Austrian integrated oil and gas company, OMV released its sustainability report for 2019, that provides a detailed overview of the company’s sustainability performance in the past year and outlines future targets for a low-carbon transition. OMV has a strong presence in Central Eastern Europe both in the upstream and downstream segment.
The report analyses the long-term risks and impacts of climate-related policies and energy sector developments, highlights potential business areas to align with and streamlines OMV’s operations reflective of sustainability goals.
OMV estimates that regulations on emissions, energy efficiency and the increased share of renewables in the energy mix are expected to result in a 5 per cent decrease in gasoline and diesel production in its European core markets and to a 51 per cent decrease in OMV’s heavy products production by 2025.
Based on the International Energy Agency’s (IEA) Stated Policy (SP) Scenario OMV analysed the impact of emissions targets on the passenger and freight fleet in Europe and OMV core markets. The results of the analysis show an expected increase in petrochemical and jet fuel production volumes and a decrease in gasoline, diesel, and heating and fuel oil volumes. In general, according to the IEA SP Scenario, changing demand will lead to a less carbon-intensive fuel mix.
OMV projects change in its product portfolio by increasing the proportion of gas in its total production, as worldwide demand for gas is anticipated to continue to grow beyond 2030. The report suggests that the phase-out of coal and nuclear power in the electricity sector will increase demand for safer and more climate-friendly gas in the European market. In the upstream segment, OMV’s current production mix is 57 per cent gas and 43 per cent oil. By 2025, the share of gas is projected to increase to more than 65 per cent. OMV expects that the shift towards natural gas will contribute to the reduction of the carbon intensity of its energy system.
The sustainability report highlights that OMV’s 2025 carbon efficiency targets were achieved ahead of schedule as the carbon intensity of operations is reduced by 22 per cent and carbon intensity of the product portfolio is reduced by 4 per cent compared to 2010.
Reduction of carbon intensity in operations is mainly due to the implementation of projects directed at the reduction of flaring and venting. The report notes, that in Romania – where OMV is engaged in upstream and downstream operations as well – fugitive methane emissions reduction through field modernisation and integrity improvement measures in OMV Petrom Upstream led to a significant reduction of accidental venting and also to the reduction of gas consumption.
The report underlines that decarbonisation could create opportunities for OMV based on the increased demand for lower- or zero-carbon fuel as compressed natural gas (CNG), liquefied natural gas (LNG) and hydrogen. OMV is already conducting pilot projects with industry partners in order to develop a business model for the cross-sector use of hydrogen gas, for transportation as well as for balancing purposes for the electricity grid in view of the increasing strain from intermittent renewable electricity sources.