Reducing environmental impact

Meeting the challenge of climate change and providing good stewardship of our natural resources

Our challenges and opportunities

Like other agricultural industries, dairy is dependent on natural resources. We are very mindful of our stewardship role and the need to look after our water, our biodiversity and our soil, as well as reduce our waste and emissions.

Climate change remains a key material sustainability risk for the industry. Impacts including water scarcity will affect milk supply and the viability of the industry in some regions. The Australian dairy industry has set a target of a 30% reduction in GHG emissions intensity by 2030. The dairy industry wants to be part of the solution to ensure we play our role in meeting the challenges of climate change.

Goal 8 - Improve land management

Australian dairy farmers are committed to managing land and water responsibly. The NFF has set a 2030 target for the net benefit from ecosystem services to be equal to 5% of farm revenue. This is an important issue and one that the dairy industry will monitor as land managed for agriculture includes assets important for biodiversity conservation.

There is no new data available for this goal or its targets and indicators.  A survey of dairy farmer natural resource management practices will be undertaken in 2020 and the outcomes reported in the 2020 Dairy Sustainability Report.

Key initiatives

These initiatives are driving change in nutrient, land and water management.

Case Study: Cutting-edge technology to improve water quality, help farmers

A series of trials across Western Australia will assess the use of technology in reducing nutrient loss from farms.

The dairy industry’s Regional Development Program, Western Dairy, is part of the Smart Farming Fertiliser project that will involve at least 36 fertiliser trials, using seven different treatments.

Cutting-edge technology, including near-infrared and x-ray fluorescence, will be used in conjunction with traditional techniques to measure productivity and nutrient status in soils and pastures.

Goal 9 - Increase water use efficiency

Water is a critical resource for the industry in all farming systems, from pasture based, to irrigated systems and housed animal systems as well as for manufacturing, and we are seeking to increase, monitor and report on our water use efficiency in both the farm and manufacturing sector. In a year when water was in short supply for much of the industry, particularly in the eastern states, there was an increased focus on wise water use.  Improving water efficiency is an ongoing challenge.

How we performed in 2019:

• Water intensity increased from 1.86 ML per ML of milk processed in 2017-18 to 1.91ML per ML of milk processed in 2018-19, representing an increase of 2.6% over the year and an increase of 9.1% on the baseline year of 2010-11.
• There was no other new data to report against the Goal 9 targets for 2019. Further information will be gathered in the 2020 NRM survey. 

Key initiatives

These initiatives are driving change in the reduction of consumptive water intensity of dairy companies.

Case Study

Bega Cheese installed a steam condensate return system at its Tatura site in 2018. The system was designed in-house by one of the company’s own engineers.

The project was initiated to return the water arising from steam used in the Clean in Place Plant and other activities in the cheese plant, such as cream cheese pasteurisation, cream cheese separation, preheating and high fat pasteurisation.

The project results in multiple environmental and cost benefits including:

• Decreased steam usage of 405,244 kg per year
• Decreased gas consumption by an average of 7,720 GJ per year
• Decreased trade waste discharge of an average of 18.7 ML per year
• Decreased water consumption of 26.7 ML per year
• Decreased chemical use and cleaner feed water, resulting in less scale and improved boiler efficiency.

Case Study: Managing water requires thinking 'outside of the box'

Northern Victorian irrigated dairy farmers Rachelle and Carl Moon manage their water portfolio in ‘three thirds’ to minimise the impact of water volatility on their business.

• The Moons utilise the water market to manage water risk, where they own 90 megalitres of water, which accounts for one-third of their Numurkah farm’s water usage. They lease one-third of their water supply and buy one-third from the temporary market.
• “Water prices are having a huge impact on our business,” Mrs Moon said. “We have milked through the wettest winter in history, and now we have drought conditions. The climate has kept us on our toes.”
• They milk 120 autumn-calving cows on 105 hectares. To increase certainty for their business, the Moons locked in an average water price on a three-year lease, which they will continue to review.

Goal 10 - Reduce greenhouse gas (GHG) emissions intensity

International scientific consensus links climate change with GHG emissions and the dairy industry has a responsibility to reduce its emissions in both the farm and manufacturing sectors.

In 2019, work focused on interrogating the proposed 2030 target to see if it is robust and how it might be achieved. Potential emissions reduction pathways for both farms and dairy manufacturing have been identified and are currently being assessed.

How we performed in 2019:

• Measured from a baseline of 2015-16, GHG emissions intensity for dairy processors increased from 140 tonnes of carbon dioxide equivalent (tCO2~e) per ML of milk processed to 143.4 (tCO2~e) in 2018-19, representing a 2.4% decrease from the previous year.
• This can be attributed to plants not operating at full capacity during the year linked to reduced milk production due to dry conditions in the eastern states. Represents 76% of milk processed.
• At farm level, a recent analysis of 1,149 Dairy Farm Monitor Project (DFMP) datasets helped to determine the 2015-16 Emissions Intensity (EI) baseline of on-farm milk production at 1.0 kg CO2e/kg Fat and Protein Corrected Milk (FPCM).

Key initiatives

Case Study: Lighting upgrades for Bega cheese and lactalis

Lights at Lactalis’ Lidcombe site in NSW used 1624 MWh per year, representing 9.5% of the total annual bill and costing $230,000 per year.

Following a site energy audit, a lighting upgrade was undertaken. The project reduced overall energy use by 660 MWh, saving $105,000 per year
in energy costs with a capital cost of $268,000.

At Bega Cheese’s Derrimut warehouse facility in Victoria, another lighting upgrade realised significant energy and financial savings. The warehouse operated around the clock with 130 inefficient metal halide lights which were replaced with more efficient high bay LED lights. Along with a reduction in energy use, there were added benefits in less heat generation, less maintenance and higher-lux levels throughout the facility (meeting AS/NZS1680 lighting standards).

Savings of $40,000 per year in operating costs were made - $60,337 operating and $4,534 maintenance pre-upgrade, and $18,984 per year operating cost post-upgrade.

Case Study: Scientists show we can breed cattle that produce less methane

In a boon for mitigating climate change, researchers have found that the genetics of a cow strongly influence the composition of their gut and how much methane they produce.

• The international team of scientists studied microorganisms in the cow’s rumen, the first stomach in its digestive system.
• “Previously we knew it was possible to reduce methane emissions by changing the diet,” says Professor John Williams, from the Davies Research Centre at the University of Adelaide.
• “What we showed is that the level and type of methane-producing microbes in the cow is to a large extent controlled by the cow’s genetic makeup,” Prof Williams said.

Goal 11 - Reduce waste

The Australian Government’s commitment to all packaging being recyclable, compostable or reusable by 2025 has increased the urgency of addressing this issue. Dairy processors typically produce a variety of waste types including packaging waste such as cardboard, paper, cartons and plastic, organic wastes such as sludge and reject product as well as office waste. On farm, silage wrap is a key issue due to a lack of available options for recycling in regional areas.

How we performed in 2019:

At the manufacturing level, waste intensity increased in 2018-19 to 1.5 tonnes of waste sent to landfill per ML of milk processed - up from 1.35 in the previous year. 

• This represents an increase of 11.5% but there has been an overall reduction of 44% compared with the baseline in 2010-11.
• Currently ten dairy companies are participating in the Australian Packaging Covenant - Bega, Brancourt Dairies, Brownes, Bulla, Chobani, Fonterra, Lactalis, Lion, Nestle and Saputo.
• An industry working group has been established to drive industry-wide progress towards meeting the 2025 National Packaging Targets and support the development of circular economies for dairy product packaging

Key initiatives

Case Study: Brownes better packaging

A dairy company launched Australia’s first renewable cartons when it ditched the fossil-fuel derived plastic lining in its milk cartons for sugarcane during 2019.

• In October Western Australia manufacturer Brownes Dairy started using waste-reducing renewable milk cartons made entirely from wood fibres and sugarcane - both renewable resources.
• Whilst carton packaging already has strong environmental credentials, the Tetra Rex Bio-based board cartons used by Brownes Dairy offer a more sustainable alternative to standard milk cartons, which contain fossil-fuel derived polyethylene plastic in the lining.
• Brownes Dairy switched 25 of its milk carton products - about 17.8 million milk cartons per year - to the packaging in 2019, with more products to follow in 2020. It is the first company in Australia to use the renewable cartons across its entire milk, flavoured milk and juice carton ranges.

Review industry progress against each commitment