IKEA Expands Renewable Electricity Programme to Suppliers in Ten More Markets

 Swedish multinational furniture company IKEA said the increased share of renewable electricity in production is one of the key contributors to why the total IKEA climate footprint decreased by 5% in absolute terms in FY22, compared to FY21.

Now to speed up the reduction of the climate footprint from production, IKEA has decided to include ten additional markets into the programme to support suppliers to switch to renewable electricity.

Almost two-thirds of the IKEA climate footprint is directly connected to the supply chain, including production at suppliers.

To contribute to limiting climate change to 1.5°C by drastically reducing greenhouse gas emissions, a programme was introduced in June 2021 to enable suppliers to purchase renewable electricity as a complement to the financing of on-site generation of renewable energy*.

Pushing Towards 100% Renewable Energy

Due to the good progress, IKEA has decided to include ten additional markets in the programme: The Czech Republic, Germany, Italy, Lithuania, Portugal, Romania, Slovakia, Sweden, Turkey, and Vietnam.

The combined electricity consumption for production in these markets stands for 0.27 million tonnes CO2 eq, or 13% of the climate footprint from production. The rollout starts during the calendar year 2023.

“Striving towards 100% renewable energy is critical to limit climate change to 1.5°C. We know that many of our supply partners struggle to purchase 100% renewable electricity and that only a part can be generated on-site,” says Andreas Rangel Ahrens, Head of Climate, Inter IKEA Group.

“By working together, we have shown that it’s possible to make renewable electricity both accessible and more affordable. We hope this also inspires other businesses to support their suppliers in the same way.”

Increased Share of Renewable Electricity

The initial focus of the programme was on the three markets where the climate footprint from electricity consumption was the highest – China, India, and Poland. Mainly driven by the programme, the renewable electricity share for production in China increased from 32% in FY21 to 64% in FY22.

Offers for affordable renewable electricity contracts in India and Poland have been successfully finalised and will come into effect during FY23. In Poland, Power Purchase Agreements (PPAs) from wind and solar with at least 50% cheaper electricity compared to the market price were secured.

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