Approach

Renewable energy will play an important part in helping us reach our climate goals. We are working 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 or self-generate both renewable fuels and renewable electricity and also encourage our value chain partners to adopt renewable energy.

Renewable electricity

To meet our climate ambitions, we are aiming to achieve 100% renewable electricity (including renewable energy credits) in our own operations by 2030 and additionally in all our franchise and third-party operations by 2040.¹

To achieve 100% renewable electricity, PepsiCo has targeted a diversified portfolio of solutions. Progress towards our climate and renewable electricity goals is being achieved in part by building on-site solar and wind installations at our plants and distribution centers, coordinated by local and sector teams. We also execute Power Purchase Agreements (PPAs), which finance the development of new renewable electricity projects such as solar and wind farms, and purchase energy attribute certificates (EACs), known as renewable energy certificates (RECs) in the U.S. EACs and RECs from existing wind or solar farms are certified by independent third parties that support existing electricity generation from renewable sources before being included in our portfolio of renewable electricity. Unbundled RECs enable companies to support the renewable energy market and renewable energy generation and their use is a common first step in the renewable electricity journey. We anticipate increasingly transitioning to longer-term renewable electricity solutions such as PPAs and on-site generation over time.

Renewable fuel

Using renewable fuel, in addition to renewable electricity, will help our efforts to meet our climate ambitions and meet our thermal requirements. As a convenient foods and drinks company, we’re in the unique position to be able to power our plants with some of the organic 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 can be used to generate electricity and heat for the plants. Pilot programs help us explore new ways to use biodigestors—including by purifying this biogas into biomethane (or renewable natural gas) to supplement our need for natural gas.

Progress

In 2023, we set new guiding principles for our operations, called Sustainable Operations from the Start, that require all new initiatives, including building new manufacturing and distribution sites, to be funded, scoped and activated with net-zero emissions and net water positive outcomes in mind. Practices from Sustainable Operations from the Start will include designing new sites with renewable electricity and fuel in mind.

Renewable electricity

In 2023, approximately 80% (nearly 3,500 GWh) of the company’s direct global electricity needs were met with renewable electricity, including through PPAs and RECs. Overall, PepsiCo’s operational electricity use was approximately 4,300 GWh, of which approximately 98% was purchased through the grid, with the remainder self-generated.

In 2023, 40 countries in PepsiCo’s operations consumed 100% renewable electricity for manufacturing operations, including use of renewable energy credits, including China, New Zealand and South Africa, who each achieved this milestone for the first time during the year.

Having met our goal to source 100% renewable electricity, including use of renewable energy credits, in the U.S. in 2021, we were named as the 9^th top corporate buyer of clean power in North America by the EPA Green Power Partnership's annual ranking of the top 100 buyers in 2022, and remain in that position as of 2024.

In 2023, we completed the installation of the largest solar panel project in Ireland at our Cork factory, coinciding with the 20^th anniversary of the facility's opening. More than 4,500 individual panels make up the installation. We anticipate that the solar panels will provide 25% of the electricity required by the site, and up to 100% during the summer months.

In our transition to renewable energy, we celebrate our progress while remaining focused on overcoming the challenges we face.

Renewable fuel

In 2023, we continued to pilot renewable fuels in our fleet, one of the biggest drivers of our Scope 1 GHG emissions. We launched a pilot program in PepsiCo U.K. to utilize used cooking oil to replace diesel for some journeys by truck. Each mile powered by used, hydrogenated vegetable oil is estimated to have approximately 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. For more information on our efforts to reduce the carbon footprint of our fleet, see Fleet decarbonization.

Beyond our fleet, we continue to explore options for renewable fuel sources for our factories and operations. We are piloting plants with anaerobic digesters, which produce biogas that can be used to meet the thermal requirements of our operations. In 2023, we opened a biomethane production facility in Manisa, Turkiye. The project, which plans to use waste from nearby companies, is projected to fulfill approximately 40% of the natural gas needs for PepsiCo's Manisa factory. Through converting 10,000 tons of organic waste into biomethane gas annually, the facility aims to reduce GHG emissions by an estimated 1,200 tons per year. Globally, we have 12 biogas installations.

Our Cork, Ireland facility became the first PepsiCo manufacturing location to eliminate the use of fossil fuels in our operations by transitioning to hydrotreated vegetable oil (HVO) to replace natural gas in heat generation. By the end of 2023, the facility reduced its Scope 1 and 2 emissions by 85% compared to a 2015 baseline.

As we work to transition to renewable energy, energy storage continues to present a challenge. In 2023, we launched a pilot at a facility in the Netherlands to store renewable energy using thermal batteries, allowing us to buy energy at off-peak hours and balance renewable energy demand curves. The thermal batteries use wind to create heat, which is later used to power our plant instead of relying on fossil fuels.

Strategic partnerships

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 working towards 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.
• 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 working to scale up renewable heating and cooling at their facilities and dramatically cutting carbon emissions.

In addition to our partnerships with external energy experts, we work with other companies, both in and out of our value chain, to expand access to renewable electricity solutions. These programs include:

• The Clean Energy Procurement Academy: In 2023, we co-launched this initiative alongside Apple, Nike, the Clean Energy Buyers Association and other global firms with the mission to equip suppliers with the skills and knowledge required to access clean energy. This program is designed to speed up the integration of clean energy into global supply chains and aims to spur policy change in China, Japan, Taiwan, South Korea, Vietnam and other Asia Pacific countries where renewable power has historically been more challenging to source.
• pep+ REnew: We launched a renewable electricity educational program for our suppliers in 2022 in partnership with Schneider Electric. It was designed with two ambitions: to educate PepsiCo's value chain partners about their renewable electricity choices and to accelerate their transition to renewable electricity through aggregate power PPAs and other renewable electricity procurement options. Building on the success of pep+ REnew, we developed a central platform for our partners to access sustainable solutions across all areas of our pep+ agenda: Partners for Tomorrow. The platform plans to expand access to sustainability programming and aims to scale solutions for supply chain partners, including expanding access to pep+ REnew.

What's next?

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 plan to continue to use our Sustainable Operations from the Start principles as the framework for growth.
  • We are continuing our work to expand renewable electricity sourcing in all markets that offer it. In 2024, we anticipate sourcing renewable energy in countries in Asia and the Middle East where sourcing was previously challenging.
  • We plan to continue to evaluate biofuel options for our operations, both on-site production and sourcing through distribution networks.
• Supply chain: 
  • Through pep+ REnew, we plan to continue to encourage our value chain partners to adopt renewable electricity at their locations. 
• Technology:
  • Our fleet team plans to continue to research and pilot new technologies that aim to reduce the thermal needs and GHG impact of transporting our products.