Hellenic Petroleum is a publicly listed oil and gas company headquartered in Greece. In 2020, it had USD 7.08 billion in revenue and a reported 3,500 employees*. The company operates three refineries and markets and distributes petroleum products in Southeast Europe. It is currently undertaking exploration activities and plans to become a fully integrated company by expanding into oil and gas production.
At the time of the assessment, Hellenic Petroleum’s target of a 50% reduction in its ‘environmental footprint’ by 2030 lacked adequate detail to enable an assessment. However, the company has since reported that it aims to reduce scope 1 and 2 absolute emissions by 30%. The remaining 20% of its target will be offset by renewable energy generation. It has also set a goal to become net-zero by 2050. Hellenic Petroleum should set a long-term target and intermediate targets for its scope 1, 2 and 3 emissions aligned with its 1.5°C pathway to reduce emissions across the entire life cycle of the energy products it sells. Moreover, it should focus on direct action, instead of relying on carbon offsetting to achieve its goals.
Hellenic Petroleum has budgeted EUR 410 million (USD 460 million) to be invested in renewable energy sources by 2024. The company does not report information on the planned company-wide capital expenditure (CapEx) for the next five years. However, compared to the company’s total reported CapEx of EUR 3.8 billion in 2019, the share of investment planned for renewable energy sources is small. Hellenic Petroleum needs to significantly increase its investment in low-carbon technologies, given that the sectoral expectation for oil and gas companies is to invest 77% of CapEx in low-carbon projects to align with a 1.5°C scenario.
Hellenic Petroleum’s low-carbon transition plan is undermined by its intention of becoming a fully integrated oil and gas company by expanding into oil and gas production next to its current refining activities. The company does not indicate whether its ambition to expand into oil and gas production has been factored into its low-carbon transition plan and its commitment to halve its ‘environmental footprint’. The company’s plan for oil production provides a clear indication of its lack of intention to transition away from oil in the long term.
Hellenic Petroleum’s only low-carbon business activity is to produce and trade renewable energy products through its subsidiary Hellenic Petroleum Renewable Energy Sources. At present, the company produces only 26 megawatts (MW) of renewable electricity, but the focal point of the company’s low-carbon transition plan is to increase renewable electricity generation to 600 MW by 2024 and 2 GW by 2030. It also plans to develop second generation biofuels and green hydrogen production.
To achieve a low-carbon transition in line with its 1.5°C pathway, the company needs to substantially increase its renewable energy and low-carbon activities ambition. The company’s target of 600 MW of renewable energy by 2025 is insignificant compared to the energy contained in its petroleum products and is less than natural gas electricity generated through its 50% joint venture in the power company, Elpedison, which generates 810 MW and plans a further 826 MW.
Hellenic Petroleum receives a trend score of -. If the company were reassessed in the near future, its score would likely decrease. The company recently reported more detail on its scope 1 and 2 emissions reductions targets and stated aims to become net-zero by 2050. However, it is undertaking exploration activities and plans to expand into upstream oil and gas production. Moreover, its target to reduce scope 1 and 2 absolute emissions by 30% by 2030 relies, excluding offsets, does not align with its1 .5°C pathway. Although the company has planned for CapEx in renewable energy projects, the amount it has budgeted for this is unlikely to deliver the rate of change required to achieve a low-carbon transition, especially when compared to the relative size of its fossil fuel activities.
At the time of the assessment, Hellenic Petroleum targeted a 5% reduction in the scope 1 and 2 emissions intensity of its refining activities for the year 2019 and provided limited detail on aims to have its ‘environmental footprint’ by 2030. It has since reported that it targets a 30% reduction in scope 1 and 2 absolute emission by 2030 and to offset a further 20% through renewable energy. It aims to become net-zero by 2050.
Hellenic Petroleum has budgeted EUR 410 million (USD 460 million) to be invested in renewable energy sources, such as solar, wind and biomass energy, by 2024. The company plans to increase its renewable energy generation capacity to 600 MW by 2025 and 2 GW by 2030, as well as to adopt carbon capture storage and green hydrogen technologies.
Hellenic Petroleum has applied for licenses for several projects in solar and wind power production and has invested EUR 140,000, a small proportion of its CapEx, on research and development (R&D) in sustainable second generation biofuel development. Despite this, the company continues to undertake oil exploration in Greece, though it has not disclosed when it plans to begin oil production.
Hellenic Petroleum’s scope 1 and 2 emissions intensity from refining operations have decreased between 2014 and 2019, while its production and sales of refined oil has remained relatively constant. The company has undertaken limited investment in low-carbon energy, with its renewable electricity capacity reaching only 26 MW.
The focal point of Hellenic Petroleum’s low-carbon transition plan – to increase its renewable energy production and develop CCS and green hydrogen technologies – is undermined by its ambition to expand into oil and gas production. Without detailed long-term emissions reduction targets and low-carbon strategies, the company is unlikely to align with its 1.5°C pathway.