Lego Willing to Pay 70% Premium for Certified Renewable Resin

Almost a year ago, Lego announced that it was abandoning a two-year project to make its iconic bricks from recycled PET, citing resulting higher carbon emissions produced by the energy-intensive process. That doesn’t mean the Danish toymaker has given up on its sustainability goals, however. In its H1 2024 earnings report this week, the company touted substantial progress made in the use of resin from renewable and recycled resources and told Reuters that it plans to make all of its products from renewable and recycled materials by 2032.

More renewable and recycled resin purchased in H1 2024 than in all of 2023

Thirty percent of all resin purchased by Lego in the first half of 2024 was certified mass balance, the company said in its report. That translates to an estimated average of 22% material from renewable and recycled sources, a significant increase over 2023: 18% of material used in the full year was mass balance certified. Lego added that it aims to purchase more than half of its raw materials from sustainable sources applying the mass balance principle by 2026.

That will cost Lego a pretty penny. According to reporting by Reuters, Lego is prepared to pay up to 70% more for certified renewable resin to manufacture its bricks in an attempt to encourage manufacturers to boost production.

Related:Lego Breaks Ground on Billion-Dollar Factory in Virginia

Consumers won't pay a premium

"This means a significant increase in the cost of producing a Lego brick," CEO Niels Christiansen told Reuters, but, if he is to be believed, the cost won’t trickle down to consumers. "With a family-owner committed to sustainability, it's a privilege that we can pay extra for the raw materials without having to charge customers extra," Christiansen said.

Profits soar

On the financial front, Lego reported blockbuster results for the first half of the year, significantly outperforming the overall toy industry. The group’s revenue increased 13% compared with H1 2023, from DKK 27.4 billion ($4 billion) to DKK 31.0 billion ($4.6 billion), while consumer sales grew 14% during that same period. Operating profit grew 26% year-on-year to a record DKK 8.1 billion ($1.2 billion).