Reykjavík Energy's climate goals validated by the Science Based Targets initiative (SBTi)

Reykjavík Energy (RE) is continuing its aim towards carbon neutrality for its own operations by 2030, as well as for its supply chain by 2040. This means the company intends to reduce greenhouse gas emissions by 90% in scopes 1 and 2, and by 40% in scope 3 by 2030, compared to the baseline year of 2016. Furthermore, emissions in the company's supply chain, scope 3, will be reduced by 90% by 2040, see appendix.

These goals were validated by the Science Based Targets initiative (SBTi) in July 2023, ensuring they meet the requirements of climate science. Simultaneously, RE joins the "Business Ambition for 1.5°C" campaign, a growing group of companies aiming to meet the goal of keeping global warming below 1.5°C. RE thus becomes part of the "Race to Zero" campaign supported by the United Nations.

Reykjavík Energy (RE) has already taken significant steps towards achieving its climate goals. For instance, by employing the Carbfix method at Hellisheiði Geothermal Power Plant, the plant will become carbon neutral by 2025, and Nesjavellir Geothermal Power Plant by 2030. This means that 95% of the carbon dioxide from the plants will be captured and sequestered in rock. Additionally, RE plans to reduce emissions from its vehicle fleet, encourage sustainable procurement, and promote energy transition in operations.

Moreover, RE will enhance the resilience of the community by adapting its service systems to climate change, see appendix.

Certified Climate Account 2023

In 2023, Reykjavík Energy (RE) conducted a thorough review of its energy and utility operations, along with projects that contribute to biodiversity and carbon sequestration, to better encompass the climate and environmental impacts of the company. This work has highlighted previously unexplored greenhouse gas (GHG) emissions that had not been accounted for in the company's climate accounting until now. Although there is still work to be done in this area, the presentation of RE's total carbon footprint has made significant progress.

RE's climate accounting is conducted according to the methodology of the Greenhouse Gas Protocol (GHGP) and has been certified by the auditing company Bureau Veritas in accordance with the international standard ISO 14064-1, see RE's climate account 2023 in appendix.

The image below outlines the framework for RE's climate accounting.

Greenhous Gas Emissions 2023

Total Emissions

In 2023, the total greenhouse gas (GHG) emissions from Reykjavík Energy (RE) increased by approximately 650 tons of CO₂ equivalent (CO₂eq) from 2016, or by about 1%. The main contributors to this increase were the high concentration of CO₂ in new high-temperature wells connected, for example, to the Hellisheidi Geothermal Power Plant, increased energy production in the power plants during this period, and the inclusion of GHG emissions from purchases and treated wastewater in the sea in the climate account for the first time after a thorough examination, see RE's Climate Account 2023 in appendix.

In 2023, GHG emissions increased by over 1,900 tons of CO₂eq from 2022, or by nearly 3% year-on-year. The operational uptime of the abatement unit at Hellisheidi Geothermal Power Plant was lower in 2023 than in 2022 due to construction activities at the power plant site and unexpected malfunctions. In 2023, the relative capture and sequestration of carbon dioxide from the Hellisheidi Power Plant was about 25% of the plant's emissions. Trial-scale CO₂ capture and sequestration began at Nesjavellir Geothermal Power Plant in 2023, accounting for 8% of the plant's emissions, see the discussion about climate goals above.

Emissions in scopes 1 and 2

Emissions for scopes 1 and 2 in 2023 amounted to over 52,000 tons of CO₂eq, which is a reduction of 4,400 tons of CO₂eq from 2016, or about 8%. The emissions from the geothermal power plants weighs the heaviest in RE's carbon footprint, accounting for about 68% of all GHG emissions. As mentioned above, RE is working according to a plan for Hellisheidi Geothermal Power Plant to become carbon neutral by 2025 and Nesjavellir by 2030, meaning that 95% of the carbon dioxide from the plants will be captured and sequestered in rock by 2030. These projects will significantly reduce GHG emissions from RE as shown in the figure below. See RE's Climate Account 2023 in appendix.

Total emissions, in thousands of tons of CO₂ equivalents, from scopes 1 and 2 in 2016 and 2023. Furthermore, the emissions according to Reykjavík Energy's climate goals, which are validated by SBTi for the years 2030 and 2040, are shown. It is assumed that the emissions for these years will be the same as the emissions from geothermal power plants will be similar in 2030 and 2040.

Emissions in scope 3

In 2023, emissions from scope 3 amounted to about 19,900 tons of CO₂ equivalents, an increase of over 3,000 tons of CO₂eq from the base year of 2016, or about 18%, see the figure below. The emissions that weighs the heaviest in scope 3 is purchases, accounting for about 25% of total GHG emissions, with the highest emissions coming from steel pipe purchases. However, these emissions decreased in 2023 compared to 2022 by about 4%. Reykjavík Energy (RE) is looking into purchasing "green steel," for example in steel pipes, once it becomes available on the market to reduce emissions. Steel pipes account for over 50% of the company's purchased goods, and thus a reduction in their emissions will significantly impact scope 3, see RE's Climate Accounting 2023 in the appendix.

Emissions have increased due to business travel of employees from 2016 by about 200 tons of CO₂eq. However, emissions have decreased due to waste by 50 tons of CO₂e and due to staff commuting by 30 tons of CO₂e in 2023 compared to the emissions in 2016. RE has offered its staff a comprehensive package to encourage more environmentally friendly modes of transportation. This includes a transport subsidy for those who travel in a climate-friendly manner, free charging for electric vehicles at the workplace, and access to electric bikes. In addition, RE supports flexible work arrangements, including the option to work from home.

Emissions, in thousands of tons of CO₂ equivalents, from scope 3 in 2016 and 2023. Furthermore, the emissions according to Reykjavík Energy's climate goals, which are validated by SBTi for the years 2030 and 2040, are shown.

Biodiversity and land-based carbon insetting projects

Reykjavík Energy (RE) has undertaken land reclamation and afforestation on the company’s own land for more than 70 years, or since 1950. These nature-based projects aim to restore soil and vegetation cover, improve soil, rejuvenate natural birch forests, and enhance biodiversity. In the past decade, an additional goal has been to sequester greenhouse gases in vegetation and soil.

The land reclamation areas cover about 595 hectares, and the afforestation areas about 965 hectares. Rewetting of peatland was carried out on just over three hectares in the autumn of 2016 with the purpose of reducing carbon emissions from the previously drained peatland and to restore the peatland ecosystem. For more details, see the section on land improvements at RE's operational sites and biodiversity.

Carbon Sequestration through Afforestation and Land Restoration

In 2023, the GHG sequestration on RE's afforestation sites was about 5,740 tons of CO₂ equivalents, the same as the baseline year 2016. The reason for this is that the sequestration is assessed every 10 years, and thus it remains the same for a whole decade until it is updated. In 2023, the sequestration on land restoration sites was about 1,250 tons of CO₂eq, having increased by 4% compared to the baseline year 2016. The avoided GHG emissions from RE's rewetting of peatland were about 40 tons of CO₂eq in 2023, estimated to be the same since 2017, see RE's Climate Accounting 2023 in the appendix. A study is planned for the area in the summer of 2024 to confirm the results.

Carbon Offsets

RE has supported carbon offsetting projects since 2018. These projects aim to reduce greenhouse gas emissions and contribute to sustainable development and social and economic benefits.

United Nations Projects

RE has supported RIPPLE Africa’s Improved Cookstove Project in Malawi, United Nations Carbon Offset Platform project, since 2020. In 2023 RE offset 1,200 tonnes CO₂eq which has increased by approximately 85% compared to 2020, see table 2. By supporting the Malawi project, it not only reduces GHG emissions but also combats deforestation and respiratory diseases, especially among women and children. RE's aim is to continue the support for this program.

Wetlands Fund Projects

From 2018 to 2021, RE supported initiatives to reduce GHG emissions through wetland restoration in Iceland. During this period, the accumulated avoided GHG emissions amounted to nearly 3,000 tons of CO₂eq, see RE's Climate Accounting 2023.