New Zealand can take a leadership role in using science and innovation to reduce methane emissions in the dairy sector — but its own solution may not be the same as the rest of the world.
Miles Hurrell, chief executive of the country's biggest company Fonterra, says New Zealand has an unique farming system with the pasture-based free roaming cows — to a lesser extent Ireland operates a similar system.
"We are the most carbon efficient producer of dairy in the world and that puts us in a good position. To maintain our competitive advantage, we need to be one step ahead.
"Yes, we have a leadership role to play but at the same time we will be slightly different, I think, in our approach."
Hurrell agreed that New Zealand's solution for reducing methane gases needs to suit pasture-based farming that is accepted internationally.
"When you are putting something in the animal's diet or removing it, you have to make sure you know the consequences. There will be a timeline for understanding this — and science and innovation will be a key."
The carbon footprint of New Zealand's on-farm milk supply is less than one-third of the global average and up to 30 per cent lower than greenhouse gas footprints of European and North American milk production.
A litre of milk produced in New Zealand creates 0.91kg of carbon dioxide emissions — compared with the global average of 2.5kg of emissions. Fonterra has customers in more than 140 countries.
Commenting on the Climate Change Commission's recommendations calling for progressively deeper emissions reductions, Hurrell said: "We all want the same outcome over time and what we advocate is to make sure we can do things at a timeline that works for everyone."
Fonterra's commitment to dealing with climate change isn't limited to farms. It is investing in innovation and infrastructure to remove greenhouse gas emissions at its manufacturing sites.
"A strong, healthy environment is important to us, and the big announcement we made months ago to be out of coal by 2037 does align with the commission's report," says Hurrell.
Nine of Fonterra's 29 manufacturing facilities use coal, and last year it achieved the target of 20 per cent reduction in energy intensity from a 2003 baseline. Fonterra believes lifting energy efficiency is a valuable prerequisite to larger investments.
The coal-fired boilers at the Brightwater site near Nelson and at the Te Awamutu facility were converted to burning wood pellets. Fonterra says converting or replacing existing coal boilers to renewable energy is a significant, logistical, technical and financial undertaking — but solutions are sustainable.
Fonterra is also replacing a third of its light fleet to electric vehicles and installing more charging stations at its sites. The Milk Vat Monitoring systems installed on farms optimises tanker pick-up schedules, and Fonterra is budgeting for five less tankers from next year.
On Covid-19, Hurrell says from a New Zealand perspective the strategy over the past 18 months is hard to dispute given the low number of deaths and hospitalisations.
But he warns: "As the rest of the world starts to live with Covid, through high vaccination rates, we have got to be really careful as a nation that we are not left behind.
"We are so far away from our markets — whether it is goods or services — and we have to go the extra mile to be close to customers. We can't lose sight of this.
"We need to go hard on getting as many people vaccinated as we can so at some point we can learn to live with Covid, in some form. It's something the Government needs to be focused on."
Hurrell says the government seems loathe to setting vaccination targets leading to the re-opening of the border for fear of things changing on them that are out of their control.
"But that's how we operate businesses every day. You deal with uncertainty, you deal with risks, and the more transparent and open you can be is helpful.
"Most of the New Zealand public would recognise that we are dealing with something that's unknown to all of us in Covid. If the government sets a target and a goal of what we are going to be doing by the next date and the goalposts move out of their control, then people will acknowledge and understand that," says Hurrell. "It's about managing those risks."
Hurrell says farmers getting labour is a real issue and some support around this, especially increasing managed isolation and quarantine spots, would be welcomed.
"We are starting to see some farmers packing up and workers moving to other parts of the world. So it gets back to my earlier point that we are going to be overtaken by the rest of the world, if we are not careful."