Mars Inc., which sells about $30 billion of deliciousness a year, is going green. We’re talking 100 percent.
The Mars mission: to eliminate fossil fuel use by 2040. The maker of Snickers and M&Ms is just 3 percent green today, at least when it comes to renewable energy. But don't worry, your green M&Ms won't cost a penny more than the coal-colored ones, according to Barry Parkin, chief sustainability officer at Virginia-based Mars. The big strategy? Wait until switching is a no-brainer.
“There doesn’t have to be a cost disadvantage to develop green energy,” Parkin told Bloomberg New Energy Finance’s Siobhan Wagner in a newsletter Q&A. Mars aims to expand its renewable power, which includes solar plants in Nevada and New Jersey, but only when it costs the same as or less than electricity flowing from the grid, he said.
Setting goals for 2040 isn’t difficult. A lot can change in a quarter century, including the entire team running the company. The shift to cleaner energy, it would seem, is inevitable -- so why not take credit for it now? More impressive is Ikea’s plan to do it by 2020.
Is Mars peering through green-colored glasses? If companies can save money switching to renewables, and individuals can too thanks to installers like SolarCity, what explains the chart below? This is the U.S. Energy Information Administration’s projection for America’s fuel mix through 2040. Renewables (including hydropower) will amount to just 16 percent, up from 12 percent today, according to the agency.
The EIA estimate is conservative, based largely on today’s technology and assuming all federal subsidies for renewables expire. The picture could be brighter.
The biggest obstacle to adoption is the so-called intermittency issue -- meaning we don’t have a good way to store power for times when the sun doesn’t shine and the winds don’t blow. If battery makers like Tesla can solve intermittency with better batteries, the U.S. renewables mix could be double the IEA’s estimate, “maybe more,” said Colm O’Connor, an alternative-energy portfolio manager at Kleinwort Benson Investors.
“I would really question any kind of estimates for 2040,” O’Connor told me at a Calvert Investments sustainability breakfast in New York last week.
I’m not trying to knock Mars. The company is a real sustainability leader in many areas -- notably its recent goal to use 100 percent sustainable palm oil by the end of 2015. Palm oil is used in just about everything we put in our mouths and on our bodies and has become a major cause of deforestation.
Rather, I'm knocking everyone else a little bit. New onshore wind power is already as cheap as coal and gas in most regions of the world, according to Bloomberg New Energy Finance. Solar prices are competitive without subsidies in 19 countries, according to a Deutsche Bank report in January. Mars's plan for cutting fossil fuels by 2040 shouldn't be the apex of American sustainability; it should be the baseline.
Really, as any good 2040 planner will tell you, sometimes success is just a matter of seeing what's coming and making sure you're not standing in the way. If more people do that, all our M&Ms will be green.
Don’t miss the BNEF Future of Energy Summit, April 7-9 in NYC. Look who's coming.
More from Tom Randall:
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- Renewable Energy at $254 Billion? Let’s Make It a Clean Trillion
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