Arla unveils new measures to help farmers self-generate renewable energy

After pledging to become a net-zero business, dairy major Arla Foods has outlined new measures to help farmers across the supply chain generate their own renewable energy and sell any excess.

Thousands of farms across Europe form Arla's supply chain, which it describes as a "micro food system"

Thousands of farms across Europe form Arla's supply chain, which it describes as a "micro food system"

The business is introducing what it describes as a “circularity loop” for the farmers, enabling them to sell Renewable Energy Guarantees of Origin (REGO) certificates directly to Arla. REGO certificates guarantee that one MWh of electricity has been produced from renewable energy sources and can be traded, often to third-party utility firms or end-user businesses that are looking to meet their own climate targets.

Arla claims that, by buying the REGOs directly from farmers, farmers will receive a better profit, as there are no costs associated with third-party processes. In this way, it hopes to encourage farmers that already self-generate to increase their capacity, and those without onsite generation to explore this opportunity.

By buying REGOs, Arla can effectively offset non-renewable electricity use in its own operations. It already purchases REGOs equivalent to around one-third of its total annual electricity demand for operations.

“This development means that Arla farmers can help their own company to accelerate the transition to renewable energy while the company can maximise the value of their investments in renewable energy,” Arla’s head of sustainability Hanne Søndergaard said.

“This demonstrates how we in our cooperative’s micro food system can work together to increase the sustainability of our value chain to the benefit of our owners, our business and the environment.”

Supply chain engagement

The news from Arla comes shortly after the firm completed what it claims is one of the biggest analyses of data on Scope 3 (indirect) carbon emissions in the dairy sector globally.

Arla received and analysed data from more than 8,100 supplier farms, relating to metrics such as what kinds of fuels are used, how many animals are owned, what they are fed, which fertilisers are used and how waste is managed.  Using ‘big data’ analysis verified independently, verified average carbon figures were generated.

These averages will help Arla identify what kind of support farmers need to deliver its 2050 net-zero goal, underpinned by a science-based target to reduce emissions per kilo of milk by 30%.

As of 2015, the dairy industry accounted for some 3.4% of the world’s annual emissions – a greater proportion than aviation. The majority of this impact is attributable to the cows themselves, mostly in the form of methane. While firms in the UK and mainland Europe are generally lower-carbon than their counterparts in geographies like the US, further progress is needed to align with national net-zero goals.

Sarah George



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