MOL Magyar Olajes Gazipari Nyrt

MOL has set two targets: to decrease its absolute flaring and venting emissions by 200,000 tonnes and to decrease its scope 1 and 2 emissions by 200,000 tonnes through energy efficiency initiatives, by 2020 compared to 2014. The company has extended these targets until 2030 and has also specified the operations these will cover. In particular, MOL plans to decrease absolute emissions from flaring by nearly 33% within its exploration and production segment and decrease direct and indirect absolute emissions by 200,000 tonnes of CO2 equivalent within its downstream operations.

However, MOL could not be assessed on the alignment of its targets with a 1.5°C pathway, either because essential parameters such as its emissions levels in the reporting year or base year were missing or because information on the exact operations covered by these targets was missing.

Between 2014 and 2019, MOL’s oil and gas extraction volumes have decreased close to 16%, with a greater proportion of less emissions-intensive oil extraction in the overall fuel mix, around 31% in 2019 as opposed to 3% in 2014, sourced from the UK. This has compensated for the higher emissions-intensive oil operations previously undertaken by the company in Hungary and Croatia, which accounted for 34% of its overall fuel mix in 2019 as opposed to 49% in 2014.

The regional shift in extraction activities has led to a downwards emissions intensity trend for MOL’s oil and gas operations. However, this emissions intensity decline is still insufficient compared with the company’s 1.5°C pathway, which requires a much steeper decrease of close to 8% annually until 2024.

MOL reports that it invests around 8% of its total research and development (R&D) in renewables projects. Although a step in the right direction, this figure is still far below the sectoral expectation of 77% low-carbon R&D spending required from oil and gas companies to be aligned with a 1.5°C scenario. The company can improve its performance on intangible investment by providing more details about the renewables projects related to its R&D spending and by investing in R&D for carbon removal technologies (CDR) and carbon capture, use and storage (CCUS), for which the sectoral expectation is an R&D spending of 5%.

MOL has not developed a strategy to influence its clients to reduce their greenhouse gas emissions. However, it has developed several activities related to alternative mobility that can help its customers reduce emissions. For instance, in 2018 MOL launched a car sharing service in Budapest called MOL LIMO. The company reports to have gradually increased the share of electric vehicles within its fleet of vehicles. It also aims to expand the points of sales for its Plugee service for electric vehicle charging at third party locations besides MOL Group service stations. The company should turn these actions into a clear strategy to increase their reach.

MOL plans to decrease absolute emissions from flaring within its exploration and production segment by nearly 33% by 2030 and its direct and indirect absolute emissions within its downstream operations by 200,000 tonnes of CO2 equivalent by 2030. The company has not specified if 2014 was still the base year for these targets and consequently, could not be assessed on these objectives.

MOL reports it will achieve emissions reductions within its downstream operations through energy efficiency initiatives. It is also implementing a leak detection and repair program (LDRP) coupled with investments in vapour recovery unit (VRU) projects across many of its sites.

The majority of MOL’s capital expenditure (CapEx) is dedicated to fossil fuel activities. In 2019, the company allocated 16% of its overall CapEx to upstream projects, 27% to midstream gas projects, refining and marketing projects and 40% to petrochemicals, but only 0.5% to power generation and 8% to consumer services.

MOL has decreased its oil and gas production volumes by nearly 16% between 2014 and 2019 and has also reduced its scope 1 and 2 emissions intensity due to a shift in the regions from where it extracts oil. However, this rate of reduction in emissions intensity is still not aligned with the company’s 1.5°C pathway.

MOL is developing several low-carbon business activities that can help the company transition away from fossil fuel activities. However, MOL’s commitment to a low-carbon transition must be reinforced through clearer targets with long-term horizons and covering its scope 3 emissions.