The efficient use of energy is critical to our drive to create a sustainable dairy industry and to our commitment to responsible dairying.

Processing in excess of 20 billion litres of fresh milk a year around the world is energy intensive. By using this important resource responsibly and efficiently, we aim to reduce our energy intensity, our energy costs and reduce our greenhouse gas emissions.

New Zealand & Australia Operational Performance FY15


The efficient use of energy remains a major contributor towards our goal of reducing emissions. Energy use per tonne of production in New Zealand and Australia (called ‘energy intensity’) increased 0.2 per cent from 8.33 GJ/tonne in 2013/14 to 8.35 GJ/tonne in 2014/15.
In New Zealand operations, improvements were observed due to a change in product mix towards lower energy intensity products such as UHT milk and the use of the reverse osmosis plant at Longburn to offset transport energy use. Our consumer business in New Zealand remains committed to reducing energy intensity but showed a slight increase due to product mix and under-use of some plant.
In Australia, a combination of product mix (including shifting to lower energy intensity powders due to a factory fire at Stanhope) and the implementation of energy efficiency projects gave an overall reduction in energy intensity.

Energy Efficiency Programme

Fonterra is in its 12th year of running one of New Zealand’s largest energy efficiency programmes aimed at reducing the energy intensity per tonne of product manufactured. Since it began in 2003, we have achieved a 16.8 per cent reduction in manufacturing energy intensity for our New Zealand operations.This is equivalent to saving enough energy in FY15 to power 190,000 average homes in New Zealand each year.

Emissions – NZ and Australia
Our manufacturing greenhouse gas emission intensity reduced 0.4 per cent from 0.612 tonnes of carbon dioxide equivalent per tonne of production in 2013/14 to 0.609 tonnes CO2-e/ tonne in 2014/15.
While our overall energy intensity performance is similar to last year, a shift in product mix towards lower emissions intensive products has helped our emissions intensity performance.

Greenhouse Gas Emissions
Fonterra was the first major dairy producer to provide a full life cycle analysis of its greenhouse gas emissions of 2004/05 in NZ. The methodology measured and established a carbon emission baseline for Fonterra to use as a benchmark against future performance.

Ground-breaking work by Fonterra during 2008/2009 saw the first steps taken towards an internationally agreed system to measure the carbon footprint of dairy. In an 18-month project, we measured the carbon footprint of our dairy products from the farm and out into our global markets. 

Key findings of the research were:
  • The carbon footprint was 940 grams of CO2 equivalent per litre of liquid milk
  • Around 85 percent of the greenhouse gases are emitted on the farm (59% methane, 17% carbon dioxide, 24% nitrous oxide)
  • Processing and manufacturing accounts for around 10% of total emissions 
  • Distribution accounts for around 5% of total emissions

Overview of Fonterra Energy Use in NZ:
Fonterra’s energy is generated from a range of sources.  Fonterra uses primarily two types of energy; electrical and thermal. The thermal energy is generated from either: coal, gas, light fuel oil (LFO), or biogas fuel sources, or from on-site co-generation facilities. 

We are committed to looking for innovative ways to optimise our energy mix towards cleaner, more efficient forms of energy, while continuing to reduce consumption. We continue to investigate the feasibility of technologies with the potential to reduce emissions and contribute to our energy efficiency and that of our farmers.

Fonterra has a fundamental requirement for a reliable cost effective source of energy to continue to operate its manufacturing plants efficiently.

Milk Collection Energy Use
Fonterra collects milk from up to 10,500 farms each day. Over the peak of the season, Fonterra collects over 87million litres of milk a day . Our tankers are covering 360,000Km to collect this milk each day – the equivalent of a one-way trip to the moon each day.

Several strategies ensure the most efficient use of energy by our milk collection fleet:
  • Very sophisticated vehicle routing software is used to ensure that milk is collected and liquid products moved using the minimum number of vehicles, travelling the shortest distance.
  • Some tankers deliver milk to transfer stations where it is accumulated and transferred for rail transportation.
  • Concentration plants are used at two locations to reduce the amount of water in the milk and reduce the volume that needs to be moved.
  • Tankers are monitored to identify less efficient vehicles.  These are corrected during servicing, or replaced.
  • Driver performance data is also recorded and used by driver trainers to coach drivers to deliver the best safety and efficiency outcomes.

Changes like these to our milk collection processes have not only helped to minimise the kilometres we travel to collect milk but also reduced the diesel we consume for those kilometres.

NZ Milk Collection Case Studies

Milk Collection Scheduling:
The Fonterra milk collection scheduling system matches drivers and tankers, suppliers to tankers and tankers to factories. It is designed to efficiently service some 10,500 farms and to collect more than 20 billion litres of milk each year.

This is logistically challenging, especially when you add in geographical and climatic constraints, so Fonterra uses a computer programme called “Genesis” as a scheduling and dispatch tool.

For every shift, we estimate the  amount of milk we expect to collect from every supplier, the site that requires the milk and the tankers available to make that happen.  Genesis will create efficient routes for the tankers, ensuring that all milk is collected and all requirements are met, while complying with safety restrictions such as shift length, access limitations and suppliers milking times while reducing the total driving time and distance to achieve this.

The implementation of Genesis has allowed Fonterra to improve its transport efficiency by approximately 11% and have a productivity hit rate of 99.6% collection in full on time.

Z Biodiesel – Foundation Partner
Fuel burned for transport makes up almost 20% of New Zealand’s greenhouse gas emissions.
As a foundation partner, Fonterra is supporting other Kiwis to make the switch to biofuel, by helping Z make it possible to bring this lower emission fuel to New Zealanders.

Fonterra will be the first company in New Zealand to plug into Z’s new B5 biodiesel having worked closely with Z since 2014.