The noteworthy greening of the Orlen logo is only a symbol of a larger change in the development strategy of this concern, which has confirmed in its strategic documents that it intends to loosen ties with fossil fuels regardless of the political turmoil in Poland – writes Wojciech Jakóbik, editor-in-chief at BiznesAlert.pl.
Orlen has presented an update of its sustainable development strategy until 2030. The goal is an energy transition balanced by the needs of energy security and affordable energy prices. This is an expression of strategic thinking at a company that is being racked by political changes, including the dispute over nuclear reactors and the merger with Lotos and PGNiG. Irregardless, the company has visibly changed its approach to fossil fuels, which will probably survive the change of government and company management.
Orlen intends to follow the example of fuel companies such as Equinor and Shell to undergo an energy transformation by reducing CO2 emissions and increasing the share of renewable energy sources, as well as greening the most important area of its activity, which is the extraction and processing of raw materials. Change is evolutionary, but consistent. However, it can’t be said it’s just greenwashing, which Orlen could be accused of if the only thing the company did was changing the logo to green in 2020. Specific measurable targets at different stages of implementation are intended to assess progress in accordance with corporate governance.
Green refineries
Orlen wants to invest in green refineries: increase the production of biofuels to 3 million tons per year and synthetic fuels to 70 thousand tons per year. Mining is to incorporate Zero Routine Flaring and Zero Venting to reduce greenhouse gas emissions by eliminating routine drilling flaring and methane release. Petrochemicals are to become greener thanks to capturing and storing up to 3 million tonnes of CO2 per year. Orlen also wants to produce up to one billion cubic meters of biogas annually.
Orlen’s approach in this regard coincides with the calm presented by the mining and refining industry. In the 2020s, we will still not do without conventional fuels, but the growth in the share of alternative fuels is to be supported by the transfer of existing assets to their service. Thus, they will not become orphaned assets, and, e.g. the refinery in Gdańsk will not be closed when the processing of fossil fuels ends. It will switch to green refining. This is the plan of the aforementioned Equinor, and Saudi Aramco, which has become Orlen’s partner in Gdańsk after the merger with Lotos.
Green products
The company from Płock intends to have more than 9 GW of renewable energy, produce 130,000 tons of green hydrogen and 300 MW in small nuclear reactors. It wants to build 10,000 electric car charging points in Central Europe. 45% of investment spending in 2030 is to be in line with the EU taxonomy, i.e. to meet the European Union’s 2050 climate neutrality target. Orlen will reduce emissions in refineries, petrochemicals and mining by 25 percent, energy intensity by 40 percent, and net emission intensity by 15 percent.
These declarations are important from the point of view of retaining customers and fighting for mature markets to the west and south of Poland. If Orlen wants to have a chance with industry leaders in the Czech Republic or Germany, he must provide them with products that meet climate standards with the EU taxonomy on top of the list. The goals are not overly ambitious, but they have been set, and no one will say that Orlen did not respond to market expectations in this regard.
Green mining
Orlen intends to introduce monitoring of greenhouse gas emissions from LDAR mining assets by 2026. It also plans to launch Baltic Power’s first 1.2 GW offshore wind farm in partnership with Canada’s Northland Power. Orlen pledges to phase out coal by 2035 In 2020, it was the first fuel company in Poland to announce its commitment to climate neutrality by 2050. Orlen produced 20 TWh of electricity and heat from coal in 2019. It is expected to go down to 6 TWh in 2030 and zero in 2035.
This, in my opinion, is the most interesting element of the strategy, which coincides with the declarations of the US giants, but also Russia’s Gazprom, which also promises to fight methane emissions. The methane strategy of the European Commission and attempts to create a common policy of the US and the European Union in this area promise to tighten the screw on methane emissions. Orlen has taken on this task and announced the first actions in this direction. It is acting in advance and making a constructive contribution, giving itself space to cooperate in the creation of regulations in Brussels.
Green nuclear power
Interestingly, Orlen has declared in is 2030 strategy it would work on the commissioning of the first SMR unit with a capacity of 300 MW in cooperation with Synthos. Earlier it was possible to hear announcements about the launch of the first small reactor in 2029. Orlen plans to appoint an ombudsman for local communities and implement a policy to manage relations with such communities. The company isplanning to launch the Orlen Good Neighbor program by 2026. It is supposed to teach about a just transition and sustainable development. On the one hand, this is a more conservative approach to SMRs, and on the other hand, it is a desirable way to meet the potential concerns of local communities. It is a better way to start than hanging banners in every community.
Green despite scandals
In summary, Orlen’s sustainable development strategy until 2030 could be presented by another energy and fuel company from our part of the world. It fits into the trend and is not greenwashing. It will be possible in the future to verify if Orlen managed to implement this strategy. Its positive impact on the perception of Orlen would probably be greater if it were not for the impact of political disputes over this company on its business image. However, politics will be close to it as long as it is jointly responsible for ensuring Poland’s energy security, and that its her ambition.