Amazon Adopts Green Hydrogen to Help Decarbonize its Operations

Rhea-AI Summary

Amazon has signed an agreement with Plug Power to supply 10,950 tons of green hydrogen annually for its operations starting in 2025. This green hydrogen will power 30,000 forklifts and 800 heavy-duty trucks as part of Amazon's commitment to achieve net-zero carbon by 2040. As a leader in renewable energy procurement, Amazon aims to decarbonize sectors reliant on fossil fuels and expand the hydrogen economy. The company plans to increase its use of hydrogen fuel-cells and has invested in developing electrolyzer technology to boost green hydrogen production.

Positive

• Agreement for 10,950 tons of green hydrogen annually will help reduce carbon emissions.
• Capacity to power 30,000 forklifts and 800 heavy-duty trucks promotes efficiency.
• Continued investment in green technologies reflects commitment to sustainability.
• Plans to scale hydrogen use in fulfillment centers and operations.
• Support from Plug Power to expand hydrogen applications enhances growth potential.

Negative

• None.

This green hydrogen deal will provide enough annual power for 30,000 forklifts or 800 heavy-duty trucks as it continues on the path to be net-zero carbon by 2040

SEATTLE--(BUSINESS WIRE)-- Amazon (NASDAQ: AMZN) today announced that the company has signed an agreement with Plug Power to supply 10,950 tons per year of green hydrogen for its transportation and building operations starting in 2025. The company will start to use green hydrogen to replace grey hydrogen, diesel, and other fossil fuels as it works to decarbonize its operations, and this green hydrogen supply contract will provide enough annual power for 30,000 forklifts or 800 heavy-duty trucks used in long-haul transportation.

“Amazon is proud to be an early adopter of green hydrogen given its potential to decarbonize hard-to-abate sectors like long-haul trucking, steel manufacturing, aviation, and ocean shipping,” said Kara Hurst, vice president of Worldwide Sustainability at Amazon. “We are relentless in our pursuit to meet our Climate Pledge commitment to be net-zero carbon across our operations by 2040, and believe that scaling the supply and demand for green hydrogen, such as through this agreement with Plug Power, will play a key role in helping us achieve our goals.”

As the largest corporate purchaser of renewable energy, Amazon continues to invest in a range of technologies because no single solution can fully close the emissions gap to net-zero carbon. When it comes to hydrogen, the challenge is that over 95% of supply is currently made from fossil fuels. Amazon wants to help change that. Large purchase agreements like this one help foster the growth of green hydrogen, which is produced through a zero-carbon pathway using water and renewable electricity.

“We already have more than 70 fulfillment centers outfitted with hydrogen storage and dispensing systems, which will allow us to start using green hydrogen to replace fossil fuels. Today, we use that system to power over 15,000 fuel-cell propelled forklifts, with plans to grow that number to 20,000 across 100 fulfillment centers by 2025. That’s just the start,” said Dean Fullerton, vice president of Global Engineering and Security Services at Amazon. “Across Amazon’s operations, we’re exploring and testing the use of other hydrogen applications, such as fuel-cell electric trucks and fuel-cell power generation stations providing electricity to Amazon buildings.”

Forklifts are just one use-case for scaling hydrogen, and many more potential uses are under development. Hydrogen can be used as a fuel similar to natural gas or diesel through a combustion process. It can also be used in “fuel cells,” where hydrogen and oxygen mix in a reaction that creates electricity with no direct emissions of pollutants or greenhouse gases at the point of use. However, to help power Amazon’s operations and meet our net-zero commitment, more hydrogen-powered equipment needs to be made commercially available.

Our supply agreement for green hydrogen not only reinforces Amazon’s commitment to urgent climate action, but signals to the industry a need to expand the hydrogen economy.

“Plug is fully committed to a green hydrogen future, and we are building a complete hydrogen ecosystem – from molecule to applications combined with a resilient network of green hydrogen plants around the world – to make hydrogen adoption easy for companies looking to reach net-zero carbon emissions,” said Andy Marsh, CEO of Plug. “Securing this major green hydrogen supply deal with a customer like Amazon affirms our multi-year investment and strategic expansion into green hydrogen. We are honored to help Amazon meet its ambitious sustainability goals and look forward to possibly expanding our relationship through the use of other hydrogen applications, such as fuel-cell electric trucks and fuel-cell power generation stations that could provide electricity to Amazon buildings and the deployment of electrolyzers in fulfillment centers.”

In addition to the supply contract with Plug Power, Amazon recently announced that it has invested in two companies developing electrolyzer technology to increase green hydrogen production. The investment is part of the Climate Pledge Fund, Amazon’s $2 billion venture investment program that supports the development of sustainable technologies and services.

Amazon co-founded The Climate Pledge in 2019, committing to reach net-zero carbon by 2040—10 years ahead of the Paris Agreement. The Pledge now has more than 300 signatories, including Best Buy, IBM, Microsoft, PepsiCo, Siemens, Unilever, Verizon, and Visa. To reach our goal, we will continue to reduce emissions across our operations by taking real business actions to decarbonize our operations. The company is already on a path to power our operations with 100% renewable energy, by 2025, five years ahead of the original target of 2030. Amazon is also delivering on its Shipment Zero vision to make all Amazon shipments net-zero carbon, with 50% net-zero carbon by 2030, and purchasing 100,000 electric delivery vehicles from Rivian, the largest order ever of electric delivery vehicles. Learn more about Amazon’s sustainability efforts: https://sustainability.aboutamazon.com/

About Amazon

Amazon is guided by four principles: customer obsession rather than competitor focus, passion for invention, commitment to operational excellence, and long-term thinking. Customer reviews, 1-Click shopping, personalized recommendations, Prime, Fulfillment by Amazon, AWS, Kindle Direct Publishing, Kindle, Fire tablets, Fire TV, Amazon Echo, and Alexa are some of the products and services pioneered by Amazon. For more information, visit amazon.com/about and follow @AmazonNews.

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FAQ

What is Amazon's green hydrogen supply agreement with Plug Power?

Amazon's agreement with Plug Power is for an annual supply of 10,950 tons of green hydrogen starting in 2025 to help reduce carbon emissions in its operations.

How will Amazon utilize green hydrogen?

Green hydrogen will power 30,000 forklifts and 800 heavy-duty trucks, helping Amazon decarbonize its logistics and transportation sectors.

What are Amazon's sustainability goals?

Amazon aims to achieve net-zero carbon across its operations by 2040, ten years ahead of the Paris Agreement.

Why is Amazon investing in electrolyzer technology?

Amazon is investing in electrolyzer technology to increase green hydrogen production and support its sustainability initiatives.

What is the significance of the green hydrogen deal for AMZN shareholders?

The deal signifies Amazon's commitment to sustainable practices, which could lead to increased efficiency and potentially enhance long-term shareholder value.