Mr Seele, oil and gas companies are increasingly coming under fire from NGOs and subsequently under pressure from society as a whole. What does the climate discussion mean for OMV?
I consider it a wake-up call, one that acts as a catalyst for us to take a more proactive approach to climate change. That said, this wake-up call needs to be heard throughout society: by business, policymakers and consumers themselves. After all, we all have a joint responsibility, otherwise not a lot will change. I do, however, find demands for an immediate exit from oil and gas unrealistic. These are valuable resources that cannot simply be erased from our everyday lives. We rely on them for industry, transport and for producing essential products. It is true, however, that we need to take a more targeted and sustainable approach to oil as a resource. All of us.
Have there been any positives for you in engaging with climate activists?
Of course. One positive is that a wide-reaching public debate is now underway, one that has also found itself on the political agenda. Correspondingly, the interest in technologies that can bring about rapid solutions has grown as well. I believe that, in addition to an efficient approach to scarce resources, addressing climate change will require a technological transformation. Unfortunately, we are rarely seen as part of the solution: technologies like carbon capture and storage, as well as carbon capture and utilization, i.e. storing CO2 and then reusing it, could make a difference immediately. These technologies come from our industry, so we are well-acquainted with them. We are focused on this as it involves our core competency.
Rapid solutions are one thing – but will they be enough long term?
Of course long-term targets will be needed. But the urgency has now escalated to such an extent that we need to talk about activities that can deliver benefits quickly, things like replacing coal with gas. This would make a significant impact at once. At the same time, we need to get to grips with discovering and developing a wide range of different technologies. This will require business, science and politics to stand together. After all, there is no single solution to the problems of climate change, many different approaches will be required.
We want to and we will make a key contribution to a lower carbon world. Our sector is not the enemy of climate action – we are part of the solution.
Rainer Seele, Chief Executive Officer, OMV Aktiengesellschaft
What does OMV’s contribution to reducing CO2 look like?
With our new climate targets, we are sending a clear signal for a lower carbon future. OMV’s ambition is to make all of its operations climate neutral by 2050 or sooner, i.e. to get Scope 1 and Scope 2 emissions down to net zero. On the path to achieving this, we have set a clear and concrete interim target: by 2025 we will reduce the carbon intensity of our operations by at least 30 percent versus 2010. This will be achieved first and foremost through energy-efficiency measures, but also by using solar power for our own operations. Other technologies, such as using hydrogen or carbon storage and utilization, still require more work on their development along with the appropriate political and regulatory frameworks before they can be implemented.
What about Scope 3 emissions, i.e. those that are generated when gasoline or diesel is used. These make up a much larger percentage. What concrete targets have you set here?
Reducing Scope 3 emissions is clearly a more complex and therefore more difficult task as we as a company are unable to directly influence this ourselves. What’s needed here is a joint effort by policymakers, industry, and the end customers. Our contribution is changing our product portfolio. This applies to the energy sector as well as to the chemicals value chain. By increasing our stake in plastics producer Borealis we are investing 4.6 billion euros in the future of the climate – away from fuels and towards high-value plastics that bind the CO2 for longer. These plastics are important for the energy transition, by the way, for producing electric vehicles, or high-voltage cable systems or solar panels. During the coronavirus pandemic we also saw the importance of high-value plastics, for example with the extremely high demand for protective masks and packaging materials. In future we will prioritize low-carbon and zero-carbon products – which should account for at least 60% by 2025.
What does this mean for the energy sector?
We will continue to increase the share of natural gas at the expense of crude oil in our production as gas is greener. Of the crude that we continue to produce, we will burn less and process more. Here we will increasingly refine it into petrochemical feedstock, for example for plastics. At the end of its useful life, the used plastic can then be recycled into synthetic crude with our ReOil process, thereby becoming part of a circular economy. Together with Borealis we want to become a leader in plastics recycling. Last but not least, we will continue to expand the range of alternative fuels offered at our filling stations such as gas, hydrogen or electric and steadily increase the biogenic component in our fuels.
And how does OMV look in the year 2050 through the eyes of Rainer Seele?
We want to and we will make a key contribution to a lower carbon world. Our sector is not the enemy of climate action – we are part of the solution. But OMV must also act in a way that is economically sustainable so that it can strengthen the business location, secure jobs, and act in the interests of its shareholders. This means that we have to evolve our business model step by step. In terms of energy, OMV will mostly offer natural gas and will save the precious resource that is crude oil for producing high-value chemical products and becoming a global leader in recycling together with Borealis. We have already taken the first steps on this journey.