A new partnership under the GIDI Fund has been announced by Prime Minister Chris Hipkins that will cut coal use at six Fonterra dairy factories, delivering massive emissions reductions and future proofing New Zealand's trade and exports.

Minister of Energy and Resources Megan Woods, and Minister of Climate Change James Shaw attended an event to celebrate the milestone at Fonterra's Hautapu manufacturing site yesterday.

Fonterra has committed to undertaking a complex range of projects that will reduce emissions by approximately 2.1 million tonnes of CO2e. This will deliver 2.69% of all New Zealand’s required emission reductions between 2026-2030.

Fonterra is anticipating a combination of energy efficiency, biomass, existing heat pump technology and newer innovative solutions will deliver these reductions.

“This hugely significant commitment means the dairy sector will dramatically cut its coal use quicker – this is not just critical for our environment, but for our economy too,” Chris Hipkins said.

“In my recent trade missions, I’ve heard first-hand the importance of New Zealand’s climate credentials to our exports. This partnership is an investment in our future export and economic prosperity.”

The Government will co-fund up to $90 million from the Government Investment in Decarbonising Industry (GIDI) Fund. Fonterra has approximately $790m in investment planned in total, to meet a revised target of a 50% reduction in carbon emissions by 2030. This is an increase on its original target of 30%, measured from a 2018 baseline.

“This is about accelerating change at scale – in a way that will also strengthen our economy and retain jobs,” Megan Woods said.