Climate Change Strategy
As a leading Southeast Asian natural resources company, MedcoEnergi is committed to navigating the climate challenge while ensuring the region's energy security. This commitment is reflected in the establishment and public issuance of our comprehensive Climate Change Strategy in 2021. This strategy serves as a roadmap for our business and operations, guiding us towards achieving net-zero emissions goals. Furthermore, it underscores the importance of transitioning towards cleaner energy sources. By implementing the Climate Change Strategy, MedcoEnergi is well-positioned to deliver sustainable value to stakeholders in the face of evolving environmental considerations. The strategy empowers us to holistically address and manage climate-related transition and physical risks through emissions intensity reduction, ultimately paving the way for a low-carbon future.
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. Demonstrating a strong commitment to sustainability, MedcoEnergi successfully achieved its interim 2025 oil & gas emissions reduction targets two years ahead of schedule in 2023. Oil & gas Scope 1 and Scope 2 GHG emissions in 2023 were a significant 22% lower than the 2019 baseline, exceeding the initial 20% target. Similarly, methane emissions in 2023 surpassed the targeted 25% reduction, achieving a remarkable 40% decrease compared to 2019. While these achievements are commendable milestones, MedcoEnergi acknowledges the ongoing challenge of maintaining such progress within the inherent complexities of the oil & gas industry.