EU Taxonomy Reporting

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 toward sustainable investments and to create market transparency. It encourages increased channeling 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 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 six environmental objectives.

OMV’s Process for Determining Taxonomy-Eligibility

In 2021, OMV assessed how much its activities contributed to the objectives of climate change mitigation and adaptation, 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 the OMV 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 businesses an introduction into the new EU Taxonomy and disclosure requirements. A series of workshops was held with all business segments and corporate entities to ensure a bottom-up identification of eligible activities, assets, processes, and related eligible CAPEX/OPEX. A final eligibility check of all identified activities/products was performed with an external party.

OMV’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 Consolidated Financial Statements 2021, Note 20) have been fully excluded from the calculation of the KPIs because OMV took the decision to sell these parts of the Group. 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 be held for sale was booked. The exclusion of disposal groups from the KPIs leads to a discrepancy with the financial report of the OMV Group.

Subsidiaries that are not fully consolidated and joint ventures were excluded from the assessment as per the reporting requirements of the EU Taxonomy Regulation.

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’s consolidated sales revenues (OMV Consolidated Financial Statements 2021, Note 5) 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 Consolidated Financial Statements 2021, Note 2.3b.

Definition of CAPEX

The CAPEX KPI is defined as Taxonomy-eligible CAPEX (numerator) divided by our 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 (see OMV Consolidated Financial Statements 2021,Notes 14 and 15). For further details on our accounting policies regarding the relevant assets, see OMV Consolidated Financial Statements 2021, Note 2.3g ff.

In the refineries, CAPEX related to PPE used for a joint production of fuels and organic basic chemicals has been allocated to the production of organic basic chemicals (activity 3.14) using an allocation key reflecting the yield, size, and complexity of the different refinery plants used for producing fuels and organic basic chemicals.

Definition of OPEX

The OPEX KPI is defined as Taxonomy-eligible OPEX (numerator) divided by our total OPEX (denominator). Total OPEX consists of 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 expenses recognized according to IAS 38 and included in the line “Other operating expenses” in the income statement (see OMV Consolidated Financial Statements 2021, Note 9).

Maintenance and repair costs and other direct expenditure related to day-to-day servicing of assets mainly include 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 statements. In the refineries, 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 different refinery plants used for producing fuels and organic basic chemicals. Expenses for short-term leases have been determined and included in line with IFRS 16. Direct costs for training and other human resources adaptation needs are excluded from the denominator and the numerator.

2021 Overview

Outlook

For 2022, the complete reporting requirements of the EU Taxonomy will be applicable for the first time. This means that in the coming year, 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 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.

OMV is member of the Platform on Sustainable Finance, the permanent expert group of the European Commission that has been established under Article 20 of the EU Taxonomy Regulation and assists the Commission in developing its sustainable finance policies, notably the further development of the EU Taxonomy.