renewable energy

Tech giant Amazon has announced that it has hit its 100 per cent renewable energy goal—seven years early. However, a report from Amazon Employees for Climate Justice (AECJ) questions the company’s climate claims.

In its sixth annual sustainability report, Amazon claims that while it was scheduled to achieve 100 per cent renewable energy in 2030, it has now matched all electricity consumed across its operations. Alongside this, it claims that absolute emissions dropped by 3 per cent in 2023, in part, due to its renewable energy investments, with carbon intensity decreasing by 13 per cent. 

The AECJ’s “Amazon Unsustainability” report, in contrast, argues that many of the claims Amazon is making are far from the truth. The organisation notes that despite a “glowing” sustainability report each year, Amazon is actually failing to meet its goals.

AECJ comprises a group of Amazon employees advocating for more sustainable and transparent operations. It credits itself as the group that pushed Amazon to create “The Climate Pledge.”

An “Overreliance” on RECs

In its announcement, Amazon said that achieving its 100 per cent renewable energy goal follows the “billions of dollars” it has invested in more than 500 solar and wind projects globally. 

It is also the biggest corporate buyer of renewable energy, according to BloombergNef.

However, the AECJ report outlines a number of issues with Amazon’s climate claims. This includes calling out what it dubbed an “overreliance” on Renewable Energy Credits (RECs).

RECs are issued for each megawatt-hour of renewable energy generated and added to the grid. They can be sold to companies like Amazon, which can take credit for that electricity.

Proponents say that RECs encourage more renewable energy build-out, but there are a number of issues with them.

Problem one, evidenced by Amazon’s 2023 CDP disclosure, is that unbundled RECs comprise 68 per cent of its total. This means that a large percentage “do not fund new renewable energy infrastructure,” the AECJ report says.

In addition to this, the report outlines that one can only be confident that RECs are meaningfully reducing emissions if the criteria of additionality, location, and time are met.

However, Amazon, it says, is lacking in transparency here. 

The report outlines that the giant does not currently disclose key information about the quality of RECs it uses, what locations or grids they are from, or when they are generated or used.  

Indeed, Amazon’s RECs are used to subtract emissions across the whole year instead of at the time they are generated, according to AECJ.

This is an issue because power-hungry data centres run 24/7.

The report recommends that Amazon requires all RECs used in accounting to match electricity usage by the hour.

Further, it writes that rival Google has adopted an hourly accounting goal to reach 24/7 carbon-free energy on every grid where it operates by 2030.

It is also worth noting that while Google received an A from nonprofit CDP, Amazon received a B.

Expansion in Areas “Heavily Reliant” on Fossil Fuels

When it comes to location, the report also estimates that in the places in the US where Amazon operates, data centres only receive around an estimated 22 per cent renewable energy from the local utilities in those regions. And according to the report, it continues to expand in areas that are “heavily reliant” on fossil fuels.

In Loudoun Country, Virginia, home to the “Datacenter Alley,” Amazon has its largest data centre location. In 2022, it had over 65 data centres either in operation or development there, according to the AECJ report. 

Dominion Energy services much of Loudoun County, and in 2023, just 1.5 per cent of energy generation was derived from renewables.

While legislation is incoming to retire existing fossil fuel generation by 2045, there are a number of loopholes that mean this likely won’t spell the end of fossil fuels.

For example, the energy company can circumvent this if the retirement of a particular unit would “threaten grid reliability and security.” The legislation also only applies to “existing” fossil fuel generation.

AI Booms, Energy Demand Grows

With the AI boom in full swing, Amazon’s energy demand will likely only rise, too. 

Indeed, some industry experts predict that data centre power consumption will increase six-fold in the next decade.

Others have predicted that the AI industry alone could account for as much energy as the Netherlands by 2026. Meanwhile, earlier this year, the IEA outlined that by 2026, electricity consumption from data centres, artificial intelligence (AI) and the cryptocurrency sector could double.

In Amazon’s announcement, it recognised the challenge brought forward by the rise of AI. 

“Looking ahead, we remain as committed as ever to getting there, but the path is changing in ways that no one quite anticipated even just a few years ago – driven largely by the increasing demand for generative AI.”

A similar message was conveyed earlier this month by Google, after sharing data that its emissions had increased almost 50 per cent in five years. 

“We also know that this is just a moment in time, and our work to decarbonize our operations will not always be the same each year—we’ll continue to make progress, while also constantly evolving on our path to 2040,” said Amazon Chief Sustainability Officer Kara Hurst, commenting on the announcement. 

Alongside the skyrocketing energy demands of AI and the lack of renewable energy to power it, the AECJ also projects that, by next year, Amazon Web Services (AWS) could be making $9.6 billion annually from the oil and gas industry alone through selling tailored AI services to fossil fuel companies. 

Emissions Progress Questioned

Amazon also claims in its sustainability report that its emissions dropped by 3 per cent last year. 

The company, under its climate pledge, aims to reach net-zero carbon emissions by 2040, “a decade ahead of the Paris Climate Agreement.” 

However, since making the pledge back in 2019, its carbon footprint has grown by 34.5 per cent, while its scope 1 emissions grew 7 per cent year-over-year in 2023. It has also been removed from SBTi’s list of climate-conscious companies.

In addition, the AECJ report argues that the tech titan fails to account for the lifecycle emissions of the products it sells, which it says “dramatically undercounts” its carbon pollution.

Last year, the company also eliminated its Shipment Zero pledge to make half of shipments carbon-neutral by the end of 2030.  

Against this backdrop, this week, the company announced it was “democratising” its guidelines, playbooks, science models, and other resources through the “Amazon Sustainability Exchange” to “accelerate supply chain decarbonisation.”

Its sustainability report also outlined its intention to “prioritise” working with suppliers committed to decarbonisation and reaching net zero.

“We have identified a list of the highest-emitting suppliers directly supporting our operations, and expect those suppliers, who collectively contribute more than 50% of emissions globally to Amazon’s Scope 3 footprint, to provide a plan for how they will decarbonize their operations and demonstrate real progress over time. We will prioritize our business toward those who provide their plans and results on their path to net zero carbon emissions,” the report reads.

Commenting on the company’s recent sustainability report, Joshua Archer, Senior Global Corporate Campaigner at the environmental organisation Stand.earth said: “In this year’s Sustainability Report, Amazon leaders had an opportunity to show us that they are finally getting serious about the climate. Instead, the report shows Amazon is moving the wrong way. The company is hoping its weak long-term promises will distract from its continued expansion of polluting planes, trucks, and vans.”

By Madaline Dunn, Editor, ESG Mena.