Ørsted

Ørsted’s rapid drop in carbon emissions intensity between 2015 and 2020 and its intention to achieve a 98% decrease in its emissions by 2025 demonstrate the effectiveness of its low-carbon transition planning and strategy. It is the largest offshore wind operator outside of China and plans a further doubling of capacity by 2025. With the closure of its remaining coal capacity by 2023 Ørsted will have fully transitioned into a low-carbon energy major.

Ørsted’s targets are significantly more ambitious than its Paris-aligned 1.5°C pathway. The company will have effectively decarbonised by 2025 and is planning on 50GW of renewables capacity by 2030. Ørsted also has a scope 3 target and so is engaging with its supply chain to drive upstream reductions. Ørsted’s speed of decarbonisation leads the sector and has been driven by ambitious targets.

Ørsted derives 90% of energy generation from low-carbon sources and has very low reliance on fossil fuel capacity for backup power. It has evolved from an oil and gas company to one of the largest renewables companies in the world. Its targets up until 2030 see significant additional growth on top of its existing, sector-leading levels of capacity. It is also involved in eight hydrogen projects across Europe. Ørsted’s business model delivers low-carbon energy and financial success for the business.

While Ørsted is operating at a high level across all modules there are some areas where the company could still further improve its disclosures and governance. Ørsted does not have a policy for handling its engagement with trade associations it is a member of. This will be particularly important as it expands into new countries and regions with different regulatory environments.
Research and development (R&D) expenditure is essential for the energy transition but there is little data available on this from Ørsted. To further enhance its climate leadership credentials Ørsted should improve its disclosure in this area.

Ørsted is targeting 98% decarbonisation by 2025 for scope 1 and 2 and by 2040 for scope 3. The aim is to be the first energy company to achieve carbon neutrality. Ørsted will phase out coal by 2023 and has very low levels of gas and biomass.

The phasing out of its coal plants in 2023 will leave Ørsted with just low levels of emissions from gas-fired back-up capacity. Ørsted is the largest offshore wind developer and aims to be the largest green energy major. The company is also investing in renewable hydrogen.

90% of Ørsted’s generation is from green sources. The company has 7.5 GW of offshore wind capacity and a further 2.3 GW under construction. In January 2021 it made the final investment decision on its first renewable hydrogen project.

Ørsted has transitioned from a fossil fuel-based company to one of the major players in renewables. It has recently established a leading position in the small but rapidly growing US market. In recent years its emissions have been reducing at an annual rate of 23%.

Decarbonisation is deeply embedded in Ørsted’s management, governance and strategy. Its actions and decisions demonstrate a consistent focus on greening its energy portfolio.