Dairy giant Fonterra says it will not install any new coal boilers at its plants.
Fonterra has 32 manufacturing sites across the country, of which about 40 percent of its current processing energy is from coal.
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The rest is from natural gas, electricity and wood.
Chief Operating Officer for Global Operations, Robert Spurway, said effective immediately Fonterra had put a stop to installing any new coal boilers or increasing capacity to burn coal.
"One of the emerging themes in our strategy review is that sustainability will be at the heart of everything we do. As part of this, we want to step up our efforts to help New Zealand transition to a zero-carbon economy," he said.
"Our farmer-owners are already some of the most efficient producers of milk in the world. We need to match them in making sure our manufacturing operations and wider supply chain are as efficient as possible, " said Spurway
However he said getting out of coal was not as easy as flicking a switch. "Transitioning Fonterra's sites away from coal requires a staged approach. We're determined to go as fast as we can but there are a number of practical challenges we have to overcome."
He said at present New Zealand's energy infrastructure in some parts of the country simply wasn't set up to handle Fonterra's requirements.
"Either there aren't alternatives to coal available or, if there are, they are not at the scale needed."
There were also cost challenges.
"Transitioning to cleaner fuels will require additional investment and we need to balance this with remaining competitive. It's right to take a staged approach."
Fonterra's manufacturing operations were on track to meet its targets to reduce emissions by 30 percent across all its operations by 2030 and achieve net-zero by 2050.