As we announced this week, Cloudflare is helping to create a clean slate for the Internet. Our goal is simple: help build a better, greener Internet with no carbon emissions that is powered by renewable energy.
To help us get there, Cloudflare is making two announcements. The first is that we're committed to powering our network with 100% renewable energy. This builds on work we started back in 2018, and we think is clearly the right thing to do. We also believe it will ultimately lead to more efficient, more sustainable, and potentially cheaper products for our customers.
The second is that by 2025 Cloudflare aims to remove all greenhouse gases emitted as the result of powering our network since our launch in 2010. As we continue to improve the way we track and mitigate our carbon footprint, we want to help the Internet begin with a fresh start.
Finally, as part of our effort to track and mitigate our emissions, we're also releasing our first annual carbon emissions inventory report. The report will provide detail on exactly how we calculate our carbon emissions as well as our renewable energy purchases. Transparency is one of Cloudflare's core values. It's how we work to build trust with our customers in everything we do, and that includes our sustainability efforts.
Purchasing Renewable Energy
Understanding Cloudflare's commitment to power its network with 100% renewable energy requires some additional background on renewable energy markets, as well as international emissions accounting standards.
Companies that commit to powering their operations with 100% renewable energy are required to match their total energy used with electricity produced from renewable sources. The international standards that govern these types of commitments such as the Greenhouse Gas (GHG) Protocol and ISO 14064, are the same ones used by governments for quantifying their carbon emissions for global climate treaties like the Paris Climate Agreement. There are also additional industry best practices like RE100, which are voluntary guidelines established by companies working to support renewable energy development and eliminate carbon emissions.
Actually purchasing renewable energy consistent with those requirements can be done in several ways — through self-generation, like rooftop solar panels or wind turbines; through contracts with wind or solar farms via Power Purchase Agreements (PPA's) or unbundled Renewable Energy Credits (RECs), or in some cases purchased through local utility companies like CleanPowerSF in San Francisco, CA.
The goal of providing so many options to purchase renewable energy is to leverage as much investment as possible in new renewable sources. As our colleague Jess Bailey described after our first renewable energy purchase in 2018, because of the way electricity flows through electrical grids, it's impossible for the individual consumer to know whether they are using electricity from conventional or renewable sources. However, in order to allow customers of all sizes to invest in renewable energy generally, these standards and accounting systems allow individuals or organizations to track their investments and enjoy the benefits of supporting renewable energy, even if the actual power comes from the standard electrical grid.
According to IEA, in 2020 alone, global renewable energy capacity increased 45 percent, which was the largest annual increase since 1997. In addition, close to 50 percent of corporate renewable energy investment over the last five years has been by Internet Communications Technology (ICT) companies alone.
Cloudflare's Renewable Energy
Cloudflare's new commitment to power its network with renewable energy means that we will continue to match 100 percent of our global energy usage by purchasing energy from renewable sources. Although Cloudflare made its first renewable energy purchase in 2018, and matched its total global operations in both 2019 and 2020, we thought it was important to make a public, forward-looking commitment so that all of our stakeholders, including customers, investors, employees, and suppliers have confidence that we will continue to build our network on renewable energy moving forward.
To determine how much renewable energy to buy, we separate our total electrical usage into two types: network and facilities. For our network, we pull data from all of our servers and networking equipment located all over the world twice a year. For our facilities (or offices), per the GHG Protocol, we record our actual energy usage wherever we have access to utility bills. For offices located in larger buildings with multiple tenants, we use energy usage intensity (EUI) estimates calculated by the U.S. Energy Information Agency.
We also purchase renewable energy in two ways. The vast majority of our purchases are RECs, which we purchase through our partner 3Degrees to help make sure we are aligned with relevant standards like the GHG Protocol. In 2020, to match the usage of our network, Cloudflare purchased RECs, I-RECs, REGOs, and other energy attribute certificates from the United States, United Kingdom, Brazil, Chile, Colombia, India, Malaysia, Mexico, Hungary, Romania, Ukraine, Bulgaria, South Africa, and Turkey among others. Although Cloudflare has employed a regional purchasing strategy in the past, we also expect to be fully aligned with all RE100 criteria, including its market boundary criteria, by the end of 2021.
Removing our historic emissions
Cloudflare's goal is to remove or offset all of our historical emissions resulting from powering our network by 2025. To meet that target, Cloudflare must first determine exactly how much carbon was emitted as the result of operating our network from 2010 to 2019, and then invest in carbon offsets or removals to match those emissions.
Determining carbon emissions from purchased electricity is a relatively straightforward calculation. In fact, it's basically just a unit conversion:
Energy (KWH) x Emissions Factor (gC02e/KWH) = Carbon emissions (gC02e)The key to accurate results is the emissions factors. Emissions factors are essentially measurements of the amount of GHGs emitted from a specific power supplier (e.g. power plant X in San Francisco) per unit of energy created. For our purposes, GHGs are those defined in the 1992 Kyoto Protocol (carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, and sulphur hexafluoride). To help ease reporting, the six GHGs are often expressed as a single unit "carbon-dioxide equivalent" or "CO2e", based on each gas’ Global Warming Potential (GWP). Emission factors from individual power sources are often combined and averaged to create grid average emissions factors for cities, regions, or countries. Per the GHG Protocol, Cloudflare uses emissions factors from the U.S. EPA, U.K. DEFRA, and IEA.
For our annual inventory report, which we are also releasing today, Cloudflare calculates carbon emissions scores for every single data center in our network. Cloudflare multiplies the actual energy used by the equipment by the applicable grid average emissions factors in each of the more than 100 countries where we have equipment.
For our historical calculations, we have data on our actual carbon emissions dating back to 2018, which was our first renewable energy purchase. Prior to 2018, we are combing through all of our purchasing, shipping, energy usage, and colocation agreements to reconstruct how much energy we consumed and when. It's actually a pretty cool exercise to go back and watch our network grow. Although we do not have a final calculation to share yet, rest assured we will keep everyone posted, particularly as we get to the fun part of starting to work with organizations and companies working on carbon removal efforts.
Where we are going next
Although we're proud of the steps we're taking as a company with renewable energy and carbon emissions, we're just getting started.
Cloudflare is also exploring new products and ideas that can help leverage the power of one of the world's largest networks to drive better climate outcomes for our customers and for the Internet. To see a really cool example, check out our colleagues blog post from earlier today, on Green Compute on Cloudflare Workers, which is helping Cloudflare's intelligent edge route some additional workloads to renewable energy facilities, or our Carbon Impact Reports, which are helping our customers optimize their carbon footprint.