By Avi Salzman

Amazon will keep increasing its purchases of renewable energy even if the Trump administration cuts support for the industry, the tech giant's director of sustainability policy said.

Amazon's commitments are important because it is the largest corporate buyer of renewable energy in the world. If Trump ends renewables subsidies and relaxes environmental regulations -- actions he has talked about -- then "net zero" commitments by corporations will become a more important driver of renewable adoption. Corporations accounted for about one-sixth of clean power purchases in the U.S. as of 2022, enough to power 5.9 million homes, according to industry group American Clean Power Association.

Amazon said on Thursday that it was the largest corporate buyer of renewable power in the world in 2024 for the fifth year in a row, based on data compiled by Bloomberg New Energy Finance. The company says it has invested in 33 gigawatts worth of renewable energy, supporting more than 600 wind and solar projects that can cumulatively power 8.3 million homes.

Jake Oster, Amazon's sustainability director, told Barron's that the company will keep pushing toward its goals regardless of what happens to federal policy. "We have a commitment to be net zero carbon by 2040 and we're going to continue to focus on those goals," Oster said.

Amazon says it already supports enough renewable power to match all of its electricity needs. But those electricity needs are rising fast, due to the company's power-hungry data centers processing artificial intelligence applications. Amazon's latest sustainability report, from 2023, says its emissions of carbon dioxide had risen by 34%, or 17 million metric tons, since 2019. Its emissions from the electricity it buys, however, had fallen 49% over that period.

The incoming president has pledged to cut tax subsidies for wind and solar energy. If Trump unwinds the Inflation Reduction Act, it could eliminate the 30% tax credits that are now available to wind and solar projects. And if he rolls back the Biden administration's rules to clean up power plants, it could allow utilities to slow their adoption of renewables.

The change in the political landscape has led some corporations to step back from their public advocacy for green energy. Big banks have quit the U.N.-sponsored net zero banking alliance en masse over the past month, for instance.

It remains to be seen whether big tech companies will also change their tune on climate policies. Amazon and other big tech companies have made voluntary commitments to become greener over the next 10 to 15 years. Those commitments are getting harder to meet as the companies build enormous data center for their AI projects. Altogether, data centers could add 44 gigawatts worth of demand to the U.S. electricity grid by 2030, according to Deloitte -- as much as is produced by 40 to 50 nuclear reactors. Utilities are planning to build more than 90 gigawatts of new natural-gas plants through 2035, in part to meet data center demand, the Sierra Club found.

Oster said that Amazon's increasing electricity needs have spurred the company to look to new sources for even more clean power. It invested in nuclear start-up X-energy and partnered with Talen Energy to hook a data center directly into a Pennsylvania nuclear plant, for instance.

Critics say Amazon hasn't effectively mitigated its climate impacts because it doesn't always build clean energy resources in the regions where it is actually using the power. In Virginia, where Amazon and other tech firms have set up the world's largest cluster of data centers, renewable energy is still relatively scarce. Solar accounts for 6% of electricity in the state and wind power is virtually nonexistent. "Decreasing emissions somewhere in the world, to the extent it is happening, does not affect the grid that supplies AWS's data centers in Virginia," wrote Ivy Main, renewable energy co-chair for the Virginia Sierra Club, in an email to Barron's.

Oster says that the company makes renewable energy investments in areas where it will make the biggest difference -- including countries like Poland that would otherwise be burning coal for power. Amazon also says it has invested in more than 100 renewable energy projects in the 13-state electric grid region that includes Virginia.

Write to Avi Salzman at avi.salzman@barrons.com

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January 16, 2025 05:00 ET (10:00 GMT)

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