How can we decarbonise our supply chains?

Working strategically to decarbonise our supply chain

Through our supply chain decarbonisation programme, we engage with our strategic suppliers, who account for more than 65 % of our total procurement spend. We work with suppliers across our offshore and onshore portfolios of wind and solar assets, and we primarily focus on our offshore wind supply chain as offshore wind is currently our largest business area and the source of most of our supply chain emissions. We have three main focus areas for this work.

1. Disclose emissions and set science-based targets

Measuring emissions across scope 1, 2, and 3 – the emissions that come from a company’s own operations, the electricity it purchases, and its value chain – is a prerequisite for informed target setting and action planning. Since the launch of our programme in early 2020, our suppliers have strengthened their measurement and reporting of emissions data; in 2021, 97 % of our strategic suppliers disclosed their emissions data to the CDP, and 26 % had either set or committed to set a science-based emissions reduction target. Prior to the launch of the programme, only 36 % reported to the CDP, and no one had set a science-based emissions reduction target.

Establishing good accounting practices is a journey and can be continuously refined. Supplier data is often of uneven and inadequate quality. That is why we use the CDP supply chain programme as a tool to help disclose emissions in a uniform and standardised way across the industry. We are also in dialogue with supplier quality, health, safety and environment (QHSE) managers on improving data quality.

To track emissions performance across our supply chain towards 2040, we are currently developing a ‘levelised CO2' model. The model will enable us to track our performance by combining supplier CDP data with generic carbon data from life cycle analyses of offshore wind farm components.

2. Use 100 % green electricity

Green electricity is a readily available solution for reducing emissions. We have set the clear expectation for our strategic suppliers to use 100 % green electricity in the manufacture of wind turbines, foundations, cables, substations, and other components by 2025.

There are different ways of covering your electricity consumption with green electricity, which, in turn, have different climate effects. One such solution is to purchase green electricity certificates. These certificates represent the positive environmental and social benefits of one megawatt-hour of green electricity generated by a renewable energy provider and are sold separately to the power itself. The certificates allow the bearer to claim a ‘unit’ of greenness even if they haven’t used that green power. Other solutions exist that more clearly contribute to realising new green electricity capacity, such as smaller on-site green electricity assets or power purchase agreements (PPAs) tied to green energy projects, whose realisation depends on securing financing.

Therefore, we have introduced green electricity guidelines to clarify what we expect from suppliers in 2025, as well as our current expectations.

3. Optimise vessel fleets and develop road maps to power vessels with renewable energy

In the long-term, we rely on breakthrough technologies for reducing most of our supply chain emissions, especially for offshore logistics and steel. Steel manufacturing happens further down our supply chain, and we therefore take additional measures to find solutions to this challenge.

Within offshore logistics, we ask our suppliers to develop road maps to transition to green energy. More short-term solutions include optimising transport routes and using sustainable biofuels. We have established sustainability criteria for the biofuels we source, which we have shared with our suppliers to inspire their work.

Not all biofuels are equally sustainable, and, from a life cycle perspective, fuels from crop feedstocks carry the risk of indirect land use changes and low greenhouse gas (GHG) savings. For this reason, our sustainability guidelines prioritise certified sustainable biofuels produced from waste feedstocks that also meet relevant thresholds for GHG savings.

In addition, we joined the Getting to Zero Coalition to collaborate across sectors on launching commercially viable net-zero emissions vessels by 2030. One of our strategic focus areas is to become a global leader in renewable hydrogen and green fuels, which are key to decarbonising vessels and heavy manufacturing, and we already have a pipeline of projects that we will deliver with key partners to accelerate this.