Arla Foods will increase financial rewards for dairy farmers who adopt practices that reduce greenhouse gas emissions, expanding its climate incentive programme from 2027 with six new areas of action and a higher value for each point earned.
The revised FarmAhead Incentive scheme will raise the number of available points from 84 to 111, while increasing the value of each point by 33 per cent, from €0.03 to €0.04 per kilogramme of milk. The first payments under the updated model will take effect on 1 January 2027.
The expansion, approved by Arla’s board of directors, represents the programme’s most significant revision since its launch in 2023. According to Brandspur Brand News, the changes are intended to give farmer owners more ways to cut emissions while strengthening the financial incentive to adopt climate-friendly practices.
The six new action areas cover forage, manure treatment, biofuels, low-carbon fertiliser, methane reduction in grazing cows and breeding. Existing measures relating to feed efficiency, fertiliser use, protein efficiency and grazing will also be revised.
Under the programme, farmers earn points for documented activities that have a scientific link to reducing emissions from milk production. Their scores influence the price they receive for their milk, connecting environmental performance directly to farm income.
Arla has allocated up to €550 million annually to incentivise climate action through the scheme. However, the cooperative said the existing framework of up to €0.03 per kilogramme of milk redistributed through the incentive programme would remain in place, despite the higher value assigned to individual points.
The company said its farmer owners had reduced absolute emissions from raw milk production by 1.2 million tonnes of carbon dioxide equivalent since 2020. Since the incentive scheme began, their average score has also increased by six points, with Arla reporting a strong relationship between higher scores and lower on-farm emissions.
Hanne Søndergaard, Arla Foods’ executive vice-president of agriculture, sustainability and communication, said linking emissions-reduction measures to milk payments offered the farmer-owned cooperative a practical way to encourage change.
Arla chairman Jan Toft Nørgaard said the expanded scheme would give farmers more options suited to the different circumstances of their farms.
The programme also supports Arla’s work with business customers through its FarmAhead Customer Partnerships initiative, which allows participating companies to support climate action on farms and access primary carbon-footprint data to substantiate sustainability claims.
By broadening the range of qualifying activities and increasing the reward attached to each point, Arla aims to encourage further emissions reductions across its dairy supply chain while helping customers demonstrate progress towards their own environmental targets.
