PKN Orlen

PKN Orlen aims to reach net-zero emissions by 2050. This is supported by its 2030 target for 25% absolute reduction in carbon dioxide (CO2) emissions from refining, petrochemicals and upstream segments. The company is also targeting a 40% reduction in emissions intensity in energy (power and heat segment in Scope 1) by 2030. PKN Orlen plans to reduce the net carbon intensity of its sold products by 15% by 2030. PKN Orlen can strengthen its commitment to low-carbon transition by setting interim targets with gaps of no more than five years. Setting regularly spaced intermediate targets will incentivise near-term actions on longer-term goals.

PKN Orlen has recently merged two fossil fuel producing companies, LOTOS and PGNiG, which increases the company’s stranded assets. If the company utilises all of its current and approved fields and reserves, its emissions are expected to exceed its 1.5°C carbon budget. Despite this, PKN Orlen continues to develop new unsanctioned oil and gas fields and exploration activities. PKN Orlen needs to cease all exploration for new oil and gas fields and limit production from existing fields and reserves.

PKN Orlen is planning to dedicate 40% of capital expenditure between 2023 and 2030 to projects aimed at reducing its carbon footprint. This is equal to USD 27 billion. However, only about USD 15 billion of this CapEx can be considered as low-carbon projects in this assessment. To improve, the company should provide more detail on the type of biofuel production it is investing in and disclose what proportion of it is based on waste materials rather than food crops. The company can also clarify what types of projects the remaining amount will be dedicated to.

There is no evidence that PKN Orlen has a policy for engagement with trade associations. The company remains a member of International Air Transport Association, which are reported to have opposed climate-aligned policies and have consistently opposed the inclusion of aviation in the EU Emissions Trading System. PKN Orlen can increase its credibility by setting a clear position on climate policy and by implementing processes to withdraw from trade associations that oppose climate-aligned climate policies.

PKN Orlen aims for net zero emissions by 2050. The company is aiming for 25% absolute reduction in CO2 emissions from refining, petrochemicals and upstream segments by 2030. The company is also targeting a 40% reduction in emissions intensity in energy (power and heat segment in scope 1) by 2030. PKN Orlen plans to reduce the net carbon intensity of its sold products by 15% by 2030. The company’s targets are reliant on an unquantified use of offsets.

The company’s low-carbon transition strategy focuses on expanding activities in renewables, biogas, biofuels, EV charging and hydrogen. By 2030, PKN Orlen is aiming for 9 gigawatt (GW) of renewables capacity, 3000 kilotons of biofuels, one billion cubic meters of biogas, 10 000 EV charging points and 130 kilotons of renewable hydrogen. The company is planning to capture 3 million tons of carbon dioxide per year through carbon capture utilisation and storage (CCUS).

The company is planning to spend USD 27 billion on emission reduction initiatives by 2030. However, it is not possible to assess whether all of these projects can be considered as low-carbon solutions. The low-carbon aligned investment includes USD 11 billion for renewables, 1.1 billion for renewable hydrogen, 2.3 billion for biogas and 0.7 billion for EV charging. The company does not report its research and development (R&D) investment for low-carbon technologies.

PKN Orlen’s scope 1, 2 and 3 emissions intensity increased between 2017 and 2021 and is projected to decrease between 2022 and 2027, though not at the rate required by its 1.5°C pathway. The company’s scope 1 and 2 emissions intensity has also increased between 2017 and 2021 and is projected to increase slightly between 2022 and 2027. To align with its 1.5°C pathway PKN Orlen needs to decrease its scope 1, 2 and 3 emissions intensity by 4% annually and its scope 1 and 2 emissions intensity by approximately 6.5% annually.

The company has recognised its need to transition away from its coal activities towards low-carbon products. However, the company continues exploration for new oil and gas fields, even though it is expected to exceed its 1.5°C carbon budget. The company has also recently merged with an oil producer as well as a gas producer. As such, PKN Orlen’s portfolio is not in line with a 1.5°C pathway.

The company publicly discloses a commitment to engaging in social dialogue with workers and unions. However, no relevant disclosure was found regarding the categories of stakeholders it engages with on a just transition. Nor was there any evidence to show the company’s ongoing social dialogue and meaningful engagement with affected stakeholders. No evidence was found of the company undertaking just transition planning to mitigate the social impacts of the low-carbon transition on workers, affected stakeholders and its business relationships. Additionally, no evidence was found to demonstrate the company’s engagement in social dialogue and with stakeholders in its just transition planning.

The company discloses the actions it takes to create jobs by establishing its green glycol production unit and joint venture. However, no public commitment by the company was found stating its intention to create and support access to green and decent jobs as part of the low-carbon transition. Moreover, no evidence was found of the company’s action to promote these jobs in a way that ensures gender balance and inclusion of vulnerable groups. Additionally, no relevant disclosure was found of the company’s assessment of employment dislocation risks. The company discloses the actions it takes to provide training and education opportunities for workers and affected stakeholders. For instance, it provides mentoring and coaching skills training to its managers and offers postgraduate courses or MAP programmes to its employees. However, no relevant disclosure was found of the company embedding equality of opportunity for women and vulnerable groups in these actions. Furthermore, no evidence was found of the company having a process for identifying skills gaps for workers and affected stakeholders or a public commitment to help workers displaced by the transition to reskill or upskill.

No relevant disclosure was found to show if the company identifies impacts of the low-carbon transition on social protection for workers and affected stakeholders, nor how it contributes to social protection. Additionally, no evidence was found that the company expects its business relationships to contribute to the social protection of their workers and affected stakeholders. No relevant disclosure was found to show how the company identifies any misalignment of its lobbying activities with policies and regulations that support the just transition, nor of the measures it takes to address misalignment. Furthermore, no evidence was found that the company lobbies for policies and regulations for green and decent job creation; retention, education and reskilling; and social protection for workers.

No policies or commitments of the company related to respect for human rights were found in the public domain. This includes the necessary policies and systems by which the company can ensure respect for basic human rights in its operations and supply chain.

The company commits to respecting the health and safety of its workers and expects the same commitment of its business relationships. No evidence was found of a time-bound target for paying all workers a living wage. While the company discloses the proportion of its direct workforce covered by collective bargaining agreements, no relevant disclosure was found of the company’s required working hours. The company discloses some indicators of workforce diversity, including the age and gender of its workforce by employee category. However, no relevant disclosure was found of additional indicators of workforce diversity. No evidence was found that the company commits to gender equality and women’s empowerment.

No evidence was found that the company commits to protecting personal data and that it has a privacy statement regarding the collection, sharing and access to personal data. No relevant disclosure was found of the company’s global tax strategy and the corporate income tax paid for each relevant jurisdiction. While the company has a policy prohibiting bribery and corruption, no evidence was found that it includes corresponding clauses in its contracts with business relationships. No evidence was found that the company has a lobbying and political engagement policy and that it specifies that it does not make political contributions. Moreover, no relevant disclosure was found of the company’s expenditure on lobbying activities.