Covestro’s Virtual Power Purchase Agreement with Ørsted: A Step Towards a Greener Future
Covestro, a global leader in the production of high-tech polymer materials, has recently made a significant stride in reducing its carbon footprint by reaching net-zero Scope 2 electricity emissions at four of its U.S. sites. This achievement is a result of the company’s existing Virtual Power Purchase Agreement (vPPA) with Ørsted, a renewable energy leader based in Denmark.
What is a Virtual Power Purchase Agreement (vPPA)?
A vPPA is a financial derivative contract between a power consumer and a renewable energy generator, allowing the consumer to claim the environmental attributes of the renewable energy produced, but without taking physical delivery of the electricity itself. In other words, Covestro is purchasing the renewable energy attributes from Ørsted, which allows the company to claim the associated carbon reductions.
The Impact on Covestro
Through this vPPA, Covestro is now able to provide approximately 90 MW of renewable energy capacity to its U.S. sites. This not only reduces the company’s Scope 2 emissions by 90,000 tons annually but also contributes to its commitment to becoming carbon neutral by 2035. The financial benefits of this agreement also provide Covestro with price certainty and risk management for its electricity costs.
The Global Impact
The shift towards renewable energy sources is becoming increasingly important in the global fight against climate change. Covestro’s partnership with Ørsted is a testament to the growing trend of businesses investing in renewable energy to reduce their carbon footprint. This not only benefits the environment by reducing CO2 emissions but also sets a positive example for other companies to follow.
The Future of Renewable Energy
- According to a report by the International Energy Agency (IEA), renewable energy is expected to account for 95% of global electricity capacity additions between 2021 and 2026.
- The cost of renewable energy continues to decrease, making it a more viable option for businesses and individuals alike.
- Governments and organizations around the world are setting ambitious targets for renewable energy adoption, further driving the market forward.
The collaboration between Covestro and Ørsted is just one example of the many ways that businesses can contribute to the global transition to renewable energy. As more companies make similar commitments, we can expect to see a significant reduction in global CO2 emissions and a move towards a more sustainable future.
Conclusion
Covestro’s virtual Power Purchase Agreement with Ørsted is a significant step towards the company’s goal of becoming carbon neutral by 2035. This agreement not only reduces Covestro’s Scope 2 emissions but also sets a positive example for other businesses to follow. With the cost of renewable energy continuing to decrease and governments and organizations setting ambitious targets, we can expect to see a significant increase in the adoption of renewable energy sources in the coming years. Together, we can make a difference in the fight against climate change and create a more sustainable future for all.
