Ant Group, operator of popular Chinese mobile payment service Alipay, plans to slash its direct carbon emissions by nearly a third by 2025 as part of its journey towards carbon neutrality at the end of this decade.
The world’s largest financial technology company, controlled by billionaire Jack Ma, will work with data centre partner Alibaba Cloud – a subsidiary of e-commerce giant Alibaba Group Holding, which owns the South China Morning Post – to boost the share of renewable energy on its total electricity consumption to 30 per cent in five years. The current share has not been disclosed.
The intermediate goals – unveiled for the first time – form part of the firm’s short, medium and long-term efforts aimed to initially reduce and eventually balance out the firm’s entire carbon footprint through clean energy procurement and carbon offset investments, according to Sabrina Peng Yijie, Ant’s president of social good and green development.
Do you have questions about the biggest topics and trends from around the world? Get the answers with SCMP Knowledge, our new platform of curated content with explainers, FAQs, analyses and infographics brought to you by our award-winning team.
“We will certainly face challenges in this journey,” Peng said in an interview. “That is why we will have experts to help review our progress and advise us annually. We are ready to put in the investments required to make it happen.”
Hangzhou-based Ant has invited experts from the China Environmental United Certification Centre, which is also working with the organisers of the 2022 Beijing Winter Olympics in assessing the event’s carbon reduction solutions, to advise the firm on its carbon neutrality plan.
The initiative comes amid a major business overhaul for the company, which outlined its decarbonisation road map last month, after regulators directed it to correct “improper competitive behaviour” surrounding Alipay.
Still, the Chinese tech unicorn aims to fully offset by the end of this year, covering direct emissions from fossil fuel combustion and indirect emissions from purchased electricity and heat.
By 2030, Ant expects to completely offset indirect carbon emissions arising from supply chain activities, including those of purchased goods and services, leased facilities, business travel, waste management and employees commuting.
Most of Ant’s carbon footprint is currently from data centre capacity that it leases from Alibaba Cloud, Peng said.
Data centres require plenty of energy to keep cool. These are secure, temperature-controlled facilities that typically house thousands of large-capacity servers and data storage systems, and equipped with multiple power sources and high-bandwidth internet connections.
The amount of electricity required for one data centre to be running at the right temperature is sufficient to meet the needs of 50,000 to 100,000 households, according to Philippe Delorme, the Hong Kong-based executive vice-president of energy management at Schneider Electric.
Electricity consumption in China’s data centre sector was forecast to rise by two-thirds by 2023 from 160.89 terawatt-hours in 2018, according to a joint report by Greenpeace and North China Electric Power University. The sector made up 2.4 per cent of the nation’s total electricity consumption in 2018.
Ant joins a string of major Chinese technology companies, such as social media and video gaming titan Tencent Holdings and telecommunications equipment maker Huawei Technologies Co, in spelling out their ambition to minimise and offset their carbon emissions.
Their initiatives follow close on the heels of President Xi Jinping’s commitment last September for China, the world’s biggest emitter of greenhouse gases, to hit peak emissions before 2030 and achieve carbon neutrality before 2060.
While renewable energy procurement forms a big part of Chinese Big Tech companies’ plans, their commitments so far trail behind those of their international peers. Data centre operator Chindata Group remains the sole Big Tech firm in the country to pledge 100 per cent renewable energy use by 2030.
Alibaba fell from first to fourth place in this year’s renewable power use rankings for cloud providers, according to Greenpeace East Asia’s latest clean energy scorecard for the country’s Big Tech sector.
Alibaba Cloud, China’s largest cloud services provider, has been committed to developing green data centres since 2015 and to embed eco-friendliness in its operations, according to a company spokeswoman.
This year, Ant plans to offset carbon emissions from its own facilities by purchasing carbon offset credits from clean energy project owners.
For the long term, the company’s full supply chain carbon reduction strategy will prioritise energy efficiency improvements, according to Peng. She said that will be followed by increased renewable energy procurement and investment, alongside natural reduction schemes such as tree plantation. Forests are natural giant carbon storage sites.
Ant also plans to deploy blockchain technology with anti-tampering features to help track of the progress of its carbon-reduction measures, while it also pursues research and development of clean energy technologies.
More from South China Morning Post: