Arla closes the loop

Nov 1, 2021 | ESG | 0 comments

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Dairy cooperative Arla has hatched a plan with its farmer members to lift the use of renewable energy

With a strategy to reduce its carbon footprint by 30% by 2030, dairy cooperative Arla has engaged with its farmer members to ensure surplus renewable electricity produced on-farm is channelled back to Arla.

Arla farmers generate green electricity for their own farms and the public grid, and now have the opportunity to sell surplus energy to Arla at a better price. Until now, farmers have sold their Guarantees of Origin (GO), issued for renewable electricity produced on the farm, as commodities either through utility companies or a trader.

Arla’s head of sustainability Hanne Søndergaard said the loop created for renewable energy produced on farm demonstrates how Arla’s micro food system can work together to increase the sustainability of its value chain to benefit farmer owners, the business and the environment. The circularity generated within Arla’s own value chain is an opportunity to make Arla’s products more sustainable. Farmers received full profits for GOs at no extra cost for the coop, contributing to the business case for farmers who are considering investing in renewable energy.   

Renewable energy used in Arla’s operations is 35% at present and since 2015, the coop has lowered emissions 24%. Currently, 24% of farmers member produce renewable electricity from wind turbines and solar panels on their farms, with 14% of those farmers able to sell their GOs to Arla. The coop estimates around a fifth of its total electricity usage can be potentially covered by farmer-produced GOs.     

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