Energy costs push packaging manufacturers towards renewables

Packaging manufacturers are increasingly investing in renewable energy and energy-efficiency projects as rising energy costs add pressure to already challenging industrial operating conditions. For companies with energy-intensive production facilities, improving the way electricity is sourced and consumed is becoming both a sustainability priority and a strategy for protecting profitability.

Recent initiatives from companies including Smurfit WestRock and Specialized Packaging Group demonstrate how packaging manufacturers are combining renewable energy procurement, on-site generation and efficiency improvements to reduce exposure to volatile energy markets. The approach reflects a broader shift towards treating energy management as an important part of long-term manufacturing resilience.

Renewable energy can reduce exposure to price volatility

Smurfit WestRock has entered into a 10-year virtual power purchase agreement alongside PepsiCo, Givaudan and Statkraft connected to a wind project in Spain. Although the arrangement does not directly supply electricity to the participating companies' facilities, it supports renewable generation while providing renewable energy certificates that can contribute towards Scope 2 emissions targets.

For large packaging manufacturers, such long-term agreements can provide greater predictability while avoiding the need to develop every renewable energy project independently. Partnerships can also reduce investment risks by allowing companies to benefit from existing infrastructure and specialist expertise.

On-site generation offers another route

Smaller packaging operations are also exploring solutions installed directly at manufacturing facilities. Specialized Packaging Group, for example, has implemented a system combining solar generation and battery storage at its plant in Chihuahua, Mexico, with the objective of reducing electricity costs by more than 25 percent.

The project uses an energy-as-a-service model, allowing the company to pay for the energy it consumes without making the full upfront investment in the infrastructure. Such arrangements can make renewable energy more accessible to manufacturers that want to reduce costs without taking on the capital requirements associated with building and operating their own energy systems.

Energy efficiency comes before new generation

Renewable energy is only one part of the strategy. Manufacturers are increasingly examining how efficiently their existing facilities use energy before committing to larger generation projects. Optimising production equipment, heating and cooling systems, compressed air networks and other industrial processes can reduce consumption while delivering faster financial returns.

For packaging companies operating with tight margins, efficiency improvements can be particularly attractive because they can lower energy bills without requiring major changes to the production process. Reducing unnecessary consumption also decreases the amount of renewable energy that needs to be purchased or generated to meet sustainability targets.

Customer expectations are influencing investment

Energy decisions are also becoming increasingly relevant to relationships between packaging manufacturers and their customers. Large consumer goods companies are placing greater emphasis on the carbon footprint of their supply chains, creating additional incentives for packaging suppliers to reduce emissions associated with production.

Access to lower-carbon manufacturing can therefore become a commercial advantage, helping packaging companies respond to customer sustainability requirements while strengthening their position as long-term suppliers.

Energy management becomes a competitive factor

The combination of rising costs, supply uncertainty and pressure to reduce emissions is making energy management increasingly strategic for the packaging sector. Rather than treating renewable energy as a standalone sustainability initiative, manufacturers are integrating energy procurement and efficiency into broader business planning.

For packaging companies, the most effective approach may involve combining several measures: reducing unnecessary consumption, improving equipment efficiency, diversifying energy sources and securing renewable electricity through long-term agreements. As energy markets remain uncertain, these investments could help manufacturers control costs while building more resilient and lower-carbon production operations.