Climate Change Strategy
We recognise our role as an energy provider, supporting the development and growth of our host countries. This role requires us to address the energy “trilemma” by balancing policy and market forces while supplying energy that is affordable, reliable, and sustainable. Integrating sustainability and climate action is essential to meet the expectations of stakeholders and the countries in which we operate.
Our Climate Change Strategy serves as a roadmap for our business and operations, guiding our progress towards achieving net-zero emissions goals. Furthermore, it underscores the importance of transitioning towards cleaner energy sources. Through disciplined implementation, MedcoEnergi is well-positioned to deliver sustainable value to stakeholders in the face of evolving environmental considerations. The strategy empowers us to manage climate-related transition and physical risks through emissions reduction and the adoption of best practices and innovative technologies.
By embedding climate considerations across our operations, we are strengthening our resilience and contributing to a lower-carbon future for the region.
Further reading on MedcoEnergi Climate Change Strategy can be found in here.
Net Zero and Interim Target
The issuance of our Climate Change Strategy in 2021 was followed by the development of a well-defined pathway for greenhouse gas (GHG) emissions reduction through the establishment of interim targets. A comprehensive approach informed the formulation of these targets. This approach included a strategic review and analysis of host governments' Nationally Determined Contributions (NDCs), the utilization of internal Long-Term Planning (LTP) data, and a peer benchmarking exercise. Furthermore, a thorough assessment of climate-related risks and opportunities was conducted, alongside a review of past and ongoing emissions reduction and energy efficiency programs. Additionally, existing and emerging regulatory trends and frameworks within our host countries were taken into consideration. The target-setting process in 2022 was a collaborative effort, incorporating both top-down and bottom-up approaches, with proactive engagement from corporate functions at all levels.
MedcoEnergi established ambitious interim climate targets for its oil & gas business, aiming to achieve a 20% and 30% reduction in Scope 1 and Scope 2 GHG emissions, respectively, by 2025 and 2030 compared to a 2019 baseline. Additionally, a 25% and 37% reduction in methane emissions is targeted for the same timeframe. The selection of 2019 as the base year ensures a pre-pandemic operational reference point for accurate measurement. Furthermore, MedcoEnergi is committed to increasing the share of renewable energy in its power business to 26% and 30% of installed capacity by 2025 and 2030, respectively.
Focused Execution to Deliver
Climate Interim Target
Our Operational Excellence has strengthened workforce capability to drive our decarbonization measures. As our second five-year sustainability roadmap completed its third year, we delivered our key climate interim targets. They include the reduction of Oil & Gas scope 1 and 2 greenhouse gas and methane emissions by 30% and 41% in 2025 from the 2019 base year. These exceeded our target of 20% reduction of scope 1 and 2 greenhouse gas emissions and 25% methane emissions for the year 2025 respectively.
We also met our targets of disclosing and assuring our 2024 Scope 3 emissions data for the first time. Moreover, our Oil & Gas subsidiary joined the Oil and Gas Methane Partnership (OGMP) 2.0 to further reinforce methane management and transparency, aligning with globally recognised reporting and management practices. We also continued to expand our lower-carbon power portfolio, with renewables accounting for 26% of renewable mix installed capacity, meeting our 2025 interim climate target.
Progress was made in managing physical climate risks, with asset-level Climate Change Risk Assessments conducted in-house for the South Natuna Sea Block B and Sumbawa Solar PV assets in 2025.
Further details on our performance on the interim targets can be found in MedcoEnergi's Sustainability Reports.
Note: This graph is an illustration of the GHG emissions and offsets trajectory to achieve Net Zero and does not describe MedcoEnergi's projected GHG emissions and carbon offsets.