PT Adaro Andalan Indonesia Tbk and its subsidiaries (“Adaro”) support the Indonesian government's commitment to reduce greenhouse gas (GHG) emissions, including efforts to achieve net-zero emissions (NZE) by 2060 or earlier. In relation to this, Adaro has prepared a series of decarbonization strategies. 

Adaro's decarbonization strategies include the following initiatives:

1. Declaring and implementing Adaro's ESG strategy framework.
2. Formulating the calculation of GHG emissions generated from operational activities for scope 1 and scope 2. 
3. Utilizing low-carbon fuels (biodiesel) and renewable energy as well as assessing the effectiveness of utilizing low-carbon fleets in operational activities. 
4. Implementing energy conservation efforts supported by operational excellence programs and energy management systems. 
5. Preparing to participate in carbon trading and carbon offsetting programs, including the utilization of appropriate technologies and the implementation of Nature-based Solutions.

Adaro's ESG Strategy Framework

Adaro's ESG Strategy Framework is structured to identify, address, and manage Adaro's ESG risks through three ESG components: environmental, social, and governance. The focus and priorities for these three components are based on materiality and relevance to the business. Adaro's ESG Strategy Framework also includes “enablers”, or efforts defined as the foundation of Adaro's ESG roadmap, programs, and initiatives. In alignment with current global trends, among the things prioritized by Adaro, the main focus is on GHG emissions and energy performance management. 

Adaro's mitigation efforts: 

1. Initiating the use of biodiesel (B5) in operational activities in 2013, and since then Adaro has continuously used biodiesel in accordance with government programs.
2. Reducing the use of fossil fuels through electrification and increasing renewable energy consumption using solar PV – for operational activities and infrastructure facilities.
3. Implementing operational excellence and energy management programs.
4. Using renewable energy certificates (RECs) as a carbon offset mechanism.
5. Implementing carbon sequestration projects and watershed rehabilitation programs.
6. Conducting revegetation and constructing energy parks. 

Adaro is currently assessing the feasibility of available technological options to ensure the effectiveness of its decarbonization efforts, such as technology for low-carbon fuels and low-carbon operational fleets. Furthermore, Adaro will continue to monitor and follow the developments in decarbonization technology as part of its efforts to achieve its NZE commitments.