Business model

Our transformation into a multi-utility powerhouse will be based around renewable energy and gas-fired energy, efficient low-emission refining and petrochemical production, upstream production of hydrocarbons, and an integrated retail offering. The Group will actively manage its business portfolio on a capex budget totalling PLN 140bn by 2030. Most of the capital expenditure will be allocated to segments that best fit in with our strategic ambitions. Around PLN 85bn will be allocated to new prospective growth areas, related mainly to renewable energy and advanced petrochemicals, while PLN 55bn will be spent to enhance the efficiency of the Group’s existing assets.

The ORLEN2030 strategy incorporates a commitment to our long-term objective of achieving a net zero carbon footprint by 2050. The Group’s 2030 CO2 reduction targets are 20% less emissions from its existing refining and petrochemical assets and 33% less from its energy business. The ORLEN2030 strategy is expected to drive a two-and-a-half-fold increase in EBITDA, to approximately PLN 26bn in 2030. The energy, petrochemical and refining segments will each deliver EBITDA of about PLN 7bn, while the retail and upstream segments will generate EBITDA of ca. PLN 5bn and PLN 1bn, respectively.

The ORLEN2030 strategy incorporates a commitment to our long-term objective of achieving a net zero carbon footprint by 2050. The Group’s 2030 CO2 reduction targets are 20% less emissions from its existing refining and petrochemical assets and 33% less from its energy business. The ORLEN2030 strategy is expected to drive a two-and-a-half-fold increase in EBITDA, to approximately PLN 26bn in 2030. The energy, petrochemical and refining segments will each deliver EBITDA of about PLN 7bn, while the retail and upstream segments will generate EBITDA of ca. PLN 5bn and PLN 1bn, respectively.

By 2030, around a half of our profits from crude oil processing will be derived from the petrochemical business. Expansion of the existing portfolio and entry into new business areas will help entrench the Group’s position as a leading petrochemical producer in Central Europe. PKN ORLEN is set to ramp up its capacities in olefins and other base products. It will also solidify its position in polymers – a business line with attractive growth potential – by extending the value chain and entering into compounding and concentrates. Concurrently, the share of speciality high-margin products (such as phenol and aromatic derivatives) in the Group’s portfolio will grow from 16% to approximately 25%. Recycling and biomaterials will be new branches of the petrochemical segment. By 2030, we will expand our recycling capacity (mainly in plastics) up to 0.4 million tonnes. We will also implement advanced circular economy technologies.

Until 2030, refining will remain an important segment of our business. Its transformation will be driven by energy efficiency improvements, increased crude conversion rates and integration with Grupa LOTOS, the Group’s major domestic peer. Expansion of the biofuel and hydrogen fuel output will be another vital driver. Within the coming decade, the Group will emerge as the region’s leading producer of biofuels (including 2G biofuels), with an annual capacity of 2m tonnes. As part of the ORLEN2030 strategy, work will be continued on the Group’s hydrogen hub projects in Włocławek and Płock, and steps will be taken to launch green hydrogen production.

The ORLEN2030 strategic vision is to vigorously develop our retail arm, based on the network expansion and significant additions to the retail offering. By 2030, the number of service stations operating across Central Europe under the Polish brand ORLEN will be at least 3,500. The ORLEN retail network will be expanded mainly on foreign markets, with the share of foreign locations up from the current 37% to 45%. We will seek to enhance the availability of alternative fuels, by deploying at least 1,000 EV fast chargers and increasing the sales of hydrogen and LNG/CNG.Our broad, integrated offering of non-fuel products and services will keep attracting new customer groups. Based on the RUCH countrywide chain of newsagents, we will expand our store and food service formats beyond service stations, and will also develop our own network of parcel pick-up points and e-commerce services. Integration with the Energa Group will help ORLEN develop comprehensive service centres for both retail and business customers, encompassing fuel and electricity sales as well as distributed energy solutions. Delivery of the initiatives outlined in the ORLEN2030 strategy will drive a 50% increase in gross non-fuel margin relative to 2019.

The ORLEN2030 strategy is also designed to ensure stable financial foundations for the Group. Our value will be built by profitable investment projects, sustainable funding sources and a robust balance sheet. Having capped our net debt/EBITDA ratio at 2.5x, we will align the Group’s CAPEX plans with its current financing capabilities. We will rely on a balanced mix of funding sources with current cash flows supported by an additional debt capacity. We will also use alternative funding sources, such as project finance, EU funding for innovation and energy transition projects, and engaging with external partners who would co-fund selected projects. Projects aligned directly with the Group’s carbon neutrality goal will be partly financed through green and sustainable bonds issued on the European capital market.