Climate responsibility

The Environmental Protection Office is involved in PKN ORLEN’s environmental protection activities and ensures that they are carried out in compliance with the law. The responsibilities of the Environmental Protection Office include:

• Coordinating activities designed to implement identified legal requirements for obtaining required environmental permits;
• Carrying out environmental monitoring activities on PKN ORLEN’s sites;
• Supervising activities related to air quality analysis, including operation of the Company’s Environmental Inspection System;
• Coordinating and taking responsibility for activities related to monitoring, reporting and securing free CO2 emission allowances;
• Environmental reporting in accordance with the legal requirements and calculating and paying environmental charges;
• Issuing opinions and agreeing on environmental aspects of all development plans, investment, upgrade and maintenance projects at the ORLEN Group;
• Participating in environmental inspections of PKN ORLEN facilities carried out by external and internal authorities;
  • Cooperating with public administration authorities with regard to formal and legal arrangements and fulfilment of obligations imposed by such authorities;
• Cooperating with environmental protection services of ORLEN Group companies, supervising the activities of ORLEN Eko;
• Supervising the scope and progress of remediation work at PKN ORLEN’s facilities; consulting and coordinating such activities at other ORLEN Group companies;
• Implementing and maintaining the leak detection and repair system (LDAR) at the Płock production plant and the PTA plant in Włocławek;
• Contributing to PKN ORLEN’s positive image through environmental education and protection of biodiversity. Our environmental objectives are set out in the Integrated Management System Policy.

Key ORLEN Group companies also have Integrated Management Systems or Environmental Management System Policies in place, incorporating a commitment to protect the environment, which includes preventing pollution, and hold all permits required by law for their operations.

Environmental initiatives are also carried out by the Water and Wastewater Management Office and the Power Generation Area.

Responsibilities of the Water and Wastewater Management Office at PKN ORLEN include:

• Managing operations in the area of production of water, collection and treatment of wastewater from the Płock production plant’s site, and coordinating the water and wastewater management activities at the ORLEN Group;
• ciągEnsuring continuity of production and distribution of different water types and collection and treatment of wastewater;
• Ensuring compliance with environmental standards, legal regulations, and permits while maintaining continuity of water production and wastewater collection at the Płock production plant.

Responsibilities of the Power Generation Area include:

• Implementing strategic projects relating to commercial and industrial power generation and renewable energy sources, i.e. wind, sun, biomass;
• Developing offshore wind projects in the Baltic Sea;
• Trading in heat, electricity and property rights in certificates of origin for electricity;
• Producing and distributing heat and electricity;
• Ensuring compliance with environmental standards, legal regulations, and permits while maintaining continuity of power generation in its area;
• Coordinating hydrogen projects implemented at the ORLEN Group, seeking synergies in the process of creating a strategic hydrogen system;
• Supervising over standardisation of hydrogen systems at the ORLEN Group with respect to process, technological and technical parameters;
• Developing electromobility at the ORLEN Group.

In the Strategy Area, the Sustainable Business Development Department was created, with responsibility for:

• Coordinating and supervising activities related to the decarbonisation programme, in particular support to ORLEN Group companies;
• Creating sustainable development strategies reflecting ESG criteria;
• Promoting new sustainability projects at the ORLEN Group;
• Working with investors on sustainable development;
• Conducting analyses related to long-term conditions for sustainable development of the ORLEN Group.

For years PKN ORLEN has consistently reduced its environmental impacts by investing in best available techniques in the area of environmental protection and following the principles of sustainable development. PKN ORLEN is fully aware of the challenges posed by the need to develop the alternative fuel sector. The changes taking place in the fuel market clearly indicate that hydrogen is going to be a readily accepted and widely used fuel. That is why PKN ORLEN has launched its Hydrogen Eagle programme, spanning Poland, the Czech Republic and Slovakia, Which is expected to allow the ORLEN Group to achieve annual hydrogen production capacity of approximately 50,000 tonnes by 2030. The programme provides for building six new hydrogen hubs powered by renewable energy sources: three in Poland, two in the Czech Republic and one in Slovakia, including an electrolysis plant powered with electricity generated by the Baltic Power offshore wind farm. The total target capacity of renewables-powered electrolysis plants will be approximately 250 MW. Hydrogen Eagle also envisages the construction of three innovative plants for converting municipal waste into low-carbon hydrogen, to be located in Płock and Ostrołęka in Poland and in the Czech Republic, as well as an international network of more than 100 hydrogen refuelling stations.

In accordance with its strategy until 2030 and in an effort to consistently strengthen its position on the alternative fuel market, PKN ORLEN took on the role of leader in the creation of the Mazovian Hydrogen Valley, a project intended to bring together several dozen entities with varying levels of experience in developing this technology. PKN ORLEN’s responsibilities will include establishing the project, defining its goals and preparing an operating strategy. A Hydrogen Valley is an area corresponding to a number of administrative regions which is to be the site of projects focusing on hydrogen applications for various areas of the economy In line with the EU Hydrogen Strategy, Hydrogen Valleys are to form a coherent European Hydrogen Ecosystem. Based on the draft Polish Hydrogen Strategy, at least five Hydrogen Valleys are to be created, To serve as centres for research, development and education on the implementation of hydrogen technologies in the economy. Currently, work is underway to establish five valleys: the Subcarpathian, Silesian, Lower Silesian, Greater Poland and Mazovian Hydrogen Valleys, with the latter serving as the central unit. Operation of the Mazovian Hydrogen Valley will be based on four pillars, which are expected to contribute to effective development and uptake of hydrogen technologies in Poland. The main pillar is building a value chain by implementing research and development projects, putting in place systematic solutions to train specialised personnel, and engaging in activities supporting regulatory processes.In cooperation with PESA Bydgoszcz, PKN ORLEN plans to purchase a modern locomotive that will be the first hydrogen-powered rail vehicle in Poland. This will be a major step towards large-scale use of zero-carbon hydrogen fuel in rail transport.

In 2021, PKN ORLEN and Synthos signed a cooperation agreement to jointly develop and implement zero-carbon nuclear energy technologies based on micro and small modular reactors (MMRs and SMRs). MMRs and SMRs are electricity generating units which, unlike traditional nuclear power plants, can reach a total capacity of up to 300 MW, are mass manufactured and delivered as a whole to a site to be installed. The mass manufacturing process makes it possible to achieve economies of scale and a relatively short construction time. Small and larger energy systems can be built, depending on the needs. The deployment configuration of SMRs can vary between standalone or multi-module plants, gradually placed in operation, making the entire project easier to finance.

In 2021, ORLEN Południe brought on stream Poland’s first and Europe’s largest green propylene glycol production unit at its biorefinery in Trzebinia. The unit has a capacityof 30,000 tonnes a year, enough to cover as much as 75% of the domestic demand for the product. This PLN 400m capex project will add over PLN 50m to the Group’s annual EBITDA. An integral part of the complex is Poland’s first hydrogen hub.
Green glycol is a high-margin bio-based product that is clean and environmentally safe. It is used for a wide range of applications, including in medicine, cosmetics, and the food industry. It can also be used in aviation as an anti-icing and de-icing agent for aircraft. ORLEN Południe will produce 30,000 tonnes of green glycol a year, An impressive 10,000 tonnes more than Europe’s only unit of this type located in Belgium.

The selection of Northland Power Inc. of Canada as a partner for PKN ORLEN’s offshore wind farm is a milestone in this pioneer project on the regional scale. By combining PKN ORLEN’s local experience gained in the course of development work on the project, which is now well advanced, with Northland Power’s global know-how, we will be well placed to quickly and effectively deliver subsequent stages of this venture. We have found a partner whose business model and vision for energy transition are in line with the ORLEN Group’s long-term plans.The cooperation will provide a major growth stimulus for the offshore industry, including Polish companies along the supply chain. Cooperation with Northland Power Inc. is to involve the development, construction and operation of a wind farm with a target capacity of up to 1.2 GW. Start of the project construction is scheduled for 2024, and its commissioning is planned in 2026.

Major developments in the area of renewables also include new projects in the Poznań region. Construction of a 20 MW PV Gryf solar photovoltaic farm owned by the ORLEN Group’s Energa has commenced near the Przykona Wind Farm (Province of Poznańthat has been in operation since July 2020. The Gryf farm is yet another project built within the premises of the former Adamów lignite mine in the Przykona commune. This location is important as it uses existing transmission infrastructure. The land owned by Energa in the Przykona commune has great investment potential – According to estimates, assets with a total capacity of about 160 MW can be built on this 300 ha site.

The Kanin wind farm, located in the Szczecin province, has added 20 MW to the ORLEN Group’s renewable Energy portfolio. Operating since 2012, the farm was purchased by PKN ORLEN from two foreign investment funds – Stage Capital and Mashav Energia. The acquisition was in line with the ORLEN 2030 business strategy , which provides for strong development of zero-carbon power generation, both through construction of own capacities and acquisition of already operating assets.

Three onshore wind farms with a total capacity of approximately 90 MW will be added to the renewable energy portfolio of the ORLEN Group. The Company signed an agreement to purchase wind farms operating in the Pomerania region from Spanish investment funds. Following the acquisition, the ORLEN Group has 353 MW of installed wind power capacity in Poland and is the fifth largest player on that market.

Five ORLEN Group companies involved in energy projects on the Baltic Sea signed a sectoral agreement. The document, being the outcome of work of the government administration, investors, companies, institutions and organisations taking part in the development of the Polish offshore wind power sector, sets the growth directions for this industry in Poland. In accordance with the adopted assumptions, the signatories will seek to ensure maximum participation of Polish companies in offshore wind power projects. The expected share of local content in projects to be executed as part of the first phase is 20–30% of their total value. This share is to increase to at least 45% for projects to be executed by 2030, and at least 50% for projects after 2030.

PKN ORLEN has engaged with the Maritime University of Szczecin, Gdynia Maritime University and Gdańsk University of Technology to cooperate in education and research on offshore wind energy. The cooperation is to include innovative research, analytical and scientific initiatives related to the development of offshore wind power generation in Poland. In addition, starting from the academic year 2021/2022, the Maritime University of Szczecin, in collaboration with PKN ORLEN, launched an offshore wind power engineering programme. Its graduates will gain technical knowledge necessary to work on the development and operation of wind farms that will soon be built on the Baltic Sea.

PKN ORLEN has invested in the expansion of the Olefins Complex at the Płock production plant, the largest petrochemical investment project in Europe in the last 20 years. The Olefins 3 Complex will be built using state-of- -the-art technologies to ensure, among others, greater energy efficiency, including a 30% reduction of CO2 emissions per tonne of the product.In view of the rising CO2 prices, this will directly improve the competitiveness of the Płock production plant. The project is scheduled for completion in the first quarter of 2024 and production launch is planned for early 2025. The petrochemical products manufactured in the Olefins Complex will be the basis for producing all kinds of everyday items, such as cleaning, hygiene and medical products, as well as synthetic fibres for the production of protective clothing and masks. They will also be used to produce car parts, components of household appliances and electronic devices, etc.

PKN ORLEN has launched a modern Research and Development Centre in Płock. Worth around PLN 184 m, the project is in line with the ORLEN 2030 business strategy objectives of increasing investment in research, development and innovation. For PKN ORLEN, it is a major step towards more effective development of new technologies and products, building its own know-how, and obtaining patents for innovative solutions. Innovative projects developed by the Centre will fully rely on the potential of Polish scientific institutions. According to the ORLEN 2030 business strategy, over the next 10 years the Company is to allocate 10% of its total investment pool, i.e. at least PLN 3 billion, to investments in this area, including new mobility, hydrogen, recycling, research and development, and digitalisation. PKN ORLEN views this as an investment in the future.

A letter of intent signed with PGNiG provides for stepping up cooperation in the development of renewable energy sources. The companies plan to establish a special purpose vehicle to invest in the creation of a network of biomethane plants. The modern plants would convert agricultural substrates, waste and processing industry residues into environmentally friendly biomethane, which could be used in industry or in the energy sector. The project would be in line with the ORLEN 2030 strategy objectives of developing lowand zero-carbon power generation. ORLEN Południe purchased two plots of land in Głąbowo, in the municipality of Ryn, taking over an agricultural biogas plant project started on the property. The company will continue construction of the project, developing it into a biomethane plant capable of producing approximately 7 mcm of biogas per year. PKN ORLEN is analysing the possibility of using agricultural biomass derived from the production of sugar and cereal products and processing it into high-margin petrochemical products, biomethane and hydrogen. The Company has signed a letter of intent to cooperate with the sugar production company Krajowa Spółka Cukrowa. The project would be in line with the ORLEN 2030 strategy objectives of developing green petrochemicals and alternative fuels.

In line with its strategy until 2030, PKN ORLEN wants to develop a new business line enabling management of plastic waste in an economically and environmentally effective way. The Company has signed a letter of intent and a feasibility study agreement with a leading provider of technology and engineering services as its partner to analyse the possibility of using the innovative Hydro-PRTSM technology in implementing chemical plastic recycling projects. The projects would help the Group to pursue the objectives of circular economy and achieve carbon neutrality by 2050. PKN ORLEN is also considering processing of municipal waste into raw materials that would be used to manufacture petrochemical and refinery products and intermediates in a modern and environmentally friendly facility.

The Company has signed a letter of intent with the City of Plock and Przedsiębiorstwo Gospodarowania Odpadami of Płock (waste management company) as prospective supplier of the waste. The joint initiative would be the first project in Poland to fully implement the principles of circular economy.

The ORLEN Group is going to generate green energy from the sun. Development of renewable energy sources (RES) is an element of PKN ORLEN’s energy strategy. The end of 2019 saw the launch of the Group’s solar photovoltaics programme, which will involve the development and coordination of solar PV projects across the ORLEN Group. In its initial stage, the Group selected six locations satisfying the relevant technical criteria for potential installation of PV units, and signed contracts with a supplier to provide project documentation for the solar PV farms. The development of renewable energy projects is also the responsibility of Energa Green Development, a company of the Energa Group established in 2021, whose operations will focus on preparing new projects, from the phase of developing the project concept and obtaining legal title to land, through the design work, to obtaining the building permit. The projects are in line with the ORLEN 2030 strategy objectives of developing the ORLEN Group mainly based on zero- and low-carbon energy sources.