Coal group welcomes Fonterra's coal exit, but warns no dash for gas

18 July 2019-- Coal Action Network Aotearoa (CANA) today welcomed Fonterra’s commitment to build no new coal plants, a “no brainer” for the climate crisis the world faces. The group has been urging this transition for six years now and says it is glad Fonterra has finally listened.

However, the group warned the dairy giant should also not turn to gas as an alternative, as it had almost the same carbon footprint as coal. Any new fossil fuel plant will have an expected life of 40 years, taking us well past the carbon zero target date. In terms of alternatives, there are large quantities of waste wood from forestry just left to rot which could be put to use on some sites.

“With this commitment to get out of coal, Fonterra has joined other members of the dairy industry, and we welcome it,” said Cindy Baxter of CANA. “Given the climate crisis it is time to stop drying milk with coal, something that has appalled visitors to the country - but they cannot make the switch to gas”

Fonterra vies with Huntly power station as the country’s second-largest coal user, burning upwards of 534,000 tonnes of coal a year (these are 2015 figures).

Fonterra’s coal use had possibly peaked anyway, according to CANA. It has only been operating its Lichfield milk drying plant (powered by coal) for half the time in the last year, and while it had consent for a new coal-fired boiler at Studholme, outside Waimate in the South Island, there wasn’t enough milk being produced in the region to warrant the cost of building it.

This week the Interim Climate Change Commission recommended that the country phase out the use of fossil fuels from process heat, starting with coal.

“What we now need from Fonterra is transparency about its coal use, and a clear phase-out plan, said CANA organising group member Jeanette Fitzsimons.

“We need to know which plants will be converted when, using wood waste rather than electricity wherever this is available. The coal industry needs this clarity, so it can plan a Just Transition away from this dirty fuel.”

CANA has been campaigning against Fonterra’s coal use for at least six years, after it found that Bathurst Mining was mining domestic coal to sell to the dairy giant to keep itself afloat after plummeting coking coal prices made it uneconomic to mine the Denniston Plateau on the West Coast.

Alongside the rise in dairy production has been the rise in the number of coal mines across New Zealand - in 2015 Fonterra persuaded Solid Energy to re-open the Kopako mine in the Waikato to supply it with coal. In the South Island Bathurst has re-opened the Canterbury Coal mine at Glentunnel and expanded its operations at Nightcaps in Southland.

As a result of the Fonterra and other dairy company contracts, Bathurst scraped through the coal price crisis and was able, with Talley’s, to stump up the cash to buy out Solid Energy’s West Coast Assets.

“It’s time Fonterra stopped propping up New Zealand’s coal industry,” said Fitzsimons.

For further background information on Fonterra and coal, see two recent blogs:
Fonterra puts coal on a spin cycle
Fonterra, a useful step forward?

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