RUEN
2019 Interactive Sustainability Report

Measures and results of actions

«One of our sustainability goals is to reduce our carbon footprint as a result of the Company's operations. And it is impossible to achieve this goal without the use of alternative energy. Therefore, we have created an innovation and technical council in this area. I think that soon we will be able to get the first results of the council's work - concrete proposals for the introduction of renewable energy sources in the activities of Tatneft».

Rustam Khalimov
First Deputy General Director for Oil and Gas Exploration and Production of PJSC TATNEFT, Head of Tatneft-Production

The company is implementing comprehensive measures to reduce greenhouse gas emissions and transition to carbon neutrality by 2050. 

As we shape our strategy to move towards low-carbon production and ensure sustainable development in the long term, we intend to achieve ambitious goals and contribute to the achievement of global goals for decarbonising the economy.

We are joining the Science Based Targets (SBTi) platform to set science-based targets to reduce greenhouse gas emissions.

In the process of building a system of accounting and reporting on greenhouse gas emissions in TATNEFT Group, the Company adheres to the standards and recommendations of the Greenhouse Gas Protocol (GHG Protocol) and aims to ensure disclosure of information regarding climatic aspects in accordance with the recommendations of the Task Force On Climate-Related Financial Disclosures (TCFD), as well as participate in the authoritative international climate rating Carbon Disclosure Project (CDP).

In assessing the coverage areas for accounting for greenhouse gas emissions, we take into account and intend to expand the application of the Corporate Standard for Accounting and Reporting of the Greenhouse Gas Protocol of the World Business Council for Sustainable Development (WBCSD) and the World Resources Institute (WRI).

Science Based Targets (SBTi)

The initiative builds on the collaboration of the CDP climate platform and the UN and coordinates the global community in setting climate change mitigation goals. Assurance of the set goals by SBTi experts significantly increases the investment status and assessment of the long-term sustainability of companies. The platform provides an opportunity for exchange of experience and interaction on the development of targets for reducing, capturing, and offsetting CO 2 emissions.

Carbon Disclosure Project (CDP)

The international CDP Climate and Environmental Disclosure Database is used by financial institutions to assess the potential of companies and investment opportunities that will lead to positive financial results in the transition to a low greenhouse gas economy. Access to the database allows investors to understand companies' stance on climate change and identify promising new investment opportunities.

In September 2019, the Board of Directors of PJSC TATNEFT adopted a new version of the Policy in the field of environmental protection taking into account climate change.

Key provisions of the Company's position in the field of climatic aspects and reduction of greenhouse gas emissions
  • The company consistently and comprehensively adheres to initiatives related to climatic aspects and the reduction of greenhouse gas emissions, and also actively participates in the discussion and implementation of activities related to the regulation of greenhouse gas emissions at the national and international level.
  • The Company ensures the adoption of managerial decisions on the development of the corporate system for accounting and management of greenhouse gas emissions towards their reduction and reduction of the carbon footprint (the totality of greenhouse gas emissions produced by the enterprises of TATNEFT Group, which have an impact on the environment, measured in CO2 equivalent). At the same time, the Company considers not only emissions from its own operations, but also emissions from the use of products that are produced and supplied to the market by the Tatneft Group enterprises, as well as in the supply chain associated with the Tatneft Group activities.
  • The company plans target values ​​for reducing the total volume of greenhouse gas emissions and implements appropriate measures to ensure these target values, including
    - introduction of advanced technologies to reduce emissions and capture emissions into the atmosphere;
    - reducing the intensity of emissions;
    - increasing the efficiency of systems for accounting and control of greenhouse gas emissions;
    - search for effective solutions for the safe utilization of greenhouse gases;
    - efficient use of associated petroleum gas;
    - improving the energy efficiency of production operations;
    - development of low-carbon energy sources such as  gas, renewable sources, biofuels;
    - production and use of environmentally friendly fuels.

The company recognizes the importance of society's demand for a transition to cleaner energy and takes into account the fundamental trend of changing the energy balance towards less carbon-intensive fuels, the development of new energy sources in order to reduce greenhouse gas emissions, as well as, in the long term, the possibility of scenarios for the transition of the global energy system to decarbonization , increased use of low-carbon technologies and energy carriers, and in general - towards low-carbon globa

During 2019, within the framework of a special project in TATNEFT Group, the system of accounting and management of greenhouse gas emissions was updated in accordance with the new requirements of the legislation of the Russian Federation and international standards in the field of climate change. 

Also in 2019, the Company adopted a new "Regulation for accounting and provision of information on greenhouse gas emissions". The calculation of greenhouse gas emissions is based on the "Methodological guidelines and guidelines for quantifying the volume of greenhouse gas emissions by organizations carrying out economic and other activities in the Russian Federation", introduced by order of the Ministry of Nature of Russia No. 300 dated June 30, 2015. A centralized approach to the collection of data on greenhouse gas emissions has been consolidated, and an approach based on the control of internal processes and procedures is used to consolidate emissions.

 Accounting for CH4, CO2 and N2O generated during fuel combustion at stationary combustion sources.Based on the inventory of emission sources Scope 1, the initial perimeter of greenhouse gas accounting for the TATNEFT Group was approved. It includes the following enterprises: Tatneft, TANECO, Tatneft-Neftekhim Management Company, Almetyevsk Heating Networks, Nizhnekamsk TPS, Tatneft-AZS-Center, Tatneft-AZS- West, Tatneft-Samara, Department for the preparation of process fluid to maintain reservoir pressure, Tatneft-Alabuga Steklovolokno, Severgeologiya, Tatneft - Nenets Autonomous Circle.

In 2019, due to the development of the structure of the Company's assets and the strengthening of the corporate climate policy, the perimeter of accounting for greenhouse gas emissions was expanded: the accounting perimeter included Tolyattikauchuk (as a result of the acquisition in 2019), as well as Nizhnekamsktekhuglerod and Tatneft- Presscomposite.

According to the recommendations of the "Corporate Standard GHG Protocol" for a consistent comparison of emissions over time, the TATNEFT Group has chosen as the baseline the earliest year for which reliable data are available - 2016. Data on greenhouse gas emissions have been restated starting from the base year due to changes in the accounting perimeter for TATNEFT Group. 

GREENHOUSE GAS EMISSION PROFILE FROM THE BASE YEAR
(WITH INDICATION OF ENTERPRISES INCLUDED IN THE PERIMETER FOR ACCOUNTING PURPOSES IN 2019), MLN.T 

Commentary: According to Chapter 5 of the GHG-Protocol. For correct comparison of GHG data over time, with structural changes, it is necessary to recalculate data for previous years.

DYNAMICS OF GREENHOUSE GAS  (GHG) EMISSIONS OF TATNEFT GROUP, MLN TONS (СО2 EQ.)

In 2019, the mass of direct greenhouse gas emissions in the TATNEFT Group amounted to 4.1 million tons of CO2-equivalent, which is 20% higher than in 2018 (3.4 million tons of CO2-equivalent).

The growth of greenhouse gas emissions in 2019 by the increased consumption of natural gas (steam generation) for the production of SVO, increase in the production of products of TANECO, increase in the volume of fuel flared during the production process of Tatneft - Presskomposite.

Compared to the base year, it was possible to reduce greenhouse gas emissions by 5%.

The dynamics of emissions by business line shows that most of the emissions belong to the Energy business line. In 2019, emissions from the Exploration and Production business area increased by more than 1.5 times. Over the past year, Tire Business has managed to reduce its carbon footprint.

Of the total mass of greenhouse gas emissions from TATNEFT Group, 99.79% is carbon dioxide. In addition to it, emissions include such greenhouse gases as methane (8.4 thousand tons) and nitrous oxide N2O (0.002262 tons).

COMPOSITION OF GREENHOUSE GAS EMISSIONS




INTENSITY OF GREENHOUSE GAS EMISSIONS IN THE EXPLORATION AND PRODUCTION BUSINESS AREA, T СО2-EQ / T OF OIL PRODUCED

The intensity of greenhouse gas emissions in the Exploration and Production business area is calculated as the ratio of emissions to the amount of oil produced.

INTENSITY OF GREENHOUSE GAS EMISSIONS IN THE OIL AND GAS PROCESSING BUSINESS AREA, T CO2-EQ / T OF PRODUCT

THE INTENSITY OF GREENHOUSE GAS EMISSIONS (BUSINESS AREA "ENERGY"),
T CO2-EQ / MLN KWH

In 2019, the Company kept records of GHG emissions using Scope 2 and Scope 3.

According to GHG Protocol Scope 2 includes emissions from purchased or purchased energy, steam, heat and cooling; Scope 3 - Enterprise value chain accounting and reporting to assess the impact of emissions throughout the value chain and focus on reducing emissions. 

Taking into account the specifics of the activity and the structure of the assets of the TATNEFT Group, for the calculations of Scope 2 the coefficient of energy emissions from Nizhnekamsk TPS was obtained.

ENERGY EMISSION FACTORS FROM  NIZHNEKAMSK TPS

Power system Emission factor Nizhnekamskaya TPS - (t CO2 eq.) Calculation of GHG emissions
Electric, thousand kWh 0.62195 (Power consumption x 0.62195)
Thermal, Gcal 0.24 (Heat consumption x 0.24)

Scope 3 calculations for the enterprises of the TATNEFT Group were carried out under the category “use of products sold”. The calculation takes into account: crude oil, gasoline, diesel fuel, kerosene, fuel oil, coke, oils, ethane, propane, butane, APG, liquefied gas, lubricants, other oil products, tire products. 

According to the calculation results, Scope 2 emissions by TATNEFT Group in 2019 amounted to 5.2 million tons of CO2-eq.

Scope 3 emissions in 2019 in the category “use of oil and oil products of TATNEFT Group” are 99.995 million tons of CO2-eq.

Scope 3 for the tire business is estimated at 11.124 million tonnes of CO2-eq for 2019.

Aggregate data on Scope 1, 2, 3 emissions by business areas of TATNEFT Group in 2019, mln tons of CO2-eq.

AGGREGATE DATA ON SCOPE 1, 2, 3 EMISSIONS BY BUSINESS AREAS OF TATNEFT GROUP IN 2019, MLN TONS OF CO2-EQ.

SCOPE 1

SCOPE 2

SCOPE 3

AGGREGATE DATA ON SCOPE 1, 2, 3 EMISSIONS BY BUSINESS AREAS OF TATNEFT GROUP IN 2019, MLN TONS OF CO2-EQ. 

Business direction Scope 1 Scope 2 Scope 3
Exploration and Production 1.4 2.62 60.7
Oil and Gas Processing 0.7 0.89 27.4
Tire business 0.001 0.52 11.12
Energy 1.71 0.11
Retail business 0.003 0.03 11.95
Machinery 0.02
Tatneft-Presscomposite 0.01 0.02
Others, including: 0.32 0.98
Tolyattikauchuk 0.31 0.94
Overall volume 4.14 5.2 111.12

Emissions of ozone depleting substances

TATNEFT Group does not use ozone-depleting substances on an industrial scale.

Emissions of ozone depleting substances  

FOCUS AND PROGRESS 2019-2020 

  • Formation and approval by the Board of Directors of the Company's position in the field of climate and reduction of greenhouse gas emissions within the framework of the new version of the Policy in the field of industrial safety, labor protection and the environment, taking into account climate change.
  • Appointment by the Board of Directors of an authorized member of the Board of Directors - an independent director for the Company's climate policy.
  • Formation of a system for accounting for greenhouse gas emissions in the Company in accordance with the GHG Protocol on the scope 1, 2, 3.
  • Integration into the Company's activities of principles and approaches to reduce greenhouse gas emissions based on the integration of the TCFD Guidelines.
  • Determination of SDG 13 “Taking urgent measures to combat climate change and its consequences” as one of the priority goals of the Company in the field of sustainable development. Determination of the Company's goal of transition to carbon neutrality by 2050 and consistent reduction of CO2 emissions by 10% by 2025 and by 20% by 2030 (relative to the baseline 2016). The targets were disclosed by the Company in 2020.
  • Approval by the Board of Directors of PJSC TATNEFT of the roadmap for the implementation of SDG 13 and the Program to reduce greenhouse gas emissions.
  • Development and approval of a matrix of KPIs related to climate change, in the context of those responsible for their achievement in TATNEFT Group, with a calculation methodology and goal setting for 2020.
  • Joining the SBTi platform - The company signed a letter of promise on business ambitions to move to carbon neutrality by 2050 and reduce greenhouse gas emissions in 2020. Development and submission of emission reduction targets for confirmation, disclosure of science-based targets. Considering that the SBTi standard for the energy industry is currently under discussion, we plan to take part in this work, which will allow us to integrate the Company's experience at the international level and provide an additional opportunity for our specialists to interact with international experts. 

FOCUS 2021

  • Focusing efforts on the development and integration into the Company's business processes of technologies to reduce CO2 emissions along the entire value chain, including making investment decisions.
  • Strengthening mechanisms for interaction with contractors and suppliers to ensure the transition to carbon neutrality.
  • Expanding disclosure of information on carbon dioxide emissions, incl. within the Carbon Disclosure Project - CDP taking into account the TCFD Recommendations.
  • Search and implementation of technologies for carbon capture and storage (CCS).
  • Integration of international standards ISO 14064 "Greenhouse gases":
    - ISO 14064-1: 2018 Specification with instructions for an organization to quantify and report greenhouse gas emissions and removals;
    - ISO 14064-2: 2019 “Specification with project-level instructions for quantifying, monitoring and reporting greenhouse gas emissions reduction or cleaning improvement”;
    - ISO 14064-3: 2019 "Specification with instructions for verifying and confirming the reporting of greenhouse gases."
  • Expanding the application of the Global Business Council for Sustainable Development (WBCSD) and World Resources Institute (WRI) Greenhouse Gas Protocol (WBCSD) and World Resources Institute (WRI) Corporate Standard for Accounting and Reporting in assessing the scope of accounting for greenhouse gas emissions of the Company.
  • Introduction in the Company of the practice of international marking of carbon trust in the Company (corporate practice and products).
  • Creation of a target “green” brand of “clean” technologies and products of TATNEFT Group.
  • Formation of prerequisites for expanding opportunities for “green” investment in the TATNEFT securities market.