Embarking On Sustainable Initiatives

From embracing the circular economy model to making new plastics from old, PETRONAS is committed to taking climate action, tackling carbon emissions and transforming plastic waste.

Businesses have a critical role to play in miti­gating global warming, and global energy group PETRONAS is demonstrating how seri­ously it takes sustainability by embarking on a purposeful journey toward climate action.

This journey is supported by the circular economy concept, and a systemic approach that cuts across the group’s various busi­nesses. In addition, in November 2020, PETRO­NAS announced its aspiration to achieve net zero carbon emissions by 2050, in align­ment with the Paris Agreement on Climate Change and the 2030 Agenda for Sustainable Development.

As a starting point, PETRONAS acknowl­edges that its operations rely heavily on finite natural resources and is aware of the con­sequent environmental footprint, from the hydrocarbon produced to the steel used in its facilities. “Therefore, it’s our duty to ensure that we consume responsibly and eliminate waste sustainably whilst ensuring long-term operations are run efficiently and safely,” says Ezrin Johanna Elias, Head of Circular Economy, Corporate Strategic Planning at PETRONAS. “Circular economy perfectly unlocks this for us,” she adds.

The principles of circular economy—elimi­nate, circulate and regenerate—have been adopted by many parts of the group, from upstream to downstream, across the non-energy business segments in property, educa­tion and shipping, at varying levels of maturity and scale. “So, we have a foundation, and we are already seeing great results, especially on increased efficiencies,” says Ezrin.

Responsible businesses maintain profitabil­ity without overlooking the needs of society and the conservation of the environment, and PETRONAS is no different. One of the compa­ny’s key strategies is to keep adding value to its existing businesses. This is achieved by hav­ing an inclusive collaborative platform, not just within the group, but also with other indus­tries as well. “Circularity works best when the ecosystem partners work together,” says Ezrin. “This complements the national agenda well, as there is a strong drive to push for circular economy in Malaysia, too.”

Rethinking Progress with New Models

Conventionally, industrial development has relied on exploiting natural resources based on the “take-make-dispose” approach— a linear economic model. Such a model is increasingly being shunned as businesses rise to meet the global demands for greater accountability of their actions. Brands that instead embrace the circular economy model within their modus operandi seek to decouple economic activity from the consumption of finite resources.

PETRONAS, being at the heart of many economies as a provider of energy, feedstock and energy-related solutions, has pivoted into circularity as a grounded way of aligning with international Environmental, Social and Gov­ernance standards. The company believes this will have positive multiplier effects on its part­ners and value chains.

Making this tectonic shift towards circular­ity, however, requires considerable investment, from reframing business models to technolog­ical advancement. For PETRONAS, such invest­ments toward sustainable outcomes mean shoring up circular carbon, waste-to-product projects and bio solutions, essentially creating sustainable value. These are helping to put the group on course to realize their “net zero aspi­ration and sustainability agenda.”

One innovation that is underway involves plastic waste being processed into high-quality plastics that are recyclable indefinitely, bringing the prospect of cleaner land, beaches and seas a step closer.

New Plastics from Old, Then Repeat

Deeply concerned by plastic pollution, the Malaysia government called for a move away from single-use plastic and plastic pollution through the Malaysia Plastics Sustainability Roadmap 2021-2030, and PETRONAS Chemi­cals Group Berhad (PCG) responded swiftly with its own initiative.

In 2019, PCG rolled out its New Plastics Economy (NPE) initiative to address plastic waste and pollution issues. A four-pronged approach followed suit, encompassing educa­tion, innovation, infrastructure and clean-up. There are clear goals in place, too. “PCG targets to recover 100% of plastic waste equivalent to our domestic polymer sales volume by 2030,” says Mohd Yusri Mohamed Yusof, Senior Vice President of PETRONAS and Managing Director/CEO of PCG.

Recognizing the importance of strategic partnerships, PCG has signed a memorandum of understanding (MoU) with Plastic Energy Ltd. The UK-based advanced plastics recycling technology company will help develop a solu­tion that turns non-recyclable plastic waste into naphtha quality pyrolysis oil. This matter can then be made to produce polymers as a feedstock for plastic production, demonstrat­ing the circularity of plastics in motion.

Going a mile further, PCG and Plastic Energy is jointly performing a feasibility study to establish a facility to convert plastic waste into naphtha quality pyrolysis oil. To complement this process, PCG signed an MoU with KDEB Waste Management and One Biosys to enable a constant supply of plastic waste material. Thus, the potential for PCG to offer certified circular polymers is there, presenting a new offering altogether for future responsible plas­tic application and consumption.

With such progressive initiatives, PCG has taken a leading role in Malaysia to influence and collaborate with plastic waste operators for plastic waste recovery, segregation and recycling. PCG is also a founding member of the Malaysia Plastic Pact, which drives the implementation of the Malaysia Plastics Sus­tainability Roadmap.

And the company has no intention of stop­ping there. “PCG will continue to explore simi­lar opportunities with others who are inter­ested to be part of PCG’s circular economy agenda,” says Yusri, referring to policymakers, small businesses and non-governmental orga­nizations. Apart from ensuring engagement with “everyone in the ecosystem,” this is also “to obtain much-needed support to imple­ment circular economy effectively and holisti­cally,” he says.

Internally, PETRONAS is seeking to engage its operating and business units, including PETRONAS Gas Berhad, to improve the recov­ery of recyclable materials. Along with the dis­tribution of educational materials in schools and clean-up activities in local communities, PCG is aiming to embed the idea of environ­mental preservation far and wide.

Some businesses might wonder if plugging into the circularity model is a costly affair. “I think the notion of circular economy solu­tions being deemed ‘expensive’ needs to be reframed if we are serious about the energy transition,” says Yusri. “Sustainability should be at the heart of an organization’s purpose and strategy, and we need to rethink how we consider value.”

The price of externalities is also a factor for consideration, driving home the need for col­laboration in research and technology. “We must be willing to share the risks. Also, we must be practical that adoption will not hap­pen overnight,” adds Yusri.

Augmenting the Renewable Energy Portfolio

Using renewable energy in the circularity model completes the loop. Beyond provid­ing low-carbon fuels such as natural gas, PETRONAS has taken definitive steps toward providing renewable options—a “step-out strategy” into the wider energy space. Its production complexes, MMHE shipyard, Universiti Teknologi PETRONAS, PETRONAS Research Centre, even Suria KLCC, are fitted out with solar photovoltaic systems. And it offers solar technology solutions to clients such as Lotus’s Stores in Malaysia, and to Hil­ton, Intel and Schlumberger overseas.

The group has big ambitions to grow in this space, with midterm targets of producing three-gigawatt energy capacity from renew­able sources by 2024. In the past three years, the group’s renewable energy capacity has tripled, and there are plans to scale up fur­ther, including hydrogen. This paves the way for PETRONAS to realize renewable energy as one of the primary energy sources in their portfolio—yet another important step in the company’s journey toward climate action.