Prime Minister Jacinda Ardern is joined by Silver Fern Farms chief executive Simon Limmer at a sod-turning function to celebrate a decarbonisation project removing coal at the co-op's Christchurch processing site in Belfast. Photo / Tim Cronshaw

Meat processor Silver Fern Farms (SFF) is moving closer towards a future without coal, as it begins work on a high-temperature heat pump at its Christchurch plant.

The Government is paying about half of the co-funded $1.6 million project in which the plant's coal boiler will be scrapped to reduce more than 1500 tonnes of coal a year -about 8 per cent of the co-op's total consumption.

Prime Minister Jacinda Ardern's sod-turning effort early this month signalled the start of the construction work at Belfast.

A large heat pump will be fitted into the existing ammonium refrigeration system.

Waste heat will be used to pre-heat hot water for the beef processing facility at Belfast.

SFF has pledged to get out of coal completely at all of its 14 processing plants by 2030 and halve emissions from coal by the end of next year.

As a result of further Government Investment in Decarbonising Industry (GIDI) funding, more coal removal projects are scheduled over the next year for the SFF Finegand site at Balclutha and at Pareora near Timaru.

Ardern said the Government recognised that moving to lower emissions was costly for businesses and had announced in May a total of $719 million towards decarbonisation as part of its emission reductions plan.

The Opposition's description of the GIDI fund as "corporate welfare" was unfair, she said.

"I consider it to be a very direct partnership and it's had huge results.

"The initial $69 million investment in GIDI helped fund 53 major industrial decarbonisation projects all contracted for completion by April 2024 and over their lifetime are estimated to save 7.4 million tonnes of CO2, the equivalent of taking 134,800 cars off the road."

Industry was adding another $116 million.

Ardern said the expansion of GIDI was equivalent to removing one million cars - a "sizeable" effort in reducing emissions.

Silver Fern Farms chief executive Simon Limmer said a major effort was going into reducing carbon at the Belfast site.

He said the site was a pioneer when it was built in 1883 - a year after the first refrigeration shipment - and reinvestment in it was part of an overall $60 million spent last year and $80 million this year.

"Most of that investment is going into sustainability projects. The focus is on energy, on waste and water and how we are ultimately ensuring that everything is better and better and meeting our objective" of reduced emissions targets.

He said the Energy Efficiency and Conservation Authority's GIDI support had helped Silver Fern Farms accelerate the Belfast project and the Government and industry partnership was important for its carbon reduction.

Limmer said the co-operative was continuing at pace with carbon reduction as demand was increasing for beef in the Net Carbon Zero programme and more farmers were supplying product.

Lamb was joining the range later this year and the price of carbon had been lifted from $10 to $50, he said.

SFF said it had already reduced processing emissions by 20 per cent since 2018.

Minister of Energy and Resources Dr Megan Woods said the decarbonisation projects at the three SFF sites alone would remove 385,000 tonnes of carbon - the equivalent of taking 7000 cars off the road.

She said the industrial and processing heat changes being made at Belfast were examples of how New Zealand would reduce its emissions and "do its bit" in the global fight against climate change.

Energy was a big part of the carbon footprint, accounting for nearly 42 per cent of New Zealand's emissions, she said.

"Often people think we've nearly got 100 per cent renewable electricity we are done and dusted in New Zealand, but our industrial processed heat has a long way to go and that's why the Government is so keen on these partnerships."

The SFF heat pump is powered by electricity, costing more than twice as much as coal, but is highly efficient for elevating water temperatures through heat recovery, and has a twin benefit of lower carbon dioxide emissions.

Another driver is the cost of coal has doubled in the past six years.

The Belfast site processed 1800 containers of meat last year, of which 85 per cent was exported.