from Jeanette Fitzsimons
It is perhaps no surprise that our friend Fonterra, as the second biggest coal user in NZ (and a substantial user of gas as well), is among the “dirty dozen” largest users of fraudulent ETS credits identified by the Morgan Foundation in their brilliant piece of research Who’s the Real Cheat Here? Climate Cheats II: The Dozen Dirty Businesses.
What is surprising is that in Zella’s creative graphic below, using figures from that report, Fonterra doesn’t look too bad. It comes tenth in the Morgan list and holds fewer shonky credits than the oil and electricity companies. Fonterra’s 1.2 million units, although still huge, compare favourably with BP’s 6.1 million units.
But Fonterra is worse than they look and here’s why:
The ETS rules give free credits to “trade exposed” companies whose overseas competitors don’t have to pay any price for their carbon emissions. Fonterra is eligible for free credits equal to 60% of its process emissions.
These credits, worth up to $25 per unit on the international market, are paid out courtesy of the NZ taxpayer. Fonterra was expected to use them in part-payment for their emissions.
But they didn’t. Instead, like many other companies benefitting from this largesse, Fonterra cheated. They sold the credits at full price and bought dirt cheap credits from places like Russia and Ukraine which did not represent actual emissions reductions – in other words, they were fraudulent. They used these junk credits to pay their ETS obligation to the Government.
from Jeanette Fitzsimons
With the world committing at Paris to strive to keep global warming down to 1.5 degrees, the pressure is on Fonterra to stop increasing its coal use and start a gradual phase out. It cannot afford the reputational damage that will result from building its huge new drying plant at Studholme, increasing its coal use to some 600,000 tonne a year.
There is another way that could be more profitable for the company and especially for its farmers, while lightening its environmental footprint. The key is to substitute “value” for “volume”.
On 30 November NZ Farmers’ Weekly ran a big article where they lauded their achievements in energy efficiency, and complained that to get off coal was too big a challenge. We disagree.
See my response in last week’s issue: https://farmersweekly.co.nz/article/energy-challenges?p=24
by Jeanette Fitzsimons
Fonterra’s coal use is under scrutiny in South Island media after Robert Spurway, Global Operations Manager, replied on Tuesday to my column in the Christchurch Press.
Waimate locals and Coal Action Network activists make their statement in front of Fonterra’s Studholme plant
We are calling for Fonterra to use wood waste instead of coal in all its new boilers at its milk factories.
Mr Spurway says coal is the “only viable source” of heat to dry milk in the south Island, and begins his arguments by setting up a typical straw man.
CANA is not saying that “a switch to entirely wood fired burners would be simple”. Of course it will take some years, and that is why Fonterra should have started yesterday. At the very least, it is essential to start now, with any new burners being designed for renewable fuels. Then the oldest burners, which date from the 1970s and are probably the least efficient, can gradually be refurbished or replaced by purpose-built wood burners. Continue reading