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Amazon's (AMZN) 71 Projects to Bolster Net-Zero Carbon Efforts

Amazon AMZN is constantly infusing resources into renewable energy projects in a bid to fuel its carbon neutrality drive.

The company’s latest announcement of 71 renewable energy projects with 2.7 gigawatts (GW) of clean energy capacity is a testament to the above-mentioned fact.

Notably, out of the projects, one marks the company’s first renewable energy project in South America — a solar farm in Brazil. Amazon is setting up three large-scale solar projects in Rajasthan, India.

The company is setting up its first rooftop solar projects in France and Austria, and its first solar farm in Poland.

Amazon is gearing up to infuse an additional 1 GW of clean energy capacity across its first two renewable energy projects in Louisiana.

Renewable energy produced by the new projects will be utilized in powering AWS data centers, Amazon’s fulfillment centers, stores and corporate offices.

We believe that the latest move bodes well for the company’s goal of reaching net-zero carbon emissions by 2040.

Amazon.com, Inc. Price and Consensus

 

Amazon.com, Inc. Price and Consensus
Amazon.com, Inc. Price and Consensus

Amazon.com, Inc. price-consensus-chart | Amazon.com, Inc. Quote

Amazon’s Aggressive Stance

Amazon has been shifting its focus from fossil fuels to clean energy for quite some time now. The shift to clean energy sources is anticipated to reduce costs in the near term, which is a major positive. The company can generate healthy returns from strengthening solar and wind investments as there are several associated tax incentives.

Amazon, known as the biggest corporate investor in renewable energy, currently has 379 renewable energy projects across 21 countries, out of which 154 are wind and solar farms, and 225 are rooftop solar projects. All the projects account for 18.5 GW of renewable energy capacity.

Growing investments in the projects have accelerated the pace of Amazon’s journey toward powering its infrastructure with 100% renewable energy. The goal was initially targeted to be met by 2030, which is now expected to be achieved by 2025.

In 2021, the company reached 85% renewable energy across its business.

Amazon’s zero-carbon goals, growing efforts toward reducing its carbon footprint, achievement and execution so far, and benefits from the initiatives are likely to instill investor optimism in the stock in the days ahead.

Notably, Amazon has lost 31.7% on a year-to-date basis against the industry’s decline of 34.1%.

Apart from the latest move, the company’s climate-friendly program, which focuses on environment-friendly products, remains a major positive. Under the new program, customers can view the Climate Pledge Friendly label, while purchasing more than 25,000 products.

The company’s growing efforts toward converting its entire delivery fleet to renewable energy by 2030 remain other positives.

Amazon’s recent agreement with Infinium to power its transportation fleet with low-carbon electrofuels is noteworthy. Infinium will supply ultra-low carbon electrofuel, which is fossil-based and made with carbon waste. Amazon will start powering its delivery-trucking fleet with electrofuels in 2023.

Beside the Infinium deal, Amazon’s purchase of 100,000 electric delivery trucks from Rivian is noteworthy.

The e-commerce giant recently inked a deal with Plug Power. Per the terms, the latter will supply green hydrogen, with which Amazon will power its transportation and building operations by 2025.

Zero-Carbon Mission Gaining Steam

The carbon-free push is gaining strong traction across the technology sector.

Not only Amazon but companies like Alphabet GOOGL, Microsoft MSFT and KLA Corporation KLAC are also taking initiatives to lower overall carbon footprints and cut energy bills substantially.

Alphabet’s aggressive three-fold strategy, which includes energy efficiency, renewable energy procurement and carbon offsets, remains noteworthy. The company’s division Google has been carbon neutral since 2007. GOOGL is aiming to be carbon-free by 2030.

Microsoft is gathering steam to become carbon negative by 2030. By 2050, MSFT aims to remove all emissions, which it has released since its founding year.

Meanwhile, KLA is committed to powering its global operations with 100% renewable energy by 2030. KLAC is targeting a 46% cumulative reduction in both Scope 1 and Scope 2 emissions by 2030 from its 2019 baseline.

Nevertheless, we believe that Amazon’s latest move will provide it a boost in this race to be carbon neutral.

Currently, Amazon carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.


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