Fonterra says $100m in carbon credit costs could help pay for clean energy
By RNZ Fonterra, one of the countrys largest greenhouse gas emitters, says it will be a decade before it will abandon coal altogether, and it wants more Government assistance. Last week New Zealand Steel said it would halve its coal use in 2027 after a Government boost to help cut coal-powered operations. NZ Steel will receive up to $140 million to create an electric arc furnace at its mill in Glenbrook, Auckland. The company said this would save cut 800,000 tonnes of carbon a year from day one. Fonterra chief operating officer Fraser Whineray told RNZ that it was working to reduce emissions, but more Government assistance would help. Between 2018 and 2030 well be down 30 percent, which means [by 2030] coal will be down about 60 percent. At the moment, for each tonne of greenhouse gases, the company must pay into the Governments Emissions Trading Scheme, but Whineray said he would like to see more of that be given back to Fonterra to help it introduce more clean alternative energy sources. Our total off-farm emissions in New Zealand at the moment is about 1.5 - 1.6 million tonnes [per year], and so you times that by the carbon price, and thats roughly the cost of surrendering carbon for our emissions in New Zealand each year. We surrender more than $100 million in carbon credits each year for our off-farm emissions, and so we are talking with ECCA [the Energy Efficiency and Conservation Authority] about what can be done to use some of that for... decarbonisation. Fonterra counted both its on-farm greenhouse gas emissions as well as the off-farm greenhouse gas emissions from the organisation. On-farm emissions are about 10 times what Fonterra, the entity, emits. Our coal is about 800,000 tonnes of emissions [per year] at the moment... Coal is about half our farm emissions, Whineray said. The ETS is supposed to recycle funds back into decarbonisation. And if were spending more than $100 million a year on carbon credits, getting a little bit of that back to help pay for the actual projects - some of which weve got under way and some much larger ones in front of us, that sounds like a pretty reasonable starting point. So far Fonterra had received just under $3m in Government grants for two relatively small projects, Whineray said. Weve done some of the largest decarbonisation projects so far... and weve got three projects simultaneously under way at the moment. Ultimately in the very long term we have to imagine a future without coal, gas and diesel. The company was looking into a variety of types of clean energy to see what might work for them, Whineray said. Were looking at biomass which weve already installed, weve got projects at Stirling in Otago, the Stirling cheese factory there which turned on Tuesday, thats now running on biomass. You can use white pellets, which are a form of tricking an existing coal boiler into thinking its getting coal and thats made of sawdust and things like that, and thats at Te Awamutu, thats our largest decarbonisation project to date. You can also look at black pellets. We did a trial with Genesis on that, which is great because you can store them outside. And they were considering new European heat pump technology that could use renewable energy in a much more energy-efficient way. Obviously diesel - weve got our electric truck running around in the Waikato now and thats part of a precursor to a larger look at our trucking fleet of 450. Whineray said one key factor when considering how to power their operations was reliability and diversification to ensure resilience. NZ Aerospace Summit in Christchurch hit by protest - which promises escalation tomorrow.