Climate Change Management

Importance and Mission

Climate change is a key challenge that may significantly impact the environment, society, and PTTEP’s business, particularly through the increasing frequency and severity of natural disasters, more stringent climate-related policies and regulations, and the transition towards a low-carbon economy.

PTTEP recognizes both risks and opportunities arising from climate change and has continuously strengthened its resilience through a systemic GHG management approach. The Company focuses on investment in natural gas projects, which emit lower GHG emissions than other fossil fuels, while supporting national efforts to reduce reliance on imported energy and enhance domestic energy security. In parallel, PTTEP applies advanced technologies to reduce GHG emissions from its operations. To align with Thailand’s Nationally Determined Contribution (NDC) and the national target to achieve Net Zero GHG Emissions by 2050, as announced at the 30^th United Nations Climate Change Conference of the Parties (COP30), PTTEP has established a climate change management framework. This framework is implemented through both internal initiatives and external collaborations to effectively reduce GHG emissions intensity.

Goals

Reduce greenhouse gas emissions intensity by 30% by 2030 and 50% by 2040 from 2020 base year for E&P business covering scope 1 and scope 2 under PTTEP’s operational control.

Achieve Net Zero Greenhouse Gas Emissions by 2050 for E&P business covering scope 1 and scope 2 under PTTEP’s operational control.

Reduce methane emission intensity to less than 0.2% by 2030.

Management Approach

Governance Structure

PTTEP has assigned the Corporate Governance and Sustainability Committee to oversee sustainability management, including climate change. This includes setting targets, policies, and greenhouse gas reduction strategies; managing climate-related risks; developing action plans; and reviewing and monitoring the implementation to ensure the company meets the defined goals. The Management Committee, chaired by the Chief Executive Officer, ensures alignment with strategic plans and greenhouse gas reduction targets, and allocates company resources efficiently at the operational level. The Committee also oversees greenhouse gas management, carbon credit management, and compliance with relevant regulations. Additionally, the company has established a Carbon Solutions Committee, chaired by the Executive Vice President of Finance and Accounting Group, to specifically manage these matters.

Decarbonization Strategy

Greenhouse gas emissions reduction (Decarbonization) is one of the core strategies of PTTEP. The Company has the following plans:

Manage E&P projects on the Company’s portfolio toward achieving Net Zero GHG Emissions by 2050, covering Scope 1 and Scope 2 under PTTEP’s operational control.
Implement GHG emissions reduction initiatives while leveraging relevant technologies.
Expand the use of renewable energy and explore future low-carbon energy applications in operations
Accelerate the development of Carbon Capture and Storage (CCS) projects
Develop carbon offsetting initiatives through Nature-based Solutions

In addition, PTTEP is adapting to the energy transition through a growth strategy in new businesses (Diversify), pursuing investment opportunities in renewable energy, carbon capture, utilization and storage (CCUS), hydrogen, and other future energy solutions.

Climate Risk Management

PTTEP has fully integrated the Task Force on Climate-related Financial Disclosures (TCFD) framework into its climate change management, as disclosed in the TCFD Report. The Company recognizes climate change as an emerging risk and systematically incorporates climate-related risks into its enterprise risk management process. The Company is currently in the process of adopting the International Financial Reporting Standard – Sustainability 2 (IFRS S2) framework to manage climate change–related risks and intends to integrate it into the Company’s enterprise risk management processes in the future. PTTEP reassesses risks with context-specific for timely improvement across all-new operation assets, upstream & downstream activities, and business partners and for compliance with modified requirements both at national and international levels. Climate-related risks are categorized into two main types:

Physical risks include direct impacts such as heavy precipitates, tropical storms, water-related risks, drought and heat waves.
Transition risks arise from changes in policies, regulations and laws, technologies, increasing demand for environmentally friendly energy, as well as stakeholder expectations and reputation.

The assessment covers short-term (2025 - 2030), medium-term (2031 - 2040) and long-term risks (2041 - 2050) for reflecting comprehensive possible risk.

For physical risk assessment, 3 scenarios are applied as guided by the Intergovernmental Panel on Climate Change (IPCC):

1 Sustainable development and low GHG emission scenario or SSP1 (Sustainable Pathway)
2 Existing planned development and intermediate GHG emission scenario or SSP2 (Middle of the Road)
3 Fossil fuel focused development and very high GHG emission scenario or SSP5 (Fossil-fueled Development)

For transition risks, 3 scenarios are applied:

1 STEPS (Stated Policies Scenario)
2 APS (Announced Pledges Scenario)
3 NZE (Net Zero Emissions by 2050 Scenario), which aligns with International Energy Agency (IEA)'s impact assessment guidance.

The assessment supports effective climate risk management by ensuring alignment with the Company’s risk appetite and long-term sustainability objectives. PTTEP continuously monitors climate-related developments and integrates mitigation, adaptation, and resilience measures through its Climate Management Plan to enhance organizational resilience and capture emerging opportunities.

Implementation of GHG Emissions Reduction (Decarbonization)

To support the achievement of climate targets, PTTEP continuously implements GHG emission reduction initiatives in line with its decarbonization strategy and pathway toward Net Zero. These efforts are carried out through key initiatives, including:

Develops a Carbon Capture and Storage (CCS) project to reduce greenhouse gas emissions from its production processes at the Arthit field in the Gulf of Thailand
Implemented GHG emissions reduction initiatives under the Company’s long-term plan across three key categories:
- 1 Gas flaring management through combustion efficiency improvement and the recovery and utilization of waste gas or excess gas back into the production process to reduce GHG emissions. For example, the installation of a Low BTU Flare system at the G2/61 Project enables reduced assist gas consumption and supports efficient operation of the permeate flare used to dispose of excess gas during low calorific value (Low BTU) conditions.
- 2 Energy efficiency improvement in operational areas through process optimization, equipment upgrades, and control system enhancements, including energy and fuel consumption reduction to lower energy intensity per unit of production without affecting product quality or output volume. Examples include improving generator efficiency to reduce fuel consumption and switching to cleaner fuels for vehicles used in equipment transportation and employee transportation to operational sites.
- 3 Application of renewable energy in operation through initiatives such as the S1 Project, which has procured electricity generated from solar energy for use in petroleum production processes since 2023, helping reduce natural gas consumption and greenhouse gas emissions.

In addition, PTTEP has implemented methane management across all operated petroleum exploration and production projects to control methane emissions from various sources, including gas flaring, stationary combustion, equipment leaks, and venting from production processes. The Company has also continuously enhanced the implementation of its Leak Detection and Repair (LDAR) program to monitor, detect, and manage methane leakage from equipment.

Furthermore, PTTEP also places importance on energy management across its operational areas. Apart from improving energy efficiency through the greenhouse gas reduction initiatives mentioned above, PTTEP has adopted the Green Office concept promoted by the Department of Climate Change and Environmental (DCCE) across its operations in Thailand, including petroleum development support bases and other supporting functions. The initiative promotes reductions in energy and resource consumption, waste generation, and greenhouse gas emissions, as well as environmentally friendly procurement practices. These efforts help raise environmental awareness and encourage behavioural change among employees toward efficient energy and resource management, while reinforcing environmental responsibility throughout the organization.

For new projects, PTTEP applies an internal carbon pricing mechanism to support investment decision-making and manage risks associated with future climate-related regulations.

For the offsetting, PTTEP prioritizes high-quality carbon credits recognized at both nationally and international levels, alongside Nature-based Solutions projects, including restoration and conservation. These efforts aim to increase carbon dioxide absorption areas and enhance the richness of Thailand’s natural resources while promoting local community participation in forest conservation and exploring opportunities to develop carbon credit projects in collaboration with the Department of Marine and Coastal Resources, the Royal Forest Department, the Department of National Parks, Wildlife and Plant Conservation, and the Mae Fah Luang Foundation under Royal Patronage.

Climate Change Data Management and Benchmarking

The GHG data covering measurement, calculation, data collection, and disclosure in accordance with internationally recognized guidelines and standards, including the GHG Protocol – Corporate Accounting and Reporting Standard, GRI Standards, American Petroleum Institute (API) – Compendium of Greenhouse Gas Emissions Methodologies, Task Force on Climate-related Financial Disclosures (TCFD), and the Oil and Gas Methane Partnership 2.0 (OGMP 2.0) Framework. Reliable greenhouse gas emission factors from internationally and nationally recognized organizations, such as the Intergovernmental Panel on Climate Change (IPCC) and the Thailand Greenhouse Gas Management Organization (TGO), are also applied in the calculation and reporting of GHG performance, based on appropriate professional judgment that takes into account measurement uncertainty, data limitations, and the scope of GHG reporting and disclosure. Currently, the organizational boundary for Scope 1 and Scope 2 GHG reporting covers only operated projects and petroleum development support bases where PTTEP serves as the operator, representing more than 60% of the Company’s total revenue based on the Financial Report.

To ensure transparency and credibility, PTTEP conducts verification and assessments of environmental performance, including greenhouse gas emissions and energy efficiency, through continuous SSHE management system assessments by both internal and external auditors. The assessment results are used to further improve the Company’s greenhouse gas reduction and energy efficiency performance. In addition, environmental performance data, including GHG data, is externally assured annually in accordance with GRI Standards. The Company also discloses greenhouse gas emissions and climate-related information in line with international and national frameworks and standards, such as the Task Force on Climate-related Financial Disclosures (TCFD) and the Carbon Footprint for Organization (CFO) guideline developed by TGO. Furthermore, PTTEP participates in the CDP climate change assessment to benchmark its performance against international best practices and peer companies within the industry, and to continuously improve its climate change management practices.

Furthermore, the Company provides training programs to enhance employees’ awareness and understanding of GHG management, while also promoting energy efficiency practices.

Collaboration and Driving Climate Change Policies

To support our Net Zero target by 2050, PTTEP collaborates with various international and domestic partners such as global oil and gas business associations advocating best practices, domestic and international sustainability networks, and government agencies, for example:

IPIECA and the Thailand Business Council for Sustainable Development (TBCSD): These organizations are vital in establishing frameworks for best practices for environmental and sustainability. As a member, PTTEP integrates policies that emphasize environmental protection and sustainable development. Further details on Sustainability Collaboration and Networking are available in the Sustainability Framework and Long-term Target.
United Nations Global Compact (UNGC): This organization addresses critical global challenges such as anti-corruption, climate change, human rights, and labor rights. PTTEP, as an UNGC member, has aligned our policies with the UNGC’s Guide for Responsible Corporate Engagement in Climate Policy, ensuring transparency, accountability, and consistency in sustainability efforts.
Memorandum of Understanding for Participation in the Oil & Gas Methane Partnership 2.0 (OGMP 2.0): OGMP is an initiative under the United Nations Environment Programme (UNEP). PTTEP manages methane emissions in alignment with the framework outlined in the OGMP 2.0 agreement.
Participation in the Oil & Gas Decarbonization Charter (OGDC): PTTEP signed this charter during the 28^th UN Climate Change Conference of the Parties (COP28). Under the OGDC, the Company sets goal for near-zero upstream methane emissions and zero routine flaring by 2030 with a goal to achieve Net Zero Greenhouse Gas Emissions by 2050.
Greenhouse Gas Reduction Steering Subcommittee: As a member, PTTEP contributes to apply the Carbon Capture, Utilization, and Storage (CCUS) technologies to accelerate Thailand’s climate mitigation efforts, particularly in the energy and industrial sectors.
Memorandum of Understanding (MoU) on Climate Change and Biodiversity Conservation: PTTEP collaborates with the Department of Climate Change and Environment and the Office of Natural Resources and Environmental Policy and Planning to develop measures and mechanisms for private-sector-led GHG reduction and climate action initiatives.
Thailand’s CCUS Technology Development Consortium: Led by the Bio-Circular-Green economy Technology & Engineering Center (BCGeTEC), Faculty of Engineering, Chulalongkorn University, this consortium fosters collaboration in CCUS research and implementation. PTTEP, along with key industry partners such as PTT Public Company Limited, Thai Oil Public Company Limited, and SCG Cement Company Limited, participates as a member, with government agencies serving as advisors.
Thailand Greenhouse Gas Management Organization (TGO): PTTEP actively engages with TGO initiatives, including co-developing the Premium T-VER (Thailand Voluntary Emission Reduction Program) methodology for Carbon Capture and Storage in collaboration with the PTT Group, participating in the Carbon Neutral Event (CNE) program, and registering reforestation projects under the T-VER program to enhance carbon dioxide absorption and storage.

PTTEP continues to contribute to national climate goals by actively participating in policy implementation, monitoring progress, and engaging in collaborative initiatives through joint development activities, meetings, and performance reviews to ensure alignment with Thailand’s climate action strategies.