Graphic Packaging International Charges Ahead on Renewable Electricity in Europe

Graphic Packaging International's first virtual power purchase agreement (VPPA) helps fuel a more sustainable supply chain for consumer packaging brands.

Thanks to our first VPPA with Zelestra, three new solar plants in Spain will add about 100 MW of new solar power capacity to the local power grid, when fully operational. That's enough to power more than 52,000 households in the area.

Caption: Graphic Packaging International, Zelestra, local officials and supporters celebrated the inauguration of José Cabrera in Guadalajara, Spain, the largest solar plant in the VPPA project and the first fully delivered in 2025.

For us, this is a way to claim using more renewable electricity to reduce our greenhouse gas (GHG) emissions in our European packaging operations. For our customers, this means packaging with a lower carbon footprint, supporting their sustainability goals and creating more responsible supply chains.

Caption: New solar plants supported by Graphic Packaging's VPPA include José Cabrera (top), Socovos II (bottom left) and Villamañán (bottom right).

Project Overview

Estimations are based on 2024 location-based emission factors for the Spanish grid.

What Is a VPPA?

A renewable power purchase agreement (PPA or RPPA) is a long-term contract between an energy company and a buyer. The buyer agrees to purchase the electricity output (or rights to the output) from the power asset along with the energy attribute certificates (EACs) associated with the purchased renewable electricity.

Meet Zelestra: Zelestra, our selected partner, has more than two decades of experience working in 13 countries. They specialize in developing, constructing, commercializing, and operating large-scale renewable energy projects.

EACs certify renewable electricity generation. Each EAC represents proof that 1 MWh of renewable electricity was produced and added to a power grid. And EACs are required to be able to claim renewable electricity usage - physically or virtually.

In a virtual power purchase agreement, like ours, we do not physically receive the electricity generated by the solar plants - only the EACs associated with the generated electricity. We apply the EACs to the electricity we buy from our own local utilities to claim renewable electricity use. Once we apply the EACs, that output cannot be claimed by anyone else.

A diagram illustrates the flow of renewable electricity and renewable EACs in a VPPA between power assets, energy buyers, grids and utilities.

Caption: The diagram above illustrates the flow of renewable electricity and renewable EACs in a VPPA.

Our VPPA with Zelestra provides Graphic Packaging International with EACs corresponding to approximately 70% of the projects' output. With these EACs, we'll be able to cover close to 70% of our EMEA region's purchased electricity demand (or 100% in continental Europe) with renewable electricity. And we expect to reduce over 50% of Scope 1 and 2 GHG emissions from Graphic Packaging International's EMEA operations.

"By participating in a VPPA, we're helping to speed up the process of 'greening' the grid," said Michelle Fitzpatrick, vice president and chief sustainability officer at Graphic Packaging International. "Our support gives renewable energy developers the ability to build new projects and add new capacity to the power grid."

This new capacity can replace and/or prevent investments in new fossil fuel plants, as well as enable the decommissioning of existing fossil fuel plants. Unlike the purchase of EACs from existing assets, the EACs from our VPPA are generated from new assets that are adding renewable energy capacity, thus further supporting climate change mitigation.

"This would not be possible without Graphic Packaging International," said Luis Alvargonzález, Zelestra's Spain country manager. "Their commitment to sustainability enabled us to accelerate the development of three new solar projects, supporting the country's transition to reliable, competitive renewable energy."

Why Solar Power?

The renewable energy source of a VPPA could be solar, wind, hydropower or another renewable source. These additional power sources help stabilize power grids and quickly expand capacity to meet growing electricity demand.

Solar power is abundant and accessible. In 90 minutes, enough sunlight strikes the earth to provide the entire planet's energy needs for one year, reports the International Energy Agency. Solar plant technology also operates quietly and passively, minimizing disturbances to the surrounding environment.

And solar plants can be integrated into the natural landscape to mitigate the impact on wildlife and nature. The solar plants are surrounded by native plants. Select sites provide nest boxes for local birds, shelters for bats and conservation measures to support biodiversity and enrich local ecosystems.

Renewable electricity projects, like this, also help strengthen the local economy. Solar plant construction creates jobs and supports local employment, training and education.

"This is one of the largest VPPA projects of its kind in recent years in Europe's packaging manufacturing industry - and we're proud to lead the way."

- Elodie Bugnicourt, Sustainability Director International, Graphic Packaging International

Using Renewable Energy to Cut CPGs' Scope 3 Emissions

Everyone wants to feel good about the purchases they make. So, companies that sell consumer packaged goods - known as CPGs, the customers we serve at Graphic Packaging International - are exploring ways to reduce the carbon footprint of their operations and supply chains.

As a key supply chain partner, we're supporting our customers' goals by setting science-based targets to reduce GHG emissions from our own operations. The emissions avoided by using renewable electricity reduce the carbon footprint of the packaging we supply, driving more sustainable supply chains for our customers.

"Achieving our ambition of zero emissions by 2050 is going to require a comprehensive approach, involving a range of actions," said Fitzpatrick. "Our VPPA is just one of the actions we're taking to progress on our near-term targets that we've committed to through our Vision 2030 and our Better, Every Day goals."

By 2032, we aim to halve our Scope 1 and 2 GHG emissions, which will also require using more renewable fuel and improving the energy efficiency of our operations.

"For us as well as our customers, it's critical to reduce the environmental impact of packaging across the entire packaging lifecycle," said Robert Mayr, vice president of operational excellence at Graphic Packaging International. "To achieve this, we're sourcing renewable electricity - through initiatives like this VPPA - while also implementing energy-saving measures across our packaging manufacturing sites."

"Innovation is in the heart of our sustainability strategy. We are here to support the very challenging environmental targets of our customers."

- Jean-Francois Roche, Senior Vice President and Chief Commercial Officer, Graphic Packaging International

The Next Steps on Our Decarbonization Journey

Graphic Packaging International's first VPPA marks a major milestone in our decarbonization journey. Starting in 2026, we expect to begin to see significant results from this agreement, a meaningful step toward our Climate Action goals for a better future.

Reducing our Scope 1 and 2 GHG emissions is a key part of our comprehensive climate strategy. We intend to:

• Use more renewable fuel in our paperboard manufacturing facilities.
• Make our manufacturing operations more energy efficient.
• And increase our renewable electricity claims to cover at least half of our purchased electricity.

"We will leverage the learnings from this project when we look at other global regions, like the U.S., to continue our journey to increase our use of renewable electricity and achieve our goal of having a minimum of 50% purchased renewable electricity by 2030," said Fitzpatrick.

Learn more about our Better by 2030 sustainability goals and progress in our 2024 Impact Report, and follow our journey on LinkedIn.

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