The energy switch: Big Pharma harnesses sun, wind and water in quest for a low-carbon future

Solar panels in an array near Clayton, North Carolina
In January 2020, Novo Nordisk connected to the grid with a 105-megawatt solar energy installation near its facility in Clayton, North Carolina. With that move, the company became the first pharma to use only renewable electricity in all of its global production facilities. (Novo Nordisk)

Alongside collaborative robots and automated guided vehicles, Amgen has carved out space for solar panels at its upcoming smart factory in New Albany, Ohio. The company’s $550 million facility-to-be in Holly Springs, North Carolina, has also set aside rooftop real estate to harness the power of the sun.

In fact, Amgen is now paving the way for sustainable energy at plants across the globe as part of its The Road to Net Zero initiative, Jim Weidner, executive director of engineering technical authority at Amgen, said in an interview.

And Amgen is among a growing roster of pharmaceutical companies taking the industry’s impact on the planet to task. In February, 43% of respondents in a GlobalData poll ranked environmental impact as the most pressing ESG issue for pharmaceutical companies to address, beating out social issues at 31% and governance issues at 26%.

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Coupled with the release of the Intergovernmental Panel on Climate Change’s (IPCC) Sixth Assessment Report on the state of climate science—not to mention the extreme weather events this year around the globe—the urgency of the situation becomes hard to ignore.

“We’re seeing extreme heat … forest fires, the rising sea levels and ocean acidification,” Jason Snape, global head of environmental protection at AstraZeneca, said in an interview. “We know as a healthcare company that the climate is going to impact the health of individuals, communities, societies and our economies.”

Renewable energy is one of the tools companies are leveraging to meet their decarbonization goals. From sales teams hitting the road in hybrid armadas to wind farms powering factories to on-site solar panels and more, pharma majors, contract manufacturers and rising biotechs alike are paving the way for more sustainable power options.

Green giants

When AstraZeneca debuted its Ambition Zero Carbon plan last January at the World Economic Forum in Davos, Switzerland, it put up $1 billion to switch its global operations to renewable heat and power, roll out a 100% electric vehicle fleet and hit zero carbon emissions from its own operations by 2025. By 2030, AstraZeneca aims to become carbon negative across its entire value chain.

Greener energy sourcing isn't just the purview of pharma majors, either. Moderna, the Massachusetts biotech on its way to massive COVID-19 vaccine revenues this year, said during its first-quarter earnings update that it plans to source renewable power at its U.S. facilities and offset 100% of carbon emissions through credit programs in 2021. 

On the contract manufacturing front, Catalent in early August said it had pulled off 97% renewable energy sourcing across its global operations. The CDMO is tapping into wind, solar, hydroelectric, and biomass. It says it plans to buy renewable energy certificates for all of its North American, South American and European sites, plus a majority of its facilities in Asia. 

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Amgen, for its part, has already achieved 100% renewable energy sourcing at its biomanufacturing plant in Singapore, plus its facilities in Ireland and the Netherlands. Amgen’s Rhode Island facility has contracted for 100% renewable electricity for 2021.

Meanwhile, over the past four years, Novartis has locked up contracts to deliver 100% renewable electricity to its operations in the U.S. and Canada, James Goudreau, head of environmental sustainability external engagement at Novartis, said in an interview. It has contracts in place that will deliver 100% renewable electricity to its European operations by 2023, he added.

And Novo Nordisk last year celebrated a victory five years in the making when it began using 100% renewable electricity across its global production, Camilla Sylvest, EVP of commercial strategy and corporate affairs at Novo Nordisk, told Fierce Pharma. It hit that target thanks to an alchemy of wind, solar and hydropower, she said in an interview. Novo aims to source renewable power across its supply chain by 2030.

Plugging into the grid

Back at AstraZeneca, renewable heat and power will fuel everything from R&D labs and manufacturing facilities to the company's commercial offices. Hitting that target takes a multipronged effort. At the highest level, the company is rolling out renewable energy onsite, with a focus on solar power, Snape said.

The company also imports renewable power and is currently at 99.9% imported renewable power globally, he added. Snape flagged two exceptions—Ukraine and Argentina. The reason? There are simply no certificates for renewable power in those countries right now.

“It’s not because we don’t want to do it,” he said. “It’s because we can’t do it.” He noted that AstraZeneca hopes to see renewable markets develop in those countries over the next five years. Then again, renewable energy certificates are the “bottom rung of the ladder” for AZ, Snape pointed out.

These days, AstraZeneca is making the switch to power purchase agreements that see it bring on additional solar and wind power to the grids of the countries where it operates. It then looks to purchase that power back.

Eli Lilly charted similar moves in Ireland recently, where it teamed up with Enerpower to debut the Republic's biggest-ever solar farm. The 16-acre setup will be used to power a "significant portion" of Lilly's Dunderrow site with renewable energy, Ireland's Industrial Development Agency said in late July. 

Amgen is also considering onsite renewables under its seven-year sustainability plan, through which it aims to achieve carbon neutrality by 2027. Meanwhile, 41% of Amgen’s electricity already came from renewable sources in 2020, Weidner said.

The designs for its facilities in New Albany, Ohio, and Holly Springs, North Carolina, allow for solar panel installation on the roofs. The electrical grids within the new sites were designed to accommodate energy distribution from potential renewable sources on site, Weidner said.

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Amgen purchases the renewable power it doesn’t generate itself, using sources like hydroelectric, wind and solar, Weidner said.

Amgen’s sustainability efforts don’t just benefit the environment; they’re good for business, too, Weidner pointed out. Between 2008 and 2020, Amgen spent $50 million to shepherd its environmental projects. Over that same period, it saved $250 million, Weidner said.

The carbon emission, water usage and waste reductions Amgen pulled off during that stretch translated into savings because the company needed to buy less electricity, fossil fuels and water, and paid less to get rid of waste, Weidner explained.

Setting up more sustainable operations “does take some upfront investment,” Weidner noted. In Amgen’s case, the company has devoted $200 million to meet its environmental commitments by 2027. Part of the outlay will be used to convert Amgen’s vehicle fleet, plus develop the onsite renewable energy sources, Weidner said. 

Teamwork makes the green work 

As with any global company, Novo’s renewable energy sources hinge on what’s available in a given market, Sylvest said. In the company’s native Denmark or in China, for example, wind power is king. In the U.S., solar power reigns supreme, while hydro is the way to go in Brazil, she said.

Sylvest highlighted the Rolodex of partners Novo’s called upon to chart its sustainability journey. In North Carolina, it’s teamed up with Cypress Creek Renewables, Cubico and Churchill Stateside to establish a large solar plant, which takes care of all U.S. operations, including production, R&D centers and the company’s headquarters.

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But offices and labs make up just 6% of Novo Nordisk’s total carbon emissions from operations and transport, Sylvest said. It’s the transport piece—which includes company cars and flights, plus product distribution—that deliver the bulk of Novo’s emissions, or about 70%. For its vehicle fleet, Novo Nordisk is angling to switch to plug-in hybrids or electric cars, with an initial emphasis on more mature markets like the European Union, Sylvest said.

The Danish pharma's Circular for Zero strategy aims to wring carbon emissions from operations and transport by 2030, with the ultimate goal to eventually have zero environmental impact, Sylvest said.  

The company knows that it’s merely one link in the massive pharmaceutical chain, which is why it’s essential that Novo gets its suppliers and partners on board, too, Sylvest said. On distribution, Novo Nordisk has partnered with Maersk to pivot to biofuels. It’s also partnered with the distributor Tjellesen to make sure supplies of its products to pharmacies in Denmark are done via electric car, she said.

In Japan, Novo’s needle supplier Nipro has set up onsite solar panels. And its partner Gerresheimer uses wind, water and solar to manufacture insulin pen components, Sylvest said.

Novartis’ Goudreau also signaled the importance of collaborative climate change efforts. For most manufacturers and industrial operations, “so much more of our emissions are embedded in our supply chain and outside of our direct control,” he said.

“One thing to remember is that no single company is really large enough to change broad supply chain behaviors,” he said. “All of our suppliers face that challenge just as much as we do, which means collaboration between companies in the same sector who share suppliers is going to be needed.”

Leaders across companies and industries need to work together “to reduce barriers and improve access” to renewable power, he added. Much of that teamwork should focus on education. Without expert advice on the renewables available in a company’s given market, the prospect of making the green switch could be “daunting” or present a “full barrier” to access, he said.

Novartis is now tackling its third generation of decarbonization goals, Goudreau said. By 2025, it aims to become carbon neutral across its own operations, which account for about 20% of the company’s overall emissions year on year. By the end of the decade, Novartis hopes to become carbon neutral across its value chain, too, which makes up some 80% of the company’s yearly emissions, Goudreau said.

Renewable power forms a third of the company’s decarbonization battle plan. The other arrows in its sustainability quiver are reduction of absolute emissions via efficiency—whether that takes the shape of technology or changes in the way Novartis works and consumes—and a portfolio of carbon-removal solutions, like forestry projects, for unavoidable emissions.

“From a technology perspective, we’re agnostic,” Goudreau said of the company’s renewable energy preference. Much as Novo’s Sylvest pointed out, Novartis’ renewable energy sources depend on availability, reliability, risk and cost, all of which vary greatly on geography and local renewable markets, Goudreau said.

Overall, though, a balance is key. It’s often quicker for a company to simply plug into a pre-established renewable energy source, but those power purchase agreements eventually expire, Goudreau noted.

Over the years, Novartis has set up a limited number of onsite renewable projects—where it makes market sense—independent of any overarching sustainability scheme, he said. Since then, the company has laid out a “more coordinated strategy” for onsite renewables, and it now has projects in the works at locations in Europe and Asia, he said.

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Meanwhile, electricity is only “one half of the energy equation,” as AstraZeneca's Snape points out. The other part is heat, and on that front, his company is working several partnerships around renewable alternatives.

Novartis’ Goudreau also has eyes on the thermal piece. “Natural gas is still a fuel source for a lot of manufacturing operations, not just for Novartis, but many of our peers and many other sectors,” he said. Finding a solution to the thermal conundrum forms part of Novartis’ strategy, as well as one of the “significant challenges” it will face on the road to meeting its sustainability goals, Goudreau said.

One “shortfall” that AstraZeneca continues to work through, Snape said, is switching its onsite combined heat and power (CHP) plants to renewable energy. Those CHP plants still burn fossil fuels to generate heat and electricity, Snape said. For that changeover, AstraZeneca will tap into the “circular economy.”

“So, we’re looking to take human waste, animal waste, crop or food waste,” Snape explained. “We can digest that anaerobically, we can couple it to carbon capture and storage, and inject biomethane onto the natural gas grid,” he said. Once that’s done, AZ can “draw down the equivalent amount we use within our sites.”

Meanwhile, taking all of Novartis’ energy use into account—both electric and thermal—about 25% of the company’s current consumption was met by renewables at the end of 2020, Goudreau said. About 57% of the company’s overall procured electricity was renewable, but that figure should jump to 100% with the completion of projects in Europe. That in turn should bring Novartis’ operations to 50% renewable energy “writ large” by 2023, Goudreau said.