Orsted has set a target to become carbon neutral by 2025, making it the first global energy company to reach net zero emissions in its energy generation.
By 2040 Orsted will also achieve a carbon neutral footprint.
According to the company, in terms of progress made so far it has installed one third of all offshore wind turbines globally and has reduced its carbon emissions by 86% compared with 2006.
Orsted chief executive Henrik Poulsen said: “We’ve come very far in reducing our emissions and Orsted is more than two decades ahead of what is required by science to limit global warming to 1.5°C.”
Orsted’s carbon emission reduction targets are science-based targets approved by the Science-Based Targets initiative (SBTi), which has validated them and classified them as more ambitious than a well-below 2°C trajectory.
Poulsen added: “We’ve now decided to take an additional step by making Orsted a carbon neutral company already by 2025. Halting climate change requires action at all levels of society, and we need that action now. Especially within production and use of energy which account for 73% of all global emissions.
“We’ve transformed from producing energy based on fossil fuels to producing carbon neutral energy. We’ve seen a real strengthening of our business and shown that a rapid green turnaround is possible. A decade ago, we were one of Europe’s most coal-intensive utilities, and by 2025, we’ll be carbon neutral.”
To achieve carbon neutrality in its energy generation portfolio Orsted will phase out coal by 2023 and will install 20GW of offshore and onshore wind by 2025. The company will continue to build more than 30GW of green energy across various technologies by 2030.
The company will cut its emissions by at least 98% by 2025.
The remaining emissions beyond 98% come from a variety of sources, where emissions are harder to abate, according to Orsted, which is looking at various solutions, including ending buying or leasing fossil-fuelled cars as of 2021 and making its entire car fleet electric by 2025.
Should offsetting become necessary, Orsted said it will only engage with projects that are verified, measurable and additional, meaning that the carbon removal would not have happened without Orsted’s engagement.
The company has committed to reducing the emissions that take place outside of Orsted, but are still linked to its activities, by 50% by 2032 compared with 2018.
To achieve a carbon neutral footprint by 2040, Orsted will “gradually phase out” natural gas trading activities while increasing the green share of power traded. The company will engage its suppliers to reduce carbon emissions from the manufacture and installation of renewable energy and encourage suppliers to set emission reduction targets aligned with climate science and to run their operations on green energy.
“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 Poulsen.