Apple’s climate promise depends on Taiwanese partners TSMC, Foxconn going green
- Seventy-one of Apple’s hundreds of suppliers have committed to using only renewable energy
- Taiwanese companies make up an outsize proportion of Apple’s suppliers because of their dominance in sectors such as made-to-order chips and electronics contract manufacturing
Apple has gone carbon neutral. But to say the same for its flagship iPhone, it is going to need help from Taiwan.
That is changing though. The Taiwanese firms are installing solar panels and buying power from offshore wind farms in line with Apple’s target of having all of its products be carbon-neutral by 2030. It underscores how climate pressure is increasingly coming not only from activists, but from within the company’s own supply chains.
So far, 71 of Apple’s hundreds of suppliers have committed to using only renewable energy, about 8 gigawatts worth, or more than the peak power demand for the entire nation of Singapore. Once completed, these commitments will avoid over 14.3 million metric tonnes of greenhouse gases annually – the equivalent of taking more than 3 million cars off the road each year.
Taiwanese companies make up an outsize proportion of Apple’s suppliers worldwide because of their dominance in sectors such as electronics contract manufacturing and made-to-order semiconductors.
Instead, Apple wants them to invest in enough renewable energy in their home region to cover their power use. That way even if a factory requires coal-fired electricity in the middle of the night, it will have invested in enough wind or solar to keep an equivalent amount of coal from being burned at other times.
For Foxconn, that means installing solar panels on the roofs and of its campuses in places like Henan province in China, where coal is still the dominant source for power. The company had installed 224 megawatts of clean energy by the end of 2019, up from 33 in 2017. But it still has a long way to go, as solar power and renewable energy credits amounted to only about 10 per cent of its power use last year, the company said in its sustainability report.
TSMC, which used renewable energy and credits for 6.7 per cent of its power in 2019, has committed to producing renewable energy for its entire operations by 2050. It signed a deal last month with Orsted to buy all of the power from a 920-megawatt wind farm the Danish energy company is developing off the coast of Taiwan, in what is the world’s largest private renewable power deal. The deal means TSMC now actually has agreements to buy more clean energy than Apple, according to BloombergNEF.
TSMC’s efforts have been aided by a massive Taiwanese government plan to transform the country’s energy mix away from coal and nuclear and toward renewables and natural gas. The Orsted deal, for example, came after Denmark’s largest power producer had established a major presence in the company, thanks to several government-backed deals for offshore wind farms.
“Growing sustainability initiatives by major companies are definitely making a dent in their supply chains,” said Jonathan Luan, a Beijing-based analyst with BloombergNEF. “Some companies have been able to change market rules to achieve their goals, like in Taiwan.”