Climate Action

Importance

(GRI 3-3a., GRI 3-3b., GRI 3.3e.)

The 2023 AR6 Synthesis Report by Intergovernmental Panel on Climate Change (IPCC) reported that the global surface temperature is trended to increase in every year. Furthermore, the report from World Meteorological Organization (WMO) reported that, greenhouse gas trapped the heat from 2015-2022 which causes the highest temperature, hits the record-breaking. Glacier melting, rising of sea level and greenhouse gas emission are still increasing and the climate change impacts to economic, society, environment, and ecosystems. Thus, the climate change issue is important to every sector to mitigate the greenhouse gas emission. This is to limit the increase in the global average temperature to no more than 1.5 degrees Celsius, in accordance with the objective of the Conference of the Parties of the UNFCCC (COP 28) and comply with the Paris Agreement. Thailand, the member of COP28, commits to reduce the greenhouse gas emission and implement the National Determined Contributions (NDCs).

OR, be a part of global citizenship, realizes the impact and severity of climate change. We announce our commitment to conduct the sustainability business and response to climate change issue through the lens of OR’s SDG approach, G-Green dimension. This is to encourage businesses to become green enterprises, supporting the establishment of a sustainable low carbon society and achieve the Carbon Neutrality within 2030 and in parallel with committing to achieve Net Zero Emission within 2050.

2023 Targets

Management Approach

OR recognizes the intensifying impact of climate change, presently. OR hence announce the commitment to sustainable business operation and prioritizes climate change issue as one of the key business strategies, which is one of the long-term goals or so called OR 2030 Goals for Healthy Environment. Which focuses on build the great environment aiming to reduce the greenhouse gas emission both direct and indirect emissions (Scope 1 & Scope 2) to be one-third from the business-as-usual compared to 2022 as a based year. In addition, OR assess the climate related-risks and opportunities to cover climate scenario analysis in accordance with Task Force on Climate-related Financial Disclosure (TCFD) guideline and to understand both physical risks and transition risks and business opportunities. Moreover, the study and development of climate tool is conducted to study the feasibility of Internal Carbon Pricing (ICP) which can be adopt for investment consideration in low carbon businesses.

Climate Change Strategy

Following our target on reducing the greenhouse gas emission to become Carbon Neutrality within 2030 and Net Zero Emission within 2050, OR has set targets with reference to Science Based Target initiative (SBTi) and develop the 3R Strategies for business operations as following:

Reduce (Own Greenhouse Gas Emissions): Moving towards the OR Net Zero goal by reducing own greenhouse gases emissions.
Remove (Residual Greenhouse Gas Emissions): Eliminating greenhouse gases by supporting greenhouse gas capture activities.
Reinforce (GREEN Portfolio of business and Investment): Expanding the portion of green portfolio and green investment

According to our climate change ambitions into tangible action, key performance indicators is set to include climate change issue and integrate into corporate KPI. Monitoring and analysis are conducted to improve the performance and report to PTT Group continuously.

Our Climate Change Governance Structure

Governance structure is designed to identify the extent of roles and responsibilities regarding climate action as concrete. The roles and responsibilities are established as the below details:

Governance Body	Roles and Responsibilities	Meeting Frequency
OR Board of Directors	Govern the business operations to follow the workplan and approve the Corporate KPI related with climate change issue with internal department. Monitor the progress of climate change strategy and Key Action Plans to comply with company policies.	Quarterly
Corporate Governance and Sustainability Committee (OR CGS)	Formulate climate policy, climate action plan, including integrating climate strategy into the core management policy and approve climate related corporate KPIs. Oversight over the implementation of Climate Strategy and climate-related risks management and opportunities at the corporate level.	Quarterly
Enterprise Risk Management Committee (OR ERMC)	Responsible for defining comprehensive key risk management policies and practices, which include climate-related risks. Assess and review risks, considering both internal and external factors which may affect the achievement of corporate goals. This is to ensure that appropriate measures for tackling climate change, based on our business context, have been put in place. Provide recommendations for monitoring and evaluating risk management and stakeholder management to OR’s Management Committee (ORMC) for further implementation.	Quarterly
Management Committee (ORMC)	Manage and ensure the direction of the operations to be sustainable. Top leadership support and sponsorship are key pre-requisites contributing to the success of the whole process.	As needed
Sustainability Development Committee (OR SD Committee)	Drive and monitor the operations of relevant departments to support implementation of the sustainability strategy and consider approving the annual OR sustainable development progress/report. Responsible for approving OR’s strategic plans, business plans, and action plans for sustainability which complies with the PTT Group policies in national and international sustainability standards.	Quarterly
Taskforces (Energy, Decarbonization, Circular Economy)	Promote and drive actions and Implementations from the policy level to the working group or operational level in particular scope of consideration for achieving OR’s 2030 Goal in Healthy Environment Strategy and implementation of TCFD framework.	Quarterly or As needed

Identifying Climate-related Risks and Opportunities and Climate-related Risk Management

Climate change impacts are spotted by consumers focusing, affects to consumer behavior changing and climate-related laws and regulations is changed such as carbon taxes. Consequently, OR puts the emphasize on climate-related risks which can affect the business operation. This is done by integrating the climate-related risks into enterprise risk management. This is to access the severity level and provide mitigation options to mitigate those risks and seeking opportunities in innovation or strategic developments to increase the business values. OR sets out the key action plans by studying the requirements, regulations continuously to manage those risks and opportunities. In addition, we also study the economic trends from national and international contexts, including Internal carbon pricing and new innovations etc.

The Action to Increase the Resilience of OR’s Businesses Strategy

Mobility Business

The oil business is the majority segment of the company that is at risk of being affected by climate change. In particular, the transition to a low carbon society economy may affecting the sale of oil and other related products and services.

Change in economic and climate change has a significant potential to change people’s awareness and their lifestyle by changing the use of fossil energy to clean energy to reduce environmental impacts, then making electric vehicles (Electric Vehicle: EV) a new choice for consumers and replacing the use of oil.

In the transition period from fossil fuel-powered vehicles to electric vehicles (EVs), OR sees an opportunity to diversify the variety of business operations that respond to such changes. Whether the expansion of the renewable energy and EV Station PluZ with both inside and outside of PTT Station covers all main routes and nationwide. These expansions cover the communities and tourist attractive places with potential such as department stores, hotels, resorts, restaurants, office buildings, etc. In addition, develop and provide the FIT Auto to be a light maintenance and repairs automotive center by expert technicians.

Lifestyle Business

Café Amazon is one of the OR businesses that integrates mitigation and adaptation into business operations for climate-related resilience.

The self-climate resilience by implementing strategies of Café Amazon has been done through the diversification of our foods and beverages offered for alternative consumer choices. Apart from coffee products, in the case of coffee beans scarce that caused by climate change impact. Additionally, the strategies included supply chain resilience, sustainable coffee sourcing, and prioritizing low-carbon products.

Plus, OR has developed business contingency plans to prevent supply chain disruptions due to extreme weather events on a regular basis and works closely with coffee producers to implement climate-resilient farming practices.

Furthermore, OR have the key action plans for climate resilience of Mobility and Lifestyle Business, read more at: OR Task Force on Climate-related Financial Disclosures (TCFD) Report 2023

Metrics and Targets

OR has key action plans as shown in the following:

1. Climate Change Management

Reforestation project of 10,000 rai within 2030 through the two collaborative projects viz., Royal Forest Department and Mae Fah Luang Foundation. Presently, OR conducts the reforestation 1,500 rai of terrestrial forest and promotes the maintenance of community forests in collaboration with the Mae Fah Luang Foundation, amounting to 8,100 rai.
T-VER Carbon Credit Project from solar rooftop and green travel with biofuel.

2. Energy & Utilities Efficiency

Since OR uses electricity as its majority source of energy, the company aims to increase the proportion of renewable energy in its establishments by requiring the installation of solar rooftops at establishments such as petroleum terminals, lifestyle business center (OASYS), PTT Station, Café Amazon branches, and LPG cylinder refurbishing plants to provide 19.90 MWp by 2030.
In addition, PTT Station and Café Amazon branches are encouraged to install solar panels to use solar energy instead of using the electricity from the grid.
Study and operate the Renewable Energy Certificate (REC) trading system.

3. Reduce Wastes to Comply with the Circular Economy Concept

Waste management is based on circular economy principles by reducing the amount of waste, reducing virgin material usage, and recycling to reduce the greenhouse gas emissions from the production and disposal process.
Increase the use of environmentally friendly materials and sustainable packaging.

Read more for Circular Economy of our business, please click

Performances and Highlight Projects

Low Carbon Society

OR has also made it a mission to achieve a low-carbon society. In 2023, OR was registered in the Thailand Voluntary Emission Reduction Program (T-VER) by Thailand Greenhouse Gas Management Organization (Public Organization) or TGO, which also certified the amount of greenhouse gases that OR could reduce or stored. In 2023, OR was in the process of developing three T-VER projects as shown as following;

Green Travel with Biofuel: The A continuously implemented project that was registered in 2022. In 2023, the project launched a campaign and encouraged customers who use Blue Card to join the project and fill up their tank with E20 or E85 gas as an act to protect the environment and reduce greenhouse gas emissions. OR will exchange Blue Card points with Carbon Credits obtained from refueling of customers who give OR consent.
The Solar Rooftop Project Phase I and Phase II are continuous initiatives following the completion of the registered project in 2022. OR monitors and collects data on the electricity generated from
these projects to use as information for future credit certification applications. Additionally, OR encourages its establishments and dealers to install solar panels, promoting clean energy and participating in the T-VER project.
Reforestation project is implemented in 2023. OR aims to increase green space for greenhouse gas absorbing. OR encourages to register and request credit certification in the future.
Reforestation Project is an initiative that commenced in 2023. OR aims to increase green areas to be a source that absorbs greenhouse gases. OR advocates for the registration of the project and requesting carbon credit certification in the future.

As one of Thailand’s leading energy businesses, OR strives to demonstrate its responsibility and contribute to the reduction and offsetting of greenhouse gas emissions both at the corporate and national levels to achieve a
low -carbon society efficiently and sustainably.

Energy Transition

The impact of climate change and economic shifts has the potential to drive consumer awareness by changing their behavior. Resulting in the shift from fossil fuel to renewable energy consumption in their daily life to mitigate environmental impact. Thus, electric vehicles (EVs) have presented a new alternative to oil consumption for consumers.

Given the opportunities brought on by a transition toward electricity vehicles, OR is working to expand its EV Station PluZ network across PTT Stations and PTT LPG Auto Stations nationwide across major routes, communities, tourist destinations, and high-potential areas, such as department stores, hotels, resorts, restaurants, and office buildings. In 2023, 1,618 DC Connectors have been opened. One of the key climate change strategies is partnerships with other organizations to promote projects that support an efficient energy transition. OR therefore collaborates with different organizations to initiate many projects, such as Swap & Go-Universal Battery Swapping Network Expansion Empowered by OR. This is achieved by expanding the network of Swap & Go electric motorcycle battery swapping station platforms that can be used with all types of electric motorcycles (Universal Swapping) within PTT stations. The project caters to consumers’ travel needs that require convenience and speed, as well as enabling seamless mobility. The project aims to expand battery swap service points to more than 100 locations in Bangkok and surrounding areas in 2024. Furthermore, there will be maintenance and repair services in the PTT Stations. The objective is to increase the proportion of use of clean energy innovations and provide a choice for consumers to save on energy costs by creating a holistic electric vehicle ecosystem. This is for the benefit of society and the environment to inclusive growth.

Energy Management Program

OR 2030 Goals, the Healthy Environment dimension, OR aim to reduce the proportion of conventional fuel use intensity more than one-third by 2030 (compared to 2022 baseline) by enhancing energy efficiency, increasing the use of renewable energy in facilities. Therefore, OR’s Energy Taskforce was established to encourage, support, drive, and share knowledge to accomplish these OR’s energy roadmap.

In 2023, OR conduct energy audits by external energy experts to identify the opportunities for improving energy performance and energy-saving projects in OR’s establishments. The target areas to evaluate of progress in reducing energy consumption are OASYS (Lifestyle business center including Coffee Roasting Plant, Bakery Plant, Dry Mix Plant, and Café Amazon Distribution Center) and Phrakanong Office Building. The scope of assessment covers three main areas e.g. air compressed, chiller plant, and cold storage for OASYS. Thus, action plan, progress, future work plan, and budget were presented through the Energy Taskforce, quarterly. An example of project or actions to reduce the amount of energy use as shown as the following:

The project of leakage inspection in compressed air at OASYS and equipment repairing showed that the opportunity to reduce energy consumption about 385,200 kWh/year.
Energy baseline and energy usage profile were identified to create the reducing energy consumption action plan for Phra Khanong Office.

To achieve the OR 2030 Goal with the Healthy Environment target, we drive the action by quantified targets to address energy savings using the QSHE Target applied to all OR’s operations, for example: target of Lubricant Distribution Centre 57.44 GJ/million litre (See in section 2023 Target: Energy consumption within the business operations) Read more

These targets reported performance and action to OR QSHE GMC Committee, quarterly. Moreover, we set our annual KPIs to initiate our energy intensity from renewable source and solar rooftop establishment to track our record on using clean or green energy by ourselves. OR also promote the use of renewable energy in our establishment via the Renewable Energy Certificate (REC).

In order to promote the use of clean or green energy, OR currently uses renewable energy from solar panel and purchased Renewable Certificate (REC) in establishments with details as follows:

In 2023, OR installs solar rooftop in OR’s establishments, marking a significant stride in our journey towards using clean or green energy. This initiative added a cumulative installed capacity of 12.783 MWp with an investment cost 381 million baht, not only showcasing our commitment to sustainable practices but also resulting in a reduced proportion of energy use of 2.936 GJ per 1 million baht of EBITDA.

Additionally, OR collaborate and working with PTT Group through PTT Group Net Zero Task Force or G-NET with Renewable Energy sub working group. The aims of this sub working group is to research and development (R&D) of renewable energy and study the feasibility of new investment for renewable energy and decrease the energy consumption

Furthermore, we not only promoted the development of energy management through the projects and cooperation but also enhanced and provided the energy efficiency awareness training to employees for consumption reduction via the following details:

For target employees and direct operational employees: Training includes the topic of measurement guidelines for evaluation of energy performance and energy saving in compressed air and chilled water systems to maximize efficiency and reduce the amount of energy consumption.
For all employees: Raising the employee awareness of energy saving and reducing energy use through public relations media and email, for example, 60+ Earth Hour Campaign for energy saving and GHG reduction.