A new diesel biofuel made from an agricultural by-product is helping power Fonterra's milk tanker fleet, and it's hoped more transport operators will follow suit.
Z Energy has built New Zealand's first commercial scale bio-diesel plant, using a process which turns an unwanted tallow product, usually exported to make soap and candles, to make the high quality diesel.
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The biofuel from the plant at Wiri, south of Auckland, is now being used in 150 Fonterra milk tankers in the Waikato and Bay of Plenty regions.
Fonterra's national transport and logistics manager Barry McColl said the biofuel would reduce carbon emissions by four percent per tanker.
"Reducing our carbon footprint is really important to us. The fuel is cleaner burning, so it definitely reduces carbon emissions," he said.
While there is a small premium for the biofuel, Mr McColl said it was worth the small cost increase.
"Doing the right thing is always going to be a little more expensive than doing the average," he said.
He said the move to biofuel was a genuine commitment by the dairy co-op.
"Fonterra has some serious targets around water use, water quality, energy use and being carbon neutral."
Meanwhile Z Energy's Sheena Thomas said use of the fuel had positive environmental benefits.
"At full capacity, the plant can produce 20 million litres of bio-fuel diesel a year, and that represents a 37,000 tonne reduction in carbon emissions for New Zealand," she said.
She said it was an easy way for the trucking industry to move towards being more environmentally friendly.
"It's cleaner burning, there's less black smoke, it's better for people and the environment, and there's less wear and tear on the engine components," said Ms Thomas.
She said the commitment from Fonterra was vital in setting up the biofuel plant.
"We wouldn't have had the courage to embark on building it without support of customers like Fonterra."
"It's been a long road, but they have stuck with us the whole way and it's great to be producing it."
Ms Thomas is hoping the trucking industry will get onboard with new fuel option.
"There's not one solution to a lower carbon future, but this is a viable alternative, it's a really sensible solution."