Manufacturing and distributing our products requires energy, including electricity and fuels like natural gas. Transitioning to renewable energy is an important part of achieving our greenhouse gas (GHG) reduction goals by 2030 and our net-zero emissions goal by 2040. Furthermore, our stakeholders expect us to reduce our energy use and transition to renewable energy to create a low-carbon value chain.
To the World:
The global economy depends on energy, yet traditional fossil fuel sources contribute to climate change and pollution. Society is looking to governments and large companies to show the leadership necessary to limit global warming to 1.5 degrees Celsius.
Renewable energy will play an important part in helping us reach our climate goals. We plan to reduce absolute direct operational Scope 1 and indirect Scope 2 emissions by 75% and our absolute indirect value chain Scope 3 emissions by 40% by 2030 against a 2015 baseline. To help do this, we will need to procure both renewable fuels and renewable electricity and encourage our value chain partners to adopt renewable energy.
As we strive to reach net-zero emissions and help drive a Positive Value Chain, we are aiming to achieve 100% renewable electricity in our own operations by 2030 and additionally in all our franchise and third-party operations by 2040.
Progress towards our goal is being achieved in part by building nearly 50 solar and wind installations at our plants and distribution centers, coordinated by local and sector teams. Additional renewable electricity is purchased through the grid where our facilities operate, an effort that requires partnership between global and sector sustainability teams in partnership with our global procurement function. To achieve 100% renewable electricity, PepsiCo has targeted a diversified portfolio of solutions. In addition to on-site renewable installations, these include Power Purchase Agreements (PPAs), which finance the development of new renewable electricity projects such as solar and wind farms, as well as energy attribute certificates (EACs), known as renewable energy certificates (RECs) in the U.S., from existing wind or solar farms, which are credits certified by independent third parties that support existing electricity generation from renewable sources.
Sourcing renewable fuel, in addition to renewable electricity, will help our efforts to meet our climate ambitions and meet our thermal requirements. As a beverages and convenient foods company, we’re in the unique position to be able to power our plants with some of the waste produced during the manufacturing process. In plants across the world, we’re piloting using by-products, like potato peels, to fuel anaerobic digesters or provide fuel by other means. These decomposition processes create biogas, which is used to generate electricity for the plants. Pilot programs help us explore new ways to use biodigestors—including by making biogas to supplement our need for natural gas.
With PepsiCo's scale, the transition to renewable energy across all company-owned and controlled operations, franchise operations and third-party operations has the potential to reduce approximately 2.5 million metric tons of GHG emissions by 2040, the equivalent of taking more than half a million cars off the road for a full year.
In 2022, approximately 65% of the company's direct global electricity needs were met with renewable electricity, approximately 2,800 GWh. Overall, PepsiCo’s electricity use was approximately 4,400 GWh, of which approximately 97% was purchased through the grid.
In 2022, 25 countries in PepsiCo’s operations sourced 100% renewable electricity for manufacturing operations, including Australia and Argentina each of which achieved the milestone during the year.
Having met our goal to source 100% renewable electricity in the U.S. in 2021, PepsiCo was named as the 9th top corporate buyer of clean power in North America by the EPA Green Power Partnership in 2022.
In 2022, our Alvalle plant in Alcantarilla, Spain installed rooftop solar panels, which provide approximately 20% of the facility’s electricity needs. At one of our facilities in the Netherlands, we launched a plan to adopt a renewable electricity system and phase out the use of natural gas. This will replace 4.5 million cubic meters of gas annually, saving 8,500 tonnes of carbon dioxide emissions by turning electricity from nearby solar and wind farms into heat and includes a heat storage and transfer system to circulate the thermal oil that powers the fryers to make Lay’s and Fritos.
In our transition to renewable energy, we celebrate our progress while remaining focused on overcoming the challenges we face.
- In 2022, PepsiCo worked diligently towards meeting its target to source 100% renewable electricity across all of its company-owned and controlled operations by 2030, sourcing 100% renewable electricity in 25 countries.
- Solar panels at our plant in Alcantarilla, Spain came online, powering 20% of the site’s electricity needs.
- The ongoing deadly conflict in Ukraine disrupted energy markets across significant portions of our business, making renewable energy harder to procure, including completely blocking procurement of RECs in Russia.
- Scaling up renewable projects and encouraging our business partners (suppliers, contract manufacturers, franchise bottlers and joint ventures) to all do the same remains challenging in some markets around the globe, given local market and/or regulatory environments.
In 2022, we improved the use of renewable fuel for our fleet, one of the biggest drivers of our Scope 1 footprint. We launched a pilot program in PepsiCo UK to use used cooking oil to replace diesel for some journeys by truck. Each mile powered by used, hydrogenated vegetable oil will have 80% fewer GHG emissions when compared with conventional diesel. Though we are currently sourcing this fuel from a third-party vendor, we are exploring how we can use waste oil from our own manufacturing sites in the future. At the end of the year, we took delivery of the first Tesla semi-trucks at our Modesto, CA facility. For more information on our efforts to reduce the carbon footprint of our fleet, see Fleet decarbonization.
Across our operations, we continue to explore options for renewable fuel sources. We are piloting plants with anaerobic digesters, which produce biogas that can be used to meet the thermal requirements of our operations. In October 2022, we completed the installation of a biogas pilot project at one of our facilities in China that collects organic waste, such as potato peels and sludge from the waste water treatment station, and transfers it to an anaerobic tank to produce biogas. The biogas is used to generate electricity for production, and the residue can be repurposed as organic fertilizer on potato farms, a contribution to both our pep+ agriculture and climate goals. The pilot is designed to generate 2.4 million kWh of electricity per year and is expected to reduce GHG emissions by 1,400 tons per year. While PepsiCo has biogas projects currently in operation across four sites globally, this is the first such project in PepsiCo Asia Pacific, Australia, New Zealand and China (APAC).
In order to meet our renewable energy goal, we are proud to partner with leading energy experts, including:
- RE100: An initiative led by the Climate Group in partnership with CDP (formerly the Carbon Disclosure Project), to bring together the world's most influential companies committed to 100% renewable electricity.
- CEBA (Clean Energy Buyers Association): A membership association for large-scale energy buyers seeking to procure renewable energy across the U.S. This partnership will assist in achieving our renewable energy goals.
- Corporate Renewable Energy Buyers Principles: An initiative facilitated by the World Resources Institute and the World Wildlife Fund.
- Renewable Thermal Collaborative: A coalition for organizations that are committed to scaling up renewable heating and cooling at their facilities and dramatically cutting carbon emissions.
In 2022, PepsiCo launched pep+ REnew, an educational program to simplify the transition to renewable electricity for many businesses. Through a first-of-its-kind partnership for the food and beverage industry, PepsiCo has created pep+ REnew with Schneider Electric — an independent advisor on renewable energy purchasing. The goal: helping suppliers adopt renewable electricity in order to reduce their carbon footprints. PepsiCo partners who want to take part can register for free at the pep+ REnew site, schedule a call with Schneider Electric to discuss their electricity profile and access online education resources. Once participants complete the curriculum of curated webinars, they have the opportunity to work with the Schneider Electric team to explore their procurement options.
Achieving our net-zero climate goal and working towards our pep+ (PepsiCo Positive) ambitions will require continued efforts to transition to renewable energy, including continued expansion of our efforts in our own facilities, collaborating with our value chain partners and piloting innovative technologies.
- PepsiCo facilities:
- We will continue exploring solar and wind projects in our European markets.
- We are continuing to expand renewable electricity sourcing in all markets that offer it. In 2023, we anticipate sourcing renewable energy in countries in Asia and the Middle East where sourcing was previously challenging.
- Supply chain:
- Through pep+ REnew, we will continue to encourage our value chain partners to adopt renewable electricity at their locations.
- Our fleet team will continue to research and pilot new technologies that aim to reduce the thermal needs and GHG impact of transporting our products.