Speaker
Description
JOB Pertamina-Medco E&P Tomori Sulawesi (JOB Tomori) is affiliation of PT Pertamina (Persero), an Indonesian national energy company that manages exploration and production of oil and gas in Indonesia. JOB Pertamina-Medco Tomori is one of the biggest asset operated in Sulawesi Island, Indonesia.
Pertamina group committed to manage their safety culture and environmental excellence through many innovation programs and initiatives. We are aware that global environmental challenges in the future are quite substantial, especially for energy sector. One of the biggest challenges is climate change, climate change affects environment in many ways including arising temperatures, sea level rise, flooding, and many more. These events affect things that we depend upon and value like water, energy, transportation, wildlife, agriculture, ecosystem and human health. It could be a privilege if we could asses the potential climate hazard that would impact to our asset, we engaged to conduct the Climate Change Risk Assesment (CCRA) to fulfil the relevant commitment regarding the assessment and management of climate-related risks and opportunities that may arise and impact the financing of the operations and developments of Senoro in the future.
The CCRA’s scope encompassed the screening of relevant climate hazards, the identification of the hazards impacting the Project’s facilities and operational activities and the Project’s resilience to these, and the evaluation of business-related risks arising from the transition to a low-carbon economy and recommending potential risk mitigation measures. The CCRA methodology adheres to international standards and frameworks, specifically the fourth edition of the Equator Principles (EP4), referencing the Guidance Note for the CCRA that released in September 2020 version, and recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). There are two climate related risks and drivers defined by TCFD, first is Physical which divided from two risk, Acute and Chronic. Second is Transition which divided from three risk, Policy & Legal, Market & Technology, and Reputation.
JOB Tomori has been encouraged to implement a CCRA aligning with climate physical risk and climate transition risks and opportunities categories of the TCFD. Specifically, the objectives of the physical risk assessment are to:
•Identify the potential climate hazards to the Project arising from current and future climate parameters;
•Understand the likely implications of these climate hazards on the Project in forward-looking climate scenarios; and
•Outline opportunities to enhance the asset’s resilience to climate hazards at high level.
The objectives of the transition risks and opportunities assessment are to:
•Identify transition risks and opportunities (referred collectively as “transition drivers”) by analysing the Project’s compatibility with the Government of Indonesia’s Enhanced Nationally Determined Contribution (E-NDC) to the global Paris Agreement and its goals;
•Determine material transition risks and opportunities by examining the industry outlook of the Project;
•Understand the likely implications of transition risks and opportunities in forward-looking climate scenarios; and
•Provide high-level recommendations how to mitigate potential transition risks and enhance opportunities.
This assessment included the use of climate data across two Intergovernmental Panel on Climate Change (IPCC) Shared Socioeconomic Pathway (SSP)4 scenarios and two timeframes: 2030 and 2050 against the baseline. The historical or baseline climate model data is representative of the true climate experienced between 1960 and 2020. Climate data was collected primarily using ERM’s Climate Impact Platform (CIP) and Global Climate Database (GCD) and was supplemented by any climate data provided by the client as well as the best available online sources of data. The climate scenario analysis included IPCC’s low-carbon (SSP 1-2.6) and high-carbon (SSP 5-8.5) emissions scenarios, as recommended by the TCFD technical guidance on climate scenario analysis5 and other internationally recognised sources. Following the results of the screening-level assessment, two material climate hazards were identified for the Project, based on their high risk scores Extreme Heat and Coastal Floods. The selection of these hazards is also aligned with the geographical location of the project, which is located near the equator and in close proximity to the sea. The Baseline Risk Score for Coastal Floods is Moderate (2.08) while the Baseline Risk Score for Extreme Heat is Minimal (0.64).
To assess the potential impacts of the transition, we selected two climate scenarios from the International Energy Agency (IEA) World Energy Outlook (WEO) 2022 – a business-as-usual scenario known as the Stated Policies Scenario (STEPS), and a low-carbon scenario aligned with the Paris Agreement's goal of limiting warming to "well below 2°C,” known as the Announced Pledges Scenario (APS). We compared the difference between these two scenarios for two-time horizons, 2030 and 2050, to gauge the magnitude of potential impacts. The result is JOB Tomori asset have more impact of transition risk or opportunity at 2050 than 2030, highlighted the Carbon Pricing become the biggest transition risk or opportunity of the operation at 2050. A carbon pricing scheme will charge a unit cost on every tonne of carbon emissions from JOB Tomori's operations that may result in an additional operating cost. Second, is a mandate to implement Carbon Capture Utilization and Storage (CCUS), The Minister of Energy and Mineral Resources (MEMR) just released the Regulation No. 2 year 2023 on Implementation of CCUS in the upstream oil and gas activities. The regulation stated that in the case of depleted reservoir, contractors need to utilise the facility for CCUS. Third, decreasing gas demand from Japan. As one of the key markets from JOB Tomori gas sales, Japan has enacted some energy roadmap to transition from fossil fuel by 2050. This is to support their Carbon Neutrality 2050 target. A decrease of natural gas demand may impact some reduction in revenues.
JOB Pertamina-Medco Tomori will always committed and contributed to responding the global challenges in environmental sector. We must recognize that combating climate change is not solely the responsibility of policy makers or regulators and scientists, but requires the active participation of individuals, businesses company, and organizations. By sharing knowledge, mobilizing resources, and advocating for sustainable practices, we can collectively make a significant impact.
