LUKOIL is making concerted efforts to more accurately determine the scale of Group entities’ impacts on the climate, to create long-term goals to mitigate impacts, and to assess the amount of investment needed to attain these goals.
Risks associated with climate change are gaining increasing attention, both from governments and the investment and financial communities.
The connection between global warming and greenhouse gas emissions is still a topic of discussion within the scientific community, but most global initiatives (including UN initiatives and programs) are based on the conclusion from scientific studies that global warming is tied to industrialization and growth in industrial production. European Union countries have set a goal to reduce greenhouse gas emissions by at least 20%Compared to the 1990 level. by 2020, chiefly by transitioning from fossil fuels to renewable sources of energy.
LUKOIL takes climate change risks into account when determining the Integrated Scenario Conditions (ISC), which are used to develop its strategy, assess investment projects, and create annual and medium-term plans. The ISC baseline factors in the impacts of Paris Agreement goals on the global balance of primary energy consumption. The fuel efficiency of cars is expected to rise in the largest economies over the medium term, electric and natural gas vehicles will come more to the fore, and the use of renewable energy sources will continue to grow. In order to assess risks and to test the sustainability of the Company’s strategy, we also developed a scenario which envisages an accelerated reduction in the consumption of hydrocarbons in the transportation sector.
We monitor and analyze business trends related to climate change, and implement programs and projects to reduce the LUKOIL Group’s greenhouse gas emissions wherever possible.
There are dedicated programs in place to reduce the flaring of associated petroleum gas (APG), to develop green energy based on renewable energy sources, and to improve overall energy efficiency. We believe that effecting general improvements to business processes and making timely adjustments to the consumer basket and staying abreast of changes in the operational environment are equally important tasks. Looking ahead to the wider use of electric cars, we are installing charging stations at our filling stations and have signed a partnership agreement with Gazprom on expanding the use of natural gas vehicle (NGV) fuel.