Merck & SK Innovation: 16 MW of Renewables in South Korea

German life sciences and electronics company Merck has entered into a 20-year Power Purchase Agreement (PPA) with SK Innovation E&S that will provide 16 MW of renewable electricity capacity to its life science manufacturing facilities located in Daejeon and Songdo, South Korea.

The deal is the company's longest renewable energy commitment within the Asia-Pacific region and is expected to commence operations in December 2027.

When the PPA becomes operational, it will supply approximately 21,000 MWh of electricity each year, which will account for approximately 75% of the electricity requirements for Merck's life science operations across South Korea.

"This agreement reflects our long-term commitment to manufacturing sustainability," says Tim Jaeger, Chief Strategy and Transformation Officer for Merck's Life Science business.

"By adding renewable electricity to the grid for our operations in South Korea, we are taking further measures to reduce our environmental impact and enabling our customers do the same."

The agreement contributes to Merck's growing global renewable energy portfolio, which includes virtual PPAs across Europe and North America as well as various onsite installations worldwide.

Renewable energy sourcing goals

Merck's agreement in South Korea will contribute towards the company's 2030 sustainability target of sourcing 80% of purchased electricity from renewable sources, an objective it now anticipates achieving well ahead of schedule.

The company initially established its group-wide sustainability strategy in 2020 and aligned all of its commitments with the United Nations' Sustainable Development Goals, having its targets ratified by the SBTi along the way.

The strategy focuses on three core commitments:

• Advancing human progress for more than one billion people through sustainable science and technology by 2030.
• Fully integrating sustainability into value chains by 2030.
• Achieving climate neutrality whilst reducing resource consumption by 2040.

Merck's commitment to climate neutrality encompasses Scope 1, 2 and 3 emissions, with interim targets of a 50% reduction in Scope 1 and 2 emissions and a 30% reduction in Scope 3 emissions by 2030, compared with a 2020 baseline.

Progress towards emissions targets

According to Merck's 2024 data, the company recorded 182 metric kilotons of CO₂ equivalent in combined Scope 1 and 2 emissions, representing a 43% reduction compared with 2020 levels.

Scope 3 emissions stood at 1,538 metric kilotons of CO₂ equivalent in 2024, a 2% reduction from the 2020 baseline.

Merck's broader sustainability framework includes commitments to sustainable product innovation, with a target for 10% of its portfolio to consist of 'Greener Alternative Products' by 2030.

The company employs SHAPE, its design for sustainability framework, alongside DOZN, a freely available online green chemistry evaluator tool, to assess and improve the sustainability profile of chemicals and products throughout their life cycle.

By 2030, the company aims for a 10% reduction in packaging weight per unit sales compared with baseline figures, with all new packaging designed following circularity principles and all fibre-based packaging sourced from deforestation-free materials.

The South Korea PPA adds renewable capacity directly to the grid, a model that differs from purely financial virtual PPAs by creating new clean energy infrastructure that benefits the broader electricity network.

This approach could align with growing emphasis on additionality in corporate renewable energy procurement, where companies prioritise agreements that result in new renewable generation capacity rather than merely purchasing certificates from existing projects.

Merck generated sales of €21.2bn ($24.4bn) across 65 countries in 2024, with operations spanning life science, healthcare and electronics sectors employing more than 62,000 people globally.