From June, the dairy giant will pay farms meeting climate criteria an extra one-to-five cents for each kilo of milk solids.
It estimates more than 5000 farms will be eligible next season.
Their emissions need to be less than the co-op's 2018 year, taking into account carbon removed by trees.
An additional 10 to 25 cents a kilogram is on offer for those with emissions about 30 percent lower than the average farm.
