Goals and indicators

LUKOIL demonstrates a sustained upward trend in reducing GHG emissions and intends to continue active work to step up efforts in this area.

In 2019, the Company surpassed its direct GHG emissions reduction target for Russian entities by two percentage points – GHG emissions were reduced by 3.3% against the 2016 level. An upward trend in reducing GHG emissions was achieved even with the growth in hydrocarbon production and refining volumes at Russian entities observed since 2016 (+1% and +6%, respectively). In the 2019 reporting year, the Company committed to determining future GHG emissions reduction targets, with progress to be reported by the Company on a regular basis.

In 2019, direct GHG emissions amounted to 37.2 million tonnes of СО2E, of which Russian entities accounted for 81%, and foreign entities for 19%.

LUKOIL Group entities that have a material impact through GHG emissions are included in the reporting: 29 RussianThe reporting boundaries include five power generation entities and one equipment operating company (LLC LUKOIL-ENERGOSETI), seven oil and gas producing entities, four oil refineries, one gas processing plant, two petrochemical plants, four oil product supply entities and one air bunkering entity, as well as four transportation entities. and four foreign entities (three oil refineries in Italy, Romania and Bulgaria, and one operating company in Uzbekistan).

In 2019, the data collection scope was defined more precisely. Unlike in previous years, emissions of natural gas used for LUKOIL-Komi’s in-house needs were taken into account in the reporting year, which had a significant influence on the dynamics of gross and specific indicators for exploration and production entities in Russia. Emission calculations for foreign entities included additional emission points of a power complex within a Romanian oil refinery (which became part of the refinery in 2019) and a catalytic cracking and reforming unit at a Bulgarian oil refinery (included as recommended by HSB Solomon Associated LLC according to the methodology appliedHSB Solomon Associated LLC (Solomon, the official company’s website.).

In Russia, the main contribution (around 80%) to the total direct emissions is made by fixed fuel combustion sources. Flaring made up about 10% of the total emissions and was at the same level as emissions from production processes.

By virtue of projects on efficient APG use, methane emissions reduced almost twofold (45.6% against the 2016 level). Almost the entire volume (more than 90%) of methane emissions comes from oil and gas production processes (in the process of APG extraction, during preventive maintenance work on equipment and in cases of equipment failures).

Indicators 2016 (baseline) 2017 2018 2019
1. Direct gross GHG emissions (Scope 1), million tonnes of СО2E
LUKOIL Group, including 38.02 37.85 36.44 37.22
1.1. Russian entities 31.29 31.14 29.99 30.26
By types of activity:
Exploration and production 10.83 8.85 8.07 10.07
Oil processing and petrochemicals 8.27 10.13 10.05 8.88
Electrical energy sector, including 12.07 11.80 11.66 11.11
  • LLC LUKOIL-ENERGOSETILLC LUKOIL-ENERGOSETI is a specialized service company that carries out activities not only in the transmission of electric energy, but also in the operation and repair of electric power equipment; maintenance of facilities for the production and transport of thermal energy, water supply and sanitation.
1.09 1.49 1.42 1.29
Transportation and sales 0.09 0.09 0.09 0.09
1.2. Foreign entities 6.73 6.71 6.45 6.96
By types of activity:
Exploration and production NA 0.24 0.37 0.33
Oil processing and petrochemicals 6.73 6.47 6.08 6.63
2. Geography
Russia 31.29 31.14 29.99 30.26
EU countries 6.73 6.47 6.08 6.63
Central Asia NA 0.24 0.37 0.33
Share of emissions accounted for by countries where the regulation of GHG emissions has been implemented (Romania, Bulgaria, Italy), % 18 17 17 18
3. GHG composition (Russian entities)
Carbon dioxide, million tonnes of CО2E 29.85 29.87 29.02 29.48
Methane, million tonnes of CО2E 1.44 1.27 0.97 0.78
Share of methane, % 4.8 4.2 3.2 2.6
Other GHGs 0 0 0 0
4. Specific GHG emissions
4.1. Specific GHG emissions in Russia
Exploration and production, tonnes of СО2E / tonne of oil equivalent in produced hydrocarbons 0.108 0.088 0.079 0.099
Processing, tonnes of CО2E / tonne of processed raw materials 0.173 0.209 0.204 0.183
Petrochemicals, tonnes of CО2E / tonne of processed raw materials 0.352 0.370 0.322 0.301
Electrical energy sectorThe indicator excludes LLC LUKOIL-ENERGOSETI (due to the specifics of the activity and the inability to bring the specific indicator to a single denominator) and LLC LUKOIL-Ekoenergo (due to the «zero» volume of direct greenhouse gas emissions). (tonnes of СО2E / MWh of generated electrical and heat energy) 0.339 0.332 0.326 0.335
4.2 Specific GHG emissions abroad
Exploration and production, tonnes of СО2E / tonne of oil equivalent in produced hydrocarbons NA 0.025 0.024 0.020
Processing, tonnes of CО2E / tonne of processed raw materials NA 0.339 0.319 0.333
5. Specific methane emissions in Russia, tonnes of СО2E/tonne of oil equivalent in produced hydrocarbons 0.015 0.013 0.009 0.008
6. Total energy consumption (purchased and internally generated), million GJ NA 497.5 489.3 487.5
7. Flaring emissions, million tonnes of СО2E 4.64 3.54 2.21 2.52

Notes. (1) GHG emissions by LUKOIL Group’s Russian entities were calculated in accordance with the calculation methodology prescribed by the Ministry of Natural Resources of the Russian FederationOrder No. 300 of the Ministry of Natural Resources of the Russian Federation dated 30 June 2015 (registered with the Ministry of Justice of the Russian Federation as No. 40098 on 15 December 2015) “On Approving Methodological Instructions and Guidelines for the Quantitative Determination of the Volume of Greenhouse Gas Emissions by Organizations Engaged in Business and Other Activities in the Russian Federation.”. Emissions by LUKOIL Group’s foreign entities were calculated in accordance with the national methodologies of the countries of operation. The indicator “Volume of direct GHG emissions” was checked as a part of the audit of the present Report (auditor — JSC KPMG). (2) The value presented in the “Share of emissions accounted for by countries where the regulation of greenhouse emissions has been implemented” line item is calculated as the ratio of GHG emissions released by European oil refineries (PETROTEL-LUKOIL S.A., LUKOIL Neftochim Burgas AD, ISAB S.r.l.) to the total GHG emissions released by LUKOIL Group. Information on LUKOIL Uzbekistan Operating Company LLC is not taken into account when calculating the above value, as no regulation of GHG emissions has been implemented in Uzbekistan at a national level. (3) Fluctuations in specific indicators for oil refining and petrochemical entities are due to changes in the production volumes of end products. (4) The figures for direct greenhouse gas emissions for 2016 are presented without taking into account data for LUKOIL Uzbekistan Operating Company LLC; for the period 2017-2019 boundaries are unified.

European oil refineries reducing GHG emissions

LUKOIL has three oil refining plants in Europe (in Italy, Bulgaria and Romania), one joint venture with Total in the Netherlands (Zeeland Refinery), and a number of medium-sized plants engaged in the lube oil refining and blending business. In line with the EU policy of reducing emission allowances for manufacturing plants, LUKOIL performs comprehensive assessments, including in terms of CO2 emission levels, when designing high-profile investment projects.

A project on the replacement of afterburners at a sulfur recovery unit was launched at an Italian oil refinery, and a project aimed at improving energy efficiency of the IGCC unit is also under consideration. Both projects will facilitate CO2 emissions reduction. A methanol production project is under consideration, the realization of which will facilitate the reduction of GHG emissions by about 600 thousand tonnes of CO2-E, according to preliminary estimates.

Potential “green hydrogen” production at a Bulgarian oil refinery and CO2 capture prospects at a Romanian oil refinery are now being analyzed.

In the Netherlands, even stronger plans have been set at the national level:

  • to reduce by 2030 CO2 emissions by 49% of the total GHG emissions (of the 1990 level);
  • to reduce CO2 emissions in the industry by 35% (of the 2016 level).

Taking into account preemptive CO2 emissions reduction plans and appreciation of emission allowances, technological CO2 capture and utilization, “green hydrogen” production and low-grade heat utilization solutions are being developed. The estimated contribution from this program to СО2 emissions reduction by 2030 is expected to reach 600 thousand tonnes of СО2E. This know-how may also be used and replicated at other entities of the Company in the EU.