Ørsted’s Net-Zero Playbook: 

What a Full-Scale Energy Transition Looks Like

Author: Elsie Andreyev

Ørsted, a Danish power utility, began as a major player in the fossil fuel industry and has successfully transitioned into a true leader in the renewable energy landscape with a bold ambition: net-zero emissions across its entire value chain by 2040. This isn’t just talk: Ørsted was the first energy company to earn a validated net-zero target by the Science Based Targets Initiative (SBTi). Further solidifying their path, SBTi recently gave the green light to their ambitious 2030 interim targets encompassing scopes 1, 2, and 3. 

Significant Strides: They’re not just setting goals; they’re hitting them.

• Back in 2010, Ørsted had a substantial portion of its power generation derived from fossil fuels. By 2017, the green share of its power and heat generation had grown significantly to 64%, following strategic decisions to phase out coal and divest its oil and gas business. This transition continued rapidly, reaching 90% renewable energy share in its power generation by 2020.
• Ørsted is well on track to achieve a significant 98% reduction in its scope 1 and 2 emissions intensity by 2025 from its 2006 baseline and expects to reach a 99% renewable energy share in its power generation in the same year.

How They’re Getting There:

• Spearheading the Renewables Revolution: Having closed its last coal-fired power plant in 2024, Ørsted now focuses exclusively on renewable energy sources, establishing itself as a global leader and one of the largest developers of offshore wind energy, alongside significant investments in onshore wind and solar PV. This fundamental shift underpins their entire decarbonization strategy.
• The Power of Partnership in Supply Chains: Recognizing that most emissions lie within their value chain, Ørsted understands that tackling this requires teamwork. Their strategy hinges on close collaboration with suppliers to drive innovative solutions in tough-to-decarbonize sectors. This includes:

• • Pushing for Green Energy Across the Board: They’re not just going green themselves; they expect all suppliers to operate on 100% renewable electricity by 2025 and are actively engaging key partners to set robust science-based targets and ensure transparent reporting of their climate impact.
  • Integrating Climate into Procurement: Climate performance criteria are now embedded into contracts with high-impact suppliers, and they’re employing detailed lifecycle assessments to track and shrink the carbon footprint of their projects.
  • Creating Demand for Sustainable Materials: By teaming up with industry initiatives and pursuing offtake agreements for low-emission materials like green steel, Ørsted is helping to stimulate the market for and accelerate the availability of sustainable alternatives.
  • Closing the Loop with Circularity: To minimize waste and maximize resource efficiency, Ørsted implements circular economy principles through innovative collaborations, such as their partnership with Siemens Gamesa to utilize recycled glass fibers in wind turbine blades.

“Measuring reporting on supply chain emissions can help guide companies’ decarbonisation efforts. It allows them to understand where emissions stem from, while increasing transparency around environmental impacts. This is important for governments, customers, investors, and other key stakeholders, who are increasingly requesting more insight into supply chain emissions.” – Ørsted

• Addressing Residual Emissions with Carbon Removal: Acknowledging that some emissions may be unavoidable even with deep reductions, Ørsted is committed to neutralizing any remaining emissions after 2040 through investment in high-quality, permanent carbon removal projects, ensuring they reach net zero.

The Bigger Picture: Ørsted’s journey offers a compelling roadmap, suggesting that even energy-intensive industries can make a profound shift towards a net-zero future by embracing renewables, actively engaging their supply chains, and championing innovation.

If you’re looking to enhance your organization’s emissions reporting and verification practices with transparency and credibility, The Climate Registry is here to help. Reach out to us at help@theclimateregistry.org for personalized guidance tailored to your needs. Additionally, explore our resources at netzeroportal.org to discover how organizations are committing to net-zero and carbon neutrality pledges, and learn how you can take meaningful action towards a sustainable future.