Fonterra expects to wrap up an emission-slashing conversion of two coal-fired boilers to wood pellets at its South Canterbury milk processing site at Clandeboye by September.
Tightening coal supplies and the co-op’s commitment to phasing out coal entirely throughout all of its processing sites by 2037 has seen $64 million put into its latest project.
The co-op calculates upgrading the boilers at the site near Timaru will reduce its overall manufacturing emissions by 9%, as well as providing energy security.
That amounts to 155,000 tonnes of CO2e less each year or equal to taking more than 64,000 cars off the road each year.
Work is on schedule with teams dismantling redundant fuel conveyors, baghouses and sections of fuel bins over the past month.
The next stage is installing new equipment for wood pellet operations.
This includes purpose-built fuel conveying systems transporting wood pellets to the top of new larger fuel bins before they are added to the boiler.
New cyclones and baghouses have also been installed that will remove and filter particles from the exhaust air.
In addition to the technical upgrades, Fonterra has improved the working environment with a new control room for teams and refurbishing existing rooms.
Clandeboye cheese and protein site operations manager Conrad Harle said contractors from throughout the South Island were being brought in for the construction, conversion and commissioning phases.
"Not only does this investment signal a viable renewable energy alternative and strengthen fuel optionality at the site, but it also provides a boost to the local economy," he said in a statement.
The project was a significant decarbonisation investment for the site and wider Fonterra.
Fonterra energy and climate manager Linda Mulvihill said the move away from coal marked an important step in supporting regional decarbonisation efforts.
"The shift to wood pellets at Clandeboye sends a strong signal to the wider industry, fostering fuel diversity in the South Island.
"By creating consistent demand, the investment helps catalyse the development of wood pellets supply chains across New Zealand.
"This in turn supports future decarbonisation opportunities at other Fonterra sites including our remaining coal using sites — Darfield, Studholme, Takaka and Edendale."
Fonterra has yet to set a date for converting Clandeboye’s remaining boilers and other South Island sites into renewable energy.
The co-op is working to achieve a 50.4% reduction in absolute scope one and two emissions by 2030, from a 2018 baseline.
