According to The Edge Markets article published on November 14, 2022, the window of time left to address climate change is narrowing. There is a 50:50 chance that average global temperatures will exceed 1.5°C above pre-industrial levels in the next five years, according to the World Meteorological Organization. This will lead to increased frequency and impact of climate hazards.
The oil and gas (O&G) industry, a major emitter of greenhouse gases (GHG), is under pressure to transform. This has to be done while ensuring that people have affordable access to resources, whether it is fuel or electricity. Balancing the security of supply, affordability for all people and environmental sustainability is crucial.
“Tackling climate change requires a transformation of how we produce and consume energy. Stakeholders across society, including the entire O&G industry, must be engaged and involved,” says Charlotte Wolff-Bye, PETRONAS Vice President and Chief Sustainability Officer.
PETRONAS is committed to making this a reality by setting clear climate targets and introducing actionable plans.
PETRONAS’ immediate focus will be to reduce its Scope 1 and Scope 2 emissions, which are the emissions from our operations and the energy we buy, and to capture business opportunities in the energy transition.
“Decarbonising operational emissions means we will commit to zero routine flaring and venting, continue to enhance energy efficiency, pursue electrification and deploy carbon capture and storage (CCS),” says Charlotte.
“Concurrently, we will be expanding into cleaner energy solutions that include renewables, hydrogen, green mobility, biofuels and more.”
PETRONAS set up Gentari Sdn Bhd, a one-stop integrated clean energy solutions provider, earlier this year to address some of these areas.
Of course, investments are needed to achieve these goals. PETRONAS aims to allocate 20% group-wide annual capital expenditure to scale up decarbonisation and renewables from 2022 to 2026.
Reducing emissions and investing in new technologies
Aside from its 2050 target, PETRONAS has set interim climate targets. For 2024, PETRONAS has committed to a 49.5 MtCO2e cap on greenhouse gas emissions for its Malaysia operations. By 2025, it targets to achieve a 50% methane emissions reduction for its group-wide natural gas value chain operations.
PETRONAS’ 2030 goal is to achieve a 25% reduction of its group-wide emissions from 2019 levels. To support this target, PETRONAS has a specific methane emissions reduction target of 70% for assets where PETRONAS has operational control and a 50% methane emissions reduction target for Malaysia’s natural gas value chain.
With emissions reduction in mind, PETRONAS is leveraging on its expertise in CCS as one of the solutions to decarbonise.
With the strong sub-surface capability in PETRONAS, it is well-positioned to build CCS solutions and will be adopting them in its high carbon dioxide fields, starting from a CCS project in the Kasawari Gas Field off the coast of Sarawak, with the planned first injection of carbon dioxide in 2026.
PETRONAS hopes to position Malaysia as a CCS solutions hub in the region.
Walking the talk
Merely setting targets is not enough. It is also important for companies to substantiate climate targets with transparent reporting. From 2023 onwards, PETRONAS aims to adopt international standards and frameworks, such as the Greenhouse Gas Protocol Corporate Accounting and Reporting Standard (2004) and Ipieca Climate Change Reporting Framework (2011). It has also expressed public support for the recommendations for the Task Force on Climate-related Financial Disclosures (TCFD) to ensure greater transparency in its approach towards climate risk, with the aim to commence disclosures from 2023 onwards.
Additionally, PETRONAS will continue to collaborate with a broad set of stakeholders to drive the transition towards a low-carbon future.
“PETRONAS is committed to supporting the nation’s energy transition and aims to forge partnerships to build new growth areas, especially in low-carbon businesses, and create new synergies by developing innovative decarbonisation solutions towards delivering a sustainable future.”
