Unilever solar electricity deal powers renewable energy use in India

Unilever has a target to reduce our absolute scope 3^[a] energy and industrial emissions by 42% by 2030, versus 2021, and a long-term ambition to reach net zero by 2039.

To deliver greater impact, faster, we need to look beyond our own operations and cut emissions in our value chain.

In India, a new power purchase agreement (PPA) that sets a fixed competitive price for renewable electricity will help us do just that by supplying ten collaborative manufacturers – as well as Unilever factories – over the next 20 years.

Thanks to government policies and incentives that seek to support renewable energy use, a new partnership between Unilever and developer Brookfield will see electricity from the 45 megawatts (MW) off-site solar project in Rajasthan reach a total of 32 sites across 15 states. Unilever and the ten collaborative manufacturers expect to generate cost savings of approximately 25% over the 20-year period, compared to the cost of grid electricity.

Cutting carbon beyond our own operations – where our suppliers come in

Collaborative manufacturers make products on our behalf and account for around a third of all manufacturing for Unilever in India.

Typically, many have not taken major steps to reduce their climate impact and are too small to secure competitive rates for renewable energy. Having long-term access to fixed-priced electricity will change that – so we helped negotiate this deal on their behalf.

Alpla India is one of our collaborative manufacturers and part of Alpla Group which also supplies packaging to Unilever. “As part of Unilever’s Supplier Climate Programme, we are fully aligned with Unilever’s climate ambition and have science-based targets in place,” says Alpla India’s Managing Director and Partner Vagish Dixit. “Partnering on this PPA will help us to lower emissions from our operations faster than we would have been able to working alone.”

The agreement will help these collaborative manufacturers reduce their scope 2^[a] (our scope 3) emissions from electricity use by over 28,000 tonnes of CO2e per year over the 20-year period. It will also enable Unilever to more directly source renewable electricity used to power its own sites, making it easily trackable from generation to consumption.

Supporting new renewable energy infrastructure in India

“With this single contract, we’re aiming to meet nearly a quarter of Unilever’s own operational electricity demand in India with renewables,” says Yogesh Mishra, Executive Director, Supply Chain for HUL & Nepal.

HUL (Hindustan Unilever Limited) has been working for over a decade to introduce more renewables into its energy mix. It stopped using direct coal on-site for thermal energy in 2021. It has switched to on-site solar arrays and started using PPAs and buying IRECs (renewable electricity certificates).

“Now we are working closely with collaborative manufacturers to make a greater impact with our sustainability agenda and to create value across our supply chain,” Yogesh says. “By transitioning electricity use to renewable sources of energy, this initiative will help us move towards our climate targets and net zero ambition.”

This is only the beginning of our work with Indian suppliers in this area. Once the project is live, we have the option of expanding it by a further 20MW to include other suppliers beyond manufacturing, for example those across raw materials and packaging.

Stronger government support helps businesses switch to renewables

Governments that create enabling policies for PPAs can help businesses to reduce emissions faster. This is why Unilever has been calling for strong nationally determined contributions (NDCs).

To help support the transition to renewables, the Government of India has offered incentives for early adopters. Businesses who have agreements in place before June 2025 will have all central transmission charges waived for the duration of their contract.

Currently transmitting new renewable energy across state is up to 15-20% more expensive than existing power options. The waiver will be an enabler that generates financial savings, and as such, in this instance has been a significant selling point for our partners.

Pioneering power agreements across multiple states with multiple partners

This is the first time a PPA in India has covered so much ground and it required securing approvals from the Government of India, distribution companies and state governments. But it is the first initiative of its kind across the FMCG industry in India, and it paves the way for other companies to follow.