Climate overview


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Why reduce on-farm emissions Targets Understanding 'Scope 3' What DairyNZ is doing Additional resources

Kiwi dairy farmers are world leaders in the production of sustainable, low carbon milk. DairyNZ has a committed science and research team leading the way in developing on-farm solutions and technology to reduce greenhouse gas emissions and their warming impact.

Why reduce on-farm emissions?

New Zealand’s international brand and the value of our products in international markets draw on our environmental credentials. New Zealand dairy farmers are known as innovators and producers of premium products, and we already have one of the lowest carbon footprints in the world, per kg of milk.

Around the world, governments, communities, businesses, and individuals are increasingly focused on reducing emissions to limit further global temperature rises.

Government targets

New Zealand has both international and domestic climate change targets that cover all sectors of our economy. The Government has committed to pricing agricultural emissions in the future as part of meeting these targets. DairyNZ is working hard to advocate for fair outcomes in agricultural emissions policy and any potential pricing.

We have been working with the agriculture sector and government to find a workable solution to managing, reporting and reducing emissions – read more.

Consumer and business-led targets

Since the Paris Agreement on climate change was signed in 2016, multinational companies, including customers of New Zealand dairy products, have started setting their own greenhouse gas reduction targets.

Several New Zealand dairy companies and banks are now also setting targets that address emissions behind the farm gate. These targets are in addition to Government action on climate change. As an example, five of New Zealand’s key agricultural banks have signed up to the United Nations Net Zero Banking Alliance, requiring them to set climate targets.

Understanding ‘Scope 3’

Corporate or business targets often categorise greenhouse gas emissions into three ‘scopes’. Scope 1 covers direct emissions from owned or controlled sources. Scope 2 covers indirect emissions from the purchase and use of electricity, steam, heating, and cooling. Scope 3 includes all other indirect emissions that occur in the upstream and downstream activities of an organisation.

The table below describes Scope 1, 2 and 3 emissions for a milk supply company, a bank, and a farm.

Scope Definition Dairy company or bank Farm
1 Direct emissions from sources owned by an organisation. Includes emissions from activities, manufacturing and transport. All emissions on-farm, including methane and nitrous oxide.
2 Indirect emissions from the generation of purchased energy an organisation uses. Emissions from electricity used at sites and offices. Emissions from sourcing electricity.
3 Indirect emissions occurring because of the activities of an organisation, but generated from sources it does not own or control. Emissions from upstream sources and products in the supply chain. This includes on-farm emissions from dairy farmers. Emissions pre-farm gate e.g. the manufacture of imported feed and fertiliser.

Understanding emissions ‘intensity’

These Scope 3 targets often seek to reduce emissions ‘intensity’, which is the emissions per unit of product, e.g. per kilo of milksolids. This is driven by customer demand for lower emissions products and is different to government climate targets and to Scope 1 and 2 targets, which are focused on reducing total or ‘absolute’ emissions.

Examples of on-farm Scope 3 targets

  • Synlait: 30% reduction in on-farm emissions per kg of milksolids by 2028 from a 2020 baseline.
  • Fonterra: 30% reduction in on-farm emissions per kg of milksolids by 2030 from a 2018 baseline.
  • BNZ: 11% reduction in financed emissions intensity (kgCO2e/kg milksolids)
  • Westpac: 10% reduction in financed emissions intensity (tCO2-e/t Fat and Protein Corrected Milk) from a 2021 baseline (separate target for sheep and beef).

Other dairy companies and banks are also starting to consider Scope 3 targets.

What is DairyNZ doing?

We are working in three key areas to support farmers with the challenges of climate change: 

Last updated: Nov 2023
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