Arla is increasing its climate incentive points from 84 to 111 in its biggest scheme overhaul since 2023
Arla will increase the value of its climate incentive points by a third from January 2027, offering dairy farmers higher payments for measures aimed at cutting emissions.
The dairy cooperative is expanding its FarmAhead Incentive with six new action areas, while increasing the number of available points from 84 to 111.
Under the scheme, farmers earn points for documented emissions-reduction measures, which directly influence the milk price they receive.
Each point will increase in value from 0.03 to 0.04 euro cents per kilogramme of milk, although the overall incentive framework will remain unchanged.
Individual payments will depend on farmers' scores, meaning the changes will not automatically deliver a one-third increase in rewards.
The expanded scheme will introduce new incentives covering forage management, manure treatment, biofuels, low-carbon fertiliser, breeding and measures to reduce methane emissions from grazing cattle.
Existing measures relating to feed efficiency, fertiliser use, protein efficiency and grazing will also be revised.
Hanne Søndergaard, executive vice-president for agriculture, sustainability and communication at Arla Foods, said the changes would give farmers more options to reduce emissions.
“Now we are taking our biggest step forward since launch, providing more ways for farmers to act and ensuring a higher reward for every point they earn.”
The update follows reported progress among Arla's farmer owners, with the cooperative stating that absolute emissions from raw milk production have fallen by 1.2 million tonnes of CO2 equivalent since 2020.
Since the incentive launched in 2023, farmers have increased their average scores by six points, with Arla reporting a link between higher scores and lower on-farm emissions.
The cooperative estimates the programme provides financial incentives worth up to €550 million annually, with payments linked to farmers' efforts to reduce emissions.
Jan Toft Nørgaard, chairman of Arla Foods, said the changes were designed to accommodate different farming systems, including businesses already achieving maximum points in parts of the scheme.
“Farms differ, and so do the opportunities to take action to reduce emissions. With this update, we are giving more farmers more options to move forward in ways that fit their farms,” he said.
The changes also reflect demand from Arla's customers for measurable reductions in emissions associated with dairy production.
Through its FarmAhead Customer Partnerships, the cooperative works with businesses to support on-farm measures and provide carbon footprint data.
The revised incentive will remain within the existing framework of up to three euro cents per kilogramme of milk redistributed through the scheme.
Approved by Arla's board of directors, the changes will be introduced in stages during 2027, with the first payments under the updated model taking effect from 1 January.