This Climate Business: Dairy done differently – Brendan Haigh (edited excerpts)
Listen to the full episode here.
Ross
Let's start with your sustainability strategy. What does it consist of? Where are the big wins for you?
Brendan
Taking a step back to when Miraka was formed we were different from the get-go. Our dairy factory is based on geothermal power which was the first in the world to do that. We put that stake in the ground really early on as to how we wanted to perform as a business. But things have changed a lot since that time. The big challenge for us now is our supply chain. We were lucky with those initial decisions that our founders made around forming that amazing factory. But when we look at our emissions and climate change, the supply chain is really where the big challenges are now. So we've switched our focus a lot more into that area.
Ross
One of the other things that you do differently is you use dual fuel vehicles. Can you talk about that?
Brendan
We're really fortunate to be part of this amazing ecosystem just north of Taupo at a place called Mōkai. And we've got a geothermal field, we've got a dairy factory, we've actually got a hydrogen plant there as well, owned by one of our owners, Tuarapaki. This is an opportunity to think about what can we do differently around reducing those emissions from those dairy tankers, which are hauling really big loads around these big hilly back country roads, burning a lot of diesel. In fact, about a third of our emissions come from these tankers. And so this initiative is around, can we take this hydrogen, which is produced by the renewable geothermal electricity, and use it to run our trucks around? And yes, that's what we're doing now. We've got one dual-filled truck and it displaces about a third of the diesel. Basically, the hydrogen goes into the diesel engine and gets combusted just like diesel. The next generation of this will be something like a fuel cell, where it's completely clean. But this is a really good way of us testing this.
Ross
How does it work with your suppliers, the dairy farmers? How do they buy into the sustainability story?
Brendan
We reward our suppliers for kaitiakitanga outcomes. And that can be not just the land, but people. We set up our [Te Ara Miraka or Miraka pathway] programme to help support and drive change for our suppliers. About 40% of our milk comes from our owners - a group of Māori trusts and a corporation around the Central North Island. But the rest of our suppliers, a hundred suppliers, they choose to come to Miraka. They could go somewhere else. They might have come from Fonterra. We can work with our suppliers to help them bring down emissions by identifying those sorts of things that they should do and rewarding them for those activities.
Ross
Right. And rule of thumb, what kind of emissions savings are you talking about?
Brendan
About 98 percent of the emissions associated with a tonne of milk powder come from on-farm. Across our supplier base, there is probably about 350,000 tonnes of CO2 equivalents produced per annum. So it's a big amount. We've done some really in-depth work to look at what we can potentially do to bring down those emissions. And we feel reasonably confident that we can drop them by about a third by 2030 and halve them by 2050, which really aligns us with New Zealand's emissions reduction goals. That's a really significant saving, halving those emissions by 2050.
Ross
Just how novel does all this make you as a business in your sector?
Brendan
It's been an interesting journey. When we started out in 2010, no one was talking about sustainability in our area. We were just doing it because it's our fundamental value. And obviously, the last five or six years, sustainability in business has become trendy, and that's awesome. If that brings about change, well, that's good too. I guess when you look at today's climate, we're seeing a lot of pushback around ESG type goals within business. That's irrelevant to us. We're going to continue to do what we're doing at the moment, irrespective of all that. That's probably what's different about us in terms of being unique. It's based on values. It's not based on a slogan or a marketing slogan on our products.
Ross
If you could gaze into the crystal ball, where does the dairy sector in New Zealand go in, say, five years with this approach?
Brendan
Technology is coming in really rapidly, and it's fundamentally changing dairying. And it's also raising the bar in terms of what you need to do to be an economically sustainable business. That's one thing. Increasing diversity across our land use. So, particularly for our Māori landowners, they've got investments in horticulture, dairy, renewable energy. We're going to see increasing diversity and that's going to impact us in a good way in terms of food processing, because we're going to have more opportunities to process different types of foods and go for different markets. I'm confident that we're going to start seeing some of these new technologies coming into our farm systems, which have the potential to really knock down methane. Like five years ago, I would be thinking this is crystal ball stuff. This stuff is now one or two years away from coming into our farming systems, and this is going to be a total game changer in terms of reducing those emissions. So that's really exciting.
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