Listed dairy producer Synlait Milk has marked its 10th year in business with a trailblazing sustainability programme for the next decade featuring some of the boldest impact reduction ambitions ever announced in the industry.
A long list of commitments was unveiled at Synlait's annual conference in Christchurch, headed by the pledge to reduce greenhouse gas emissions by 35 per cent per kilogram of milksolids on-farm and 50 per cent off-farm by 2028.
Other highlights of the programme include reduction of water consumption on and off-farm by 20 per cent/kgMS and a 45 per cent/kgMS reduction in on-farm nitrogen loss by 2028.
The company announced an increase in premium payments to suppliers for best practice dairy farming, including an incentive payment for not feeding any palm kernel extract.
It also promised never to build another coal-fired boiler and announced the installation of New Zealand's first large-scale electrode boiler at its advanced dairy liquids plant under construction at Dunsandel.
Other initiatives included becoming part of the global movement of Certified B corporations and establishing a social investment fund to boost support for communities, organisations and projects aligned to Synlait's sustainability goals.
Outgoing chief executive John Penno told the Herald Synlait was not asking each of its 200 Canterbury suppliers to improve their greenhouse gas emission performance by 35 per cent/kgMS. The ambition was across the supply base.
"We are not asking our best farms to move, we are asking our other farms to move towards our best farms (performance). What we're providing is a framework to invite people into the system and provide a financial incentive to move up towards best practice."
Technology solutions would also be required to achieve the bold goals, Penno said.
"It's fair to say there is some reach, some stretch on the technology but we are very confident that technology is near at hand. It's no longer pie in the sky, and we're working with those technology parties as to how we might get those technologies implemented on our farms as soon as they are available."
Synlait had worked with New Zealand's top pastoral greenhouse gas scientists in formulating the reduction aim numbers.
"They're not our numbers. They are validated back through the experts," Penno said.
The payback to the company would be that it would continue to attract discerning customers prepared to pay a premium for its products.
For Synlait farmers, improved systems delivered improved farm profitability and efficiencies.
Of Synlait's 200 suppliers, 63 were certified with the company's Lead With Pride premium payment programme and 30 more were close to certification.
Premiums for qualifying Gold Plus category farmers would increase from 6c/kgMS to a potential 20c/kgMS, while qualifying Gold Elite farmer premiums would rise from 12c/kgMS to a potential 25c/kgMS.
Penno said leading farmers understood that like all businesses they would increasingly be expected by the community and customers to farm with appropriate levels of stewardship.
"We've worked very hard to address the issues and set up programmes that not only incentivise them to move forward and make the changes needed but provide the framework as well and the financial incentives to help them make the move forward."
Director of sustainability and brand Hamish Reid said the 35 per cent reduction/per kg milksolids ambition for greenhouse gas emissions comprised three target gases.
The first was nitrous oxide, the most toxic gas to emit from a farm. It made up about 26 per cent of total farm gas impact per kg milksolids.
"We think we can halve that to minus-50 percent per kg milksolids by 2028," Reid said.
Nitrous oxide comes from nitrogen fertiliser emissions and from overly wet soil and cow urine.
"It's also the problem that results in nitrogen leaching into waterways. It comes from poorly-managed soils which are too wet. We have case study farms in our network that have proven that nitrogen oxide reduction of 60 per cent/kgMS is possible, which also reduces nitrogen leaching into waterways," said Reid.
The second gas is methane, a shortlived and less toxic emission, which Synlait believes, along with carbon dioxide, can be reduced by 30 per cent/kgMS by 2028.
Reid said top greenhouse gas scientists "fell off their chairs" when told of Synlait's targets.
"But when they'd gathered themselves, they said this is absolutely do-able and the science is there to show it's possible. Case studies on our best farms show it's been done."
Reid said the electrode boiler for the new Dunsandel plant would generate steam using 85 per cent renewable electricity.
"The dairy industry in processing needs to make a lot of steam to heat. Traditionally (the source) it's coal in the South Island and a combination of coal and natural gas in the North Island. With fossil fuels there are greenhouse gas problems."
However the company could not instal an electrode boiler at its Waikato plant, going up at Pokeno, because the area's electrical infrastructure wasn't yet suitable.
This plant, due to be operational for the 2019-2020 dairy season, would use natural gas.
Synlait was working with the local electricity lines company and when the site was further developed, it would use electricity, Reid said.