Danish dairy giant wants to reward climate-friendly producers

Arla, Denmark’s largest dairy company and a major exporter, wants to reward farmers for low emissions under a new climate policy.

Danish dairy giant wants to reward climate-friendly producers
Danish dairy Arla wants to reward farmers for green production. File photo: Henning Bagger/Ritzau Scanpix

The company could spend 3.7 billion kroner per year rewarding its most climate-efficient suppliers, media Finans reports.

The measure is one of a number Arla plans to take to reduce its CO2 emissions and would make it the first dairy company in the world to implement a climate plan of this nature, according to Finans.

The plan would give the company several commercial opportunities, its CEO Peder Tuborgh told the media.

Milk will become more expensive for consumers in future but demand for sustainable products will increase, according to Tuborgh.

“This plan ensures that we fulfil our goal of reducing emissions of greenhouse gases from farms and by a further 30 percent by 2030. But the plan also provides a lot of commercial opportunities for Arla and makes financial sense for our shareholders,” he said.

Under the proposal, cash rewards would be given to milk farmers as part of a point system. The most sustainable producers would score up to 100 points, which would give them up to 30 øre (0.3 kroner) more in payment per litre of milk.

Milk producers are positive about the plan according to Kjartan Poulsen, head of the national milk producers’ union, Landsforeningen af Danske Mælkeproducenter.

But it will not work unless consumers must be willing to pay more for milk, Poulsen warned.

“This must not end up as a plan that just moves a lot of money around between farms. A precondition for all of this is that customers want to pay what these efforts cost. Otherwise it won’t last for long,” he said.

The plan was scheduled to be presented by Arla on Friday. The Danish dairy firm is owned by over 9,000 Danish and foreign milk producers.

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Danish wind energy giant Vestas makes loss for first time in a decade

Danish wind turbine producer Vestas has registered a loss for the first time since 2013, the company said as it published annual results.

Danish wind energy giant Vestas makes loss for first time in a decade

The company said that increasing costs of energy and raw materials had contributed to the operating loss, as had high inflation.

“Vestas and the wind industry were ready to provide solutions to address the energy crisis, but were constrained by cost increases, logistical challenges, outdated market designs and permitting processes”, the company said in its annual report.

The annual results show a deficit of just under 12 billion kroner for the year.

Preliminary figures released at the end of last month showed that Vestas had turned over around 108 billion kroner in 2022. As such, costs have dragged the company into an overall loss for the year.

Vestas has been forced to raise the price of its wind turbines to adapt to market conditions, it said.

“The increasing price of wind turbines has been and remains a necessity to account for inflation on operating costs and secure the long-term value creation of the industry,” the company said when it announced its 2022 turnover.

“Our focus to protect the value of our products and solutions needs strict discipline to address the raised costs of raw materials and components in dialogue with customers,” it said.

A reduced level of activity is expected at the company in 2023, while pressure from inflation will still be high. That could have an additional negative impact on profit.

Turnover is predicted to be between 104 and 115 billion kroner in 2023.

A degree of uncertainty must however be attached to that prognosis, Vestas stressed.

“The announced expectations try to take account of the situation and challenges as they appear at this point in time,” it said in the results released on Wednesday.

Vestas’ share price was up 2.7 percent on the Copenhagen stock exchange in mid-morning trading, in a market up by 0.8 percent overall.

The wind turbine maker employs around 29,000 people globally including 5,900 in Denmark.