Shell (SHEL.US) and Ferrari NV (RACE.US) have signed a long-term renewable energy agreement to help factories reduce emissions.

Shell (SHEL.US) announced on Tuesday that they have signed a long-term agreement to supply renewable energy to Ferrari NV (RACE.US) by the end of 2034 to help the luxury car manufacturer reduce carbon emissions. These "power purchase agreements" (long-term contracts where businesses purchase electricity directly from a power generation company) have become increasingly popular in Italy in recent years, providing manufacturers a way to lock in energy costs and ensure a green power supply. According to the agreement, Shell will supply 650 gigawatt hours of electricity from a power station developed by them to Ferrari NV over a period of 10 years, meeting nearly half of Ferrari NV's energy needs at their Maranello factory near Modena, helping in decarbonizing their production process. Shell Energy Italy will also provide additional electricity and renewable energy certificates to cover all of Ferrari NV's electricity needs in Italy. It is expected that this agreement will significantly reduce Ferrari NV's scope 1 and scope 2 emissions - direct emissions from their operations and emissions from purchased energy; the automotive company's goal is to reduce absolute emissions by 90% by 2030. Luca Ferrigno, CEO of Shell Energy Italy, stated, "We are pleased to further consolidate our cooperation with Ferrari NV through signing this important agreement." Shell is currently a partner of Ferrari NV's racing team, Scuderia Ferrari.