Sustainability is at the heart of how ST operates. Our new sustainability magazine, Amplify, shines a spotlight on the people behind our progress and the wide range of sustainability topics we’re working on across ST, from decarbonizing our operations to supporting the communities around our sites.

This article explores how we are transforming our electricity supply to support our carbon neutrality goal, and the strategy, partnerships and teams making it possible.

Path to 100% renewable electricity

Renewable electricity procurement is gaining attention worldwide and behind each announcement is an exciting journey that demands strong commitment to build a credible, company-wide approach. Here, we take a behind-the-scenes look at how we developed a procurement strategy that champions credibility, additionality, and drives meaningful long-term impact.

The power of choice

Sourcing 100% renewable electricity is a cornerstone of our carbon neutrality goal. With operations worldwide, we need a truly global approach that avoids quick fixes or easy solutions in favor of a strategy that works reliably, credibly, and effectively across all locations.

We began with a concept known as the ‘credibility hierarchy’ of renewable energy procurement. This industry-wide model ranks different methods of renewable energy procurement according to the environmental value they deliver. At the top is on-site generation – think solar panels on rooftops or solar arrays in adjacent fields. Next comes off-site generation through Power Purchase Agreements (PPAs), followed by green tariffs and unbundled renewable energy attribute certificates (EACs).

Our strategy prioritizes the most impactful options whenever possible: on-site generation where feasible, PPAs for major electricity needs, and EACs for remaining consumption. This balanced portfolio approach supports our ambitious goal of sourcing 100% renewable electricity by 2027.

Our PPA journey

In reality, relatively few industrial sites can support enough on-site generation to meet their needs. For this reason, we focus on the next best procurement method – PPAs.

So, what exactly is a PPA? Simply put, a PPA is a contract between a corporate buyer (called the ‘off-taker’) and a power producer to purchase electricity at a certain price for a defined period. The electricity can be supplied by existing renewable energy assets or new-build projects, usually a wind or solar farm. A key point here is that the long-term agreement with a guaranteed buyer allows power producers to secure financing for renewable energy projects, enabling investment in additional generating capacity. In other words, PPAs can enable a new source of renewable electricity to be created.

Since signing our first PPA for our Bouskoura site in Morocco in 2021, we have expanded our portfolio with PPAs in Italy, Malaysia, and France. Each new contract builds on lessons learned from previous negotiations, with the most recent agreements in France and Italy representing significant milestones.

The French agreement with Total Energies, which started in January 2025, is particularly notable. It’s a 15-year contract representing 1.5 TWh of electricity, and includes structuration services to transform intermittent production into a constant volume (‘baseload’) of renewable electricity, making it the first PPA of its kind in France.

True team effort

Anyone who’s been involved in the PPA process knows it’s not for the faint-hearted. From initial concept to signed contract, it can take two years or more. For our French PPA, discussions began in October 2022, with operations beginning in January 2025. This process involved setting the project criteria, releasing the tender, selecting partners, and finalizing agreements.

With negotiations involving multiple parties and a high-stakes outcome, they can be complex and require a depth and breadth of expertise from across the company. These complex contracts require input from many departments: Corporate Sustainability, Procurement, Legal, Finance, Tax, Treasury, Manufacturing, and Communications, not to mention buy-in from top leadership.

Additionality in action

What makes these agreements especially meaningful is their ‘additionality’ – the fact that many of these renewable energy projects might not exist without our investment. By committing to purchase power over long periods at agreed prices, we are helping to make these projects financially viable.

For the team members who devoted countless hours to bringing these agreements to life, there’s a profound sense of accomplishment in seeing the actual renewable energy projects in operation. Site visits to the wind farms now supplying our operations with renewable energy, make the impact tangible, allowing team members to witness firsthand the results of their efforts and celebrate with the colleagues and partners who helped make it possible.

Our PPA strategy is a vivid demonstration of our belief that renewable energy procurement isn’t about meeting targets or signaling our virtue – it’s about creating lasting partnerships, enabling new renewable energy projects, and bringing together diverse teams across the company to tackle one of business’s most pressing challenges. It’s a journey that’s transforming not just how we power our operations, but how we secure our future as a truly sustainable business.

This article is one of many featured in our new sustainability magazine. Explore the full issue to discover more initiatives, insights, and perspectives from across ST. st-sustainability-magazine-amplify-vol1-en.pdf