Dairy cooperative Arla Foods is looking to increase the share of renewable energy in its operations and achieve net zero by 2050, by using Renewable Energy Guarantees of Origin (REGO).
These are issued for the renewable electricity produced on farms.
Until now, the cooperative’s farmers’ only option has been to sell their REGOs as a commodity for resale, either through a utilities company or a trader.
Now, by selling their REGOs directly to Arla and excluding third parties, the farmers are rewarded with the full value that Arla would pay for REGOs on the open market.
This move has been welcomed by Arla’s chairman, dairy farmer Jan Toft Norgaard.
He said: “With this opportunity, the green energy that our owners produce can be counted as part of our collective actions to make dairy products more sustainable.
“The full profit for the REGOs that we are able to secure the farmers with this move has no extra cost for the cooperative and is a positive contribution to the business case for Arla farmers who consider investing in renewable energy.”
By teaming up in this way, Arla farmers are pushing further towards the circularity model where the profits benefit their business – feeding into the Arla cooperative philosophy.
Arla estimates that around a fifth of the company’s total electricity usage in its operations can potentially be covered by farmer-produced REGOs.