PwC 1 Enabling a Net Zero world Exploring corporate decarbonisation ambitions and aspects of renewable energy procurement and carbon offsets in Southeast Asia December 2023 PwC 2 Acknowledgements Key authors Special acknowledgements “Exploring corporate decarbonisation ambitions and aspects of renewable energy procurement and carbon offsets in Southeast Asia” was produced by PwC Singapore. PwC Singapore Fang Eu-Lin (Sustainability and Climate Change Practice Leader) Jennifer Tay (Asia Pacific Infrastructure Leader) Shawn Wang (Senior Manager) Rachel Woo (Associate) PwC contributors Ian Milborrow (Partner, Climate Finance and Net Zero, PwC UK) Indrie Tjahjadi (Director, PwC Singapore) Simon Burns (Senior Manager, PwC Singapore) Srikkanth Ramachandran (Manager, PwC Singapore) Levine Thio (Senior Associate, PwC Singapore) International Emissions Trading Association (IETA) Björn Fondén (International Policy Advisory) Morgane Kundert (International Policy Assistant, IETA) We would like to thank IETA for their contributions of knowledge and insights on carbon credits and the global decarbonisation landscape. Please note that an acknowledgment here does not imply an endorsement of the views presented in this report. We would also like to thank the following industry leaders who provided valuable insights and content to this report: Alvin Lee Regional Head of Puro.earth, APAC Nithyanandam Yuvaraj Dinesh Babu Executive Director, Climate Action Data Trust Bryan McCann Director of Supply, Climate Impact X Rene Velasquez Founder, Carbon Exposure Project Dharsono Hartono CEO, PT. Rimba Makmur Utama Riza Suarga Guai Ti Howe CFO, REDEX Russell Quek Senior Managing Consultant, South Pole Jen Wee Kang Founder and CEO, REDEX Zhao Tan Board Member, REDEX Nadiya Nair Strategy & Development Team Lead - Renewable Energy & Carbon Markets (APAC), ACT Commodities Chairman, Agraus Resources PwC 3 Contents 1 Report highlights 04 2 The decarbonisation landscape in Southeast Asia 07 2.1 Net Zero ambitions in Southeast Asia (SEA) 3 2.2 Corporates are facing pressures to decarbonise Unpacking Net Zero 3.1 Context 13 3.4 Actions beyond a company’s Net Zero targets 3.2 Carbon neutral 3.3 Net Zero 4 5 3.5 Steps for corporate decarbonisation Exploring renewable energy procurement methods and renewable energy certificates (RECs) 4.1 Why procure renewable energy 4.3 Considering REC procurement 4.2 RECs in the context of SEA 4.4 Ongoing discussions on RECs Exploring carbon offsets 17 26 5.1 Why purchase carbon offsets 5.4 Considering carbon credits 5.2 Carbon offsetting options 5.5 Ongoing discussions on carbon credits 5.3 Carbon offset projects in SEA 6 Appendix 38 Disclaimer: This report should not be construed as legal, tax, financial or accounting advice, and any information provided is not intended to be sufficient for you to rely on to make a decision. We recommend that you consider the appropriateness of the information in this report having regard to your specific circumstances and obtain independent advice before making any decision. PwC 4 1 Report highlights Enabling a Net Zero world | 5 PwC 5 1 Report highlights The decarbonisation landscape in Southeast Asia Unpacking Net Zero Exploring renewable energy procurement methods and renewable energy certificates (RECs) Exploring carbon offsets Appendix Report highlights The report aims to: • Highlight the state of Net Zero ambitions in SEA (including corporates) • Inspire corporates to raise their ambitions, and to contribute further to the development of decarbonisation in SEA • Inform what respective emission reduction ambitions entail • Provide considerations for corporates in SEA as they decarbonise and utilise RECs and carbon credits (CCs), including understanding developing areas. The decarbonisation landscape in Southeast Asia (SEA): The critical importance of reducing emissions in SEA is driving both governments and corporates to act, despite the unique regional challenges present. As one of the regions most impacted by climate change anywhere in the world, a majority of countries in SEA have now outlined their Net Zero ambitions. While countries in SEA are taking various initiatives to operationalise their Net Zero ambitions, significant challenges remain such as its higher exposure to fossil fuels. Nonetheless, countries in SEA are making its decarbonisation efforts through new and emerging government policies. It is also o