Leading the low-carbon transition: SCG’s cement decarbonisation roadmap in Southeast Asia – Surachai Nimlaor, SCG Cement

So good morning. Good morning, everyone. So it's my pleasure today I am here. I want to share our decarbonization roadmap of SCG to all of you. We are one of the leading cement company in the area, in Thailand and in ASEAN. And we are committed to reducing carbon emission, and continuing to provide high quality products and solution to our customer. Today, I will introduce our decarbonization action, key highlight action, and share how we are expanding successful low carbon solution across Thailand and Southeast Asian. Before I go into detail, let me brief you today's agenda. First, I will give you a short introduction of SCG and our business overview in Thailand and in ASEAN.

And next, I will introduce SCG cement manufacturing facility across Southeast Asia, including our regional footprint and production network. And then I will share our decarbonization roadmap. This section cover both Thailand Cement Manufacturing Association, or TCMA, roadmap and SCG own decarbonization roadmap. Finally, I will highlight some of our key decarbonization projects and success story, showing how we are turning our roadmap into real action and result. So let me introduce you our history. SCG was found in 1913 and has gone from a cement company into a regional business leader. Over the past 113 years, we have expanded into building materials, packaging, chemicals, and distribution.

Today, we operate through three core businesses with more than 400 companies, over 50,000 employees, and annual revenue around 500 billion baht. We continue to drive our innovation and sustainable growth across ASEAN. Now you have seen an overview of SCG, let me focus on cement business. As one of the leading cement producer in Southeast Asia, we operate an extensive manufacturing network across the region. We have a total cement plant production capacity of 33 million ton per year, with operation in Thailand, Vietnam, Cambodia, Laos, Indonesia, and Myanmar. This regional footprint help us to serve customer efficiently and supporting our decarbonization roadmap across ASEAN.

Our strategic location plant and integrated regional network enable efficient logistic, cost competitive, and reliable product delivery across Southeast Asia. With our strong manufacturing presence across the region, reducing carbon emission has become one of our key priorities. To support Thailand Net Zero target by 2050, Thai Cement Manufacturer Association, or TCMA, has developed a decarbonization roadmap for the cement industry. So I can claim that our association in Thailand, I think we are the first one who has developed this decarbonization roadmap. The roadmap highlight several emission reduction pathway, with the CCUS being the largest low at around 45% of the total reduction.

Other key levers include energy efficiency, low carbon cement, alternative fuel uses, efficient concrete production, renewable energy, and natural carbon sink. This roadmap demonstrate that achieving net zero will require multiple solution working together, supporting by innovation and industry-wide collaboration. Following the TCMA roadmap, we have developed our own decarbonization roadmap with a clear target. You can see that we aim to be net zero in 2050 So we aim to reduce our emission from 34 million tons in 2020, this is our baseline, to 25 million tons by 2030 and achieve net zero emission by 2050.

Our strategy is based on four key pillars: energy transition and efficiency, calciche cement, CCUS, and carbon offsetting. Together, these initiatives will help us to reduce emission and supporting sustainable growth and contributing to the global climate goals. I would like to show one of our key actions under energy transition strategy to increase our alternative fuel usage in our cement plant. Today, alternative fuel provide around 40% and heat energy used in our cement production process. So total maximum capacity is around 60% that we can use. The average figure is 40%, because we have to balance and monitor the price gap between coal and biomass.

And these fuel include biomass, energy crop, RDF, and industrial waste. By reducing our dependency on fossil fuel, we can lower carbon emission and move closer to our net zero. Next, beside alternative fuel, renewable energy is another key to drive our decarbonization journey. Currently, renewable energy contribute around 40% also of our energy consumption. We utilize several renewable energy solutions, including waste heat generation, solar rooftop, solar farm, and solar floating. Together with alternative fuel, these initiatives help reduce carbon emission and support our pathway to net zero.

Besides reducing emission in our own operation in our cement plant, we also help our customer to reduce emission to low carbon products. In Thailand, our flagship green products are low carbon cement and low carbon concrete. Both products can reduce carbon emission by up to 15%, compared to ordinary Portland cement or OPC. And this solution could help support the transition to more sustainable construction industry. And to further reduce the emission from a product, we have developed LCT, a new generation of low carbon cement. By replacing parts of the clinker with calciche and limestone, LCT can reduce CO2 emission by 30% to 40%. It depend on the care content in the LCT.

So we are now preparing for large scale production and have already demonstrate its performance through several real projects and customer collaboration. I think that for your program on Wednesday, all of you will go to Tha Luang Cement Plant. So, you can see over there. Tha Luang Cement Plant is one of our project that we plan to produce our calciche in the cement plant. And in addition to low carbon products such as LCT, SCG is also developing CCUS solution to address emission that cannot be reduced through other measures. This pilot project partially supported by the Ministry of Higher Education, Science, Research and Innovation.

They capture carbon dioxide from a cement plant emission using VPSA technology. This is just a pilot project in our R&D center. The capture carbon dioxide is then utilized in the concrete curing process and permanently stored inside the products. This project demonstrate a practical way to reduce emission and producing low carbon construction materials. For the low carbon solutions I have introduced are now reaching a customer beyond Thailand. Today, our low carbon cement products are exported to ASEAN countries, and another country, for example, Australia, Maldives, and some parts of the US. Supported by international recognized certification such as EPD.

These products demonstrate that SCG competitive in the global market. This expands our position, a leading low carbon cement producer in Thailand and support the global transition in a low carbon future. To support the global growth of our low carbon cement, SCG is strengthening our capacity in Vietnam through our guiding cement plant in the south of Vietnam. This facility will serve as a strategic export hub, supplying low carbon cement to key markets. For example, in the US, Australia, and Oceania. The project improve logistic efficiency, support business growth, and help accelerate the transition to low carbon construction worldwide.

So, in summary, SCG is driving decarbonization through energy transition, low carbon product, LCT, CCUS, and regional expansion. By scaling up these solutions across Southeast Asia and the global markets, we are supporting the transition toward a low carbon construction industry, and we remain committed to achieve our net zero target. This creates sustainable value for our customer, society, and the environment. So, that's all for my presentation. Thank you.