Kraft Heinz earns federal money to decarbonize its Velveeta plant in Minnesota

The Minnesota plant that makes all the nation’s Velveeta will gain an influx of government cheddar for environmental upgrades that will nearly eliminate its carbon emissions.

This week the Department of Energy awarded Kraft Heinz $170 million for clean energy projects at 10 plants, including one in New Ulm, Minn., that will reduce annual emissions by more than 99%, the company said.

The plant employs 400 people and makes all of the company’s signature gooey cheese product as well as the sliced cheese found in Lunchables, according to the New Ulm Area Chamber of Commerce. Other products include Kraft’s Deli Deluxe cheese slices and Cheez Whiz for foodservice customers.

New Ulm’s factory will have $3 million from the federal money. The upgrades could include heat pumps, electric heaters, electric boilers, anaerobic digestors, biogas boilers, solar-thermal, solar photovoltaic and thermal energy storage, a spokeswoman said.

The projects are expected to be completed by 2030.

“We’re on a journey to achieve net-zero greenhouse gas emissions by 2050,” Marcos Eloi Lima, chief procurement and sustainability officer, said in a statement. “This investment will give us critical resources to make necessary improvements in our plants to help increase their energy efficiency and reduce emissions.”

The $26 billion food company, headquartered in Chicago and Pittsburgh, plans to replicate the technology it adopts at the 10 plants across its entire manufacturing footprint.

Kraft Heinz had shifted retail Velveeta production out of New Ulm a decade ago but brought it back with a $100 million investment in 2017. The plant first opened in 1955 and was, at one point, the largest processed cheese facility in North America.

In 2022, Kraft Heinz sold its Albany, Minn., powdered cheese plant to Kerry Group.