Pupuk Kaltim is Committed to Encouraging Decarbonization through ESG

Decarbonization refers to the process of reducing greenhouse gas emissions, especially carbon dioxide, that come from burning fossil fuels. As a country with a large population and rapid economic growth, Indonesia is one of the main contributors to carbon emissions at the regional level.

In this case, decarbonization is achieved by implementing low-carbon technologies and energy sources (e.g. renewable energy, regenerative agriculture, electricity grids and hydrogen).

The concept of decarbonization emerged from the 2015 Paris Climate Agreement (Paris Agreement). The agreement aims to limit global warming to well below 2°C above pre-industrial levels and pursue efforts to limit it to 1.5°C. To achieve this goal, countries must reduce greenhouse gas emissions rapidly, achieving carbon neutrality by 2030 and net zero emissions by 2050. This is where decarbonization comes into play.

Pupuk Kaltim Increases Acceleration of Decarbonization Rate through ESG

PT Pupuk Kalimantan Timur (Pupuk Kaltim), as a subsidiary of BUMN Pupuk Indonesia, is increasing the acceleration of the rate of decarbonization through the comprehensive implementation of Environmental, Social, and Governance (ESG).

Pupuk Kaltim has a vision to become a world-class company in the fertilizer, chemical and agribusiness industries that is growing and sustainable. Currently Pupuk Kaltim has 13 factories, including 5 ammonia factories with a capacity of 2.74 million tons/year, 5 urea factories with a capacity of 3.43 million tons/year and 3 nitrogen, phosphorus and potassium (NPK) factories with a capacity of 300 thousand tons/year. year.

"For Pupuk Kaltim, ESG is not just compliance but a way of life. We start planning with an ESG orientation and measure our performance results also with ESG. Pupuk Kaltim as the largest urea fertilizer producer in Indonesia and Southeast Asia is also committed to being a pioneer in the Green Transformation of the Petrochemical Industry, " said Pupuk Kaltim President Director Rahmad Pribadi in his statement in Jakarta, Wednesday (28/6/2023).

Decarbonization Through ESG: Pupuk Kaltim Focuses on Decarbonization by Implementing ESG Principles

Rahmad said, currently Pupuk Kaltim is implementing a series of programs to reduce carbon emissions through comprehensive ESG implementation which has been realized through various programs, including the development of green ammonia, construction of a soda ash factory, community forests, and the use of renewable energy sources.

Comprehensive ESG Program: The Company Has Implemented a Comprehensive ESG Program, Including the Development of Green Ammonia, Soda Ash Plant, and Renewable Energy

Several efforts to reduce carbon emissions have also been implemented at Pupuk Kaltim, such as the use of PLTS, and switching operations from conventional to electric motorbikes and cars. In the future, Pupuk Kaltim will also focus on developing innovation and technology to explore the use of renewable energy, including green ammonia.

Simultaneously, while remaining committed to running a sustainable and environmentally friendly business, Pupuk Kaltim also uses leading technology to continue to innovate. This needs to be developed in order to make the world less carbon or more environmentally friendly.

Global Achievement: Pupuk Kaltim Ranked First in the World in the Agrochemical Category Based on ESG Risk Rating from Sustainalytics

The consistency of this comprehensive ESG implementation has also been proven by the success of Pupuk Kaltim in ranking first in the world in the Agrochemical category based on the ESG Risk Rating standard from Sustainalytics.

Pupuk Kaltim has also risen to the top position out of a total of 73 companies in the agrochemical sector in the world. In this assessment, Pupuk Kaltim received a score of 21.3 so it is considered to have a medium risk of experiencing a material financial impact from ESG factors. ESG Risk Rating measures Pupuk Kaltim's achievements through two assessment factors, namely Exposure and Management.

Exposure is defined as a company's vulnerability to ESG risks. Meanwhile, Management refers to the actions taken by the company to overcome ESG problems.

Contribution to Government Targets: The Company is Committed to Supporting the Indonesian Government's Targets in Reducing Carbon Emissions, Including NDC 2030 and Net Zero Emissions 2060

This innovation developed by Pupuk Kaltim also aims to support the government's target to reduce carbon emissions, the commitment of which is stated in the Nationally Determined Contribution (NDC) of 31.89 percent in 2030 as well as other targets, namely Net Zero Emission in 2060. PKT is committed to contributing on the environment in decarbonization efforts by achieving the target of reducing emissions by 32 percent by 2030 in two phases.

In the first phase, Pupuk Kaltim focuses on the concept of a circular economy and carbon offsets through several initiatives, such as planting 10 million trees by 2030, using electric bicycles and motorbikes for company operations, and using rooftop Solar Power Plants (PLTS) in the company's operational areas.

In the second phase, Pupuk Kaltim focuses on low carbon sourcing and carbon capture storage which is packaged in technology development and innovation for exploring renewable energy sources, one of which is clean ammonia.

Awards: Pupuk Kaltim Wins Several Awards for Its ESG Initiatives, Such as Corporate Emissions Transparency 2023

As the largest ammonia and urea producer in Southeast Asia, Pupuk Kaltim is committed to implementing sustainable business principles and strengthening its position as a pioneer of green transformation in the country's petrochemical industry.

Not only fulfilling obligations, but this commitment has been embedded in every line of activity carried out by Pupuk Kaltim itself. The ESG initiatives carried out by the company have been widely recognized through various awards and recognitions both at national and global levels.

This initiative carried out by Pupuk Kaltim is in line with the 2023 Corporate Emission Transparency awards event for the company's efforts to reduce carbon emissions in every process of the company's business lines. Pupuk Kaltim succeeded in winning two awards for Corporate Emission Reduction Transparency in the Green Elite Category and an award for Transparency in Calculation of Corporate Emissions in the Platinum Plus Category.

Rahmad positively welcomed the appreciation given to Pupuk Kaltim by continuing to be committed to implementing various sustainable emission reduction programs in order to create a better environment.

"This award is clear evidence of the dedication of all Pupuk Kaltim people who are always committed to working with the company in exploring innovation and technology to implement sustainable business practices within Pupuk Kaltim. Of all the things we have done, thank God, it turns out that the implementation of ESG has a direct impact on financial performance at Pupuk Kaltim with a net profit of IDR 14.59 trillion in 2022," he said. (Nisa)