November 9, Nordborg – Danfoss announced that it has signed an agreement for renewable power supply that will reduce 28,000 tons of CO2 annually, corresponding to a reduction of 23% of its total scope 1 & 2 emissions in China.
The agreement – a so called power purchase agreement (PPA)- is a major step in Danfoss’ global ambition to achieve CO2-neutrality in scope 1 and 2 by latest 2030. Danfoss is of one the first global companies to secure long-term renewable power for part of its operations in China.
The agreement between Danfoss and State Grid (Tianjin) Integrated Energy Service Co., Ltd. and Tianjin Yinghua New Energy Technology Development Co., Ltd. will take effect from 1 January 2024. The renewable power is produced at a newly constructed solar park located about 20 kilometers from the Danfoss Wuqing campus.
“I am very excited about this. It’s a first of its kind agreement, which secures long term renewable power supply to one of our largest campus-factories in Danfoss. Secondly, we can invite our suppliers and customers in the Tianjin-province to also sign-up to be supplied from the solar park. And finally, because this new agreement comes on top of our efforts to drive energy efficiency at our Wuqing campus the last seven years, which has delivered a 56% improvement of energy productivity,” says Torben Christensen, Chief Sustainability Officer and Head of Global Services at Danfoss.
“At Danfoss we aim to be our customers preferred decarbonization partner. This requires us to take a lead in the decarbonization of our own operations, which is why we aim to achieve carbon neutrality in our own operations (Scope 1 and 2) already by 2030. This is more ambitious than what we have signed up for in our Science Based Target-commitment. We do this for two main reasons; First of all, we want to demonstrate that the technologies and solutions are ready. Secondly, we believe “seeing is believing” - and by leading the way we hope others will follow suit,” says Torben Christensen.
Danfoss uses a three-step approach to decarbonize factories through reduce, reuse, and re-source. As Torben Christensen elaborates: "First, we apply energy efficiency, to bring our energy consumption down. Secondly, we reuse the energy that we have already used once and finally we look into how we can source what we need from renewable sources."
A strategically important step to reach global ambition
The three-step approach has also been used at the Wuqing Campus which in total has a size of 87,000 square meters. Since 2016, the factory output has increased by 51% while total energy consumption has decreased by 3%. Thereby, energy productivity has increased by 56% and CO2 emission decreased by 30% (18,000 tons annually). The annual electricity consumption at Danfoss' Wuqing campus today is 45 million kWh, which will be fully covered with this new agreement. Danfoss is investigating similar solutions in other Chinese cities where Danfoss has large campuses/factories.
Arthur Xu, President of Danfoss China, stated: “The agreement marks a major milestone for Danfoss on the way towards our carbon neutrality goal. As the world’s leading decarbonization partner, we have explored an effective roadmap for the manufacturing industry to decarbonize their growth through effective cooperation along the full value chain.”
This is Danfoss’ third power purchase agreement for renewable energy. In May 2023, Danfoss signed a power purchase agreement to power all sites in North America with green energy.
Additionally, Danfoss' 250,000 square meter headquarters in Denmark achieved carbon neutrality in scope 1 and 2 in 2022 - mainly through energy-saving projects, using excess heat from processes and data centers, sourcing green energy, and offsetting residual emissions.
This is how Danfoss decarbonizes in Scope 1 and 2:
- 'Reduce' involves energy savings using a broad variety of Danfoss’ products and solutions for industrial and commercial buildings.
- 'Reuse' includes the recycling of excess energy from buildings, processes, and data centers using a broad variety of Danfoss’ products with heat recovery and heat pump solutions.
'Purchase' involves replacing fossil fuels with renewable energy to make the remaining energy green.
For further inquiries:
Mikkel Ballegaard Pedersen, Public Relations Manager
Phone +45 26 10 95 19
Email: Mikkel.ballegaard@danfoss.com