
IKEA Expands Program to Support Suppliers’ Switch to 100% Renewable Energy
IKEA announced a significant expansion of its renewable electricity programme, adding 14 new countries – including the U.S. – to the initiative, aimed at addressing supply chain emissions and working towards 100% renewable energy across its value chain.
Addressing greenhouse gas (GHG) emissions from production forms a significant part of IKEA’s commitment to become climate positive – reducing more emissions than the value chain generates – by 2030. Electricity consumption accounts for approximately 36% of IKEA’s emissions from production, which in turn make up around 7% of the company’s total climate footprint. To support its climate goals, IKEA has set targets to secure 100% renewable energy, including electricity, heating, cooling and fuels, by 2030, and 100% renewable electricity consumption across its own operations by 2025.
Sriram Rajagopal, Head of Climate and Air Quality at Inter IKEA Group, said:
“We are striving towards 100% renewable energy across the IKEA value chain. Electricity generation from fossil fuels is one of the largest sources of greenhouse gas (GHG) emissions globally. By collaborating with suppliers, we can make the shift towards using more renewable electricity easy, accessible, and affordable. This collaborative effort not only helps reduce our environmental impact but also empowers our suppliers to decarbonise their operations.”
IKEA launched the renewable energy program in 2021 in three markets, including China, India, and Poland. Under the program, the company provides direct suppliers with local solutions, including bundled framework agreements and Power Purchase Agreements (PPAs) to purchase renewable electricity from the grid at pre-negotiated prices, covering electricity demand that cannot be generated onsite.
Following the successful rollout of the program, which saw significant renewable electricity share increases in the targeted regions, IKEA announced its first expansion of the program last year, adding ten new markets including the Czech Republic, Germany, Italy, Lithuania, Portugal, Romania, Slovakia, Sweden, Türkiye, and Vietnam. In its new announcement, IKEA revealed that the share of renewable electricity in production of its products increased to 75%, up from 71% the prior year, and that the expanded program again saw strong results.
Susanne Waidzunas, Global Supply Manager at Inter IKEA Group, said:
“We have received great response from our partners since the launch of the programme and are excited to expand it further. The share of renewable electricity used by our suppliers in Vietnam increased by 40 percentage points between FY23 and 24, reaching 84%.”
New markets added in the new expansion include Bangladesh, Brazil, Bulgaria, Egypt, Hungary, Indonesia, Japan, Mexico, Netherlands, Pakistan, Slovenia, Spain, Thailand and the United States.
Waidzunas added:
“By assisting our suppliers in 14 additional markets to access renewable electricity, we are taking an important next step towards ensuring that IKEA products are produced with less impact on the planet.”