Fonterra invests $64M to replace coal boilers with wood pellets at Clandeboye, cutting 155,000 tonnes CO2e annually by September.
Fonterra's Green Leap Coal Out, Wood Pellets In
Fonterra is putting a sleeper hold on polluting coal boilers with a $64 million conversion to wood pellets to reduce emissions at its South Canterbury milk processing site. Photo: Fonterra

$64M project slashes emissions at Clandeboye, boosting sustainability and local economy.

Fonterra, a global leader in the dairy industry, is making a significant stride towards environmental sustainability with a substantial $64 million project at its South Canterbury milk processing site in Clandeboye. The initiative involves replacing existing coal-fired boilers with modern, efficient systems powered by wood pellets. This strategic conversion is anticipated to be fully operational by September, marking a pivotal moment in the company’s commitment to reducing its carbon footprint within the agribusiness sector.

This major investment is set to dramatically cut Fonterra’s manufacturing emissions by an impressive 9%. This reduction is equivalent to eliminating 155,000 tonnes of CO2e annually, or the environmental impact of taking over 64,000 cars off the road each year. The move is a direct response to tightening global coal supplies and aligns with Fonterra’s broader, ambitious goal of completely phasing out coal usage across all its processing sites by 2037, driving a cleaner future for dairy production.

The complex conversion project entails a complete overhaul of the energy infrastructure at Clandeboye. This includes the meticulous dismantling of old, coal-burning equipment and the installation of entirely new systems specifically designed for wood pellet operations. New fuel conveying systems, larger fuel bins, cyclones, and advanced baghouses are all part of this comprehensive upgrade, ensuring a seamless transition to a renewable energy source for large-scale milk processing.

Beyond the direct environmental benefits, this substantial investment by Fonterra is also set to provide a significant boost to the local economy. The project is engaging numerous contractors from across the South Island, creating employment opportunities and stimulating regional economic activity. This highlights how large-scale sustainability initiatives in the dairy sector can generate positive ripple effects throughout local communities, proving that green investments can also be smart economic choices.

The shift to wood pellets at Clandeboye serves as a powerful signal to the wider dairy community and other industrial sectors. It not only provides a viable renewable energy alternative for Fonterra but also strengthens its fuel optionality, reducing reliance on fossil fuels. Furthermore, this pioneering move is expected to catalyze the development of more robust wood pellet supply chains across New Zealand, paving the way for future decarbonization opportunities at other Fonterra sites and inspiring broader adoption of sustainable practices in dairy economics.

Source: Otago Daily Times: Coal-fired boilers to be replaced by wood pellets by September

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