Fonterra, one of the New Zealand's biggest coal users, said it planned to cut back on its use of the fossil fuel as part of its goal to have net zero emissions from its global operations by 2050.
The dairy co-operative uses the intense heat generated by coal and gas for a network of driers which take the water out of milk in order to turn it into milk powder.
Three of Fonterra's 17 North Island plants still use coal while the rest use gas. Fonterra's South Island plants, which don't have access to pipeline gas, use coal.
Fonterra said in a statement that it was committed to helping New Zealand achieve its Paris Climate Agreement commitments.
"That's why we've set new targets to reduce both our on-site and on-farm emissions," chief operating officer global operations Robert Spurway said in a statement.
"We've set a target of net zero emissions for our global operations by 2050, with a 30 per cent reduction by 2030 from a 2015 baseline," Spurway said.
He said the target would be achieved by making changes at Fonterra's manufacturing sites and adopting new technologies.
Spurway said Fonterra would introduce biofuel to its tanker fleet and the co-operative intends to have 100 electric vehicles within its light vehicle fleet by 2019.
Fonterra is also exploring low emission energy supply options for its sites, such as electricity and wood biomass.
"We will only use coal as a last resort, with a target of no new coal boilers installed from 2030," Spurway said.
The Bioenergy Association - an organisation aimed at raising awareness about alternative fuels - said Fonterra is already trialling co-firing wood biomass in existing coal boilers.
Brian Cox, the association's chief executive, said Fonterra's commitment to not install any new coal boilers from 2030 sent a strong signal to the bioenergy industry.
"Fonterra is a is a large energy user and their intention to transition away from coal will provide positive stimulus for the wood fuel supply sector to meet fuel demand," he said.
"The wood fuel supply market has been growing and is well placed to increase fuel supply over the next few years," Cox said.
The bioenergy sector covers wood energy, liquid biofuels, and waste to energy/biogas for the production of heat, generation of on-site electricity, and use as a vehicle fuel.
Coal Action Network Aotearoa (CANA) has long protested about Fonterra's use of coal.
In January, CANA protesters chained themselves to a gate to prevent coal being delivered to Fonterra's Clandeboye dairy factory in South Canterbury.
In December, the organisation staged a protest outside Fonterra's head office in Auckland.
No immediate comment from the network was available in response to Fonterra's announcement.