Indonesia’s Private Steel Manufacturing to Lead Carbon Neutrality

Jakarta, 21 February 2023 – Gunung Raja Paksi Tbk (GRP), a member of Gunung Steel Group and one of the largest private steelmakers in Indonesia, announced the launch of its Net Zero Roadmap today, which outlines its action plan for achieving carbon neutrality by 2050. In line with Indonesia’s Enhanced Nationally Determined Contribution (ENDC) to reduce its emissions by approximately 31.9% unconditionally and a net zero target of 2060 or sooner, GRP has taken steps to bolster their Environmental, Social and Governance (ESG) strategy and reduce primary sources of emissions from the use of grid electricity and fuel (natural gas and coal) combustion, via clean energy alternatives.

The steelmaker has set out a plan to engage stakeholders across the supply chain in minimizing the environmental and social impact from steel. GRP has built its ESG strategy around five core pillars:

• Responsible Procurement
• Environmental and Social Compliance
• Energy Transition and Low Carbon Solutions
• Contributing to Responsible Environmental Management
• Nurturing Talent

In accordance with these pillars, the Net Zero Roadmap outlines the GRP’s decarbonization goals, which builds upon the Energy Transition and Low Carbon Solutions pillar, whereas the new sports center builds on the themes of Nurturing Talent.

To date, steel production accounts for almost 8% of global carbon emissions and this figure is expected to rise, as the global appetite for steel consumption increases. Against this backdrop, government and industry leaders alike, are making commitments to reduce their carbon footprint and GRP is determined to support these national and global agendas.

Upon evaluating its emissions based on the Greenhouse Gas (GHG)Protocol and identifying its primary sources of emissions, GRP has identified 5 main pillars of emissions reduction measures and initiatives to achieve carbon neutrality:

• Fuel Switching: transitioning from coal to cleaner sources of energy such as natural gas
• Production improvements and resource efficiency improvements: Balancing between meeting current steel demand whilst decarbonizing production processes
• Carbon offsetting: Investing in carbon offset projects that benefit the environment
• Collaboration and Partnership: Working with public and private sector stakeholders to implement solutions to reach Net Zero i.e. the Indonesian Iron & Steel Industry Association (IISIA) and participating in the Net Zero Hub by Indonesian Chamber of Commerce (KADIN).

GRP’s Net Zero roadmap also includes its disclosure for 2021 GHG Inventory, which is currently at 0.86 Tonne CO2/ Tonne of Crude Steel production. As an electric arc furnace (EAF) operated mill, GRP has the advantage in decarbonizing its manufacturing plant compared to other global steel players who run by Blast Furnace Operated mills. This inventory data serves as a baseline for GRP’s decarbonization journey.

“In the past year, we are hearing more conversations from the industry around decarbonization and transitioning to cleaner energy sources. As much as there is increasing attention towards ESG, we believe that action speaks louder than words. Mapping out these actionable steps is the right way forward in our ESG strategy. With our Net Zero Roadmap, we are determined to shift the business towards a carbon-neutral one and collaborate with stakeholders within our supply chain to achieve this mission,” said Sheren Omega, Head of Sustainability at GRP.

In addition, GRP also announced the launch of its new sports center, which focuses on one of the five core pillars – Nurturing Talents. The World Steel Association showed that steel workers suffer long-term health effects such as cancers, respiratory diseases and stress related disorders as a result of prolonged exposure to hazards on the job. GRP believes that improving the mental and physical well-being of their employees is essential for them to excel at work. The new sports center will provide employees an outlet to destress and recharge for work in light of building career longevity.

“Our employees are crucial assets to the company. Some of them have been with us for decades and it is only right that we as a company safeguard their well-being and provide them with a healthy working environment. We believe that initiatives like this sports center will go a long way in setting our employees up for success at work,” said Tony Taniwan, Executive Committee at GRP.

Embarking into a new year, GRP is determined to support construction projects for eco-friendly infrastructure such as the building of the New Capital City (IKN), Solar Panel and Electric Vehicle Plants. The company also seeks to actively engage the government and industry leaders in identifying solutions to help the industry transition to a cleaner future.

GRP is currently a full member of the ResponsibleSteel™ and has certified products and operation sites which meets the pre-requisite 13 principles, and the 370 associate requirements, highlighted in the ResponsibleSteel™ International Standard V2.0.

CEO of Gunung Capital, Kimin Tanoto said steel manufacturing has a chance to fight climate change.

“We bet on the future with the electric and recycled matter. We have cut climate change and the impending policy, therefore we will have the chance to fight (climate change) on fairgrounds,” Kimin continued.

Gunung Capital has in-depth knowledge and experience operating steel assets across the value chain. Gunung Capital is assisting the company in meeting its carbon reduction targets through the adoption and implementation of comprehensive strategies to transform climate action into long-term business opportunities.