As part of the European Commission’s Sustainable Growth Financing Action Plan, Regulation (EU) 2020/852 establishing an EU classification system for ecologically sustainable economic activities (EU Taxonomy) entered into force in 2020.
The EU Taxonomy is a key instrument for the European Union to redirect capital flows towards sustainable investments and to create market transparency. It encourages increased channelling of investments by companies, investors and policymakers to where they are most needed for sustainable development. Therefore, the EU Taxonomy Regulation will play an important role in scaling up sustainable investments and implementing the European Green Deal. According to the EU Taxonomy, the OMV Petrom Group is required to disclose how, and to what extent, its activities are classified as sustainable, as defined in the EU Taxonomy Regulation.
The Taxonomy Regulation establishes six environmental objectives:
1. Climate change mitigation
2. Climate change adaptation
3. The sustainable use and protection of water and marine resources
4. The transition to a circular economy
5. Pollution prevention and control
6. The protection and restoration of biodiversity and ecosystems
In June 2021, the Commission formally adopted the Climate Delegated Act, establishing the criteria that define which activities substantially contribute to climate change mitigation and adaptation, the first two out of the six environmental objectives.
OMV Petrom’s process for determining Taxonomy-eligibility
In 2021, OMV Petrom assessed how much its activities contributed to the objectives climate change mitigation and adaption, as required by the EU Taxonomy. In the first year of the Taxonomy’s application, we are required to disclose the share of Taxonomy-eligible economic activities in our total turnover, CAPEX, and OPEX.
The assessment of eligible activities in OMV Petrom Group was carried out through an interdisciplinary project team, using a bottom-up and a top-down approach. A series of internal workshops with management and experts was held in order to give OMV Petrom businesses an introduction into the new EU Taxonomy and disclosure requirements. All business segments and corporate entities participated in a series of workshops to ensure a bottom-up identification of eligible activities, assets, processes, and related eligible CAPEX/OPEX/TURNOVER. A final eligibility check of all identified activities/ products was performed with an external party.
OMV Petrom’s values for the KPIs are derived from the figures reported in the Group’s consolidated IFRS financial statements. Disposal groups classified as held for sale according to IFRS 5 (see OMV Petrom Consolidated Financial Statements 2021, Note 12) have been fully excluded from the calculation of the KPIs. This means that disposal groups according to IFRS 5 have not been considered in the assessment of eligible activities and they have been excluded from the denominator of the KPIs for the full reporting period 2021, irrespective of when the reclassification to “held for sale” was booked.
Associates accounted for using the equity method and not-consolidated subsidiaries were excluded from the assessment as per the reporting requirements of the EU Taxonomy regulation.
 As defined by the EU taxonomy
Definition of turnover
The proportion of taxonomy-eligible economic activities in the total turnover has been calculated as the part of sales revenues derived from products and services associated with taxonomy-eligible economic activities (numerator) divided by the sales revenues (denominator), in each case for the financial year from January 1, 2021 to December 31, 2021. The denominator is based on OMV Petrom’s consolidated sales revenues (OMV Petrom Consolidated Financial Statements 2021, Note 19) and adjusted for sales revenues coming from disposal groups according to IFRS 5. For further details on our accounting policies regarding the consolidated sales revenues see OMV Petrom Consolidated Financial Statements 2021, Note 4.3.p).
Definition of CAPEX
The CAPEX KPI is defined as Taxonomy-eligible CAPEX (numerator) divided by OMV Petrom total CAPEX (denominator). The denominator, total CAPEX, consists of additions to intangible assets (including oil and gas properties with unproved reserves), tangible assets and right-of-use assets and is adjusted to exclude any additions related to disposal groups according to IFRS 5 during the reporting period. For further details on our accounting policies regarding the relevant assets, see OMV Petrom Consolidated Financial Statements 2021, Note 4.1.d), e), f).
Relevant CAPEX was identified for each eligible activity.
In the refinery, CAPEX related to PPE (Property Plant and Equipment) used for a joint production of fuels and organic basic chemicals have been allocated to the production of organic basic chemicals (activity 3.14) using an allocation key reflecting the yield, size and complexity of the refinery plant used for producing fuels and organic basic chemicals.
Definition of OPEX
The OPEX KPI is defined as Taxonomy-eligible OPEX (numerator) divided by OMV Petrom total OPEX (denominator). Total OPEX according to EU Taxonomy consists of research and development (R&D) expenses, maintenance and repair costs, other direct expenditure related to day-to-day servicing of assets and short-term leases.
R&D expenses include the research and development expenditure recognized according to IAS 38 “Intangible assets” and included in the line “Other operating expenses” in the income statement (see OMV Petrom Consolidated Financial Statements 2021, Note 22).
Maintenance and repair costs and other direct expenditure related to day-to-day servicing of assets include mainly costs for external services, personnel expenses and material costs related to regular and unplanned maintenance, repair and servicing measures. The related cost items can be found in the line items “Production and operating expenses” as well as “Selling, distribution and administrative expenses” of the income statement.
Relevant OPEX was identified for each eligible activity.
In the refinery, maintenance and repair costs allocated to cost centers involved in the joint production of fuels and organic basic chemicals have been allocated to the production of organic basic chemicals (activity 3.14) using an allocation key reflecting the yield, size and complexity of the refinery plant used for producing fuels and organic basic chemicals.
Expenses for short-term leases have been determined and included in line with IFRS 16 “Leases”.
In 2021, 2.15% of OMV Petrom’s turnover can be classified as Taxonomy-eligible. The main contributor was the activity 3.14 Manufacture of organic basic chemicals.
|% of total turnover|
|Manufacture of organic basic chemicals (3.14)||556.23||2.15%|
|Transmission and distribution of electricity (4.9)||1.01||0.00%|
In 2021, 6.05 % of OMV Petrom’s CAPEX can be classified as Taxonomy-eligible. The largest contributors were the activities 3.14 Manufacture of organic basic chemicals, 6.14 Infrastructure for rail transport and 7.1. Construction of new buildings. Together these made up 81.45% of our Taxonomy-eligible CAPEX. Other contributors were 6.2 Freight rail transport 6.5 Transport by motorbikes, passenger cars, light commercial vehicles, 7.2 Renovation of existing buildings and 4.1. Electricity generation using solar photovoltaic technology.
|% of total CAPEX|
|Manufacture of organic basic chemicals (3.14)||76.25||2.61%|
|Infrastructure for rail transport (6.14)||48.55||1.66%|
|Construction of new buildings (7.1)||19.19||0.66%|
|Other eligible activities||32.78||1.12%|
|Taxonomy non-eligible activities||2,746.20||93.95%|
In 2021, 7.23% of OMV Petrom’s OPEX can be classified as Taxonomy-eligible. The largest contributors are the activity 3.14 Manufacture of organic base chemicals, 4.9 Transmission and distribution of electricity, 6.14 Infrastructure for rail transport and 7.2. Renovation of existing buildings. Together these made up 77.34% of our Taxonomy-eligible OPEX. Other contributors were 9.1 Close to market research, development and innovation and 6.5. Transport by motorbikes, passenger cars and light commercial vehicles.
|% of total|
|Manufacture of organic basic chemicals (3.14)||14.01||1.87%|
|Transmission and distribution of electricity (4.9)||9.83||1.31%|
|Infrastructure for rail transport (6.14)||9.14||1.22%|
|Renovation of existing buildings (7.2.)||9.02||1.20%|
|Other eligible activities||12.3||1.64%|
|Taxonomy non-eligible activities||696.52||92.77%|
For 2022, the complete reporting requirements of the EU Taxonomy will be applicable for the first time. This means that we will assess how much of our activities are not only Taxonomy-eligible, but also Taxonomy-aligned. We expect significantly lower levels of alignment than of eligibility.
Furthermore, the Commission adopted the Complementary delegated Act, which introduces specific disclosure requirements for businesses related to their activities in the gas and nuclear energy sectors and expects to adopt the second Delegated Act related to the remaining four environmental objectives in 2022; thus, we will also assess and report on those activities.