New report shows massive carbon footprint of Fonterra’s PKE imports

Press release - December 4, 2011
Auckland 4 December 2011: A new report released today by Greenpeace New Zealand reveals that the 1.4 million tonnes of palm kernel expeller (PKE) imported into New Zealand during the 2010/2011 dairy season, could have produced up to 8.9 million tonnes of greenhouse gas emissions (1). This is the equivalent to 12 per cent of New Zealand's entire annual greenhouse gas emissions.

The Carbon Cost of Palm Kernel Expeller from Malaysia and Indonesia is the first comprehensive report produced on the carbon footprint created by PKE. It was written by independent scientist Dr Rob Carlton, who specialises in calculating carbon footprints. It was also peer-reviewed by Professor Pete Smith, a member of the Intergovernmental Panel on Climate Change, and a world-leading expert on soil carbon emissions.

As 90 per cent of imported PKE goes to the dairy sector, and 95 per cent of dairy farms are owned by Fonterra, the report makes it clear that Fonterra's use of PKE - which has increased exponentially since 2005 - is likely to be having a significant effect on the carbon footprint of its milk products. New Zealand currently buys over a third of global PKE stocks (2).

The report comes at a time when New Zealand's key export markets are taking the issue of PKE very seriously, because of the palm products industry's climate impacts. A recent UK Government report highlighted the use of PKE for animal feed as an area needing urgent attention, due to its links to deforestation (3).

This is part of a trend for retailers overseas to demand more sustainable, climate-friendly goods. In 2009, the major UK supermarket chain Tesco became the first retailer to label the carbon footprint of milk.

"The UK Government is clearly taking the environmental impact of using PKE seriously, and now this report, which demonstrates the high carbon cost of PKE, means that there is nowhere left for Fonterra to hide. The game is up," says GPNZ Climate Campaigner Nathan Argent.

"This report also shows that John Key's effort to defend the use of PKE is out of step with the science, and the views of our key export markets (4). It is time the New Zealand Government followed the lead of the UK Government and acted to protect our economy, and the climate (5)," Argent says.

The huge carbon footprint of palm kernel comes from the well-documented destruction of both rainforests and carbon rich peatlands in Indonesia and Malaysia by the palm industry, as it expands to meet the global demand for PKE, along with its co-products crude palm oil, and palm kernel oil. These forests and peatlands are vital in storing greenhouse gases that, when released, help drive climate change.

The destruction of Indonesia's forests and peatlands also has a devastating impact on biodiversity. The endangered orang-utan and the Sumatran tiger are just two of the species under threat of extinction due to the loss of natural forest habitat. The IUCN Red List of Endangered Species classifies the Borneo orang-utan as endangered, with estimates indicating that there are between 45,000 and 65,000 left in the wild.

"New Zealand has a choice - we can get a reputation for industrial dairying that destroys orang-utan habitat and drives climate change, or become world leaders in low carbon dairying," Argent concludes.

Fonterra produced a report into the carbon footprint of its products in 2009, based on its 2004-2005 operations. A copy of the report was eventually released to Greenpeace New Zealand under the Official Information Act, but with almost all input data and results blanked out. As such it is not clear how Fonterra calculated the climate impact of the PKE it uses. Parts of Fonterra's report suggest that no climate impacts were attributed to PKE.

PKE imports to New Zealand have increased eleven fold since 2005 - with almost all of those imports being used by the dairy sector.

Greenpeace has been working to get Fonterra to stop using PKE since 2009. Greenpeace New Zealand has twice sent teams into Indonesia to document the destruction caused by the currently unsustainable palm industry. Greenpeace NZ activists have also carried out actions against PKE shipments three times, the last in February 2011 in New Plymouth.


The report can be found here

For interviews, call Nathan Argent, Greenpeace NZ Climate Campaigner, on 021 971 234. To arrange an interview with Dr Rob Carlton, call Jay Harkness, GPNZ Media and Communications, on 021 495 216.


(1)    The report estimated that 2010/11's PKE imports were responsible for up to 8.91 million tonnes of greenhouse gas emissions. Assuming 77 % (90% x 86%) of the carbon emissions are spread across the total New Zealand milk production (16,000 million litres) this represents GHG emissions associated with PKE between 38 and 70 g CO2-e per litre  of fresh milk.  The corresponding emissions, calculated using mass allocation, are 232 to 433 g CO2-e per litre of fresh milk. The use of PKE is, therefore, likely to represent a significant source of unaccounted GHG emissions in this sector.

(2)    New Zealand imported over 1.4 million tonnes of palm kernel in the 2010/2011 seasonal year (Statistics New Zealand), which is over a third of the global trade (which stands at 4.86 million tonnes, according to the United States Department of Agriculture Foreign Agricultural Service).

(3)    Review of Policy Options Relating to Sustainable Palm Oil Procurement, a report prepared by Proforest for the UK Government's Department of Environment, Food and Rural Affairs, March, 2011, says: "The supply chain study also highlighted the large volumes of palm kernel meal being imported for the animal feed sector. To date, this sector has not been subject to the same level of market interest or pressure for sustainably sourced product, and therefore offers the potential for significant gains in sustainable sourcing through targeted awareness-raising and support."

(4) John Key, TVNZ, September 17, 2009, regarding PKE: "It's a waste product, in my opinion it's not leading to deforestation and on that basis I have no intention of intervening."

(5) United Nations Environment Programme UNEP (2007) 'The Last Stand of the Orangutan', UNEP, January 2007 grasp/docs/2007Jan-LastStand-of-Orangutan-report.pdf