Reducing Dairy’s Biggest Carbon Challenge: Scope 3 Emissions

Supply chains in dairy are fragmented and complex, making emissions reductions difficult but highly impactful. The good news? Leading dairy brands are proving that sustainability and profitability can go hand in hand. This blog explores how companies like Danone, Nestlé, and Arla Foods are taking bold steps to decarbonize dairy while ensuring long-term industry resilience. 

Scope 3 emissions represent the largest share of the dairy industry’s total greenhouse gas (GHG) emissions. These emissions are generated across multiple stages of the supply chain, including: 

• Enteric fermentation (methane from cows) – Cows naturally emit methane during digestion, making enteric emissions the largest single contributor to dairy’s carbon footprint. 

• Feed production & land use – Deforestation, fertilizer use, and soil degradation contribute significantly to emissions. 

• Manure management – Improper handling of manure leads to methane and nitrous oxide emissions. 

• Processing & refrigeration – Dairy processing requires large amounts of energy, often powered by fossil fuels. 

• Transportation & distribution – Cold chain logistics and global distribution networks add to the industry's carbon footprint. 

According to the FAO (Food and Agriculture Organization), dairy production accounts for nearly 3.4% of global human-caused GHG emissions, making it a critical sector for decarbonization 

Reducing Methane Emissions Through Feed Innovations 

Methane is the biggest challenge for dairy emissions, but innovations in feed additives and dietary changes are proving effective in reducing enteric methane production. 

How Leading Brands Are Achieving This:  

• Developing methane-reducing feed additives such as Bovaer, which can cut emissions by up to 30%. 

• Incorporating seaweed-based supplements, which have been shown to reduce methane production in cows. 

• Shifting to regenerative grazing practices that improve soil health while lowering emissions. 

Example: Nestlé has partnered with dairy farmers to introduce Bovaer, a methane-reducing feed additive that has been scientifically proven to cut methane emissions from cows by 20-30%. This is part of Nestlé’s commitment to achieving net-zero emissions by 2050. 

Improving Land Use & Sustainable Feed Sourcing 

The dairy industry is highly land-intensive, requiring vast amounts of feed crops and grazing land. Sustainable farming solutions are essential for reducing deforestation and soil degradation. 

How Leading Brands Are Achieving This: 

• Adopting regenerative agriculture to restore soil health and increase carbon sequestration. 

• Sourcing deforestation-free feed ingredients to prevent land conversion. 

• Investing in cover cropping and crop rotation to reduce reliance on synthetic fertilizers. 

Example: Danone has implemented regenerative agriculture practices across 50,000 hectares of dairy farmland, reducing carbon emissions while improving biodiversity and soil health. Their initiative is part of their climate resilience strategy to make dairy farming more sustainable.  

Decarbonizing Manure Management & Energy Use 

Manure is a major source of methane and nitrous oxide emissions, but better management practices and biogas production are providing solutions. 

How Leading Brands Are Achieving This: 

• Expanding the use of anaerobic digesters to capture methane and convert it into renewable biogas. 

• Implementing precision manure management to reduce emissions and improve fertilizer efficiency. 

• Exploring composting solutions to reduce nitrous oxide emissions. 

Example: Arla Foods has invested in on-farm biogas production, allowing dairy farms to convert manure into renewable energy, cutting methane emissions while powering their facilities. This initiative aligns with Arla’s goal to reduce dairy’s carbon footprint by 30% by 2030. 

Electrifying Dairy Processing & Cold Chain Logistics 

Processing and refrigeration are major sources of dairy industry emissions. Companies are cutting their carbon footprint by shifting to renewable energy and low-carbon logistics. 

How Leading Brands Are Achieving This: 

• Electrifying dairy processing plants with renewable energy sources. 

• Switching to low-carbon refrigeration systems to reduce hydrofluorocarbon (HFC) emissions. 

• Implementing electric and hydrogen-powered transportation for dairy distribution. 

Example: Fonterra has committed to 100% renewable electricity in its New Zealand processing plants by 2030. The company is also piloting hydrogen-powered dairy tankers to reduce emissions from milk transportation. 

Tracking & Reporting Scope 3 Emissions 

With growing pressure from regulators and consumers, dairy companies are adopting advanced tracking systems to measure and reduce Scope 3 emissions. 

Key Strategies: 

• Implementing blockchain-based emissions tracking for supply chain transparency. 

• Engaging farmers in carbon reduction programs to align with SBTi goals. 

• Partnering with third-party organizations for verified sustainability reporting. 

Example: FrieslandCampina has launched a blockchain-based emissions tracking system, enabling full transparency in dairy supply chains. By tracking emissions at every stage—from feed sourcing to transportation—FrieslandCampina ensures compliance with sustainability commitments and investor expectations 

With the EU’s Corporate Sustainability Reporting Directive (CSRD) in effect as of January 2025, large dairy brands must now report Scope 3 emissions. Meanwhile, in the U.S., the SEC’s climate disclosure rules remain on hold, but investors and regulators still expect transparency. 

Brands that invest in automated emissions tracking, methane reduction, and regenerative agriculture will not only stay compliant—they’ll lead the industry forward. 

Reducing Scope 3 emissions in dairy is complex—but you don’t have to navigate it alone. Karbon-X helps dairy brands track, manage, and reduce emissions effectively while ensuring compliance with global regulations. 

From methane reduction strategies to supply chain decarbonization, Karbon-X partners with brands to drive measurable carbon reductions without compromising profitability. 

Get in touch with Karbon-X today and take your sustainability strategy to the next level.