HEINEKEN AIMS FOR CARBON NEUTRAL VALUE CHAIN BY 2040

Ahead of the UN Climate Change Conference (COP 26), due to take place this November in Glasgow, Scotland, Heineken has made far-reaching commitments on carbon that will affect its entire business, from barley to bar.

Last week, the global beer giant promised to be carbon neutral in its production by 2030, and across its full value chain by 2040. This makes the company the first global brewer to aim for carbon neutrality at this scale.

The targets are ambitious for an enterprise whose portfolio spans more than 300 international, regional, local and speciality beers and ciders, with breweries, malteries, cider plants and other production facilities in more than 70 countries.

The announcement last week lifted the company’s share price by €2, before slipping back slightly at close on Friday to just over €92 per share. Nevertheless, Heineken’s move is important in that it covers so much of its business. To decarbonise its own production by 2030 is one thing, but to also ensure the same for its entire value chain by 2040 is another.

As COP 26 draws closer, other major companies will, no doubt, be highlighting their green credentials, but perhaps not on such a level. So far, Heineken’s larger rival, AB InBev, has revealed a climate goal that by 2025, 100% of its purchased electricity will be from renewable sources and that it will ensure a 25% reduction in CO2 emissions across the company’s value chain.

Much smaller beer companies have already become carbon neutral to some degree. Recent examples include: New Belgium’s Fat Tire Ale becoming the first US beer to be certified carbon neutral, and Brewdog’s claim of becoming the world’s first carbon negative beer.

The scale at Heineken is much bigger. CEO Dolf van den Brink said in a statement: “In this UN Decade of Action, we are accelerating our actions to address climate change in order to meet the 1.5°C goal set by the Paris Agreement. We will further reduce our emissions through energy efficiency and speed up the transition towards renewable energy.”

This is the first in a series of what the Amsterdam-based company calls Brewing a Better World: its sustainable development strategy. Beyond production, a large part of Heineken’s carbon footprint comes from agriculture, packaging, distribution and cooling and that means a concerted effort to work with suppliers and partners to reach its carbon neutral goal by 2040.

A road to zero impact

To do all that and to mark its commitments, Heineken has become a member of climate action initiatives such as Race to Zero and RE100, and also has a planned pathway in place with key targets:

• All production sites will be carbon neutral by 2030 by maximising energy efficiency and renewable energy
• In partnership with suppliers, also by 2030, Heineken plans to cut emissions by 30% across its value chain against a 2018 baseline. The chain includes barley farmers, glass and cans makers, own production, logistic providers and fridges to customers.
• A science-based approach is being taken by working closely with SBTi3 to validate progress.

Heineken says it is building on momentum started in 2008, having reduced carbon emissions per hectolitre in its breweries by 51%. Since committing to transition to renewable energy in 2018, the company has implemented over 130 renewable energy projects, including five of the world’s 10 largest on-site solar-powered breweries.

Other projects include partnering to build a wind farm in Finland to help supply 13 of its operating companies; utilising sustainable biomass made from agricultural waste to heat two breweries in Indonesia; the addition of solar panels at its Ibadan brewery in Nigeria; and sourcing rice husks from local farmers to heat brewing boilers in Vietnam.

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