The 2030 Business Strategy focuses on the transition to low-carbon business by identifying sustainable ways to satisfy client’s needs to offer more energy with less emissions. We will continue to invest to meet the decarbonization targets.
Climate Change and Energy Transition
We recognize climate change as one of the most important global challenges and we support the goals set forth by the Paris Climate Change Agreement. OMV Petrom’s 2030 strategic ambition is to lead the energy transition in SE Europe, capitalizing on emerging markets opportunities. The company’s ambition is to achieve Net Zero operations by 2050 and three key directions contribute to this objective: decarbonize current operations, expand lower carbon gas business, and pursue low and zero carbon business opportunities. OMV Petrom builds on its unique expertise and capabilities as the largest integrated energy player in SE Europe.
By 2030, the company’s portfolio will be expanded to include five new zero and low carbon business activities, which together will account for EUR 3.7 bn investments, representing around 35% of cumulated CAPEX by 2030, and will contribute approximately 15% to the total 2030 Clean CCS EBIT.
To provide customers with a range of lower carbon energy options, OMV Petrom has already made significant steps towards achieving its objective to develop its portfolio of low and zero carbon products.
Together with Complexul Energetic Oltenia, OMV Petrom invests in electricity production from photovoltaic solar energy (PVs). The two companies plan to build four PV parks with a total capacity of ~450 MW. According to current estimates, the PV parks should supply electricity to the national energy system starting 2024. The total investment required for the development of the four PV parks amounts to over EUR 400 mn, of which approximately 70% is financed through the Modernization Fund. With the additional four parks in operation, Romania’s installed solar power capacity increases by ~30%. Our goal is to operate more than 1 GW of renewable power capacity by 2030, including through partnerships.
In the area of sustainable mobility, more than 100 EV charging points were installed by the end of 2022 to contribute to road transport decarbonization. The policy makers are supporting the development of electro-mobility and we see customers having a more open mind towards alternatives. For 2030, our target is to have more than 500 alternative fuel refill points installed. In the Petrobrazi Refinery, the first batch of sustainable aviation fuel was manufactured by co-processing locally produced rapeseed oil. As such, Petrobrazi is the first certified refinery in Romania to produce sustainable aviation fuel (SAF). The SAF volumes produced at the Petrobrazi Refinery can help reduce the CO2 emissions from commercial flights by about 70%, compared to conventional fuel. OMV Petrom plans that more than 15% of the total fuel production in 2030 will come from biofuel, with 150 kt/year of 2nd generation ethanol from straws and 450 kt/year of sustainable aviation fuel and renewable diesel.
At the end of Q3 2022, we announced the final decision to invest EUR 130 mn for a new aromatic production unit at the Petrobrazi Refinery. The plant will function at modern operating standards with low environmental impact and will double the production capacity of aromatic unit to around 100 thousand tons per year, starting 2026.
Furthermore, in the second half of the decade, the Company will intensify investments to seize opportunities on carbon capture, utilization, and storage, as well as on hydrogen, which are anticipated to have a significant contribution to the decarbonization of the country.
For carbon capture, utilization, and storage, OMV Petrom aims to leverage its extensive expertise as E&P operator, also capitalizing on Romania’s onshore and offshore storage potential. We have identified the first onshore opportunity that we might develop by building on the existing assets and subsurface capabilities. In addition, OMV Petrom will test an innovative technology for carbon capture and utilization at the Petrobrazi Refinery. OMV Petrom is a partner in an ambitious European project to address the problem of CO2 emissions through carbon capture and conversion technologies. Over a five-month period in 2024, we will capture the CO2 from flue gasses released by the cogeneration unit, further converting it electrochemically into a marketable product.
In offshore, the Neptun Deep natural gas project progresses towards final investment decision, with OMV Petrom as Operator and Romgaz as partner, as European energy security focus brings strong alignment from all stakeholders to move forward at pace. We plan to invest up to EUR 2 bn in the project and the estimated recoverable resources of around 50 bcm would ensure around 70 kboe/d plateau production, all net to OMV Petrom. Subject to final investment decision in mid-2023, the first production of gas is expected approximately four years later. The increase in gas production will also support the country’s efforts to reduce GHG emissions, as gas can replace coal in power generation and enable integration of renewable capacities. The target is to reach 70% share of gas in 2030 in the Company’s total hydrocarbon production, reflecting the pivotal role of natural gas as a transition fuel in the energy mix in Romania.
We also made progress towards decarbonizing the internal power consumption with cross-divisional on-site PVs projects in all business divisions contributing to the reduction of Scope 2 emissions. At the end of 2022, PV panels were installed on 150 filling stations, covering around 30% of the OMV and Petrom branded filling stations in Romania. The estimated annual production of the PV panels is 2,700 MWh, which is equivalent to the annual power supply for 1,500 apartments. The amount of electricity produced by the photovoltaic panels covers up to 25% of the consumption of a filling station. In E&P, at Asset Muntenia Vest, the first PV park commissioned in the first half of the year will produce more than 4,600 MWh of green power throughout its entire life cycle. Additional similar projects are expected to be commissioned in 2023.
Moreover, to help achieving our decarbonization targets, we are already offering our customers solutions such as partial CO2 offsetting. Starting 2022, OMV Petrom offers clients the possibility to offset 20% of the CO2 emissions generated during driving for the customers filling up their cars with MaxxMotion performance fuels, by supporting local and international carbon offset projects in the form of forest protection. OMV Petrom supports carbon offset projects from the Climate Partner portfolio that are certified by the Verified Carbon Standard (VCS). Carbon offset projects operate in different regions and are geared towards several SDGs.
Overall, the implementation of the 2030 Business Strategy, with the strong commitment to energy transition, will lead to the reduction of carbon intensity throughout all business segments. Carbon intensity of our operations is expected to decline by around 30% while the intensity for Scope 1-3 emissions is forecast to drop by around 20% until 2030. We are targeting a reduction in our methane intensity to less than 0.2% by 2025, in line with international targets. At the end of 2022, the intensity of our operations is ~ 11% lower than end of 2019, while the reduction of the Scope 1-3 emissions is ~ 9%. An impressive result is recorded for methane intensity, with 0.48% for 2022 (1.61% in 2019).
According to Article 8 of the EU Taxonomy Regulation, OMV Petrom Group prepares a statement on its EU Taxonomy eligible and aligned activities indicating the related CAPEX, OPEX and turnover included in the Group Sustainability Report. For detailed information about the process and the results, see EU Taxonomy Reporting sections in this report.
The progress on our promises and new targets
Our Climate change and energy transition approach and actions contribute to the following UN Sustainable Development Goals:
- SDG 3 – target 3.9, by employing cleaner energy sources to ensure healthier lives
- SDG 7 – target 7.2 and target 7.3 by increasing our share of renewables and increasing efficiency
- SDG 8 – target 8.4 through resource efficiency improvement in our operations
- SDG 12 – target 12.4 by employing a more sustainable management and efficient use of natural resources
- SDG 13 – target 13.1 by increasing our resilience to climate change impacts, including scenario analysis.