Merck will purchase electricity generated by renewable energy sources from a unit of state-owned conglomerate China Resources for the next 10 years as the German drugmaker cuts its carbon footprint in China to meet its carbon neutrality goals.

Merck will buy 300 gigawatt-hours of green electricity from China Resources Power Holdings in its first long-term renewable power purchase agreement in the country, the Darmstadt-based firm said on WeChat today. The deal will lift the proportion of green power used by the company’s production and operations to 60 percent in China.

The agreement will help Merck cut its Scope Two emissions, or those directly produced by its manufacturing activities and those from the production of the energy it buys, by 185,000 tons and achieve its goal of carbon neutrality by 2040, the company said.

CR Power will provide electricity generated by renewable energy sources to Merck’s five plants and one warehouse in eastern Jiangsu province starting this month, Merck said.

Tracking the entire life cycle of renewable energy is now a reality thanks to blockchain technology, and this will ensure the authenticity of green power consumption, it added.

Merck has been actively participating in China’s pilot scheme for green power trading that was launched in 2021. Its plants in Nantong, Jiangsu province and Shanghai have already been buying green power on short-term contracts, it added.

China is Merck’s second largest market globally. Merck has 21 companies in the country doing business in the fields of life sciences, healthcare and medicine, and electronics technology which employ nearly 5,000 people, according to its website.

Merck’s global sales slumped 4.8 percent in the first three quarters last year from the year before to EUR15.8 billion (USD17.2 billion).