Arla Lifts Dairy Farmer Payments to Cut Emissions
- Point value rises from 0.03 to 0.04 euro cents per kilogramme of milk from January 2027.
- Available incentive points increase from 84 to 111, with six new measures added.
- Arla targets a 30.3 percent cut in Scope 3 FLAG emissions by 2030 against a 2020 baseline.
Each carbon point now adds measurably more to the milk price farmers receive.
From January 2027, dairy farmers supplying Arla will earn up to 0.04 euro cents per kilogramme of milk for each point scored under an expanded carbon incentive scheme, up from 0.03 cents now. The number of available points is rising from 84 to 111, with the changes introduced in stages throughout 2027 and payments under the revised scheme beginning on 1 January 2027.
Arla Foods, the farmer owned dairy cooperative, is adding six new measures to its FarmAhead Incentive programme, New Food Magazine reports. The scheme, introduced in 2023, already sits within a framework worth up to €550 million (about £465 million) annually, through which farmers earn points for documented emissions reducing actions that feed directly into the milk price they are paid.
The six new areas are forage, manure treatment, biofuels, low-carbon fertiliser, reducing methane from grazing cows and breeding. Arla is also revising existing criteria covering feed efficiency, fertiliser use, protein efficiency and grazing, drawing on updated farm data and newer emissions reduction technology. Arla says farmer owners have cut absolute emissions from raw milk production by 1.2 million tonnes of CO2 equivalent since 2020, and average incentive scores are up six points since the scheme began.
The expansion sits under a wider target: Arla has committed to cutting absolute Scope 3 emissions from forest, land and agriculture, covering raw milk and externally sourced whey, by 30.3 percent by 2030 against a 2020 baseline. Through its FarmAhead Customer Partnerships, Arla supplies participating customers with farm-level carbon footprint data, which manufacturers and retailers increasingly need to stand behind their own Scope 3 reporting.
For UK dairy buyers, including those sourcing through Arla Foods UK, the mechanics matter on two fronts. The milk price itself now carries a carbon component that will grow as more points become available and each point is worth more, which feeds directly into dairy ingredient cost lines. Separately, any manufacturer or retailer relying on Arla's farm-level emissions data for its own supply chain reporting should expect that data to shift as the underlying incentive criteria change from January 2027.