Putting Carbon Matching into Practice
At Amazon, we know that accounting for carbon emissions is crucially important for the planet and meeting our own sustainability goals. That is why Amazon helped co-found the Emissions First Partnership, a coalition of companies that are committed to modernizing the greenhouse gas accounting standards for the power sector. Our goal is to rapidly decarbonize electricity grids to mitigate the worst effects of climate change, and we believe that modernizing the Greenhouse Gas Protocol’s carbon accounting standards can further incentivise companies to accelerate this critical outcome.
Modernizing the carbon accounting standards means shifting away from counting the megawatt hours (MWh) of electricity consumed by our business, or by counting the MWh of carbon-free electricity generated by our more than 400 wind and solar projects. Instead, we would calculate the emissions from both our power consumption and the avoided emissions from our investments in clean energy.
This approach is important because it recognizes that the emissions from the energy sector vary based on time and location. For example, an Amazon solar farm in Kentucky is expected to avoid nearly twice the carbon emissions than if the project was built in California. This is because Kentucky’s grid is still primarily powered by fossil fuels, while California contains a broader mix of lower-carbon energy sources (49,166 tCO2 each year avoided in Kentucky versus 26,205 tCO2 each year in California). When it comes to the fight against climate change, this matters a lot. Understanding the emissions impact from our decisions is critical to ensure we are accelerating decarbonization to the fullest potential with each additional step we take.
Measuring the emissions impact of investments, like the solar farm mentioned above, will encourage companies to decarbonize the power system at a faster rate--and we know that moving fast is crucial in the fight against climate change. We also know that the emissions from the power sector do not remain within state or national boundaries and the effects of the climate crisis are not shared equally. This is why we need a carbon accounting framework that encourages investments on carbon intensive grids.
Over the last six months, we have worked to put our proposed “carbon matching” framework into practice. We are looking at the emissions avoided at some of our renewable energy projects around the world. Starting to understand this data is a first step towards considering how this data can inform our decision-making process.
Amazon has announced six utility-scale wind and solar projects in India. These projects help power our data centers and facilities in India and are part of meeting our goal to be powered by 100% renewable energy. These projects are expected to generate 2.83 million MWh of
electricity annually, that’s enough to power approximately 500,000 average Indian homes. While that is important, we are more excited about the emissions avoided by these projects. That is because India has a carbon intensive grid. Altogether, we expect these projects to avoid more than two million tons of carbon emissions annually.
To demonstrate why location matters, we looked at the emissions avoided if we located these same six renewable energy projects in Sweden, one of the most decarbonized power grids in the world. While these wind and solar farms would generate nearly the same amount of electricity, they would avoid under 40 thousand tons of emissions annually. That’s over a 60x difference. This demonstrates why having the data to understand the impact of a project’s location is important for optimizing corporate investments in clean energy.
As mentioned above, California has a relatively low-carbon power system and it has a lot of solar power. That means that the grid usually has too much available electricity during the
sunniest parts of the day. But the grid often has to shift to fossil fuel generating sources of power later in the day, when people increase their power consumption and the sun sets. Amazon’s 470 MW of solar and storage projects on the California grid, however, take advantage of batteries to store clean electricity from solar power but discharge it later in the day when the grid is more reliant on fossil fuels. When we measure the impact of these projects, we can see why timing matters so much. If these projects were solar alone (without the batteries), they would only avoid 26,800 tons of emissions annually. With the battery storage, these same projects avoid 75,600 emissions, a nearly 3X increase in avoided emissions.
As the global demand for electricity is expected to more than double by 2050, we know that we need a clean grid to charge electric vehicles, electrify buildings, and, most importantly, maintain a 1.5-degree scenario. We can see that understanding the emissions data from a few projects in Amazon’s portfolio can really make a difference. By looking at emissions, we can gain a clearer understanding of the emissions avoided by our clean energy investments. We believe embedding this method into the standard carbon accounting framework used by thousands of companies will help ensure that clean energy investments are accelerating the power sector's decarbonization around the world.