Polski Koncern Naftowy Orlen (PKN Orlen) is a publicly listed fully integrated oil and gas company headquartered in Poland, with 32.42% state ownership. In 2020, it had USD 23.11 billion in revenue and a reported 22,337 employees in 2019*. PKN Orlen operates in refining, petrochemicals, electricity production and retail services in Europe. Its upstream production, mainly in Canada, has tripled in recent years.
PKN Orlen has established a target to reduce the absolute scope 1 and 2 emissions of its refining operations by 20% by 2030. However, the target could not be assessed because the company does not specify a base year or provide the emissions of its refining activities.
The company should improve the ambition of its target by expanding its coverage to include all oil and gas activities, including upstream activities, and specifying a base year. Furthermore, to drive efforts to achieve its net-zero commitment by 2050, the company should align its target with its 1.5°C pathway and develop frequent and regularly
Of the total capital expenditure (CapEx) of PLN 140 billion (USD 36.5 billion) planned by PKN Orlen between 2021 and 2030, it has committed 18%, i.e. PLN 25 billion (USD 6.5 billion), to projects to reduce greenhouse gas emissions. The company intends to use this expenditure to mainly improve energy efficiency, grow renewables capacity and develop sustainable biofuels. Although PKN Orlen performs well against most other companies in the benchmark, it still needs to increase its low-carbon CapEx share. Under a 1.5°C scenario, oil and gas companies are expected to dedicate 77% of their CapEx to low-carbon and mitigation technologies.
There was a small increase in the proportion of gas in PKN Orlen’s sold product mix, which has a lower emissions intensity from combustion than oil. However, as the company’s main focus has remained on refining, this did not result in significant changes to its scope 1, 2 and 3 emissions intensity, which remained constant between 2014 and 2019.
The company needs to make a significant shift towards low-carbon products if it is to reduce its scope 1, 2 and 3 emissions intensity by 4% per year to align with its 1.5°C pathway. The company’s plans to develop more low-carbon products, such as renewable energy and sustainable biofuels, can provide the opportunity to achieve this emissions intensity reduction and fossil fuel dependence.
PKN Orlen receives a trend score of -. If the company were reassessed in the near future, its score would likely decrease. Although the company has set a net-zero commitment for 2050, its current emissions reduction targets only cover refining, petrochemicals and electricity generation. They do not apply to its upstream business activities and cannot be assessed because they do not specify a base year. The company shows ambition to increase its low-carbon revenue streams. However, without plans to reduce its fossil fuel production, it is unlikely that it will reduce its emissions intensity at the rate required by its 1.5°C pathway.
PKN Orlen has committed to achieve net-zero carbon emissions by 2050. However, it does not disclose if this commitment includes scope 3 emissions. The company also targets a 20% reduction in absolute scope 1 and 2 emissions at its refining operations by 2030. The company has not committed to upstream emissions reductions.
PKN Orlen’s low-carbon transition plan focuses on a five-fold increase in renewable energy capacity to 2.5 gigawatts (GW), a six-fold increase in biofuel production capacity to 2 million tonnes per annum, development of hydrogen production and an expansion of the range of alternative fuels at its retail locations. It aims to invest 18% of its CapEx on low-carbon and mitigation technologies between 2021 and 2030.
PKN Orlen has acquired a majority stake in Energa Group, an electricity company that is 30% renewable. As a result, the company’s renewable capacity is currently 0.5 GW. The company is also in the early stages of constructing a second-generation bioethanol unit.
PKN Orlen’s refining volumes have increased by approximately 24% and its upstream production has at least tripled between 2014 and 2019. There is no evidence of significant reductions in its scope 1 and 2 or scope 1, 2 and 3 emissions intensities.
PKN Orlen demonstrates a commitment to increase its range of low-carbon products through renewable energy generation and second-generation biofuel production. However, the company does not plan to reduce its fossil fuel activities, having grown production significantly since 2014 and planning a “cautious” expansion of its upstream portfolio.
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PLN 86,178,000,000 (USD 23.11 billion)
Publicly listed with 32.42% owned by government of Poland