Carbon Emissions Reduction

Material Topic: Carbon Emissions Reduction

Supporting the goals of the Paris Agreement by reducing the carbon footprint of our operations, for example by improving energy efficiency and reducing the venting and routine flaring of gas.

Key GRIs

• GRI 302: Energy 2016
• GRI 305: Emissions 2016

NaDiVeG

• Environmental concerns

Most Relevant SDGs

The Carbon Emissions Reduction material topic focuses on reducing the GHG emissions of our operations (Scopes 1 and 2) through targeted efforts such as improving energy efficiency, increased use of renewable electricity, modernizing our equipment and processes, and reducing venting and flaring of gas. These efforts are integral to meeting our goal of becoming carbon neutral in our operations by 2050, which is also incorporated into our HSSE Policy. As part of our Strategy 2030, we have set specific interim targets for the short (2025), medium (2030), and long term (2040) on the path to meeting our 2050 goals.

Targets 2025

• Reduce carbon intensity of operations¹ CO₂ equivalent emissions produced to generate a certain business output using the following business-specific metrics – E&P: t CO₂ equivalent/toe produced; refineries: t CO₂ equivalent/t throughput (crude and semi-finished products without blended volumes); power: t CO₂ equivalent/MWh produced – consolidated into an OMV Group Carbon Intensity Index, based on weighted average of the business segments’ carbon intensity (Scope 1) ≥30% vs. 2010
• Achieve at least 1 mn t of CO₂ reductions in 2020–2025 from operated assets

Target 2030

• Reduce absolute Scope 1 and 2 emissions by ≥30% vs. 2019

Target 2040

• Reduce absolute Scope 1 and 2 emissions by ≥60% vs. 2019

Status 2022

• Carbon intensity of operations reduced by 17% vs. 2010
• 0.64 mn t of CO₂e reduced through concrete emissions reduction initiatives and divestments vs. 2020
• Scope 1 and 2 emissions reduced by 23% vs. 2019

Most relevant SDGs

SDG targets:
7.2 By 2030, increase substantially the share of renewable energy in the global energy mix
7.3 By 2030, double the global rate of improvement in energy efficiency
13.1 Strengthen resilience and adaptive capacity to climate-related hazards and natural disasters in all countries

Effective carbon and energy management helps reduce costs and liabilities. The OMV Group’s comprehensive approach to managing GHG emissions encompasses GHG and energy accounting and reporting, inventory management, audits, assessment plans, and training for employees. An audit conducted by the internal auditing team in 2020 on the completeness, correctness, reporting processes and methodologies, and quality assurance processes of our GHG accounting confirmed that the OMV Group reports Scope 1, 2, and 3 emissions in a complete and correct manner, that the accounting methodology complies with international standards, and that the reporting process is adequate.

In 2022, the Corporate Carbon, Energy & ESG Management team continued to conduct on-site audits of GHG accounting to verify and improve transparency. This included a detailed assessment of the process of collecting data, the process of managing the data (measurement, estimations, assumptions, calculations, forecasts, consolidation, etc.), and the process of internal and external data communications. The audits confirmed the good practices already in place and highlighted some potential areas for improvement. For all findings and non-conformities, respective action plans are being defined and tracked for close-out in OMV’s HSSE reporting tool.

Governance

Ultimate responsibility for reducing carbon emissions lies with OMV’s Executive Board. The Chief Executive Officer (CEO) is responsible for the overall management and coordination and is therefore also responsible for overseeing climate-related issues. OMV Executive Board members meet regularly (at least quarterly) to discuss current and upcoming environmental, climate, and energy-related policies and regulations, related developments in the fuels and gas market, the financial implications of carbon emissions trading obligations, the status of innovation project implementation, and progress on achieving climate targets. The Executive Board’s remuneration is linked to the achievement of our GHG emissions reduction targets (for more information, see Sustainability Governance).

OMV’s Supervisory Board also oversees the carbon emissions reduction topic. In 2021, we established a new board committee especially for this purpose. The Sustainability and Transformation Committee was formed to support the Company’s Supervisory Board in reviewing and monitoring OMV’s sustainability strategy, ESG-related standards, performance, and processes, and specifically, the Group’s performance in HSSE (Health, Safety, Security, Environment) and climate change.

At Group level, responsibility for GHG accounting and management, sustainability reporting, and ESG governance lies with the Carbon, Energy & ESG Management team in Investor Relations & Sustainability, an area overseen by the CFO. OMV’s Carbon, Energy & ESG Management department is responsible for generating OMV’s GHG inventory based on international standards and best practice. This ensures a consistent approach across the Group.

The main tasks of the team are:

• to define, implement, and manage OMV’s carbon strategy process,
• To monitor, calculate, and report OMV’s GHG emissions, and
• to define OMV’s GHG reporting protocols and tools.

The team coordinates activities throughout the business, providing guidance to stakeholder groups such as subsidiaries, business units, and assets on GHG and energy-related topics. To ensure consistency across the Group, there are also dedicated teams in OMV Petrom and Borealis. Tailored voluntary training on GHG accounting, monitoring and management, sustainability, and climate change is developed by the experts in the Carbon, Energy & ESG Management team and offered to interested employees Group-wide.

In 2022, OMV updated its Capital Allocation Framework and introduced the new project category “Sustainability Projects” which are allowed to meet less stringent economic return requirements. The Carbon, Energy & ESG Management team developed a new strategic climate scoring methodology for Group-wide investment projects. The impact of investments on OMV’s decarbonization strategy is now taken into account. Alongside other strategic scoring aspects, this allows for holistic portfolio optimization across the OMV Group to support the achievement of our GHG reduction targets (for more information, see Sustainability Governance).

In 2022, the team also developed a Group-wide GHG Management Framework. This is the new OMV Group regulation that defines how to measure, report, and manage greenhouse gas emissions and contains the definitions, boundaries, and rules for the OMV Group’s strategic GHG reduction targets and “net zero by 2050” ambition. It also defines the requirements for purchasing voluntary carbon offsets and their contribution to achieving the Group’s GHG target. The regulation also introduced new requirements for Scope 1 E&P methane emissions accounting, which will align with the Oil & Gas Methane Partnership 2.0 (OGMP 2.0) Framework as a minimum and require E&P-operated source-level measurement of methane emissions (OGMP 2.0 level 4) by 2026.