Climate Strategy and Water Management
IRPC recognizes the direct and indirect impacts of climate change throughout our businesses’ supply chain. IRPC has in place the climate change management approach by determining strategy, setting direction and reviewing strategy in accordance with the changes of situation, monitoring performance index regarding significant climate change. Energy Efficiency Index is set as an indicator for performance assessment among staff of all levels from the President to employees in the production line and supporting of related production lines. The performance is reported to the Board of Environmental Management, to the Management and the Board of Directors meeting. As for other indicator i.e., reduction of the greenhouse emission and water management which considered as an indicator for the operation unit, the result is reported to the Environmental Management Committee and the Management Committee of Rayong Management Committee.
IRPC aims to reduce direct and indirect greenhouse gas emissions and water consumption in accordance with QSSHE Policy to carbon neutrality in 2050 and net zero by 2060 aligned with the Paris agreement to limit global temperature rise to well below 2 degrees Celsius by 3 GHG reduction program 1. Eco-operation & Technology (Shift the operation from fossil based power to renewable energy and increase energy efficiency) 2. Reshape-Portfolio (Adjust portfolio by investing in non-oil with Eco-Solutions) and 3. Absorption and offset (Seek all means to absorb and offset carbon) for low carbon society. IRPC, therefore, is committed to concerning the organization to SDG including climate change issues through IRPC Climate Change Statement.
IRPC Climate Change Statement [link]
IRPC includes climate-related risks into its corporate risk portfolio and prioritizes risk portfolio by using risk matrix based on composite exposure of each corporate risks. The composite exposure is measured in 2-dimensions, Risk Likelihood and Risk Impact to an organization in 3 aspects (Economic, Social and Environment). This is for ensuring that we have well-balanced ESG risk portfolio.
IRPC has assessed climate change risks annually and determined sensitivity analysis of climate change risk in order to assess carbon dioxide reduction projects in order to consider cost and GHG reduction.
IRPC aim to develop our climate-related risk and opportunities assessments in alignment with recommendations from the Task force on climate-related financial disclosure (TCFD). Our assessments have been built upon the recent set of information reported in accordance with the requisites of Stock Exchange of Thailand (SET), as well as for the purpose of DJSI reporting requirements. This comprises of the following.
Physical Risks: altered weather pattern with more droughts and flooding, extreme weather events, resulting in increased business interruption.
From our risks and opportunities analysis, we have determined what would hypothetically happen to our businesses under two different scenarios as follows:
|IRPC recognizes the importance of combating climate change by starting various organizational initiatives, like the Floating Solar Power project, Internal Carbon Pricing, and Carbon-Neutral project. IRPC is committed to develop products and organize initiatives that reduce greenhouse gas emissions to combat climate change. Moreover, IRPC also applies the circular economy principle to our business operations by collaborating with partners to reuse the industrial plastic waste in our production process.|
On the other hand, IRPC have also considered opportunities which might arise in the midst of climate change in order to stimulate the world’s agenda on limit temperature rise no more than 2°C. considering the change of consumers’ behavior towards EV cars, we find that the shift in new vehicle purchase in responding to the government promotion of the EV manufacturing would result in an increase in sales of petrochemical products, such as Polypropylene Compound & Composite which are used for the production of both interior and exterior automotive parts. Besides, to attain the needs of battery manufacturing, the supply of Acetylene will also be higher.
Task Force for Climate Related Financial Disclosure (TCFD) [link]
Discerning of the risks related to regulations, the climate change severity which is likely to increase in the near future, IRPC takes into account the Paris Agreement which Thailand has expressed its intention to lower the greenhouse emission to control the rising of the global temperature in 2016, the changes of market demand toward low-carbon products and the advance of low-carbon technology, for instance, batteries and electrified vehicles including physical risk i.e., severe weather, flood and the draught which could get worse. In other point of view, IRPC visions the opportunity of business growth through a variety of low-carbon products and the use of alternative energy of which IRPC has invested continuously in terms of product development and project implementation to manage such risks and to seek for an opportunity to become a leader of climate change management in a concrete plan. IRPC has established the climate change strategy and pathways as a framework for business operation as follows.
Sustainability Strategy endorsed by Board of Directors [Link]
Climate Change Strategy endorsed by Corporate Governance and Sustainability Committee [Linlk]
As IRPC recognize how importance of climate change impact on core businesses of oil and gas and petrochemical now facing, IRPC developed the climate change strategy and positioning the organization (as leader/ fast follower) to move forward. Process of strategy setting has been done through identifying risks & opportunities, evaluating peer practices & stakeholder expectations, and executive workshop. Our strategy aims to ensure that roadmap of initiatives should be undertaken to achieve its strategic ambition.
IRPC is committed to the research and development of new products to meet the different requirements from customers and development of environmental-friendly products which creates more business opportunity and helps IRPC to be able to adapt to the change in economy, society and environment, which leads to sustainable growth.
IRPC offers alternative solutions for users who are concerned about environmental impacts by developing the products as follows:
In addition, IRPC also addresses the transition of a low carbon economy operating in their own operation through several projects. For example;
To contribute to the management of climate change, IRPC has improved the efficiency of the production process, develop low-carbon products and energy saving products. IRPC enhanced the energy efficiency in the production process continuously in order to utilize the natural resources to its maximum efficiency and bring about minimal impact to the environment. As a result of several production process improvements include efficiency improvement in heat and steam management, Electricity Reduction and Logistic Management, as well as collaborative initiatives with PTT Group, etc.
There are two types of energy saving and CO2 reduction program, which are operational control projects, and process improvement (includes additional equipment installation projects).
Furthermore, IRPC invested 550 THB million in the Floating Solar Power project which has a generation size of 12.5 megawatts in 2020. Resulting in GHG reduction of approximately 10,510 tons of carbon dioxide per year.
In 2021, IRPC starts implement Internal carbon price at USD 20 per tonnes of CO2 equivalent as shadow pricing to evaluate new green investments and infrastructure projects. We have applied the ICP in Renewable projects and Energy Efficiency Improvements, example: Floating Solar Phase II for PP Plant and VDU Heater Energy Efficiency Improvement for Lube Plant.
Since 2021, IRPC starts implement Internal carbon price at USD 20 per ton of CO2 equivalent as shadow pricing to evaluate new green investments and infrastructure projects. We have applied the ICP in Renewable projects and Energy Efficiency Improvements. More than 12 projects using shadow pricing, for example Meltblown expansion project for Polypropylene, and Global Hygiene: Spun bond Expansion project for Polypropylene.
And implicit price is reflected IRPC spent on CSR activity reducing emission; install solar cells for pumps and other equipment to develop smart farming at Nong Yang village, Buriram Province, Development Center for Disabilities, Sri Wattana Village, Udonthani Province
IRPC establishes Sustainable Water Management Framework in order to ensure proper water management in IRPC supply chain, water risk assessment, and analyzing and developing risk mitigation plan.
IRPC initiates water consumption strategy 321RPSD which are
|IRPC recognizes the importance of setting up water-related targets and goals to align with public policies and meet the needs of surrounding communities
IRPC is committed to involving all stakeholders when managing water resource and its related impacts through programs engaging the authorities and surrounding communities, such as conserving water usage and water reserves in the case of droughts, distributing tap water, and planning flood prevention measures in local communities. As a member of Eastern Water War Room Management, IRPC also engages with governmental agencies (Royal Irrigation Department, Provincial Waterworks Authority, and Industrial Estate Authority of Thailand) in order to share and discuss resolution measures to water-related issues in the eastern region. Furthermore, IRPC is also involved with PTT Group Water Management Team: PTTWT in planning management strategies for efficient use of water resources in its production process.
IRPC uses water from natural resource to feed into the production process. The water is allocated from Rayong Irrigation Department, released into quality improvement for use in various systems, including cooling water system, demineralized water production, using saltwater for Flue Gas Desulfurization (FGD). IRPC controls quality of water before discharging out of the premise under standard established by the Department of Industrial Works and other relevant authorities. Furthermore, to assure the effective use of water, IRPC has implemented the 3Rs principles to water management approach.
IRPC has the comprehensive risk management related to water, including physical risks i.e., water volume, water quality and risks related to regulations and provisions from risk assessment. According to the Aqueduct Water Tool of the World Resource Institute (WRI), it is found that IRPC is located in the low baseline water stress1. Consequently, the assessment result is brought forward for preparing water management plan and for the study and forecast on the use of water in the future business operation.
Remark: 1Baseline Water Stress means the ratio of water allocated for a certain area per total volume of water resource based on the water consumption of the upper basin area (resource: WRI Aqueduct 2014).