IKEA announced a significant expansion of its program to support its suppliers in accessing renewable energy, rolling out the initiative to ten new markets, as part of its goal to address supply chain emissions and work towards 100% renewable energy across its value chain.
Addressing greenhouse gas (GHG) emissions from production forms a major part of IKEA’s commitment to become climate positive – reducing more emissions than the value chain generates – by 2030, with supply chain emissions account for nearly two thirds of IKEA’s climate footprint. IKEA said that it is expanding its renewable energy program in a bid to speed up the reduction of its climate footprint from production, after achieving a 5% reduction across the company in 2022.
IKEA launched the renewable energy program in 2021 in three markets, including China, India, and Poland. Under the program, the company provides direct suppliers with local solutions, including bundled framework agreements and Power Purchase Agreements (PPAs) to purchase renewable electricity from the grid, covering electricity demand that cannot be generated onsite. IKEA also offers a separate program to finance on-site renewable energy projects.
Following the success of the initial rollout – the renewable electricity share for production in China doubled to 64% in 2022, for example – IKEA said that it will roll out the program to ten additional markets, including the Czech Republic, Germany, Italy, Lithuania, Portugal, Romania, Slovakia, Sweden, Türkiye, and Vietnam.
According to the company, the electricity consumption for production in these markets account for around 270,000 tonnes of CO2e emissions, or approximately 13% of the climate footprint from production.
Andreas Rangel Ahrens, Head of Climate, Inter IKEA Group, said:
“Striving towards 100% renewable energy is critical to limit climate change to 1.5°C. We know that many of our supply partners struggle to purchase 100% renewable electricity and that only a part can be generated on-site. By working together, we have shown that it’s possible to make renewable electricity both accessible and more affordable.”