Fonterra report concedes palm kernel imports reverse emissions progress

Fonterra published its third Annual Sustainability Report. Photo / AFP

By Eric Frykberg of RNZ

New Zealand's largest company Fonterra says it is making environmental progress on several fronts, but concedes a setback in the area of emissions intensity.

The importation of palm kernel to feed livestock during dry weather raised overall emissions per farm.

Fonterra's has published its third Annual Sustainability Report, which describes progress in three areas - its people, the environment and its economic results.

It also said it was on track to meet its targets, but emissions intensity was a challenging area.

Emissions intensity measures the quantum of greenhouse gas emissions per unit of product.

The language used to describe this problem was complex.

"In New Zealand, for the 2017/18 season milk, the estimated cradle-to-farm-gate carbon intensity, including land use change, is 0.911 kilograms of carbon dioxide equivalent per kilogram of fat-and-protein-corrected milk," the report reads

"Excluding land use change, this is 0.78 kilograms of carbon dioxide equivalent, which is up slightly on our 2014/15 baseline season, and our highest level since the 2012/13 season.

"The rise is primarily due to increased brought-in feed, mostly PKE2, due to drought in some regions."

The company's general manager of sustainability performance & reporting, Gary Philip, said emissions intensity had been tracking down from 20 years ago, but later kicked up because extra feed had been brought in to feed cows during a drought.

In other areas, the company expressed confidence about its prospects.

One of its key ambitions was to have a farm environment plan for all of its farmers by 2025.

At present, 23 per cent of farmers had one, up from 12 per cent a year ago.

Fonterra global sustainability director Carolyn Mortland thought moves towards a 100 per cent target by 2025 would work.

"We have had to build up our team of sustainable dairy advisers and train them - we have doubled the number of these advisers," she said.

"We are also working with other farm environment providers, and if they meet our standards we will accept them."

Mortland said she did not want farm management plans to be a checkbox action and wanted farmers to take responsibility working towards achieving them.

She also said the company would work had to achieve its goal on overall greenhouse gas emissions.

"We believe we are on track to reduce emissions in our factories by 2030, but progress will be lumpy," she said.

"What our plan entails is to first become as energy efficient as possible, so that we reduce the total amount of energy we use.

"With the remaining amount of energy we deploy, we will be able to be convert to lower carbon or renewable sources at a cost effective rate."

Regarding its business ambitions, Fonterra aimed to increase its earnings per share from 17 cents now to 40c by 2022 and 50c by 2024.

"We are honing our financial disciplines," she said.

"We have a strong ethic led from the top of doing what we say we will do and we will be working very diligently to achieving that."

- RNZ