Dive Brief:
- PepsiCo has signed a 10-year virtual power purchase agreement with clean energy producer Statkraft to decarbonize its operations and supply chain in Europe, it announced Tuesday.
- The renewable energy underlying the decade-long agreement will be generated by a wind project based in Spain, currently being modernized with more efficient turbines to boost renewable electricity output. The clean electricity generated through the VPPA is expected to reduce 32,000 metric tons of carbon dioxide emissions annually, according to an April 28 release.
- The food and beverage giant served as the lead buyer and signed the deal alongside two key suppliers, ingredients manufacturer Givaudan and sustainable packaging company Smurfit Westrock. PepsiCo said the three companies were able to nab favorable commercial terms and secure access to long-term renewable energy opportunities that are usually only available to large buyers.
Dive Insight:
The deal is part of PepsiCo’s “pep+ Renew” program, which it launched with Schneider Electric in 2022 to help supply chain partners — including suppliers, manufacturers and bottlers — transition to renewable electricity. The program aims to provide suppliers with the resources and education needed to navigate the clean energy market and accelerate renewable energy adoption through PPAs, according to the companies.
PepsiCo said it worked with Schneider Electric's global consulting practice SE Advisory Services to structure the deal with Statkraft. The deal is the second pep+ Renew cohort to sign a VPPA and the first European renewable electricity cohort.
The VPPA also builds on goals outlined in the PepsiCo Positive (pep+) program, the company’s broader sustainability strategy launched in 2021, according to the company.
“This agreement with Statkraft is a further step forward in our journey to reduce emissions not only within our own operations but across our entire value chain,” Archana Jagannathan, PepsiCo’s chief sustainability officer for Europe, Middle East and Africa, said in the release. “By collaborating with PepsiCo’s value chain, we aim to expand access to renewable energy solutions, support the transition to cleaner power, and accelerate progress toward our climate goals.”
Last year, the company reset its sustainability strategy, which included adjusting its net-zero target date from 2040 to 2050 and using 2022 as its baseline emissions year, rather than 2015.
The reset came after Pepsi’s 2023 sustainability report flagged that the company was unlikely to meet its 2025 sustainability targets. This recalibration also included updated packaging sustainability targets and setting new 2030 emissions reduction goals.
