Commercial, Sourcing Renewables - February 17, 2023
IKEA Expands RE To Suppliers in 10 Markets
IKEA will include 10 additional markets into its program to support suppliers to switch to renewable electricity since nearly two-thirds of the IKEA climate footprint is directly connected to the supply chain, including production at suppliers.
The program was introduced by IKEA in June 2021 to enable suppliers to purchase renewable electricity as a complement to the financing of on-site generation of renewable energy.
The following additional markets will be included in the program: The Czech Republic, Germany, Italy, Lithuania, Portugal, Romania, Slovakia, Sweden, Türkiye, and Vietnam. The combined electricity consumption for production in these markets stands for 0.27 million tons CO2 eq, or 13% of the climate footprint from production. The rollout starts during the calendar year 2023.
The increased share of renewable electricity in production is one of the key contributors to how IKEA’s climate footprint decreased by 5% in absolute terms in FY22, compared to FY21.
“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 accessible and more affordable. We hope this also inspires other businesses to support their suppliers in the same way,” says Andreas Rangel Ahrens, Head of Climate, Inter IKEA Group in a statement.
IKEA will provide local solutions, such as bundled framework agreements and PPAs to purchase renewable electricity from the grid, enabling its direct suppliers to consume 100% renewable electricity in their production.
All heating and about 15% of electricity consumption of the suppliers can be addressed by on-site investments with installations of for example solar panels and boilers. This is achieved through the 100 MEUR financing of renewable energy announced in Dec 2019.
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