5 May 2016
Fonterra scraps plans for one of two coal-fired boilers, but should drop both

That Fonterra has decided to scrap plans to build one of two coal-fired milk driers in South Canterbury is a good start, but the company could take a step further and cancel the entire project, Coal Action Network Aotearoa (CANA) said today.

In response to strong opposition, including from CANA, Fonterra has told Environment Canterbury (1) that it no longer wants to build two coal-fired milk driers at its Studholme expansion outside Waimate in South Canterbury and has scaled plans back to just one. It has promised that this one plant would be a hybrid that could burn up to 20 per cent biomass instead of just coal, but still hasn't committed to burning that biomass.

“Fonterra has taken us halfway to the right point,” said Coal Action Network’s Cindy Baxter. “It has heard our opposition, but it hasn’t quite got the full message. It should cancel the second plant as well.”

“From our calculations, even one new boiler would require around 270,000 more cows (2) in the area to feed the plant, equivalent to plonking a city bigger than Los Angeles into the area, without a sewerage system. This is smaller than our original estimate of a Jakarta-sized footprint, but is still way more than the local environment can cope with.”

Expert witness for CANA at the hearing, dairy economist Peter Fraser noted that Fonterra was still predicting, as it did in its application, an unrealistic continual growth of the dairy sector, and an ongoing rise in the price of milk powder.

“There’s a big question here for Fonterra shareholders: can they take the economic burden of a massive stranded asset?” he asked.

Aside from the pressure on the local environment from so many more cows, Coal Action Network slammed Fonterra’s plan to ignore submissions calling for the plant to run on wood waste, rather than coal.

“If Fonterra insists on going ahead with this plant, there is no reason why it can’t build a state-of-the-art wood waste boiler,” said Ms Baxter.

“We don’t believe Fonterra has done its homework on the amount of wood waste available; it refused to release its study. To even think of building a milk boiler that runs on coal in the 21st century, in the wake of the Paris Agreement on climate change, is simply irresponsible. Fonterra says it 'aims to' use the biomass as a way of ‘transitioning out of coal’ which is laughable – one doesn’t transition out of coal by building a brand new coal-fired boiler.”

Coal Action Network Aotearoa called on the Environment Canterbury panel of commissioners to refuse Fonterra’s application.

ends

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