Environmental - Climate Change | PETRONAS Chemicals Group Berhad (PCG)

Why It Matters

Climate change is the biggest crisis facing humanity and its impact has continued to worsen over the years, as indicated by the Intergovernmental Panel on Climate Change (IPCC).

This is why tackling climate change has become an important part of our business and growth strategy. Transitioning to a low-carbon economy and pursuing the implementation of decarbonisation technologies within our assets — guided by PETRONAS’ Net Zero Carbon Emissions by 2050 (NZCE 2050) pathway — will enable us to continue delivering products and solutions that have minimal to no impact on the environment, and ensure our ability to create long-term value for our customers and stakeholders.

Our Approach

We assess and adopt various measures to mitigate our operations’ impact, including factoring in carbon pricing in our growth projects. Our approach to climate change management is centred on our NZCE Roadmap, through which we aim to achieve net zero emissions by 2050 for Scope 1 and Scope 2 GHG emissions across all our operating assets.

Our Climate Strategy

Our NZCE 2050 Roadmap provides us with clear goals to reduce our emissions by 20% by 2030, more than half by 2040, and net zero by 2050.

PCG’s Reduction Pathway Towards Net Zero Carbon Emissions by 2050

Scope 3 GHG Emissions

We recognise the importance of our Scope 3 emissions which represent the value chain emissions from our business. In 2021, we assessed our Scope 3 emissions for the first time and identified the two most material sources for us to establish a baseline.

We followed up with a more detailed assessment in 2022 to determine a baseline for all 15 categories* of emissions, which enables us to more accurately identify opportunities to reduce our carbon emissions across our supply chain.

In 2023, we completed Scope 3 emissions baselining for all relevant categories under the scope, and are working towards progressive disclosures and identifying emission reduction opportunities across the value chain.

* For more information on the 15 categories of Scope 3 GHG emissions, please refer to https://www.epa.gov/climateleadership/scope-3-inventory-guidance

From 2023 onwards, PCG will be aligning with PETRONAS’ goal of fully adhering to the Greenhouse Gas Protocol’s Corporate Accounting and Reporting Standard, the IPIECA Climate Change Reporting Framework, and the ISO 14064-1: 2018 for greenhouse gases.

To provide a total view of emissions across the Group, we will report according to the operational control approach** and equity share approach,*** and include Scopes 1, 2 and 3.

** Operational Control Approach means that a company has authority to implement its operational policies.

*** Equity Share Approach reflects economic interest, which is the extent of rights a company has to the risks and rewards flowing from an operation.

Stepping Up Our Climate Strategy

We will continue implementing strategies to remain aligned with PETRONAS’ NZCE 2050 pathway.

Our Board of Directors hold ultimate responsibility in monitoring the implementation of our climate-related initiatives and progress towards our set goals and targets.

Reducing Our GHG Emissions at Operational Assets

We enhanced our operating assets via initiatives such as fuel and steam optimisation, power consumption conservation, Advanced Process Control (APC) and Real-Time Optimiser (RTO), all of which are implemented at our manufacturing plants.

Scope 1 and Scope 2, GHG Emissions	2021	2022	2023
Scope 1 GHG emission (mil tonne CO₂e)	5.98	5.95	5.96
Malaysia (Commodity)	5.66	5.70	5.74
International (Specialty)	0.32	0.25	0.22

Scope 2 GHG emission, Location based (mil tonne CO₂e)	1.48	1.48	1.47
Malaysia (Commodity)	1.33	1.35	1.33
International (Specialty)	0.15	0.13	0.14

Scope 2 GHG emission, Market based (mil tonne CO₂e)	1.48	1.48	1.38
Malaysia (Commodity)	1.33	1.35	1.24
International (Specialty)	0.15	0.13	0.14

Total GHG Emissions, Location based (mil tonne CO₂e)	7.47	7.43	7.43
Malaysia (Commodity)	7.00	7.05	7.07
International (Specialty)	0.47	0.38	0.36

Total GHG Emissions, Market based (mil tonne CO₂e)	7.47	7.43	7.33
Malaysia (Commodity)	7.00	7.05	6.97
International (Specialty)	0.47	0.38	0.36

GHG Intensity (tonne CO₂e/tonne)	0.65	0.69	0.71
Malaysia (Commodity)	0.67	0.71	0.73
International (Specialty)	0.43	0.43	0.45

Leveraging Technology

We are embarking on digitalisation to track and optimise our energy consumption in real time, which will translate into GHG emissions reduction.
We have initiated low carbon technology assessment and evaluated the use of renewable energy through solar panel installation at our assets’ rooftops.
We are also assessing the feasibility of carbon capture and storage integration with our current and future assets, for long-term asset decarbonisation.

Embedding Our Climate Strategy Into Our Business Management

We integrate climate risks identification, prioritisation management and disclosure processes, as well as various GHG mitigation initiatives into our Corporate Risk Profile (CRP).
Our top management’s performance is assessed using key performance indicators that include managing climate-related matters.