The farm’s emissions need to be less than the co-op’s 2017/2018 base year, Fonterra said.
An additional 10-25 cents a kilogram is on offer for an estimated 300-350 farms whose planet-heating emissions are around 30% lower than average.
The money for the 300-odd highest performers will come from incentives paid by Mars and Nestlé as part of those companies’ climate commitments.
Those multinationals have been working with Fonterra to meet their targets because supply-chain emissions from ingredients make up a large part of their footprints.
The company says farmers can already earn up to 10 cents per kilogram of milk solids extra for meeting other, non-climate criteria and these payments will be on top of that.
About 87% of Fonterra farmers will also be eligible for help with services such as making herds more efficient with genetics, which can also lower emissions.
The co-operative said it needed to reduce emissions per kilo by 30% off 2018 levels by 2030 to remain competitive, meet market access demands and comply with increased legal and reporting obligations.
Dairy is the country’s biggest-emitting sector, however, the current Government does not plan to price farming emissions until as late as 2030.
Pressure from large dairy customers overseas is expected to drive some level of emissions reductions anyway, however, the Ministry for Primary Industries has said it can not fully model how much yet.
- RNZ
