Ikea's Coal Removal Project has helped Chinese manufacturers move to cleaner energy ©Ikea
Ikea's Coal Removal Project has helped Chinese manufacturers move to cleaner energy ©Ikea

Ikea is helping its supply chain remove coal

The furniture firm is creating case studies to help its suppliers in China cut their carbon footprint

Product rejection rates dropped for one of Ikea’s glass suppliers when it closed down its coal furnace and started using natural gas. That was one of the positive effects found by the China-based tier one supplier when it took part in a pilot project with the flatpack company to reduce its carbon footprint.

By removing the onsite furnace, the energy supply became more stable and dust levels in the factory reduced, which helped to produce better quality glass with fewer pollutants.  

Finding the positives was a key part of Ikea’s Coal Removal Project, explains Stefan Karlsson, sustainability compliance manager for Ikea purchasing service in China, “because, it is not about gaining money by changing from coal to, say, natural gas”.  Creating case studies helped tell the story.

Ikea has a sustainability agenda, People & Planet Positive, which includes a commitment to reduce the company’s carbon footprint, and to cascade that through its suppliers. While the commitment is well known within Ikea – and supported top down – it is not high on the agenda of all suppliers, he says. With the Chinese government also encouraging manufacturers to clean up their acts, it was a natural fit for Ikea to help its Chinese suppliers – of which there are over 300 – to use cleaner power and to aim to remove on-site coal-fired plants, he says.

Karlsson wanted to ensure relationships continued well, to maintain a partnership rather than behave like a big boss telling suppliers what to do, as well as show a long term commitment, and for the suppliers to remain competitive. So they set about creating case studies. “Ikea is practical,” he says. “We like to start things and learn during the process. We want successful solutions we can share.” 

Having already mapped the carbon footprint of suppliers through its Supplier Sustainability Tool, Karlsson enlisted the help of interns from EDF Climate Corps and talked to suppliers to find those who were in a position to transfer and were keen.

They are working with nine suppliers as pilot case studies, from textile firms to glass and ceramics, large and small, finding the best energy source for each – some use biogas but most move to natural gas.

By removing the furnace, some found space for an additional production line. Cleaner air is helping too. “It has had a good impact on people and the community so workers are more motivated,” he says. “This year one of our glass suppliers – Jinan Dior Glass Product – will remove coal completely, reducing CO2 emissions by 35,200 tonnes.”


Carbon case study

In 2016, Tian Qiao and Shuyi Li, fellows at EDF Climate Corps, which matches graduates with firms to work on environmental projects, joined Ikea to assist in the Coal Removal Project. They identified 60 suppliers powering their manufacturing plants with coal. They then analysed the potential savings for using cleaner energy, considering government subsidies, and created a case study of a textile supplier that could gain about 25% energy cost savings and, with a more stable energy source, improve product quality.

By the end of their fellowship, eight Ikea suppliers had plans to remove coal from their manufacturing process, cutting CO2 by an average of 50%, with cost increases potentially offset by generating solar power themselves or by renting land to a solar company.

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