ADARO’S DECARBONIZATION JOURNEY – DIVERSIFYING INTO THREE PILLARS: ADARO ENERGY, ADARO MINERALS, & ADARO GREEN

PT Adaro Energy Indonesia Tbk and its subsidiaries (“Adaro”) supports the Indonesian government’s commitment to reduce greenhouse gas (GHG) emissions, including measures to achieve net-zero emissions (NZE) by 2060 or earlier.

As a measure of our support, Adaro has taken concrete action in several areas, including a detailed calculation of GHG emissions produced by our operational activities under scope 1 and scope 2, using more biofuel in operational activities, increasing the use of renewable energy at our facilities, and conducting energy conservation measures. Furthermore, Adaro has also been preparing the GHG emission reduction strategy, exploring technologies for GHG emission reduction / sequestration, and preparing to implement Nature-based Solutions (NbS) through the Adaro Land business segment.

Adaro’s decarbonization journey includes the following three initiatives:

1. Uniting the previous eight growth pillars (Adaro Mining, Adaro Mining Services, Adaro Logistics, Adaro Power, Adaro Land, Adaro Water, Adaro Capital and Adaro Foundation) into one growth pillar, called Adaro Energy, and establishing two new growth pillars: Adaro Minerals and Adaro Green. This classification is expected to make Adaro’s initiatives against global warming and climate change more systematic, focused, and aligned with the shift towards a green economy and sustainable development.

   Adaro Minerals, consisting of PT Adaro Minerals Tbk and its subsidiaries, focuses on metallurgical coal mining and processing, aluminum smelter and other minerals and its derivative products that are essential for the world’s transformation towards green economy.

   Adaro Green, consisting of PT Adaro Clean Energy Indonesia and its subsidiaries, will focus on developing renewable power generation facilities.

2. Calculating scope-1 and scope-2 GHG emissions produced by the operational activities of the subsidiaries under Adaro Energy.

3. Disclosing and executing Adaro’s ESG strategy framework.

Adaro’s ESG Strategy Framework

Adaro’s ESG Strategy Framework was formulated to identify, address and manage Adaro’s ESG risks through ESG three components: environment, social and governance. The focuses and priorities for these three components are based on the materiality and relevance to the business. The ESG Strategy Framework also includes “enablers”, or the measures set as the bases of the Adaro’s ESG roadmap, programs, and initiatives. In line with the current global trend, among Adaro’s priorities, the main focus is GHG emissions and energy performance management. 

Adaro’s decarbonization timeline

Adaro’s mitigation measures

1. Pioneering the use of biofuel in operational activities in 2013 (currently using biofuel B35)
2. Reducing the use of fossil fuel and increasing the use of renewable fuel – through electrification, co-firing and solar PV development – for operational activities and infrastructure facilities
3. Executing carbon sequestration projects, watershed rehabilitation and revegetation to support the government’s environmental programs, and developing an energy garden
4. Preparing for carbon pricing implementation
5. Conducting operational excellence and energy management programs

Adaro has started exploring the feasibility of the available technological options to ensure effective decarbonization measures, such as the technologies for low-carbon fuel and low-carbon operational fleet, carbon removal, and a renewable offset mechanism (carbon credit and renewable energy certificate). Furthermore, Adaro will continue to monitor and keep up with the decarbonization technological advancement to support the achievement of its NZE commitment.