and the solution could help reduce typical truck emissions by between 70 and 90 per cent.
Ballance said new and used trucks coming into New Zealand would have to meet Euro 5 emission standards from January 1 and bigger trucks would have to use selective catalytic reduction (SCR) technology to meet this.
Fonterra chairman Sir Henry van der Heyden said the company travelled about 75 million kilometres each year collecting milk from farms.
"Today our customers, our consumers want to have a lot more confidence in the way that food is actually produced," van der Heyden said.
"The issue around sustainability gets talked about a hell of a lot more than what it actually has done in the past."
Fonterra procurement category manager Guy Cooper said the company would have a fleet of 480 milk collection trucks by the end of November, including 113 using SCR technology.
Fonterra chose supplier Orica to provide the additive for its trucks mainly because that company had an existing distribution network onto Fonterra's sites.
"The other reason was that when we got started with them we said, 'Well look, we really want to work with a company that can develop a New Zealand solution,"' Cooper said.
Fonterra's entire fleet could be using SCR-type trucks within about five years.
Orica at present imported a product from Korea but when stocks were used up it would begin supplying GoClear made by Ballance.
Urea accounted for 32 per cent of the solution by volume, with the rest made up of water, Cooper said.
"If you think about it it's not very sustainable shipping demineralised water from Korea," he said.
Fonterra would use about 475,000 litres of solution this season and the cost of using it netted off about level with the fact that SCR trucks ran leaner.
"So we're not really going to put a lot of money into our back pocket but it is more about being a responsible corporate user of fossil fuels."