Focus On Net Zero Carbon Emissions

In line with Malaysia’s decision to ratify the Paris Agreement in 2016, which deals with GHG emissions and climate mitigation, PETRONAS’ net zero carbon emissions pathway supports the country’s nationally determined contributions and the Agreement’s goal to limit the rise in average global temperature to well below 2 degrees Celsius and as close as possible to 1.5 degrees Celsius, according to Forbes.

PETRONAS has taken many progressive steps to decarbonize its operations by undertaking and consolidating climate action activities across the group. Since the introduction of its carbon commitments ten years ago, the group has reduced around 17.5 million t of carbon dioxide equivalent from its operations as of the end of 2021.

Charlotte Wolf-Bye, PETRONAS vice president and chief sustainability officer, says, "equivalent to removing around 3.8 million gasoline-powered vehicles from the roads, using the United States Environmental Protection Agency Greenhouse Gas Equivalencies Calculator."

Wolf-Bye, who was appointed in mid-2021, has been busy with her team at the newly created Corporate Sustainability unit based at the PETRONAS Twin Towers in Kuala Lumpur. The task of guiding divisions and subsidiaries under the PETRONAS banner to chart the group’s net zero carbon emissions by 2050 pathways falls on their shoulders.

Their immediate focus will be to reduce operational greenhouse gas emissions. To drive Scope 1 [direct] and Scope 2 [indirect] emissions reduction, PETRONAS aims to allocate 20% of the Group’s annual capital expenditure to finance decarbonization initiatives and renewable projects from 2022 to 2026. This will help the group achieve 43.30 MtCO2e for groupwide operations, along with zero routine flaring and venting and increased energy efficiency of existing facilities.

According to the 6th Assessment Report of the Intergovernmental Panel on Climate Change [IPCC], methane is 82.5 times more potent than carbon dioxide. Hence, methane emissions are important and should be addressed with urgency. "What gets measured, gets managed," says Wolf-Bye. "So, we have set targets for reducing methane emissions from scope 1 and scope 2 emissions, a 50% target to reduce methane from our global operations by 2050 compared to the 2019 levels, which are to escalate to 70% by 2030."

PETRONAS is a signatory member to the Oil and Gas Methane Partnership 2.0 and the Methane Guiding Principles initiative. These memberships will enhance PETRONAS’ approach to methane emissions measurement, reporting, and reduction. The group will advocate sound policies and regulations while benefiting from the knowledge gained on effective methane management, according to the report.

Preventing GHGs from entering the atmosphere is important for mitigating climate change. "Limiting global warming means preventing GHG emissions from occurring at the first instance, that is, at the source," Wolf-Bye explains. The company is pursuing CCS as a means of reducing emissions from its operations. The activity is expected to commence in 2026.

The Malaysian stock exchange will launch the natural environment to clean up the air, which will serve as the foundation for voluntary carbon markets.

The company is leaning on the natural environment to clean up the air—the basis of voluntary carbon markets, which the Malaysian stock exchange will launch by year's end. "It is imperative to support nature-based climate solutions in combating emissions," says Wolf-Bye, stressing the need to conserve the forests and wetlands that sequester carbon dioxide as part of natural processes mentioned in the report.

PETRONAS is defining its strategy and positioning around nature-based climate solutions. Its interest would be in supporting carbon offset programmes within Malaysia, where its tropical rainforests have been identified as among the oldest in the world and are very rich in biological diversity.