Climate Change Management

Importance and Mission

Climate change may impact the environment and PTTEP's business, in terms of more frequent natural disasters, stringent national and international policies and regulations, and a drive towards low carbon future.

PTTEP has continuously initiated actions to reduce and mitigate risks, including an increase in the investment proportion of natural gas as a cleaner transition energy and studies to find ways to reduce greenhouse gas (GHG) emissions. In addition, to align with the Nationally Determined Contribution (NDC) target and support Thailand’s goals to achieve Carbon Neutrality by 2050 and Net Zero GHG Emissions by 2065 as committed at the 26^th United Nations Climate Change Conference of the Parties (COP26), the Company has established climate change management approach through various initiatives within the organization and in collaboration with external agencies to reduce greenhouse emissions.

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 near-zero upstream methane emissions and zero routine flaring by 2030.

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

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 to reach Net Zero Greenhouse Gas Emissions target by 2050. This target covers both the GHG emissions Scope 1 and Scope 2 under PTTEP’s operational control.
Execute greenhouse gas (GHG) emissions reduction plan by leveraging relevant technology application.
Maximize the use of renewables and explore clean future energy application in operational areas
Accelerate the development of Carbon Capture and Storage (CCS) projects
Study and pursue carbon offsetting preparation through initiatives such as forestation

In addition, PTTEP is adapting to the energy transition through a growth strategy in new businesses (Diversify), seeking investment opportunities in renewable energy, carbon capture, utilization and storage (CCUS), hydrogen fuel development, as well as future energy sources.

Climate Risk Management

PTTEP has fully integrated the Task Force on Climate-related Financial Disclosures (TCFD) framework into its climate change management as shown in the TCFD Report. Furthermore, PTTEP incorporates risks that may result from climate change into serious consideration, treating it as the Company’s emerging risk. PTTEP reassesses risks with context-specific for timely improvement across all-new operation assets, upstream & downstream activities, and clients and for compliance with modified requirements both at national and international levels. Assessed climate change risks consist of physical risks and transition risks. Physical risks are related to direct impacts such as heat waves, heavy precipitates, tropical storms, drought and water-related risks. Transition risks are related to changes of risks of policy, legal, technology, market, and reputations. The assessment covers medium-term risks (2026 - 2035) and long-term risks (2036 - 2050).

In the assessment of physical risks, 3 scenarios are applied as guided by the Intergovernmental Panel on Climate Change (IPCC): 1) aggressive mitigation scenario or representative concentration Pathways (RCP 2.6); 2) strong mitigation scenario (RCP 4.5); and 3) Business-as-usual (BaU) scenario (RCP 8.5). In the assessment of transition risks, 3 scenarios are applied: 1) Stated Policies Scenario (SPS - previously known as “New Policies Scenario (NPS)”, 2) the underlying assumptions and modelling methodology remain unchanged), Sustainable Development Scenario (SDS) and 3) IPCC's 1.5°C scenario. The first two scenarios are in line with International Energy Agency (IEA)'s impact assessment guidance and the last with IPCC's guidance.

This risk assessment process helps ensure that PTTEP’s climate risk management is appropriate. The Company closely monitors and tracks climate change that may affect corporate risk level in order to manage risks by the balancing the risk appetite level and corporate sustainable development. In addition, PTTEP has developed a Climate Management Plan in response to the Company’s physical and transition risks. The plan is an integration of mitigation, adaptation, and resilience actions to allow its understanding on vulnerabilities to climate, place us in a strong position to increase resilience to potential threats, and exploit new business opportunities.

Implementation of GHG Emissions Reduction (Decarbonization)

To achieve the target, PTTEP implements the GHG emission reduction projects (Scope1 and 2), incorporating with the energy efficiency management, by means of flare/excess gas recovery and utilization, energy efficiency improvement, production efficiency enhancements, methane leak mitigation through Leak Detection and Repair (LDAR) program, and renewable energy such as solar energy and wind energy in operation. For new projects, PTTEP has established an internal carbon pricing mechanism to support investment decision-making, alongside efforts to reduce greenhouse gas emissions in alignment with the company’s direction.

The Company is also developing technologies to reduce greenhouse gas emissions from its production processes by implementing a Carbon Capture and Storage (CCS) project at the Arthit field in the Gulf of Thailand.

PTTEP undertakes greenhouse gas offset initiatives through the management of high-quality carbon credits that are recognized both nationally and internationally. In addition, the company has set targets for restoration and conservation projects under Nature-based Solutions. 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 Disclosure and Benchmarking

PTTEP regularly conducts the effectively internal and external reviews and audits of its Safety, Security, Health and Environment Management System (SSHE MS), along with environmental data verification, including GHG emissions and energy performance data. The objective is to identify opportunities for improving GHG emissions reduction and energy efficiency. In addition, GHG performances data is externally verified to ensure that PTTEP’s practices comply with the Global Reporting Initiative (GRI Standards) and the ISO 14064-1. PTTEP also provides trainings and workshops to ensure the employees are aware and understanding on the GHG emissions management and energy efficiency improvement in their operations.

PTTEP's operational transparency reflects in the inclusion of climate change strategy and performance, including energy management performance in the annual reports and sustainability reports. PTTEP has also disclosed the information in the TCFD report and has reported environmental and climate change-related performance to CDP since 2010. PTTEP has been ranked at "Leadership Level" for the 7^th consecutive years since 2014, and “Management Level” since 2021, reflecting its environmental stewardship compared to its peers.

Collaboration and Driving Climate Change Policies

PTTEP has set a target to achieve Net Zero GHG Emissions by 2050 (Net Zero), aiming to support Thailand’s targets of achieving carbon neutrality by 2050 and net zero greenhouse gas emissions by 2065, in alignment with the United Nations Framework Convention on Climate Change and the Paris Agreement. Apart from the Net Zero target, the Company collaborates with various partners such as global oil and gas business associations advocating best practices, domestic and international sustainability networks, and government agencies to drive national policies, 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.