Strategy

OMV’s goal is to transform from an integrated oil, gas, and chemicals company into a leader in innovative sustainable fuels, chemicals, and materials, leveraging opportunities in the circular economy. An integral part of the Group’s strategy is its ambition to become a net-zero emissions company by 2050 for Scope 1, 2, and 3 emissions. In view of the ongoing transformation in the energy industry and a global goal of net-zero emissions, OMV is building on its strengths and seizing opportunities to position itself competitively. Our sustainability ambitions, especially getting to net zero, can only be achieved with considerable effort and capital allocation. In our Strategy 2030, we have earmarked investments of more than EUR 13 bn for the purpose of achieving our emissions reduction targets.

Sustainability Criteria in Investment Decisions

In 2022, OMV updated its Capital Allocation Framework and developed a strategic scoring methodology for investment projects based on four pillars: business strategic targets, financial metrics, risk profile, and climate targets impact. This new methodology has been tested in a pilot phase. The scoring helps to objectively define and review OMV’s most important strategic projects and allows for holistic portfolio optimization across the OMV Group to support our strategy delivery, including our GHG reduction pathway. Climate scoring is an integral part of this overall scoring and covers the investment’s impact on the OMV Group’s Scope 1, 2, and 3 climate targets for 2030, as well as EU taxonomy relevance.

As part of the updated Capital Allocation Framework, OMV also introduced a new definition for “sustainability CAPEX,” which encompasses investments that meet one of two criteria: either they are aligned with the EU taxonomy or they are investments that support the implementation of OMV’s 2030 Sustainability Framework. The latter includes investments related to methane leakage detection and repair, energy efficiency programs, chemical recycling, and community investments classified as strategic social investments, among others.

For sustainability projects to pass the final investment decision, different financial hurdles apply compared to those applicable to the rest of the projects in the portfolio. Thus, “sustainability CAPEX” projects use distinct “weighted average cost of capital (WACC)” rates that consider the specific risks of sustainability projects (usually lower compared to other projects) and a payback period of <20 years (longer than for other projects). The goal of the new Capital Allocation Framework is to facilitate investments in projects aligned with our climate targets, including our long-term net zero target, rather than traditional fossil fuel-related investments.

Moreover, inorganic growth projects should comply with the overall Group path to net zero by 2050 and should support the low-carbon growth of OMV. The potential impact of mergers and acquisitions on OMV’s climate targets is reviewed as part of due diligence.