PepsiCo signs renewables deal with suppliers to reduce Scope 2 and 3 emissions

Power Purchase Agreements with Smurfit and Givaudan are part of drinks giant’s programme to decarbonise value chain

PepsiCo has partnered with two of its suppliers in an innovative renewable energy deal that will reduce its Scope 2 and 3 emissions.

The drinks giant signed a 10-year virtual power purchase agreement (VPPA) to buy Energy Attribution Certificates (EAC) from a Spanish wind farm that’s undergoing reconstruction.   

Smurfit WestRock and Givaudan signed parallel VPPAs for the project at the same time. 

The collaboration is part of PepsiCo’s ‘pep+ REnew’ programme, through which it is seeking to help its suppliers decarbonise by adopting renewable electricity.  

PepsiCo described the new deal as “a proof point” for the programme. 

“For a lot of PepsiCo’s value chain, power purchase agreements are very difficult to do on their own due to credit, not meeting volume minimums or lack of resources to dedicate to the process,” a spokesperson told Real Economy Progress. 

“By working together, cohort members can pool volumes and purchase long‑term, highly credible EACs, enabling them to make robust renewable electricity claims and demonstrate progress against their own decarbonisation targets.”

All three companies will be able to claim lower Scope 2 emissions because of the VPPAs, and PepsiCo will therefore also be able to reduce its Scope 3 emissions from suppliers. 

PepsiCo said its consequent renewable energy claims would be “considered highly additional” because “there is a direct causal link between our agreement and new renewable generation being added to the grid”. 

“This is fundamentally different from purchasing unbundled EACs on the open market, which typically do not drive new project development,” added the spokesperson. 

Writing on LinkedIn, PepsiCo’s chief sustainability officer, Jim Andrew, claimed the deal provided “access to long-term renewable electricity that would otherwise be out of reach for many suppliers”.

“This is what scaling decarbonization looks like,” he continued. “Lead buyers convening other buyers, expert advisors helping translate intent into action, and energy providers bringing new clean power online.”