Ørsted Planning to Become Carbon Neutral by 2025

Ørsted plans to become carbon neutral by 2025, making it the first major energy company to reach net-zero emissions in its energy generation

Ørsted, one of the leading offshore wind energy developers in the world, which was recently ranked the most sustainable company in the world, has now announced that it plans to become carbon neutral by 2025. Making it the first major energy company to reach net-zero emissions in its energy generation – far ahead of science-based decarbonisation targets for limiting global warming to 1.5°C. Additionally, the firm has also set a target of achieving a carbon-neutral footprint by 2040.

As the leading developer of offshore wind, Ørsted has installed one-third of all offshore wind turbines globally. By driving out carbon emissions from its energy generation and operations, the company has reduced its carbon emissions by 86 percent compared to 2006. And the firm now takes an additional step in its decarbonisation journey by deciding to become a carbon-neutral company by 2025. 

Henrik Poulsen, CEO of Ørsted, said the firm has come very far in reducing its emissions and it is more than two decades ahead of what is required by science to limit global warming to 1.5°C.

“We’ve now decided to take an additional step by making Ørsted 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 percent of all global emissions.”

The most important levers that will get the firm to carbon neutrality are a complete phase-out of coal by 2023 and the installation of 20 GW of offshore and onshore wind by 2025, supported by a commitment to invest DKK 200 billion in green energy in the period 2019-2025. With its determination to continue the phase-out of fossil fuels and build-out of green energy, it will see its emissions reduced by at least 98 percent by 2025.

The remaining emissions beyond 98 percent come from a variety of sources, where emissions are harder to abate. The firm will seek to push the reduction beyond 98 percent and look for solutions to reduce the remaining emissions. One such solution is its decision to stop buying or leasing fossil-fuelled cars as of 2021 and make its entire car fleet electric by 2025.

As it is now only a few years away from net-zero energy generation, the company has decided to embark on the next phase in its decarbonisation journey, which is to address the carbon emissions beyond its own walls and align these emissions with the 1.5ºC pathway. These emissions come from energy trading and from the supply chain.

The company has committed to reducing the emissions that take place outside of Ørsted but are still linked to its activities, with 50 percent by 2032 compared to 2018. Ørsted now also sets a target to achieve carbon neutrality across the company’s entire carbon footprint by 2040, ten years ahead of the global target for net-zero emissions as required by climate science to limit global warming to 1.5ºC. 

To achieve a carbon-neutral footprint, the firm will gradually phase out natural gas trading activities while increasing the green share of power traded. Furthermore, it 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.