MOL Group to spend more than $4 billion on green investments, following updated strategy

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Hungary’s energy group MOL has updated its long-term strategy SHAPE TOMORROW, aiming to make the region greener, more self-sufficient and more competitive.

Thus, MOL Group is investing in further strengthening the region’s security of supply and creating value from waste and shaping the future of mobility with innovative technologies. The updated strategy places greater emphasis on renewable fuels, green hydrogen, biomethane and geothermal energy. It will spend more than 4 billion US dollars (approximately 3.6 billion euros) on green investments by 2030 and aims to reach carbon neutrality by 2050.

“In 2016, we were one of the first in the oil and gas industry to announce that we would diversify from fossil fuel and gradually develop ourselves in petrochemicals and consumer services,” said Zsolt Hernádi, CEO of MOL Group. “We have been following the same direction for eight years, but we have to take into account that recent years have brought radical challenges and change in the energy industry. The time has come to update our strategy again, as sustainability targets have become more ambitious while demand for fossil fuels remains strong.”

“[…] Alongside our traditional business activities, we will be using green energy to make our company and thus the whole Central European region, more sustainable, self-sufficient and competitive,” he added. “We create value from waste, kick-start the circular economy and further strengthen security of supply. There is no question that the energy transition must be implemented and the very ambitious targets set by the European Union must be achieved. This is in the interest of all of us.”

He also underlined that it is not possible to reach the ambitious EU’s targets alone and that it is not fair if all the costs of the energy transition are passed on to industrial companies.

“Community goals can only be achieved with community support, smart regulation and cooperation on all levels,” he pointed out. “MOL Group can be counted on as a partner in this common European effort.”

As downstream continues to strengthen its refining positions in Europe, the updated strategy focuses on the production of biomethane and green hydrogen, while the circular economy increases the contribution of bio- and waste streams to production. To diversify from fossil fuels, MOL Group is investing 1 billion US dollars (approximately 917 million euros) in waste integration, recycling and medium-scale chemical investments by 2030.

The company is also planning to spend more than 1 billion US dollars by 2030 on projects that enable energy efficiency, the scale-up of sustainable fuels in its portfolio and substantially reduce the business’s GHG emissions. And, to achieve these goals, MOL will increase the use of renewable electricity across the whole group, particularly in the Downstream area.

Upstream also keeps playing a key role in financing the group-level transformation and the Group will maintain production at an average daily level of at least 90,000 barrels of oil equivalent for the next 5 years. At the same time, the division will strengthen its carbon-neutral projects: the company is building on its existing competencies to start geothermal exploration, launch a pilot lithium project and focus on building storage capacity in Carbon Capture and Storage. Upstream also will further strengthen cross-border cooperation between MOL and INA, optimise its infrastructure and support the security of supply in the region through efficiency improvements and cost optimisation.

Consumer Services aims to reach 1 billion US dollars EBITDA per year by 2030. This will require further network expansion and optimisation in existing and potential new markets in the CEE region. The company plans to increase the share of non-fuel products to 65 per cent of all transactions by 2025 and to 85 per cent by 2030. In line with market needs, it will further develop its mobility solutions, its electric charging network and prepare for the uptake of hydrogen fuel cell vehicles.

Moreover, the company considers waste as a valuable raw material and energy source and will increase its recycling rates to 65 per cent by 2035, while reducing landfilling to 10 per cent. Waste management business could potentially provide 1.5 million tons of feedstock per annum to the regional oil, chemical and energy sector from 2030.

As MOL Group is expected to consume around 2,500 gigawatt-hours (GWh) per annum of renewable electricity by 2030 due to Downstream decarbonisation, it is also building its own renewable portfolio. The green hydrogen plant in Százhalombatta will be supplied with renewable electricity and solar projects are expected to provide the majority of the production, while the company considers additional renewable sources and storage solutions.

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