Climate change

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Climate change
and the energy transition

The announcement of our Net Zero by 2050 ambition in 2021 and the launch of our Net Zero roadmap in 2023 — the first energy company in Southeast Asia to take such a critical step — demonstrates our commitment to climate action. Our roadmap includes near-term emission reduction targets by 2030 aligned with the GHG Protocol and the latest climate-science and long-term targets by 2040 that are consistent with the deep decarbonization of the power sector.

Since then, we conducted the following activities to ensure that efforts to implement our targets and address remaining gaps on emissions reduction:

  • Training on Net Zero for the Board, senior management and employees
  • Roadshows and meetings with business units to discuss and develop Net Zero targets, initiatives and metrics at their level
  • Regular monitoring and reporting of Net Zero progress
  • Continuous improvement of data collection and disclosures on Net Zero
Net Zero progress 2024 01

2030 target achieved

For scope 1 emissions from own generation

55% reduction

Scope 1 emissions vs baseline

Our targets, strategies and performance

Target 1 addresses scope 1 emissions from our own generation activities.

  • With the successful implementation of the world’s first market-based Energy Transition Mechanism (ETM), our scope 1 emissions have significantly decreased. The ETM enabled the divestment and early retirement of our 246 MW SLTEC coal plant by 2040, 15-25 years ahead of its typical operational lifespan have significantly decreased.
  • To achieve the 2030 target, we aim to divest the two remaining thermal assets from our portfolio by 2025 to further reduce scope 1 emissions. Our renewable energy output will also continue to increase as more projects begin operations.
  • In 2024, we achieved an 81 percent reduction from our 2021 baseline, bringing us closer to our 2030 target. This progress was driven by a 55 percent decrease in scope 1 emissions associated with energy generation due to lower fuel consumption, coupled with a 130 percent increase in output from renewable sources.

Target 2 addresses scope 1 emissions from sources other than own electricity generation, such as from fleet vehicles and scope 2 emissions from electricity consumption.

  • To reduce our emissions from these scopes and achieve the 2030 target, we aim to procure Energy Attribute Certificates (EACs) and install solar technologies across sites to reduce grid consumption.
  • In 2024, our scope 1 emissions from non generation-related activities and scope 2 emissions increased to 28,644 tCO2e as more renewable sites began construction and operations. Acknowledging the gap that must be addressed for this target, we continue to promote energy efficiency across our sites and are exploring greener options for fuel and electricity.

Target 3 addresses scope 1 and scope 3 emissions from our own generation and retail electricity activities.

  • To achieve our 2030 target, aside from divesting our thermal assets by 2025 and increasing our generation output from renewable sources, we intend to address emissions associated with retail electricity.
  • In 2024, we achieved a 38 percent reduction compared to our baseline in 2021. Aside from lower scope 1 emissions from energy generation and higher renewable energy output, our scope 3 emissions from retail activities also decreased, contributing to improved performance on this target.

Target 4 addresses the remaining scope 3 emissions from upstream and downstream activities, including purchased goods and services, capital goods, fuel- and energy-related emissions not covered in target 3, upstream transportation and distribution, upstream leased assets, waste, employee commuting, business travel and investments.

  • Based on our 2021 baseline, emissions from our supply chain–purchased goods and services, capital goods and upstream transportation and distribution–constitute the biggest share of this target.
  • To this end, we are working towards establishing a detailed strategy and roadmap to address upstream emissions, including enhancing GHG data collection and reporting, engaging and collaborating with key suppliers and contractors to align with Net Zero goals, procuring lower carbon when possible”; (3) change last bullet point to: In 2024, our intensity from other scope 3 emissions decreased by 40 percent compared to 2021 levels, a significant progress from last year’s performance. This performance reflects our increasing RE output from newly completed projects.
  • In 2024, our intensity performance decreased by 24 percent, a significant progress from last year’s performance. This target reflects our higher RE output amidst expanding construction activities.

Having established strategies to address our primary emission hotspot – scope 1 emissions from generation activities – we are now directing our efforts toward addressing the next key sources of emissions: supply chain and purchased electricity. We are closely collaborating with our business units to integrate Net Zero strategies and targets at every step of project development and operations.

Eric Francia at Climate week

ACEN president and CEO Eric Francia joined the 2024 Climate Week NYC, the biggest annual climate event of its kind. He joined key figures in a panel discussion entitled “Harnessing Transition Credits to Drive a Coal to Clean Transition in Emerging Markets” where he emphasized the significant role of transition credits in overcoming the challenges of the energy transition in emerging markets.

Pioneering energy transition

2022

In November 2022, we completed the world’s first market-based Energy Transition Mechanism transaction for the divestment and early retirement of the 246 MW SLTEC coal plant in the Philippines.

ACEN pioneering energy transition

2023

At COP28, we announced our partnership with The Rockefeller Foundation’s Coal to Clean Credit Initiative (CCCI) and the Monetary Authority of Singapore (MAS) to develop the world’s first Transition Credits project that would leverage carbon finance to phase out a coal-fired power plant and replace it with renewable energy, in line with the Paris Agreement.

Pioneering energy transition 2023 1

2024

In August, we signed a Memorandum of Understanding (MOU) with GenZero and Keppel Ltd. to jointly explore the origination and utilization of Transition Credits to accelerate the retirement of the SLTEC coal plant, and replace it with a clean energy dispatch facility.

Pioneering energy transition 2023 Pioneering energy transition 2024

Climate adaptation
and resilience

Palauig Solar Phase 1 in Zambales ACEN
The 363 MW Palauig Solar (Phases 1 & 2) is one of our large-scale development projects in Zambales, Philippines.

We proactively identify and address the environmental and social risks across our projects, including climate risks, through our Environment and Social Management System (ESMS). We determine which among our operational plants are prone to physical risks, including tropical cyclones, flooding, water stress, drought, wildfires and extreme temperatures. We also identify climate risk adaptation and mitigation measures as part of our environmental assessment studies during the development phase. These studies play a crucial role in shaping engineering solutions that will help optimize our construction design and operational and management plans.

In the Philippines, for instance, we implement adaptive work schedules and heat index monitoring to safeguard workers during extreme heat, while continuously enhancing emergency response plans for cyclones, floods, wildfires and extreme temperature as aligned with international standards. To reduce the risk of wildfires, we establish fire breaks and regular vegetation management.

In Vietnam and Australia, advanced weather tracking software and early warning systems are deployed to enable proactive responses to extreme weather events. This is supported through local fire brigade engagement and completion of emergency preparedness scenarios at the facility. These comprehensive measures not only address immediate climate risks, but also pave the way for sustainability certifications and green financing opportunities.

Climate resilience 0507 01