Greenhouse Gas Emissions Reduction

Scope 1 and 2 Emissions

Scope 1 emissions encompass direct emissions from sources within a company’s control (e.g., combustion in owned or controlled boilers and furnaces). In the palm oil industry, these can arise from various sources, such as plantation soil management, combustion of biomass for generating steam and electricity in processing facilities, fuel combustion for vehicles and equipment across plantations, mills, and refineries, land-use change from the company’s palm oil operations, and transportation of harvested palm fruits from lorries or ships owned by the company.

As for Scope 2, these are indirect emissions resulting from purchased energy, such as the generation of purchased electricity, heat, or steam consumed by a company. In our operations, scope 2 emissions arise from using grid electricity and steam for processing facilities or other operations in the palm oil industry.

The emissions from direct sources controlled by Musim Mas (Scope 1) and indirect emissions from purchased electricity and steam used to operate our facilities (Scope 2) contributed to approximately 9% of the Group’s baseline year emissions.

Scope 3 Emissions

Most GHG emissions in many sectors fall under Scope 3 emissions, which are indirect emissions from a company’s value chain stemming from upstream and downstream activities (e.g., emissions from suppliers, contractors, and their goods and services). These are beyond a company’s operational control. While these are sources where we would have lesser influence in emission management, we recognize that accounting for GHG emissions across our supply chain is a crucial step.

We model and account for our Scope 3 emissions against the GHG Protocol guidelines. Based on the preliminary results of our baseline year, a majority of Group emissions come from Scope 3 emissions, contributing to more than 90% of the total emissions.

A Focus on Upstream Emissions

In addition to employing the GHG Protocol at our global operations, we calculate emissions across our Roundtable on Sustainable Palm Oil (RSPO)-certified upstream operations using the RSPO PalmGHG v4 calculator. The calculation covers all of our 15 RSPO-certified integrated mills.

The primary emissions are from land-use change combining land conversion and peat oxidation. The installation of methane capture facilities at our palm oil mills reduces our GHG emissions by hundreds of thousands of tons of carbon dioxide equivalent (tCO2e) every year. Combining other emissions sources and offset with sequestration (from palm trees and conservation areas) as well as from the sale of electricity generated from our methane capture facilities and palm kernel shells (PKS), our net emissions intensity was about 2.7 MT CO2e/MT CPO in 2022.

Life Cycle Assessment (LCA)

In addition to accounting for our Group emissions, we also account for our carbon footprint of product (emissions intensity of product). Our products form ingredients for our customers’ product manufacturing, making our emissions part of their Scope 3 emissions. Consequently, as part of global collective decarbonization efforts, customer requests for a product carbon footprint (PCF) have been growing.

In 2019, Musim Mas began overseeing a Life Cycle Assessment (LCA) for our upstream products. In 2022, we piloted a project to conduct an LCA for selected downstream products. The evaluation follows the ISO 14040 and ISO 14044 standards with a cradle-to-gate approach. The LCA covers potential environmental impacts such as global warming potential (including PCF), eutrophication, acidification, and water consumption.
In parallel to the ongoing pilot project, Musim Mas is processing customers’ PCF requests in stages. The LCA study is a rigorous exercise relating to the scope and product life cycle process; hence, Musim Mas will continue to improve our LCA models, conforming to the highest standards.