Positive and Negative Impacts 

PTT is acutely aware of the impact its activities, products, and services in the oil and natural gas sector have on society and the environment, given that this sector forms the backbone of the organization. Emissions of greenhouse gasses, both direct and indirect, are inevitable across the entire value chain, posing significant challenges and risks, from environmental degradation like global warming to complex socio-economic impacts. In the current global and national context, where urgent action to address climate change is paramount, these issues directly affect PTT's business operations. In 2021, PTT has integrated climate change risks and opportunities as crucial factors in its strategic planning, shaping its long-term goals until 2030. These goals include Business Growth, New Growth, and Clean Growth, reflecting the commitment to steer the business towards a low-carbon future, ultimately aiming for net zero emissions by 2050. As PTT transitions its wholly-owned operations and subsidiaries—where it holds a 100% share—from traditional to future energy and new business ventures beyond conventional energy, it not only positively impacts the environment but also stimulates economic growth. This transition fosters employment opportunities, improves the quality of life for individuals and communities, enhances the skills and knowledge of its workforce, and may even receive support through tax incentives.

Objectives/Goals

Management Approaches

PTT Climate Change Governance Structure

PTT has incorporated considerations of climate change into its strategic direction, corporate vision, and risk management practices. This integration is guided by comprehensive oversight across multiple dimensions, encompassing both overall sustainability and various interconnected organizational systems, as follows:

• Supervision of climate change issues is one of the key sustainability concerns at the management level and falls under the purview of the Governance Risk and Compliance Management Committee (GRCMC). This committee reports to the Corporate Governance and Sustainability Committee (CGSC) on a quarterly basis. Additionally, the PTT Group Sustainability Management Committee (GSMC) oversees the framework of operations and ensures alignment within the PTT Group.
• Oversight of achieving long-term greenhouse gas emission reduction goals and reaching net-zero emissions is entrusted to the PTT Group Net Zero Task Force (G-NET). This task force is responsible for establishing clear target frameworks to elevate climate change mitigation efforts, supporting Thailand in achieving its nationally determined carbon neutrality goals, and aligning with the Ministry of Energy's policies. Furthermore, it drives business model adaptations in line with the strategic direction and corporate vision set forth.
• With respect to the oversight of organizational risk management, the challenge posed by climate change is particularly a significant organizational risk that necessitates the establishment of measures and plans to control and mitigate. This includes the development of risk indicators (Leading/Lagging Key Risk Indicators) and reporting progress to the Corporate Plan and Risk Management Committee (CPRC) at the management level, as well as to the Enterprise Risk Management Committee (ERMC) on a quarterly basis.

The Assistant to the Chief Sustainability Officer is the primary unit responsible for overseeing, coordinating, and collaborating on policy formulation, objectives, strategies, operational indicators, management guidelines, and action plans. This collaboration extends to various units within the organization, including corporate level departments, business groups, business units, and relevant departments such as the Innovation Institute, PTT's New Business and Infrastructure Group, and the Natural Gas Business Unit.

Climate Change Management Process^GRI201-2

PTT's climate change management aligns with sustainable development guidelines and adheres to international standards. This is achieved through the following processes:

1. Data collection involves gathering greenhouse gas emission quantities and related information concerning risk and opportunity management from climate change. This process adheres to the specifications outlined in PTT Standards and Tools for Greenhouse Gas Inventory
   
2. Monitoring global and local climate change situations that impact the organization's business operations involves tracking legal regulations, rules, and controls governing greenhouse gas emissions, as well as guidelines and standards related to global climate change. This includes participation in conferences, engaging with stakeholders, and collaborating with government agencies, corporations, and other entities.
   
   
3. Identifying climate change risks and opportunities at corporate level by considering these factors
   
   • Risks associated with transitioning towards a low-carbon society (Transition Risks).
   • Risks stemming from the physical changes in climate (Physical Risks).
   • Opportunities arising from climate change.
4. Integrating risks and opportunities into business scenario analysis is crucial throughout the strategic planning process, including financial impact assessments conducted through financial estimation and planning. This process relies on data from monitoring global and local climate change situations affecting the organization's operations. It involves identifying risks and opportunities across two main operational aspects:
   
   • Mitigation Action: Measures undertaken to control, reduce, or capture greenhouse gas emissions, aiming to mitigate the impacts of climate change.
   • Adaptation Action: Initiatives implemented to adapt to changing climate conditions, ensuring the organization's resilience and sustainable competitiveness.
5. This information is translated into the organization's strategic plan, including the development of the Corporate Risk Profile in the organizational risk management process. This profile is derived from the comprehensive collection of risk factors across all business units, support functions, and headquarters, as well as external factors that may significantly impact the organization. These risks are then incorporated as performance indicators at the organizational level, aligning with the State Enterprise Assessment Model Key Performance Indicators (SE-AM KPI) and Corporate Key Performance Indicators (Corporate KPI). Furthermore, they are cascaded down as Key Performance Indicators (Functional KPIs) relevant to specific functions.
6. The monitoring and review of progress in implementing the corporate strategy, objectives, and Key Performance Indicators (KPIs) are reported to the governing bodies according to the established oversight structure at both management and board levels within PTT. These reports are provided quarterly in accordance with the prescribed governance framework.
7. Summarizing operational outcomes and providing transparent disclosure to both internal and external stakeholders are achieved through Form 56-1 One Report and PTT's official website.

Risk Management

PTT has enhanced its organizational risk management system by establishing a framework that aligns with global risk management standards, including COSO ERM 2017 and ISO 31000:2018. These internationally recognized standards are embraced by leading organizations worldwide. Implementing a comprehensive risk management process throughout the organization is pivotal in achieving the vision, mission, and goals set forth. This process is integrated with strategic planning and business development efforts to mitigate risks that may hinder the organization from reaching its objectives.

During the strategic planning phase, it is crucial to identify risk factors at multiple levels: organizational, business unit/functional, and operational. This assessment should encompass both internal and external factors, as well as key organizational objectives and strategies. Additionally, it is essential to consider the expectations of stakeholders to ensure a comprehensive understanding of potential risks that may arise, encompassing both short-term and long-term perspectives. This holistic approach ensures that all potential risks are thoroughly evaluated and addressed in a comprehensive and well-rounded manner.

During the strategic planning phase, PTT will develop a Corporate Risk Profile, which will be derived from collecting all risk factors from business units, support functions, and the corporate office, including external risk factors that could significantly impact the organization. This is to mitigate the impact of obstacles and capitalize on opportunities by identifying potential risks and opportunities for value creation, along with developing a risk management plan, defining Key Risk Indicators (KRIs), and assigning risk owners responsible for managing each risk, based on the organization's risk management plan derived from the corporate risk profile.

The corporate risk profile and risk management plan, vetted by the Organizational Risk Management Committee, will be integrated into the corporate strategy for approval by the PTT Board. This alignment ensures that the risk management plan corresponds with the organization's goals and business strategies. The directives from the Organizational Risk Management Committee will be communicated to management and operational staff throughout the organization for effective implementation, ensuring timely responses to risks and enhancing readiness to address business risks comprehensively.

Climate Risk and Opportunity Assessment^GRI201-2

In integrating the process of analyzing risks and opportunities arising from climate change into the strategic planning and organizational risk management, PTT has adopted the climate scenario analysis process as per the recommendations of the Task Force on Climate-related Financial Disclosure (TCFD). This approach is used to assess and identify the impacts on business operations resulting from both physical and transition risks associated with climate change over various timeframes. The two formats of assessment cover preliminary petrochemical business, advanced petrochemical business, infrastructure business, and natural gas business groups. The detailed assessment can be downloaded for review below.

PTT Task Force on Climate-related Financial Disclosures (TCFD) Report 2023

Transition Risks:

• Risk from acute natural disasters, such as natural calamities, etc.
• Long-term, chronic changes in weather conditions, such as gradual temperature increases, rising sea levels, etc.

• Technologies that can enhance energy efficiency.
• Opportunities for investment in alternative energy or renewable energy businesses.
• Access to markets for clean and environmentally friendly energy products.
• Access to funding sources supporting environmental initiatives both domestically and internationally.
• Increase revenue from low-carbon products, which refer to products (goods or services) released by PTT Group that reduce greenhouse gas emissions, such as alternative energy from solar power, water, and RDF.
• Avoided emissions for third-parties. This refers to products (goods or services) provided by PTT Group that enable customers or users to reduce greenhouse gas emissions, such as E10, E20, and E85 gasohol, as well as biodiesel and natural gas, which are registered as a T-VER project by TGO. 

Climate Change Strategy

PTT is unwavering in its commitment to steer all aspects of life towards a low-carbon society seamlessly. This entails proactively managing and mitigating both the positive and negative impacts stemming from climate change at every juncture of its business operations. Since 2021, the Company has embedded this commitment into its strategic trajectory, with a clear aim to transition its business towards energy and other sectors beyond energy, with the objective of curtailing greenhouse gas emissions in line with short-term, medium-term, and long-term targets. The details of this transformative journey permeating throughout the organization's operational landscape along the entire value chain are as follows:

• The formulation of long-term goals for 2030 demonstrates a genuine dedication to business transformation. These objectives encompass Business Growth, New Growth, and Clean Growth, serving as pivotal points in crafting business plans and operational strategies aimed at achieving these enduring targets.
• PTT has established the objective of Clean Growth, aiming to slash greenhouse gas emissions by 15 percent by 2030, compared to the levels recorded in 2020. Moreover, it pledges to declare a carbon neutrality goal by 2040 and attain complete net-zero greenhouse gas emissions by 2050. These initiatives are reinforced by governmental measures aimed at propelling Thailand towards a low-carbon society.
• Establishing the "3P Action Plan" aligned with the organization's long-term goal for 2030, serving as a framework for collaborative initiatives within the PTT Group. Key projects include:

3P Decarbonization Pathways	Key Actions	Proportion of GHG Reduction
Pursuit of Lower Emissions Link with Clean Growth targets to minimize process greenhouse gas emissions during routine operations.	Carbon dioxide capture and storage Utilization of carbon dioxide for beneficial purposes Use of renewable energy and hydrogen energy Implementation of energy-saving and conservation projects Carbon offsetting through carbon credits to mitigate greenhouse gas emissions	30
Portfolio Transformation Change the business model by creating growth from the energy business of the future by increasing the proportion of the Green portfolio and managing the Hydrocarbon portfolio.	Promoting growth from future energy businesses Increasing the proportion of renewable energy production Decreasing investment in fossil energy Supporting the use of electric vehicles in Thailand	50
Partnership with Nature and Society Increase the amount of carbon dioxide absorption and storage through natural methods through planting and maintaining forests and increasing green areas.	Maintaining and preserving 1 million rai of forest from the "Sustainable Forest Plantation Project in Honor of His Majesty the King," initiated since 1994. Continuously planting new forests on 1 million rai, and, in collaboration with the PTT Group, an additional 1 million rai.	20

• PTT has established the PTT Group Net Zero Task Force (G-NET) comprising high-level executives from companies within the PTT Group. This task force is responsible for setting targets and focusing on managing key projects aimed at significantly reducing greenhouse gas emissions or enhancing carbon dioxide removal and sequestration. These efforts align with the business context of PTT Group, such as Carbon Capture & Storage (CCS), Carbon Capture & Utilization (CCU), Renewable Energy (RE), Hydrogen Energy, and Reforestation (RF), to support Thailand in achieving its carbon neutrality goal and reaching net-zero greenhouse gas emissions. Additionally, it drives business transformation according to the defined strategic directions and business plans. Progress is reported to the Good Corporate Governance and Sustainability Committee quarterly, with a focus on managing risks related to climate change, overseen by the Corporate Vision and Risk Management Committee. PTT has implemented control measures and mitigation plans to reduce risks, along with clear leading/lagging key risk indicators, to effectively mitigate risks. Furthermore, the PTT Group Clean & Green Task Force has been established, comprising operational representatives from group companies responsible for monitoring and controlling greenhouse gas emissions to align with the set targets. They track joint progress and measure outcomes in an eco-efficient manner. PTT Group Clean & Green Strategy, a long-term incentive program, runs from 2020 to 2030.

• The establishment of greenhouse gas emission targets serves as performance indicators in line with the State Enterprise Performance Evaluation System and organizational key performance indicators. These metrics gauge and assess the performance of the Chief Executive Officer and President and top management officials, cascading down to relevant departments accordingly.

The implementation of carbon pricing mechanisms for use in PTT's investment considerations^GRI305-5

Utilizing carbon pricing mechanisms to inform investment considerations within PTT is one of the tools supporting investments in greenhouse gas reduction projects. These initiatives aim to mitigate the impacts of climate change and drive PTT's business towards a low-carbon society. Evaluation by the Investment Management Committee (SIMC) and PTT's Management Committee determines projects eligible for carbon pricing consideration. Greenhouse gasses considered for pricing include CO₂, CH₄, N₂O, HFCs, PFCs, SF₆, and NF₃. However, primary focus lies on activities that reduce CO₂, CH₄, and N₂O. Projects eligible for greenhouse gas reduction typically span all three scopes: direct emissions (Scope 1), indirect emissions from energy consumption (Scope 2), and/or other indirect emissions (Scope 3). Evaluation of greenhouse gas reduction is conducted using the PTT Group GHG Tool, referencing principles from the API Compendium and IPCC 2006. For activities not assessable via the PTT Group GHG Tool, methodologies accepted at national or international levels such as those by TGO and IPCC are utilized for calculation.

In 2022, PTT applied carbon pricing mechanisms to assess the feasibility of selecting alternative energy projects in various operational areas. This initiative aims to promote localized greenhouse gas management practices within operational regions.

The approach to utilizing carbon pricing mechanisms for investment evaluation by PTT can be summarized as follows:

• Drive low-carbon investments, where carbon pricing mechanisms are used to evaluate projects aimed at both directly and indirectly reducing greenhouse gas emissions in the operations of PTT.
• The utilization of carbon pricing in the form of shadow prices is integrated into the investment decision-making process. The Investment Management Committee employs this approach to evaluate investments, valuing carbon at $20 per ton of carbon dioxide equivalent.

The benefits that PTT will gain from implementing the carbon pricing strategy include:

• Being a guideline for internal behavioral change, it enables PTT to conduct business aimed at a low-carbon society, reducing risks and creating opportunities related to long-term climate change.
• Instilling confidence in all stakeholders, especially investors, by demonstrating a commitment to conducting business towards a low-carbon society.
• Increasing investment opportunities in businesses and projects that can generate business benefits alongside environmental benefits by reducing greenhouse gas emissions for the PTT Group. This is achieved by applying the Internal Carbon Price (ICP) mechanism to evaluate the viability of alternative energy projects in various operational areas, promoting spatial greenhouse gas management practices in operational areas.

Standards and Tools for Developing Greenhouse Gas Accounting within the PTT Group

The PTT Group has been diligently compiling and reporting data on greenhouse gas emissions, absorption, and storage since 2006, covering direct emissions (Scope 1), indirect emissions from energy consumption (Scope 2), and other indirect emissions (Scope 3). External independent audits are conducted annually to ensure accuracy and transparency. In 2022, there were significant updates to the scope of greenhouse gas accounting. Data is now compiled in a consolidated format for both domestic and international companies, adhering to the Greenhouse Gas Protocol. Additionally, adjustments were made to the Global Warming Potential (GWP) values based on AR6 IPCC guidelines, particularly for methane (CH₄), nitrous oxide (N₂O), and the HFCs and PFCs groups. These adjustments are crucial for calculating greenhouse gas emissions accurately. These updated methods have been applied to reporting for both individual companies and the entire PTT Group since 2020. This ensures alignment with the Group's targets, set in 2020, and facilitates compliance with the country's Net Zero goals. Furthermore, the PTT Group Environmental Master Plan 2021-2030 has been revised to harmonize with national objectives for achieving carbon neutrality.

In 2023, PTT underwent a comprehensive review to enhance the collection and reporting of other indirect greenhouse gas emissions (Scope 3). This involved a thorough assessment of significant activities contributing to Scope 3 emissions for both PTT and its subsidiaries. Among these activities, the most significant was the combustion of fuel sold by PTT. The reporting scope was expanded from solely reporting the combustion of fuel products sold directly by PTT or its affiliates to encompass the distribution of products to consumers of other companies within the Group, e.g., TOP, GC, and IRPC. Additionally, data on other significant activities was reported, including the transportation and distribution of raw materials, transportation and distribution of finished goods, waste disposal from production processes, and business travel. 

Plans and Key Initiatives^GRI305-5

Progress Updates: Accelerating the Adaptation of Production Processes in the Pursuit of Lower Emissions.

Carbon Dioxide Capturing and Sequestering Project in the Gulf of Thailand and Nearshore Areas in the Eastern Region – Thailand’s First of Its Kind

Conducted under internal collaboration within the PTT Group, it is divided into two parts, namely: Off-shore: This initiative focuses on capturing carbon dioxide emissions at their source and is spearheaded by PTTEP. It encompasses two primary areas: the Arthit Project, which taps into natural gas reserves, and the Lang Lebah Project. Notably, the Arthit Project represents Thailand's inaugural venture into this field and is anticipated to mitigate greenhouse gas emissions by around 1 million tons of carbon dioxide equivalent annually. The Front-End Engineering Design (FEED) phase has been successfully concluded, with operations slated to commence by 2027. Near-shore: This initiative focuses on capturing and storing carbon dioxide emissions by the PTT Group in the vicinity of the Eastern Seaboard region. The projected capture and storage capacity is approximately 6 million tons of carbon dioxide per year. Plans for project implementation are scheduled to commence after 2030. In 2023, a comprehensive study report was prepared on the Eastern Thailand Carbon Capture and Storage Hub (CCS Hub), known as the White Paper. This initiative aims to reduce Thailand's greenhouse gas emissions. It was presented to the government on behalf of the PTT Group through the Climate Change Policy Committee. The report explores strategies for driving reductions in greenhouse gas emissions, including the application of capture technology, utilization, and carbon storage. Additionally, collaborative efforts were made to estimate the cost of carbon capture across various production processes (CO2 Capture Cost Estimation & Prioritization), conduct feasibility studies for gathering and transportation, and develop CCS business models to guide future investment planning Furthermore, the PTT Group has established the Thailand CCUS Alliance (TCCA) in collaboration with leading educational institutions, private companies, government agencies, and public organizations. The alliance aims to create a strong collaborative platform to drive Carbon Capture, Utilization, and Storage (CCUS) technologies in all dimensions. Its objectives include fostering cooperation among stakeholders to advance CCUS projects, supporting the implementation of CCS initiatives in a sustainable manner, and assisting the country in achieving its greenhouse gas emission reduction targets.

Carbon Capture and Utilization (CCU)

The Rayong Natural Gas Separation Plant, the PTT Innovation Institute, and OR have collaborated to explore the potential development of business and market opportunities for sodium bicarbonate products derived from carbon dioxide separated at the plant. These products can be utilized in various industries such as food, pharmaceuticals, animal feed, and industrial chemicals, both domestically and internationally. This initiative aims to enhance the business capabilities of the PTT Group while reducing carbon dioxide emissions into the atmosphere and promoting self-sufficiency by reducing reliance on imported raw materials/products while promoting business operations in tandem with sustainable environmental conservation and care. Moreover, the SODANA project, focusing on Sodium Bicarbonate, has received investment approval and is currently undergoing construction tendering, while the Animal Feed Protein product has signed a Memorandum of Understanding (MOU) with partners and has progressed to a product & market proof stage. Additionally, PTT is also exploring the continuous potential of other products, such as methanol, which serves as a precursor in adhesive manufacturing, resin for the furniture industry, and as a primary component in biodiesel production. However, the current production heavily relies on imports from abroad, necessitating a higher proportion than domestically produced. If PTT can produce methanol locally, it would help reduce carbon dioxide emissions, substitute imports, and alleviate trade imbalances. Currently, this is in the preliminary engineering study stage.

Alternative Energy Utilization in Operational Areas

PTT has taken strides in adopting solar energy through the installation of solar panels across various sites to harness renewable power from the grid. In 2023, efforts were intensified with additional solar panel installations in operational zones. This expansion included the incorporation of floating solar panels and rooftop setups at the Innovation Institute's premises. Presently, PTT boasts a solar energy production capacity of 1.6 megawatts, slated to commence operations in 2024. At present, the Innovation Institute integrates solar panels and wind turbines, collectively generating 1.68 megawatts of renewable energy. Operational areas encompass districts 1, 2, 3, 5, 6, 7, 8, 9, 10, 11, and 12, maintenance and operation zones for coastal stations, and the Chonburi Operations Center, totaling a capacity of 1.46 megawatts. The Natural Gas Vehicle Unit's operational zone contributes approximately 9 kilowatts to the electricity grid. Additionally, the Eastern Economic Belt Innovation Project, or the Wangchan Valley Project, adds a capacity of about 50 kilowatts. Once all PTT projects are operational, an estimated 4,670 megawatt-hours of electricity can be generated annually from renewable sources. This transition is anticipated to slash around 1,878 tons of carbon dioxide emissions per year in Scope 2 emissions for PTT. Moreover, PTT has transitioned from using internal combustion engine vehicles to electric cars, including Battery Electric Vehicles (BEVs) and Plug-in Hybrid Electric Vehicles (PHEVs), in 2023, totaling 60 vehicles. This shift is expected to reduce greenhouse gas emissions by approximately 127 tons of carbon dioxide equivalent per year. There are plans to increase the number of electric vehicles in the future.

Effective Use of Energy

Additionally, a natural gas separation plant, Unit 7, has been constructed to replace Unit 1, with plans for commercial operation starting in 2024. This initiative is projected to reduce greenhouse gas emissions by 112,000 metric tons of carbon dioxide equivalent per year compared to the previous Unit 1. Furthermore, there are energy efficiency improvement projects under the Operational Excellence initiative within the PTT Group, which have resulted in cost savings of over 1,420 million baht in 2023. In 2023, PTT implemented an energy management and reduction project at the natural gas separation plant in Rayong Province operational area, aimed at decreasing electricity purchases from the grid and generating electricity from natural gas within the facility. These improvements resulted in a reduction in carbon dioxide emissions of 690 metric tons per year. Furthermore, PTT has promoted employee participation in productivity enhancement projects. The objectives of these projects aim to streamline work processes, increase productivity, reduce costs, generate additional revenue, and minimize idle time. In 2022, the objectives of process improvement were expanded to align with the organization's sustainable strategy, focusing on three key perspectives: 1. Efficient use of water resources in operations, 2. Transitioning businesses towards low-carbon societies, 3. Resource optimization with a focus on circular economy principles and waste management. Employees are encouraged to propose projects to reduce energy consumption, both electricity and heat, and to modify equipment in production processes to reduce greenhouse gas emissions. Notably, more than 30 projects have stood out in this regard.

Hydrogen Fuel Energy

Utilizing hydrogen gas as fuel within engines or in conjunction with fuel cells and employing electrochemical processes to convert it into usable energy offers several advantages. Firstly, it is a clean energy source that does not emit pollutants, contributing to environmental preservation. Additionally, it has the potential for comparable performance to traditional fossil fuels. In line with these advancements, PTT has established the Hydrogen Thailand Group to drive hydrogen and fuel cell technologies forward, positioning them as the future's alternative energy sources, thereby transitioning towards a low-carbon society. The PTT Innovation Institute has developed a strategic plan to establish a hydrogen business portfolio, which has been approved by the PTT Board. Additionally, a task force has been formed to develop the hydrogen business, aiming to achieve its objectives. Currently, there is an ongoing study on investment opportunities in Green Hydrogen, collaborating with partners both domestically and internationally. Moreover, collaborations with OR, Bangkok Industrial Gas Co., Ltd. (BIG), Toyota Daihatsu Engineering & Manufacturing Co., Ltd. (TDEM), and Toyota Motor Thailand Co., Ltd. (TMT) have been established to study and develop future energy projects. As part of these efforts, a pioneering hydrogen fuel station for fuel cell electric vehicles has been inaugurated in Bang Lamung District, Chonburi Province, becoming Thailand's first. The station facilitates testing of Toyota's Mirai fuel cell electric vehicles in Thailand, providing shuttle services between Utapao Airport and Chonburi Province for tourists and passengers in nearby areas. Technical data collected from actual usage will be utilized to foster awareness and support future expansion endeavors. In 2023, the Hydrogen Business Development Task Force conducted a study to prepare for the development of the hydrogen business in Thailand. Together, they produced a White Paper covering the potential and challenges of hydrogen in Thailand in the future, outlining the support needed from the government sector and proposing action plans to be presented to the responsible government agencies.

Progress in Operations: Accelerating the Transition to Environmentally Friendly Business Practices - Portfolio Transformation

Transformation of Investment Direction
PTT ceased investing in the coal business entirely in February 2023, having completed the sale of shares in PTT Mining Limited (PTTML) to Astrindo Group companies in Indonesia. Investments in renewable energy, electric vehicles, and other energy-related ventures will be pursued through companies within the PTT Group, showcasing significant progress.

Guidelines for Using Internal Carbon Pricing Mechanism to Inform Investments by PTT

Utilizing carbon pricing mechanisms to inform investment decisions stands as a pivotal tool in bolstering the prospects of investments in projects aimed at reducing greenhouse gas emissions. Moreover, it serves as a vital strategy in mitigating the adverse effects of climate change while steering the company's operations towards a low-carbon trajectory. This approach entails rigorous assessment by both the Investment Management Committee and the Management Committee of PTT. PTT's carbon pricing mechanism adopts a shadow pricing model, pegged at a rate of 20 US dollars per ton of carbon dioxide equivalent. In 2023, the application of carbon pricing was integrated into investment appraisal processes for projects aimed at reducing greenhouse gas emissions. This included assessing the viability of utilizing renewable energy within operational areas and evaluating projects for carbon dioxide utilization. Furthermore, PTT has pushed for and supported group companies in implementing carbon pricing principles in project screening and selection processes to encourage alignment with emission reduction targets. This enables PTT Group to select projects focused on reducing greenhouse gas emissions in line with its objectives.

Progress Update: Accelerating Reforestation Efforts in Partnership with Nature and Society

Collaboration with the Government to Increase Green Spaces

From the project of planting enduring forests in honor of His Majesty King Bhumibol Adulyadej the Great, on the occasion of his 50th anniversary of ascension to the throne, PTT has been undertaking reforestation efforts since 1994, totaling one million rai across all regions of the country. Additionally, PTT has developed conservation networks to sustainably manage and protect forests, including the involvement of volunteer forest rangers in reforestation areas, as well as collaborative environmental conservation efforts related to soil, water, and other relevant aspects. Until the present, in 2023, PTT remains committed to increasing green areas to enhance carbon sequestration through natural means. This involves plans to expand both terrestrial and mangrove forest areas by an additional one million rai by 2030, along with continuous monitoring and maintenance plans. These efforts include surveys of areas and tracking the carbon dioxide absorption results from forests in each region of the country. By signing an understanding document, PTT, together with the Department of Forestry, the Department of National Parks, Wildlife, and Plant Conservation, and the Department of Marine and Coastal Resources, has united efforts from both public and private sectors in theory and practice. This includes supporting research activities and sharing academic information, expanding areas for carbon dioxide absorption and carbon storage, as well as involving local communities in forest resource conservation and biodiversity preservation efforts. Furthermore, an event called "Life Power: Transforming Forests, Planting One Sapling Towards Two Million" was organized on August 8, 2023, at the PTT reforestation site in the reserved national forest areas of Wang Phloeng, Pa Muang Khom, and Lam Narai Forest, Maha Pho Subdistrict, Sa Bot District, Lopburi Province. There were 450 participants who collectively planted over 4,500 trees. This marked the first step towards the initiative of planting an additional 1 million rai of forest. As of now, PTT has received support and carried out reforestation activities on over 86,173 rai (across 25 provinces), surpassing the designated plan of 75,000 rai. This is in conjunction with registering reforestation projects under the Thai Voluntary Emissions Reduction (T-VER) standards to elevate forest restoration efforts to meet academic standards. In driving community engagement initiatives, PTT has signed a memorandum of understanding for collaborative forest planting and conservation with community enterprises such as the Kon Konthorak Pa Maesong Conservation Community Enterprise in Taopun Subdistrict and the Community Conservation and Reforestation Enterprise in Huai Mai Subdistrict, Song District, Phrae Province. These are considered the first community enterprises in Thailand to provide services in forest planting and conservation. Concerning community forest restoration, PTT has also signed a cooperation agreement with the Community Forest Management Committee of Ban Nong Thit Sorn, Nachuek District, Mahasarakham Province, marking the first community forest in Thailand to participate in carbon credit sharing projects. Additionally, PTT has collaborated with ARV Company, a subsidiary of PTTEP Group, to utilize satellite imaging technology and unmanned aerial vehicles (drones) for surveying and analyzing data to identify potential areas for intervention.

Carbon Footprint for Organization: CFO

PTT has compiled data on the amount of greenhouse gas emissions and absorption from its organizational activities in 2022. This was done using the methodology of the Thailand Greenhouse Gas Management Organization (Public Organization), which covers both direct and indirect greenhouse gas emissions. The total greenhouse gas emissions were found to be 10.87 million tons of carbon dioxide equivalent, and the amount of greenhouse gas absorption from planting and maintaining forests from the Permanent Forest Planting Project in Honor of His Majesty (initiated in 1994) was 0.90 million tons of carbon dioxide equivalent in 2022 alone. This has been certified and announced by the TGO on March 11, 2024. Certificate of Carbon Footprint for Organization

Key Achievements

• The intensity of greenhouse gas emissions from the activities of the PTT Group, both direct and indirect (Scope 1 and 2)^GRI305-4
• The intensity of greenhouse gas emissions from the activities of the PTT Group, including direct emissions, indirect emissions, and emissions from the combustion of fuel products sold by PTT (Scope 1, 2, and 3)^GRI305-4
• Direct and indirect greenhouse gas emissions for PTT Group1 (million metric tons of carbon dioxide equivalent)^{GRI305-1, GRI305-2, GRI305-3}
• PTT Group Energy Consumption^{GRI305-1, GRI305-2, GRI305-3}
• The amount of energy produced from renewable energy sources in the year 2023

PTT Data Performance: Environment