Asia Pulp and Paper (APP) has had its near-time decarbonisation targets approved by the Science Based Targets initiative (SBTi), although the targets do not account for the firm’s biggest sources of emissions – from land use change – due to an ongoing review of how to validate these emissions by the standard-setter.
The paper and pulpwood company’s climate targets were quietly approved by SBTi in January.
The controversial Sinar Mas-owned firm is Indonesia’s first major resources firm to get its targets validated by SBTi, the leading standard for decarbonisation targets aligned with the Paris climate accord.
APP told Eco-Business that it is taking a “structured approach” to emissions reduction, and its net zero strategy remains intact “despite recent political commitments regarding the Paris Agreement”.
Indonesia’s climate and energy envoy said last month that he considers the Paris Agreement “no longer relevant” for Indonesia following the United States’ withdrawal from the deal in January. He also called a pledge made by President Prabowo Subianto that Indonesia will close all of its coal plants by 2040 false, sparking concerns of a U-turn in the country’s coal phase-out plans.
These statements have brought into question the climate commitment of some of Southeast Asia’s largest carbon polluters.
APP has pledged to cut its Scope 1, or direct emissions, and Scope 2 emissions from the energy it buys and uses by 54.6 per cent by 2033 and reduce its Scope 3 full value chain emissions by 32.5 per cent by the same year. The baseline year for its targets is 2023.
Underpinning the target is a commitment to sustain a landmark pledge APP made in 2013 to stop cutting natural forests, a promise that environmental watchdogs have reported has been breached in the company’s concessions and through suppliers multiple times over the last 12 years. APP maintains that there has been no deforestation in its supply chain since the pledge was made.
APP’s Scope 3 target only includes energy and industrial emissions and omits climate pollution from forest, land and agriculture (FLAG). APP’s FLAG emissions and those of its suppliers are vast, as much of its plantations are sited on carbon-rich peat soil, which releases massive amounts of greenhouse gases when dried for agriculture.
In its response, APP said that it will include FLAG emissions in its Scope 3 target once SBTI’s pathway for timber and wood fibre is available. SBTi has temporarily suspended its timber and wood fiber pathway and as such has paused the validations of targets specifically on FLAG-related emissions for companies operating in the forest and paper products sector. It has not said when the suspension will be lifted.
APP’s Scope 3 emissions have dropped from 23.4 million tonnes of carbon dioxide equivalent (tCO2e) in 2020 to 19 million tCO2e in 2022, according to the company’s sustainability reports. Environmental Paper Network has estimated that APP’s emissions from its plantations on dried peat are around 44 million tCO2e, which is roughly on par with the annual climate pollution of Norway.
The company indicated some difficulty in accumulating the data needed to calculate a Scope 3 target. “We have been socialising our priority vendors on Scope 3 since 2023 and, at present, we have been following up with the vendors that have committed to submit the data,” a company spokesperson said.
It added that it was encouraging other vendors to draw up their own decarbonisation targets.
APP told Eco-Business that it is addressing its Scope 2 emissions by transitioning away from coal towards renewable energy, adopting waste-to-energy solutions, and buying renewable energy certificates.
APP has a long-term net zero target of 2060, in line with Indonesia’s national net-zero goal, although the company said it is working on bringing the goal “closer to 2050” – a target year that Prabowo said was possible for the country to achieve in a speech late last year.
Greenpeace, a non-profit that closely tracks APP’s commitments, said the firm’s net zero claim is questionable given that FLAG emissions have not been addressed.
Greenpeace’s global Indonesian forests campaign lead Kiki Taufik noted that APP’s operations generate massive emissions from land use, especially from peatlands that have been drained, and emissions reduction claims are not meaningful without large-scale rewetting and rehabilitation of these peatlands.
Corporates say “no change” to net zero plans
In response to queries about their commitment to net zero after signals of Indonesia’s retreat from the Paris Accord made by politicians last month, Indonesian firms with high-profile sustainability commitments told Eco-Business that their targets remain unaffected.
Royal Golden Eagle (RGE) said it is “more important than ever” to reaffirm its commitments, which include achieving net zero emissions from land use by 2030 from Asia Pacific Resources International Limited (APRIL), APP’s pulp and paper rival. The company’s targets have not been validated by SBTi. It reports its emissions, which totalled 13.1 million tCO2e in 2023, using the Intergovernmental Panel on Climate Change (IPCC)’s guidance for land use change and forestry.
RGE cited measures including the increased uptake of renewable energy, investments in nature-based solutions, and delivering “cleaner energy alternatives” through sustainable aviation fuel SAF and solar energy initiatives.
RGE’s climate targets include zero tolerance for deforestation, although the company was recently linked to forest loss in its palm oil supply chain in a protected nature reserve in Indonesia.
Steel giant Gunung Raja Paksi (GRP) said there is “no change” to its plan, which is to be carbon neutral by 2050 and achieve net zero emissions by 2060 or sooner, in line with Indonesia’s domestic net zero target. The company’s chief transformation officer Kelvin Fu told Eco-Business that it is “fully committed” to net zero and plans to invest in a decarbonisation project this year that would “accelerate” its ambitions.
“Our plan is driven by our business needs to differentiate our brand and product and position ourselves for the future where there will be increasing carbon taxes,” he said. In an interview in 2023, Fu cited the introduction of carbon border taxes as a potential barrier to growth for Asian steel companies, which has motivated the company to decarbonise. He did not elaborate on GRP’s new plans.
Textiles and garments company Pan Brothers, which supplies global brands such as Adidas, Uniqlo, and The North Face, said there was no change to its decarbonisation plans, which include a reduction in Scope 1 and 2 emissions by 50.4 per cent by 2032 from a 2022 base year, and cutting Scope 3 emissions by 30 per cent by the same year.
Though Pan Brothers’ near-term targets were approved by SBTi, a longer-term net zero commitment made in 2022 was removed by the standards body. The firm’s sustainability director, Satrio Boediarto told Eco-Business that SBTi required the firm to hire a third-party assurer to evaluate its net zero target, but doing so was too costly.
Pan Brothers was Indonesia’s first manufacturing company to get its climate targets approved by SBTi. The company’s decarbonisation strategy involves the addition of more solar capacity to its factory roofs following a government policy shift that supports renewable energy proliferation. It is also ramping up energy efficiency measures and switching its car fleet to EVs.
These companies are signatories to the Indonesian Chamber of Commerce’s Net Zero Hub, which was set up after the COP26 climate talks to support Indonesian businesses to decarbonise through the use of the SBTi framework. Forty-two Indonesian firms have SBTi-approved climate targets, although nine targets have been removed, either because they did not meet the criteria or they missed deadlines for submitting validated targets.
