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Synlait commits to significantly shrinking environmental footprint over 10 years

Thursday 28th June 2018

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Synlait Milk has committed to significantly reducing its environmental impact over the next decade. The plan includes reducing greenhouse gas production and water consumption, moving away from coal-fired boilers, and offering juicy cash incentives to farmers who meet sustainability targets and who don't use palm kernel in feed.

The company told staff, dairy farmers and partners at its annual conference in Christchurch that it is committed to reducing greenhouse gas emissions by 35 percent per kilo of milk solids on-farm and 50 percent per kilo of milk solids off-farm by 2028. The on-farm reduction includes 50 percent cuts in nitrous oxide, 30 percent in methane production and 30 percent in carbon dioxide, it said. 

The move comes after the government opened a consultation on its Zero Carbon Bill, which focuses on whether a new emissions reduction target for 2050 should treat all gases that cause climate change the same, or take a different approach to different gases depending on whether they cause short-term or long-term warming.

The discussion document looks at three different options.

- Net zero carbon dioxide by 2050, which would reduce net carbon dioxide emissions in New Zealand but not other gases like methane or nitrous oxide, which predominantly come from agriculture.

- Net zero long-lived gases and stabilised short-lived gases by 2050, which would reduce emissions of long-lived gases (including carbon dioxide and nitrous oxide) to net zero by 2050, while stabilising emissions of short-lived gases (including methane).

- Net zero emissions by 2050.

Synlait said it will reduce water consumption by 20 percent per kilo of milk solids both on- and off-farm by 2028 and will cut nitrogen loss on-farm by 45 percent per kilo of milk solids by the same year. It will also offer farmers who do not feed palm kernel expeller to their cows an additional premium. 

The milk processor has also committed to never building another coal-fired boiler and working hard to address existing coal infrastructure, it said. 

It will also commission New Zealand's first large-scale electrode boiler in January 2019 to provide renewable process heat at its Dunsandel facility. According to Synlait, over a 10-year period its estimated emissions savings are roughly the same as the emissions from 9,600 households. 

"We're stepping up to take responsibility for our business and demonstrate leadership in the primary industry that will benefit all New Zealanders," said chief executive John Penno. 

Climate Change Minister James Shaw welcomed the news. “The fact that Synlait believes it can reduce greenhouse gas emissions on its farms by more than a third in just 10 years using existing technology and best practice demonstrates what is possible for the dairy sector as a whole. Its commitment to building no new coal-fired boilers and reducing existing coal use is also very encouraging," he said.

Penno said that in order to achieve its targets it will leverage its Lead with Pride programme and tailor support to each dairy farm. 

The programme was launched in 2013 and rewards independently-certified dairy farmers for meeting best practice in four 'pillars': environment, animal health and welfare, social responsibility and milk quality. 

According to Synlait's milk supply manager David Williams,  28 percent of its farms are already certified under the programme, with a number more working toward certification. The programme has three tiers and each includes a premium payment.

The company will increase payments in the top two tiers to further incentivise farmers, Williams said. Synlait has more than 200 suppliers. 

For example, farmers who meet additional criteria in each of the four best practice pillars, and who are independently certified annually, will see their premium increase from 6 cents per kilo of milk solids to up to 20 cents.

Farmers can move to the top tier after 12 months - if they meet additional criteria. That could see the premium increase to a possible 25 cents per kilo of milk solids. 

Synlait shares last traded at $11.54, up 0.4 percent and have gained 59.7 percent so far this year. 


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