New Zealand's Fonterra, a dairy co-operative owned by thousands of farming families, has announced new funding measures for the 2025/26 season, aimed at reducing on-farm emissions.
Under the new measures, effective 1 June 2025, farms that meet specified emissions-related criteria will receive an additional payment ranging between NZ$ 0.01 and NZ$ 0.05 per kilogram of milk solids (kgMS).
The company added that its newly announced initiative is part of an update to its existing Co-operative Difference framework and will be funded through separate agreements with Mars and Nestlé.
Funding from these partners will be divided into two streams: one offering access to on-farm tools and services to improve emissions efficiency, and the other providing an extra emissions incentive payment of between NZ$0.10 and NZ$ 0.25 per kgMS for farms with the lowest emissions footprints within the co-operative.
Fonterra CEO, Miles Hurrell highlighted, ”We’re growing relationships with customers who value the hard work farmers put into producing sustainable, high-quality milk, along with the co-op’s quality of on-farm data and ongoing commitment to improvement”.
How Many Farmers Would Be Eligible?
Based on data from the previous season, approximately 5,000 farms are expected to qualify for this payment.
Fonterra estimates that around 87% of farmers could be eligible for on-farm solutions, while between 300 and 350 farms could qualify for the additional incentive payment.
In addition to the new payments, Fonterra’s Climate Roadmap will remain a central component of its sustainability efforts, with a target to reduce on-farm emissions by 30% by 2030 from a 2018 baseline and achieve net zero by 2050.
Previous Initiatives
Previously, Fonterra has collaborated with Mars and Nestlé for various initiatives, including pilots and programmes aimed at enhancing farm efficiency and reducing greenhouse gas emissions.
Mars has supported Fonterra farmers through initiatives such as the Mars Tools and Services pilot and the Greener Choices programme, while Nestlé’s earlier partnership efforts included the Net Zero Pilot Dairy Farm in Taranaki, New Zealand.
Both companies claim to continue to support Fonterra’s sustainability actions as part of their broader commitments to reducing emissions in their respective supply chains.
