Energy provider Ørsted announced today a new requirement for all suppliers to transition to 100% renewable electricity use when providing products or services to the company by 2025, becoming the first energy company in the world to set such a target.
The energy provider stated that the new commitment supports its science-based target of reaching net zero across its full value chain by 2040. Ørsted introduced its 2040 net zero goal in 2020, and last year became the first energy company to have its targets certified under the Science Based Targets initiative’s Net Zero Standard.
With the 2020 launch of its net zero initiative, Ørsted initiated a supply chain decarbonization program, targeted primarily at the company’s strategic suppliers in the most carbon intensive categories in its supply chain, including the manufacture of wind turbines, foundations, substations and cables. Strategic suppliers account for approximately 50% of Ørsted’s procurement spend.
Two years into the program, the company revealed that a majority of suppliers involved have already adopted 100% renewable electricity use.
Today’s announcement extends the requirement to shift to 100% renewable energy to all suppliers, enabling Ørsted to address supply chain emissions related to areas such as component manufacturing, transportation, installation and operation of renewable energy assets.
The company expects suppliers to cover their electricity use with renewable electricity by investing in on-site renewable electricity assets, entering into PPAs tied to renewable energy projects, or purchasing renewable electricity certificates.
Ørsted said that it will support its suppliers with renewable electricity guidelines to help select the best solutions.
Mads Nipper, Group President and CEO of Ørsted, said:
“We recognise the efforts undertaken by all existing and new suppliers who share our ambitions and will commit to using 100 % renewable electricity. We look forward to working together to achieve this goal as soon as possible and to set a new gold standard for the renewable energy industry.”