Ørsted Targets Carbon Neutral Supply Chain by 2040

On track to be carbon neutral in energy generation and operations, Ørsted wants to cut energy trading and supply chain emissions in half by 2032 and then down to net-zero emissions by 2040.

In the program, the strategic suppliers will be asked to disclose their own emissions and set science-based carbon reduction targets, use 100% renewable electricity in the manufacture of turbines, foundations, cables, substations and components, as well as optimize their current vessel fleet and develop a roadmap to power vessels with renewable energy.

According to the Danish company, suppliers in the most carbon-intensive categories include manufacturers of turbines, foundations, substations and cables as they are produced using steel, aluminum and copper, among other materials, which are energy-intensive to extract and manufacture.

The second-largest source of supply chain emissions is the fossil fuels used by the maritime vessels that transport and install offshore wind components.

Ørsted stated it has more than 22,000 suppliers, with strategic suppliers constituting 50% of the company’s total procurement spend.

The company also plans to encourage its remaining suppliers to reduce the carbon impact of their goods and services and is strengthening the sustainability criteria in the company’s procurement tenders.

“It’ll be challenging to reach a carbon neutral footprint by 2040, and it’ll require significant innovation in all parts of our supply chain. Many of the green technologies to be used to decarbonise our supply chain exist but they’re not yet cost competitive. With the 2040 target, we want to help drive the necessary innovation forward to mature the green technologies in the industries that supply to us,” said Henrik Poulsen, CEO of Ørsted.

“Reducing emissions in the renewable energy supply chain is a significant task. Businesses will need to collaborate across supply chains to cut emissions at the pace and scale demanded by science. We now reach out to our industry-leading suppliers to join forces to accelerate the global green transformation.”

To remind, Ørsted recently set a target to become carbon neutral by 2025 and achieve a carbon-neutral footprint by 2040.