A new report warns that a boom in U.S. computer chip manufacturing could fuel demand for polluting energy, despite the company’s environmental claims. Surprisingly, the solution for manufacturers may be to act like other big tech companies chasing climate goals.
Once operational, new semiconductor factories built in the U.S. by the Big Four – Intel, TSMC, Samsung and Micron – could use more than twice as much electricity as the city of Seattle. The companies claim to use renewable energy, but according to an analysis by the nonprofit Stand.earth, that’s not entirely true.
Semiconductors happen to account for a large portion of a device’s carbon footprint. Unless companies switch to clean energy, they could end up increasing greenhouse gas emissions as domestic chip manufacturing revives.
Semiconductors happen to account for a large portion of a device’s carbon footprint
The Chip and Science Act passed in 2022 sets aside $52.7 billion for domestic chip manufacturing. Now, four companies reviewed in the report plan to build large plants in Arizona, Ohio, Oregon, Idaho, Texas and New York. The report states that each large factory uses as much electricity as a medium-sized town. Cumulatively, the nine facilities could ultimately add 2.1 gigawatts of new power demand.
“Even with our recently announced investments, we are not slowing down any of our sustainability commitments,” Intel said in an email.TSMC, Samsung and Micron did not immediately respond to requests for comment. edgeRequest for comment. To be sure, all four companies have pledged to provide 100% renewable electricity for their U.S. operations, but the devil is in the details.
The culprit is a popular tactic used by companies of all types today making clean energy pledges: purchasing unbundled renewable energy certificates (RECs). Please bear with me as I explain how companies claim to use renewable energy when in fact they do not.
First, there is currently not enough renewable energy produced in the United States to power all of these companies’ operations. Renewable energy still accounts for only about 20% of the U.S. electricity mix. When solar or wind farms provide electrons to the grid, it all gets mixed in with electricity from fossil fuel power plants. If a new factory is connected to the grid, there’s really no telling where the power it uses will come from.
REC is a flawed attempt to solve these problems. Electric companies can essentially sell two renewable energy products: actual electricity and RECs, which represent the benefits of the renewable energy produced. Ideally, RECs should provide additional revenue to support the development of new renewable energy projects. If a company matches its electricity usage to an equivalent number of RECs, it can ostensibly write in its marketing and sustainability reports that its operations are 100% renewable.
REC is a flawed attempt to solve these problems
Starting to see a disconnect? There is growing evidence that RECs are not as effective at cleaning up the grid as some companies hope. The popularity of RECs has made them so cheap that they don’t necessarily incentivize new clean energy projects. A 2022 study of 115 companies that purchased RECs found that they significantly overestimated the reductions in greenhouse gas emissions from electricity use.
To minimize environmental damage, semiconductor manufacturers should follow the lead of Apple, Google and Meta, the report said. Rather than purchasing RECs that renewable energy generators sell as separate products, technology companies can have a greater impact by agreeing to power purchase agreements (PPAs). This is a long-term agreement to pay for a certain amount of electricity from a specific renewable energy project.
PPAs have been more successful in actually bringing new renewable energy projects online. Google and Meta go one step further with their power purchase agreement, committing to match their electricity consumption with local clean energy generation 24/7.
Apple’s pledge to push its suppliers to use clean energy could affect semiconductor manufacturers. The Stand.earth report cites Apple’s sustainability report, which shows semiconductor emissions account for nearly half of the greenhouse gas emissions from manufacturing its devices. The race to develop more powerful computer chips for artificial intelligence will only increase the stakes.
“Consumers are tired of big tech companies making ambitious climate promises, only to drag their feet on delivering on those promises,” Gary Cook, director of global climate policy at Stand.earth, said in a press release. “53 billion The rapid expansion of domestic semiconductor manufacturing triggered by the U.S. dollar U.S. chip bill provides a unique opportunity to shift a key part of the IT industry supply chain toward renewable energy plants.”
