EU Taxonomy Reporting

As part of the European Commission’s Action Plan on Financing Sustainable Growth, Regulation (EU) 2020/852 established an EU classification system for environmentally sustainable economic activities (EU taxonomy) and came into force in 2020.

The EU taxonomy is a key instrument for the European Union to redirect capital flows toward sustainable investments and to create market transparency. It encourages increased channeling of investments by companies, investors, and policymakers to where they are most needed for sustainable development. Therefore, the EU Taxonomy Regulation will play an important role in scaling up sustainable investments and implementing the European Green Deal.

OMV has been a member of the Platform on Sustainable Finance, the permanent expert group of the European Commission that was established under Article 20 of the EU Taxonomy Regulation, since October 2022 and has assisted the Commission in developing its sustainable finance policies, notably the further development of the EU taxonomy.

For the OMV Group, the EU taxonomy provides a means to assess which of our current and future economic activities can be classed as environmentally sustainable. According to the Taxonomy Regulation, any activity identified in this category must make a substantial contribution to at least one of the EU’s environmental objectives, in addition to not significantly harming any of the objectives and meeting the defined minimum social safeguards. The six relevant environmental objectives of the Taxonomy Regulation are:

1. Climate change mitigation
2. Climate change adaptation
3. The sustainable use and protection of water and marine resources
4. The transition to a circular economy
5. Pollution prevention and control
6. The protection and restoration of biodiversity and ecosystems

In June 2021, the Commission formally adopted the Climate Delegated Act, establishing the criteria that define which activities substantially contribute to climate change mitigation and adaptation, the first two out of the six environmental objectives. The disclosure requirements were effective for reports published since January 1, 2022, in relation to the aforementioned climate change objectives. In 2022, the Complementary Climate Delegated Act was released, which extends the EU taxonomy framework to permit certain economic activities involving gas and nu­clear energy to be classified as “environmentally sustainable” and came into effect on January 1, 2023. The EU taxonomy for the four remaining environmental objectives and the amendments to the Annexes of the Disclosures Delegated Act were published in June 2023 by the European Commission.

OMV’s Process for Identifying and Assessing EU Taxonomy Activities

EU Taxonomy Eligibility Assessment

An economic activity is considered to be taxonomy-eligible if it matches the description of the activity given in the EU taxonomy. In order to identify eligible activities/products at OMV, we performed a screening of the full portfolio of OMV activities and compared our activities to the description of the economic activities/products listed in Annex I or II of the EU Taxonomy Climate Delegated Act and Annex I–IV of the EU Taxonomy Environmental Delegated Act.

The assessment of eligible activities and products at OMV is carried out by an interdisciplinary project team, using both a bottom-up and a top-down approach. A series of internal meetings and training sessions with management and experts was held in order to give OMV businesses an introduction to the new EU taxonomy and disclosure requirements. A further series of workshops was held with all business segments and corporate entities to ensure the bottom-up identification of eligible activities, assets, processes, and related eligible CAPEX/OPEX/turnover. OMV’s identified EU taxonomy-eligible economic activities are mainly related to the environmental objective of climate change mitigation, and one activity is related to the environmental objective of the transition to a circular economy. Analysis of all our economic activities is done on an annual basis and includes an update of the previous year’s assessment.

EU Taxonomy Alignment Assessment

In 2022, OMV carried out an alignment assessment based on the EU taxonomy criteria and this was updated over the course of 2023. The assessment had the purpose of identifying whether any newly identified eligible activities fulfilled the criteria for substantial contribution to the climate mitigation objective or climate adaption environmental objective, the do no significant harm (DNSH) criteria of the other environmental objectives, and the minimum social safeguards criteria. Note that no comparison figures are available for the four additional environmental goals for the reporting year 2022. The economic activities that OMV identified as aligning with the EU taxonomy are all related to the environmental objective of climate change mitigation. The alignment assessment of OMV’s eligible activities according to the EU Taxonomy Environmental Delegated Act will be done in line with the legal requirements as of next year.

Responsibility for the alignment checks and evidence gathering was clearly defined in the OMV Group’s EU Taxonomy Guidance. The project/asset managers for the respective eligible project/activity were responsible for assessing compliance with the criteria for substantial contribution and the respective DNSH criteria. Support was provided by the OMV Group Sustainability team and sustainability experts from OMV Petrom and Borealis. The required physical climate risk and vulnerability assessments to comply with the DNSH climate change adaptation criteria were performed centrally by OMV Group Sustainability in conjunction with Corporate Risk Management, and with the support of an external provider in line with the OMV Group’s Enterprise-Wide Risk Management approach.

In general, the main taxonomy-eligible business activities for OMV relate to activity “3.14 Manufacture of organic basic chemicals”, activity “3.17 Manufacture of plastics in primary form,” and activity “4.13 Manufacture of biogas and biofuels for use in transport and of bioliquids”. More detailed information can be found in the respective KPI section (Turnover, CAPEX, OPEX).

The assessment of compliance with the minimum social safeguards and governance criteria was performed by OMV Group Sustainability by assessing whether the clauses in relevant OMV policies (Human Rights Policy, Code of Conduct, Code of Business Ethics, Tax Strategy) are in line with the international standards referred to in the EU taxonomy. It was further assessed whether OMV’s human rights management system and its related processes (e.g., grievance mechanisms, community consultation) are established in line with these international standards. The detailed assessment showed no gaps between the OMV Group’s approach to human rights policies, addressing of impacts, due diligence and risk assessment procedures, communication, grievance mechanisms, consumer interests, anti-corruption, competition, or taxation and the social safeguard requirements laid out in the EU taxonomy. For more details on the unadjusted gender pay gap and the Board gender diversity, please refer to the Diversity, Equity, and Inclusion chapter, and Workforce Data.

No relevant final liability regarding breaches of the minimum safeguards have been identified at OMV in recent years, including breach of labor law or human rights, breach of corruption or competition laws, or breach of tax laws.

Definition of Financial KPIs

OMV’s values for the KPIs are derived from the figures reported in the Group’s consolidated IFRS financial statements.

The KPIs are calculated based on the sales revenues, CAPEX, and OPEX of all fully consolidated subsidiaries of the OMV Group. Subsidiaries that are not consolidated, associated companies, and joint ventures were excluded from the calculation of KPIs as per the reporting requirements of the EU Taxonomy Regulation.

The proportion of taxonomy-aligned economic activities in the sales revenues, CAPEX, and OPEX (the “alignment ratio”) has been calculated as the part of sales revenues, CAPEX, and OPEX derived from products and services associated with taxonomy-aligned economic activities (numerator) divided by the total sales revenues, CAPEX, and OPEX (denominator). The same logic applies to the calculation of the “eligibility ratio.”

The denominators for the financial KPIs were defined and can be reconciled with the IFRS Group financial statements as follows:

• The denominator of the turnover KPI is based on OMV’s consolidated sales revenues (OMV Consolidated Financial Statements 2023, Note 6 ). For further details on our accounting policies regarding consolidated sales revenues, see OMV Consolidated Financial Statements 2023, Note 3.2b.
• The denominator for the CAPEX KPI consists of additions to intangible assets (including oil and gas properties with unproved reserves), tangible assets, and IFRS 16 right-of-use assets (see OMV Consolidated Financial Statements 2022, Notes 16 and 17). Additions from business combinations are included in the denominator, except for additions to goodwill. Decommissioning assets are not included in the denominator. Additions included in the denominator deviate from additions according to the IFRS Group financial statements because government grants are not considered in the denominator while the net presentation option is applied for the IFRS Group financial statements. For further details on our accounting policies regarding the relevant assets, see OMV Consolidated Financial Statements 2023, Notes 3.2g, h, and p.
• Total OPEX consists of R&D expenses, maintenance and repair costs, other direct expenditure related to day-to-day servicing of assets, and short-term leases. R&D expenses include the research and development expenses recognized according to IAS 38 and reported in the line “Other operating expenses” in the income statement (see OMV Consolidated Financial Statements 2023, Note 10 ). Maintenance and repair costs and other direct expenditure related to day-to-day servicing of assets mainly include costs for external services, personnel expenses, and material costs related to regular and unplanned maintenance, repairs, and servicing measures. The related cost items can be found in the line items “Production and operating expenses” and “Selling, distribution, and administrative expenses” in the income statement. Expenses for short-term leases have been determined and included in line with IFRS 16. Direct costs for training and other human resources improvement needs are immaterial and therefore excluded from the denominator and the numerator.

For most of the activities, sales revenues, CAPEX, and OPEX for aligned and eligible activities could be allocated directly to individual activities listed in the taxonomy based on data available in the Group entities’ ERP systems. This ensured that there was no double counting of aligned or eligible sales revenues, CAPEX, and OPEX. In the refineries, CAPEX for assets used for the joint production of organic basic chemicals and fuels has been allocated to the taxonomy-eligible activity “3.14 Manufacture of organic basic chemicals.” Also, this has been allocated to non-eligible activities using an allocation key reflecting the yield, size, and complexity of the different refinery plants used for this purpose. The same approach was used for repair and maintenance expenses for cost centers, which are involved in the production of organic basic chemicals and fuels.

The method of calculating the KPIs was changed in 2023 to fully implement the guidance published by the European Commission in the form of Frequently Asked Questions (FAQs).¹ EU Commission: Commission Notice on the interpretation and implementation of certain legal provisions of the Disclosures Delegated Act under Article 8 of the EU Taxonomy Regulation on the reporting of taxonomy-eligible and taxonomy-aligned economic activities and assets (second Commission Notice), C/2023/305, October 20, 2023 Grants deducted from CAPEX in the financial statements are now excluded from the CAPEX KPI in the numerator and denominator. In addition, turnover, CAPEX, and OPEX from assets held for sale (IFRS 5) have been included since January 1, 2023, in the calculation of all three KPIs. Prior-year KPIs were not adjusted. The impact of these changes would have been immaterial. Total government grants related to assets and deducted from CAPEX in 2022 amounted to EUR 5.4 mn. Total sales revenues related to IFRS 5 disposal groups amounted to EUR 3,838.1 mn in 2022 and were mainly associated with the nitrogen division at Borealis and the retail business in Slovenia. Total CAPEX related to IFRS 5 disposal groups amounted to EUR 5.9 mn.

Taxonomy-Eligible and Taxonomy-Aligned Turnover

In 2023, 18.1% (2022: 17.8%) of OMV’s total turnover was classified as taxonomy-eligible (non-aligned), while 0.2% (2022: 0.1%) of OMV’s total turnover was classified as taxonomy-aligned. In 2023, all taxonomy-eligible/aligned turnover was related to the objective of climate change mitigation.

Taxonomy-Eligible Turnover 2023

The eligible turnover arose from activities “3.17 Manufacture of plastics in primary form,” which reflects the activities of our C&M segment (e.g., production of polyolefins), and “3.14 Manufacture of organic basic chemicals,” also coming from the C&M segment (e.g., production of ethylene and propylene), as well as activity “4.29 Electricity generation from fossil gaseous fuels,” mainly from power sales from the Brazi gas-fired power plant in Romania. Furthermore, the activities “4.30 High-efficiency co-generation of heat/cool and power from fossil gaseous fuels” and “5.9 Material recovery from non-hazardous waste” contributed to the taxonomy-eligible turnover.

Taxonomy-Aligned Turnover 2023

In EUR mn

The majority of aligned turnover in 2023 was derived from the activity “4.25 Production of heat/cool using waste heat,” which reflects the waste heat supplies from the Schwechat refinery. Another contribution arose from activity “3.17 Manufacture of plastics in primary form,” with Ecoplast Kunststoffrecycling GmbH processing post-consumer plastics and turning them into high-quality LDPE recyclates. Further minor contributions to aligned turnover resulted from the activity “4.13 Manufacture of biogas and biofuels for use in transport and of bioliquids,” which covers the sales of sustainable aviation fuels, as well as from the activity “6.15 Infrastructure enabling low-carbon road transport and public transport,” which covers hydrogen sales for mobility purposes.

Electricity produced from renewables, such as the generation of electricity using solar photovoltaic technology and wind power, is used for internal consumption only.

The split of aligned and eligible turnover between revenue from contracts with customers and revenue within the scope of IFRS 9 is included in the following table. Eligible revenue from transactions within the scope of IFRS 9 includes power sales from the gas-fired power plant in Romania.

Taxonomy-Aligned Turnover 2023

In EUR mn

Taxonomy-Eligible and Taxonomy-Aligned CAPEX

In 2023, 27.7% (2022: 34.2%) of OMV’s total CAPEX was classified as taxonomy-eligible (non-aligned). 10.5% (2022: 9.5%) of OMV’s total CAPEX was classified as taxonomy-aligned. Lower taxonomy-eligible (non-aligned) CAPEX in 2023 compared to 2022 was related to a decrease in activity “3.14 Manufacture of organic base chemicals,” which was partially offset by higher CAPEX in activity “3.17 Manufacture of plastics in primary form.” In 2023, the majority of taxonomy-eligible/aligned CAPEX was related to the objective of climate change mitigation, with only a minor part of eligible CAPEX being related to the environmental objective of the transition to a circular economy.

Taxonomy-Eligible CAPEX 2023

The majority of eligible CAPEX was derived from the activities “3.17 Manufacture of plastics in primary form” and “3.14 Manufacture of organic basic chemicals,” both reflecting the activities of our C&M segment. Other contributors were the activities “3.10 Manufacture of hydrogen” and “9.1 Close to market research, development, and innovation” (e.g., R&D into chemical recycling, e-fuels, geothermal projects), activities in Section 6 Transport (e.g., railway transportation and infrastructure), various activities in Section 4 Energy (e.g., production of heat/cool from geothermal energy, electricity generation from fossil gaseous fuels, manufacture of biogas and biofuels for use in transport and public transport, transmission and distribution of electricity, etc.), and activities in Section 7 such as “7.2 Renovation of existing buildings” (mainly filling station buildings) and “7.3. Installation, maintenance, and repair of energy efficiency equipment.” Under the circular economy objective, the activity “2.7 Sorting and material recovery of non-hazardous waste” can be reported, reflecting OMV’s joint venture with Interzero to build and operate Europe’s largest sorting facility for chemical recycling. In 2023, CAPEX of EUR 107.4 mn was related to business combinations (2022: nil), of which EUR 28.1 mn was related to intangible assets and EUR 79.3 mn to tangible assets.

Taxonomy-Aligned CAPEX 2023

In EUR mn

The largest contributors to aligned CAPEX were activities “3.14 Manufacture of organic basic chemicals,” which reflects our investment in Borealis’ propane dehydrogenation unit 2 (PDH2) in Kallo, and “9.1 Close to market research, development, and innovation,” which stems from the investment in the ReOil^® 2000 chemical recycling demonstration plant at the Schwechat refinery. Other contributors to taxonomy-aligned CAPEX were the following activities: “3.10 Manufacture of hydrogen” (e.g., UpHy project), “4.1 Electricity generation using solar photovoltaic technology” (e.g., PV plant in Arbesthal, PV plant in Würmlach), “4.3 Electricity generation from wind power” (e.g., Gullfaks Hywind Tampen project), “4.9 Transmission and distribution of electricity” (e.g., renewable electricity transmission line to Edvard Grieg field), “4.13 Manufacture of biogas and biofuels for use in transport and of bioliquids” (e.g., production facilities for sustainable aviation fuels and Glycerin to Propanol activities at the Schwechat refinery), “4.25 Production of heat/cool using waste heat” (e.g., district heating hub at the Schwechat refinery), “6.15 Infrastructure enabling low-carbon road transport and public transport” (e.g., hydrogen filling stations, electric charging points), and “7.6 Installation, maintenance, and repair of renewable energy technologies” (e.g., installation of PV panels and heat pumps).

The rise in total aligned CAPEX in 2023 in comparison to 2022 is mainly due to the turnaround of the Petrobrazi refinery, the new aromatic complex project being executed and shown under the activities “3.14 Manufacture of organic basic chemicals” and “6.15 Infrastructure enabling low-carbon road transport and public transport,” mainly reflecting electric vehicle (EV) charging station projects at various locations.

Aligned and eligible CAPEX can be disaggregated into additions to the different asset classes in the table below. Additions to right-of-use assets are included in additions to property, plant, and equipment.

Taxonomy-Aligned CAPEX 2023

In EUR mn

Five-Year CAPEX Plan

The EU taxonomy CAPEX plan includes the list of economic activities for which taxonomy-aligned investments in 2022 and 2023 have already been made and provides information on the planned CAPEX to overall expand these activities. The CAPEX plan intended to expand taxonomy-aligned activities is based on the latest Supervisory Board-approved business plan, whereas the time horizon reflects the maximum five-year period for a CAPEX plan mentioned in annexes 1–5 to the Commission Delegated Regulation (EU) 2020/852. The planned CAPEX is subject to reviews and changes. The EU taxonomy CAPEX plan does not include planned CAPEX for taxonomy-eligible activities that were not claimed as taxonomy-aligned in 2022 or in 2023 but are likely to be taxonomy-aligned in the future, such as geothermal activities and CCS activities.

Taxonomy-Eligible and Taxonomy-Aligned OPEX

In 2023, 42.1% (2022: 41.1%) of OMV’s total OPEX was classified as taxonomy-eligible (non-aligned). 0.3% (2022: <0.1%) of OMV’s total OPEX was classified as taxonomy-aligned. In 2023, all taxonomy-eligible/aligned OPEX was related to the objective of climate change mitigation.

Taxonomy-Aligned OPEX 2023

In EUR mn

Taxonomy-Eligible OPEX 2023

The largest contributors to eligible OPEX were the activities “3.17 Manufacture of plastics in primary form” and “3.14 Manufacture of organic basic chemicals,” both reflecting the activities of our C&M segment, as well as the activity “4.29 Electricity generation from fossil gaseous fuels.” Other contributors were the activity “9.1 Close to market research, development, and innovation” (e.g., R&D into ReOil^®), along with various activities from Section 6 Transport (e.g., infrastructure for rail transportation). Furthermore, eligible OPEX resulted from the activities “5.12 Underground permanent geological storage of CO₂” (e.g., CCS activity offshore to the south of Norway) and “7.2 Renovation of existing buildings.”

Aligned OPEX was mainly derived from the activities “3.17 Manufacture of plastics in primary form” (Ecoplast), “4.1 Electricity generation using solar photovoltaic technology” (PV plants, e.g., Lobau, Schönkirchen, Arbesthal), and “4.25 Production of heat/cool using waste heat” (district heating hub at the Schwechat refinery).

Taxonomy-Aligned OPEX 2023

In EUR mn

Outlook

OMV has a clear commitment to becoming a net-zero company by 2050 and has set ambitious GHG reduction targets for 2030 and 2040 across all GHG scopes. In order to achieve those targets, a significant amount of CAPEX will be allocated to low-carbon business projects and activities between now and 2030. Organic CAPEX growth will be driven by investments in sustainable and low-carbon projects in all three business segments of OMV. For the period 2022–2030, around 40% of the average annual organic CAPEX of around EUR 3.5 bn will be low-carbon CAPEX. In total, OMV will invest EUR 13 bn in low-carbon business solutions between 2022 and 2030.