Thailand Thai Oil Integrated Report 2025 Analysis: Net Zero Strategy, Climate Risk, Biodiversity, Safety and the Energy Transition

Thai Oil Public Company Limited, or Thai Oil, is one of Thailand’s major integrated petroleum and refining companies, with businesses spanning oil refining, petrochemicals, lube base oil, power and related activities. Headquartered in Bangkok, the company has operated for more than 64 years and reported refinery production of approximately 290,388 barrels per day in 2025, equivalent to 105.6% of its stated nameplate capacity.

The company’s sustainability positioning is particularly relevant because its traditional refining activities face increasing exposure to energy-transition pressures, carbon regulation, changing fuel demand and expectations for lower-carbon products. Thai Oil’s latest strategy reflects an attempt to manage this tension by strengthening existing businesses while developing low-carbon and new-energy opportunities.

Thai Oil’s 2025 Integrated Report covers economic, environmental and social performance from 1 January to 31 December 2025 and represents the company’s 15th consecutive year of sustainability reporting aligned with international standards. The report uses the Integrated Reporting Framework and GRI Standards, including GRI 11 for the Oil and Gas Sector, while also referencing the UN Global Compact, TCFD and UN Sustainable Development Goals. Its reporting boundary covers entities representing approximately 96% of group sales revenue.

The report is also noteworthy for its materiality methodology. Thai Oil applies both impact and financial materiality and incorporates concepts from ESRS and the EU Corporate Sustainability Reporting Directive into its assessment process. The results are subsequently connected with strategic planning, targets, key success indicators and enterprise risk management, suggesting that materiality is being used beyond report preparation alone.

Key Sustainability Themes and Disclosures

Climate transition remains one of the most significant issues. Thai Oil targets net-zero greenhouse gas emissions by 2060 and states that it is prepared to accelerate this to 2050 if economically viable technologies can support competitiveness. Its strategy includes emission reduction within existing operations, management of residual emissions and controls over future emissions, while potential growth areas include sustainable aviation fuel, hydrogen and carbon capture and storage.

The reported emissions profile shows the scale of the challenge. Scope 1 and 2 emissions were approximately 3.26 million tonnes CO2e, while Scope 3 emissions reached 42.61 million tonnes CO2e in 2025, down from 46.86 million tonnes in 2024 and below the company’s stated target of 50 million tonnes. Thai Oil also reports 893,584 tonnes CO2e of avoided Scope 3 emissions associated with sales of lower-carbon products compared with conventional oil products.

Resource efficiency is another visible theme. The group reported zero industrial waste sent to landfill, a 1.82% reduction in net freshwater consumption and no freshwater consumption from water-stressed areas. Its circular economy disclosures also state that 100% of waste was diverted from disposal through reduce, reuse and recycle approaches, while 31% of freshwater consumption was replaced by distilled water from desalination.

Nature-related risk is becoming more explicit. Thai Oil discusses TNFD developments and has established biodiversity commitments covering no net deforestation, no gross deforestation, no net loss and ultimately net-positive impact. The group also set 2025 targets for biodiversity risk assessments across its own operations and upstream and downstream activities, suggesting an emerging effort to integrate nature considerations into operational risk management.

Social Performance and Human Capital

Thai Oil reported an employee engagement score of 77%, up from 74% in the previous year, while employee turnover declined to 2.85%. The company also disclosed an average of 374 hours of employee training and development per person during 2025, indicating significant investment in workforce capability as the energy sector changes.

Safety remains particularly material for a refining business. Thai Oil targets top-decile oil and gas industry performance for recordable injuries and ultimately aims for 0.10 cases per million hours by 2030. The report states a total recordable injury frequency rate of 0.36 cases per million hours for all workers, although it also records one Tier-1 process safety event, highlighting the distinction between personal safety performance and major process-safety exposure.

Human rights management extends to suppliers. Thai Oil reports that human rights risk assessment covered 100% of its business activities and suppliers, with management and mitigation plans developed for identified risks. New suppliers are also required to acknowledge the group’s Sustainable Code of Conduct and complete ESG self-assessments, indicating growing integration of ESG considerations into procurement.

Governance and Strategic Signals

The governance framework places sustainability oversight at both board and executive levels. The Board approved the 2025 material ESG topics, sustainability strategy, net-zero pathway, anti-corruption policy, QSHE policy and biodiversity commitment, while the Corporate Governance and Sustainability Committee monitors sustainability progress and GHG strategy semi-annually. A management-level Sustainable Development Steering Committee chaired by the CEO reviews climate risks, ESG strategy and implementation.

Thai Oil also reports no fines for legal or regulatory non-compliance and no reported corruption or bribery cases in 2025, with all employees participating in annual conflict-of-interest reporting. Environmental data, safety information and the materiality assessment process are subject to external verification, adding another layer of credibility, although assurance coverage varies by indicator rather than necessarily encompassing every disclosure in the report.

What This Report Suggests About Future Direction

The direction of travel appears to be gradual diversification rather than an abrupt departure from refining. Thai Oil’s “2S1P” strategy combines strengthening core businesses with investment in specialty chemicals, sustainable aviation fuel, hydrogen, CCS and other lower-carbon opportunities. This positioning may allow the company to manage energy-transition risk while preserving cash generation and operational capabilities from existing assets.

The integration of double materiality, climate scenario analysis, net-zero governance, biodiversity commitments and supplier ESG requirements suggests a sustainability framework becoming increasingly connected with capital allocation and enterprise risk management. Stakeholders should nevertheless monitor absolute emissions, execution of the 2035 interim climate pathway, process safety performance and the commercial scale of new low-carbon businesses, as these will provide stronger evidence of transition progress than policy commitments alone.

Pacifica ESG View

Thai Oil’s 2025 Integrated Report signals a company attempting to reconcile a carbon-intensive core business with a progressively broader transition strategy. Governance, materiality assessment, environmental management and supply-chain integration appear relatively structured, while emerging areas such as biodiversity and low-carbon business diversification are receiving greater attention. The key question is execution: stakeholders should watch whether Scope 1–3 emissions, process safety and investment in SAF, hydrogen, CCS and other transition businesses demonstrate measurable progress toward Thai Oil’s longer-term sustainability objectives.

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