Processors, farmers and retailers have reached an ambitious agreement to help reduce the environmental impact of the dairy industry.

In a move that will create a blueprint for other sectors of the UK economy, the industry yesterday published a Milk Road Map, which sets out environmental targets over the next 12 years.

Dairy farmers have until 2020 to cut the greenhouse gas balance from farms by 20% to 30%, compared with 1990 levels. They are also expected to recycle or reuse 70% of non-natural waste and 40% of the energy used on farms should come from renewable sources. Half of all plastic bottles will be recycled into new milk bottles, almost no waste from dairies will go to landfill and water and energy consumption will be lower.

Other targets include all outer bulk packaging to be recyclable or reusable, and 10% of processors' non-transport energy to come from renewable sources or combined heat and power. There will also be mandatory energy benchmarking for processors and a 60% reduction in water-use per tonne of end-product.

Dairy UK director-general Jim Begg said: "The Milk Road Map is a pioneering collaboration between all links in the supply chain. Shoppers will be getting the same nutritious milk, but they will know that it has a lower impact on the environment than ever before."