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McDonald’s to Tackle Supply Chain Emissions in New Enel Solar Energy Deal

Global Association for ESG

19 Dec 2022

The Virtual Power Purchase Agreements for 189 MW from Enel’s Blue Jay Solar is expected to cover 100% of McDonald’s U.S. logistics supply chain’s electricity load with renewable electricity

The Virtual Power Purchase Agreements for 189 MW from Enel’s Blue Jay Solar is expected to cover 100% of McDonald’s U.S. logistics supply chain’s electricity load with renewable electricity.

McDonald’s Corporation and all five members of the restaurant chain’s North American Logistics Council (NALC) – Armada, Earp Distribution, Martin Brower, Mile Hi Foods and The Anderson-DuBose Company – have signed agreements with Enel North America to purchase renewable energy and the associated renewable energy certificates (RECs) from Enel Green Power’s Blue Jay solar project in Grimes County, Texas. This innovative aggregation of a major company purchasing power jointly with its logistics partners means the electricity load of McDonald’s USA’s entire logistics supply chain for all its U.S. restaurants is expected to be 100% supported by renewable energy.

In 2023, the Blue Jay solar energy plant is anticipated to be completely operational. After everything has been done, McDonald's and its suppliers will have purchased a total of over 470,000 megawatt hours (MWh) of renewable energy yearly. In terms of greenhouse gas (GHG) emissions, this is the same as avoiding more than 170,000 metric tonnes of carbon emissions annually or more than 80 million trucks miles driven.

Bob Stewart, SVP and Chief Supply Chain Officer, North America, at McDonald's, said: "Adding Blue Jay solar to our U.S. renewable energy portfolio is one of the many crucial stages in our journey to attaining our net zero ambitions. "This agreement is a special illustration of how McDonald's and its logistics partners are collaborating to use their reach and scale to jointly combat supply chain emissions. We are enthusiastic about our ability to work together to address climate change and promote ongoing improvement.

The GHG Protocol classifies supply chain emissions as Scope 3 emissions, and they are difficult to treat and measure since they are caused by actions outside of the organization's direct control, like product distribution and transportation. According to a report by CDP from 2022, scope 3 emissions represent an average of 75% of the GHG emissions from businesses.
McDonald's went one step further by becoming the anchor buyer with its suppliers, while major corporations are increasingly promoting and advising their partners on how to reduce their carbon emissions. According to Danny Fahey, NALC Sustainability Lead and Vice President of U.S. Strategy at Martin Brower, "McDonald's and the NALC understood early on that collaboration across the supply chain is the only approach to successfully manage power emissions for all logistics suppliers. This collection exemplifies how collaboration will be crucial to achieving long-term climate goals.

To support McDonald's and the NALC members in meeting their ambitious climate targets, a total of 189 megawatts (MW) of renewable energy will be purchased. This amount is equal to the yearly renewable energy consumption of almost 900 McDonald's restaurants in the United States.

According to Paolo Romanacci, president of Enel Green Power, the company's renewable energy division in North America, "this creative partnership highlights how Enel is assisting significant organizations adopt a hands-on approach in helping their partners decarbonize their operations." "We are proud to be a part of such a historic agreement and look forward to assisting McDonald's and its suppliers in achieving their supply chain emission reduction targets with this customised solution," the company said.

The local communities in close proximity to the Blue Jay solar project are a top priority for Enel, McDonald's, and its suppliers. In order to take part in Enel's Premium Offer programme and jointly create community investment initiatives that adhere to each company's basic values, the companies signed a memorandum of intent.
Over the course of operation, the project is anticipated to bring in more than $41 million in new tax income for state taxing entities, creating about 275 employment during the building period. Since the project's construction began in May 2021, Enel has also donated more than $216,500 to support STEM and upskilling programmes for nearby schools and institutions. Additionally, an 88.2 MWh battery energy storage system is part of the Blue Jay project, which will assist the local energy grid's dependability.

Coho Climate Advisors assisted with the buyer aggregation.

According to Gavin Ahern, Director of Client Service for Coho Climate Advisors, "close collaboration among all parties during a trying period in the renewable energy market proved necessary to establish this excellent deal."

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