Most fat supplements added to dairy diets are derived from palm acid oil or palm fatty acid distillate. There are environmental concerns about palm oil production due to deforestation and high greenhouse gas (GHG) emissions. The objective of this study was to evaluate a palm-free fat supplement, Envirolac. Envirolac contains vegetable oils, marine oils and glycerine encapsulated within a cellulosic fibre-clay mineral carrier matrix. The carrier matrix has small particle size to facilitate rapid rumen passage and minimal interference with rumen digestion. Fifty cows were divided into two balanced groups of 25 cows. Each group received Control (calcium soap of palm fatty acid distilate, 0.5 kg/d) and Envirolac (0.5 kg/d) diets in a crossover design with two feeding periods of four weeks duration, so that each cow received both diets. Envirolac has a lower total fat concentration than the calcium soap, so the feeding rate delivered less total fat. When fed on Envirolac, cows yielded more milk 40.7 v 40.1 kg/d), energy-corrected milk (ECM; 42.9 v 41.3 kg/d) and milk components (1605 v 1514 g fat, 1239 v 1199 g protein, 1871 v 1839 g lactose, per day), and produced milk with higher concentrations of fat (40.1 v 38.6 g/kg) and protein (30.7 v 30.1 g/kg), than when fed on Control. When fed on Envirolac, cows produced milk with higher concentrations of fatty acids (FA) synthesised de novo in the mammary gland (25.5 v 23.6 g/100 g total FA), lower concentration of palmitic acid (35.5 v 37.2 g/100 g total FA), and higher concentrations of some long-chain fatty acids (C20:0, C20:1, C20:3n3, C21:0, C22:0, C22:6n3 and C23:0), than when fed on Control. There was no effect of treatment on dry matter intake (DMI; mean 23.4 kg/d), so feed efficiency was higher (1.83 v 1.76 kg ECM/kg DMI) for Envirolac than Control. There was no effect of treatment on dry matter digestibility (0.73), methane production (433 g/d), methane yield (19.3 g/kg DMI) or methane intensity (10.9 g/kg ECM). Feed carbon footprint of Envirolac was calculated to be 1028 g CO2eq/kg DM, which is 0.46 of the value for a calcium soap (2830 g CO2eq/kg DM), and reduced feed carbon footprint per kg ECM milk production by 11 %. This study demonstrates that Envirolac can replace palm-based fat supplements in dairy diets to improve feed efficiency and reduce the carbon footprint of milk production.