TOWARDS A CARBON- NEUTRAL MILK CHAIN − WHEN AND HOW IS IT POSSIBLE? 20.5.2019 JUHA NOUSIAINEN, SENIOR VICE PRESIDENT, carbon-neutral milk chain

Together we make life better ANIMAL WELLFARE OWNED BY DAIRY FARMER CO-OPERATIVES SUSTAINABLE MILK PRODUCTION AND CIRCULAR ECONOMY INNOVATIONS PROMOTING HEALTH AND WELL-BEING TRANSPARENT PROCUREMENT

MEANS CONCRETE ACTS, FROM THE FARMS TO THE TABLE Valio 11.11.2019 COMPANIES CAN SOLVE For us, sustainability GLOBAL CHALLENGES MEANS CONCRETE ACTS, FROM THE FARMS TO THE TABLE

Concrete and immediate actions are needed to mitigate climate change 20.11.2018 Concrete and immediate actions are needed to mitigate climate change Greenhouse gas emissions in Finland 2017 Emissions must be reduced in all sectors of the societies Emissions must be removed from the atmosphere. Merely reducing emissions is not enough to achieve the targets of the Paris climate agreement We must move from fossil economy to circular economy Million tons CO2-ekv. Source: Statistics Finland, Greenhouse gas emissions in Finland 2017 https://tilastokeskus.fi/til/khki/2017/khki_2017_2018-05-24_kat_001_fi.html

The carbon footprint of milk, from field to dinner table, consists of Valio 11.11.2019 The carbon footprint of milk, from field to dinner table, consists of % Source: Valio

Carbon neutral milk chain – Activites from field to consumers 20.11.2018 Carbon neutral milk chain – Activites from field to consumers CARBON NEUTRAL MILK CHAIN Land use Higher productivity from mineral soils Development of forage market Mitigation of emissions from organic soils Carbon sequestration Grassland as carbon sink Improvement of biodiversity Restoration of peat land Forestration Emission mitigation technologies Animal breeding and improved lifetime production, feeding innovations, barn technology Pro Manure Network Processing of side streams of milk chain for energy and nutrients Energy Improvement of energy efficiency and the use of renewable energy Logistics Development of low carbon logistics Packages Sustainable materials and packaging innovations Waste Minimization of waste through the whole chain

We have cut METHANE EMISSIONS IN HALF OVER THE LAST 50 YEARS 20.11.2018 We have cut METHANE EMISSIONS IN HALF OVER THE LAST 50 YEARS In Finland over the past 50 years the amount of methane generated by ruminating dairy cows has been cut in half The amount of methane per liter of milk has decreased significantly due to improved animal welfare, proper nutrition and breeding, resulting in cows producing more milk

Valio 11.11.2019 AIMING TOWARDS CARBON-NEUTRAL MILk by 2035 How to reset milk’s climate impact? Our most important solutions: • grass fields to bind more atmospheric carbon • renewable energy from cow manure • minimising the emissions from the peatland fields

Towards a carbon-neutral milk chain: this is how we will do it! 20.11.2018 Towards a carbon-neutral milk chain: this is how we will do it! Pro Manure eco-system Valio CARBO program I. Grass as an efficient carbon sink and a novel raw material A. Modeling of environmental impact 30% Carbon-neutral milk chain 50-70% II. Green cow –efficient milk production 10% B Farm pilots Mitigation emissions from organic soils III. Feeding innovations 15% C. Sustainability index for farms IV. New technology in barn => (”zero-energy barn”) 15% D. Collaboration network V. Strategies to improve biodiversity 9

20.11.2018 PROMANURE: NUTRIENT RECYCLING AND ENERGY PRODUCTION THROUGH NEW TECHNOLOGY AND A COLLABORATION NETWORK Manure Valio’s patented process for processing manure produces nitrogen and phosphorus fertilizer fractions, as well as biogas and clean water. We are creating a manure ecosystem, i.e. a network in which the different players pursue local and centralized solutions for manure processing. The final goal is an ecosystem of dairy farms and bioplants. Bioplant: patented technology Nitrogen and phosphorus fertilizer fractions Biogas and clean water

Opportunities to milk farmers who own valio 20.11.2018 Opportunities to milk farmers who own valio Many dairy farmers are eager to be part of the climate solution. Many of the tools are simple and don’t generate any extra costs for the farms. On the contrary, diverse and healthy fields improve crop yields. Farmers need support and information: what are the best ways to increase the carbon absorption of fields, reduce methane emissions of cows, or put manure back into the nutrient cycle? Together with Valio Group’s cooperatives we are helping farmers to take practical environmental actions at the farm level.

VALIO 11.11.2019 a.i. virtanen lead Valio’s laboratory and received nobel price in chemistry He invented AIV fodder, creating the foundation of the current milk production system. Now we need to update the system to give solutions for today’s climate challenge.