Merck and China Resources Power Enter into Long-Term Green Power Agreement to Reduce Carbon Footprint in China

Merck, a leading science and technology company, has signed a 10-year green power purchase agreement (PPA) with China Resources Power Holdings Co., Ltd. This is Merck’s first long-term renewable energy procurement in China, with an expected consumption of 300 gigawatt hours (GWh) in ten years. It will bring the company’s usage of green electricity in production and operations in the country to 60%, and reduce Scope 2 carbon emissions by 185,000 Tons. This initiative advances Merck’s goal of increasing its worldwide purchased electricity from renewable sources to 80% by 2030 and becoming climate-neutral by 2040.

“Merck is actively applying more eco-friendly production and operations in China. We will significantly increase the usage of renewable energy through this long-term partnership with China Resources Power, not only to achieve greater energy savings and carbon reduction but also to make positive contributions to China’s decarbonization goals,” said Marc Horn, President of Merck China. “Merck and China Resources Group have a strong partnership in Healthcare and Life Science, and the green power procurement enhances our collaboration in sustainability.”

According to the newly signed PPA, CR Power starts to provide green power to Merck’s five manufacturing sites and one warehouse in Jiangsu from January 2024. The PPA trading process uses blockchain technology to track renewable energy throughout its life cycle to ensure authenticity. After completing every transaction, Merck China receives a digital “Green Electricity Certificate” issued by the National Renewable Energy Information Management Center. The certificate serves as an “electronic ID card” of clean energy and is the sole verification of renewable energy consumption.

China officially launched the green power trading pilot in 2021, introducing a new operation model of green electricity consumption. Since then, Merck China has been engaging in renewable energy procurement. With its Life Science Center and Healthcare Site in Nantong, Merck China was one of the first enterprises to purchase green power in Jiangsu province. Merck’s Electronics Site in Shanghai also signed a PPA in the third quarter of 2023. Those green power transactions were short-term annual purchases. With the ten-year renewable energy deal signed with China Resources Power, Merck China ensures a stable long-term supply of green electricity to meet the production and operation needs of its Healthcare, Life Science, and Electronics business sectors in China, while increasing its proportion of green electricity usage to an industry-leading level.

“We are pleased to take our partnership with Merck one step further and expand it from Healthcare and Life Science to the new area of green energy, supporting Merck in achieving its sustainable development goals. We are committed to working alongside Merck to accelerate scientific and technological innovation, drive the construction of a renewable energy industry chain with greater scale and resilience, and promote the green energy transition across the world,” said Han Yuewei, the Vice General Manager of China Resources Group.

Merck China will continue to take multiple measures to integrate sustainability into its production and operations, including green electricity certification, the construction of photovoltaic and wind power facilities on site, and the application of carbon and energy management systems in manufacturing sites. Merck China strives to build green factories and fulfil its sustainability commitment, which is aligned with China’s dual carbon goal.

Merck Group takes concrete actions to cover 80% of its purchased electricity from renewable energies by 2030. In November 2023, the company signed virtual power purchase agreements (VPPAs) for a total of around 300 GWh of renewable energy per year to cover 100% of Merck’s current electricity purchases in Europe from 2025 onwards. Last year, Merck also announced a 16-year renewable energy contract for the Liberty County Solar project in Texas, propelling the company to match 90% of its purchased electricity consumption in the United States from renewable energies. As part of its global sustainability strategy, Merck aims to become climate-neutral by 2040.

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