Shell PLC has entered into a long-term agreement to supply renewable energy to Ferrari NV until the end of 2034, the companies announced on Tuesday. The deal is a significant step in Ferrari’s strategy to reduce its carbon footprint and transition toward more sustainable manufacturing practices.

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Details of the Green Power Agreement

Under the power purchase agreement (PPA), Shell will provide 650 gigawatt-hours (GWh) of renewable electricity over 10 years from a plant developed by the oil and gas company. This supply will cover nearly half of the energy needs of Ferrari’s Maranello plant near Modena, Italy.

In addition, Shell Energy Italia will supply supplementary electricity and renewable energy certificates (RECs) to ensure that Ferrari’s total electricity consumption across Italy is sourced sustainably.

PPAs such as this have become increasingly common in Italy and across Europe, allowing manufacturers to lock in energy costs while securing a long-term supply of clean electricity.

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Impact on Ferrari’s Carbon Emissions

The agreement is expected to significantly reduce Ferrari’s Scope 1 and Scope 2 emissions—those generated directly by its operations and indirectly through purchased energy. Ferrari aims for a 90% reduction in absolute emissions by 2030, and this partnership with Shell is a major milestone toward achieving that goal.

Gianluca Formenti, CEO of Shell Energy Italia, commented:

“We are proud to further strengthen our partnership with Ferrari through the signing of this important agreement.”

Shell already maintains a longstanding partnership with Scuderia Ferrari, the luxury carmaker’s Formula 1 racing team, highlighting the companies’ ongoing collaboration in innovation and sustainability.

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Strategic Importance of Renewable Energy PPAs

Long-term PPAs provide companies like Ferrari with several advantages:

• Decarbonization: Directly reduces operational emissions by sourcing green electricity.
• Cost Management: Locks in energy prices for extended periods, mitigating volatility in electricity markets.
• Regulatory Compliance: Helps meet evolving European Union sustainability regulations and corporate ESG commitments.
• Brand Leadership: Positions Ferrari as a luxury automaker committed to environmental responsibility.

By securing renewable energy for its production facilities, Ferrari joins a growing cohort of manufacturers leveraging PPAs to transition toward a low-carbon economy.

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Outlook for Sustainable Manufacturing

The Shell-Ferrari deal reflects a broader trend in the automotive and industrial sectors, where companies increasingly rely on renewable energy contracts to achieve sustainability targets. Italy, in particular, has seen rising adoption of PPAs as manufacturers seek to balance cost, energy security, and decarbonization goals.

Over the next decade, partnerships like this are expected to play a crucial role in helping luxury and industrial brands meet ambitious climate commitments while maintaining operational efficiency.