Naftna Industrija Srbije : Investor Day_2023_ESG_osnovni pokazatelji i budući pravci razvoja

Investor Day 2023

ESG 2023 - Basic indicators and Future directions of development

Sustainable development of NIS

• Sustainable development is development that meets the needs of the present time, without compromising the ability of future generations to meet their own needs.1 In this area, NIS is guided by the global goals of UN2, and recognizes the contribution to the achievement of 12 out of 17 goals.
• The concept of sustainable development has also been implemented in the Vision and all business processes of NIS3, and it represents a strategic commitment and a fundamental practice that is constantly being perfected.
• In 2010, the reporting process was established through the Sustainable Development Report of NIS, in accordance with the most widespread methodology in this area - GRI.4. So far, 13 consecutive Sustainable Development Reports verified by an independent auditor have been published, thus transparently reporting on key projects, achievements, and indicators in the field of sustainable development.
• The published Sustainable Development Report of NIS for 2022 has been fully harmonized with GRI Standard 11 (sectoral GRI standard for the oil and gas industry), which entered into force on 1 January 2023.

1. Most often, the definition of the concept of Sustainable Development given by the World Commission on Environment and Development at the UN (the so-called Brundtland Commission).
2. Global goals were adopted by the UN in 2015 as a universal call for action by all member states to eradicate poverty, protect the planet, and ensure peace and prosperity for all people - by 2030 at the latest.
3. Company vision: NIS will be a recognized leader of the Balkan region in its sector, following the dynamics of sustainable development and efficiency increasing, expressing a high level of social and environmental responsibility, as well as modern standards of customer service.
4. GRI (Global Reporting Initiative) - an international non-profit organization, established in 1997 with the aim of achieving the highest quality in corporate reporting on sustainable development. GRI provides the most widespread global reporting standards on sustainable development

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ESG of NIS

ENVIRONMENTAL

• ESG (Environmental, Social, Governance) - represents a set of criteria and factors in the field of environment, social issues, and corporate governance.

 The ESG can be seen as a comprehensive framework that combines the most important issues in the process of implementing sustainable development of NIS.

• The slide highlights a cross-functionaloverview of the contribution of NIS to the UN Global Sustainable Development Goals, for each of the aspects within the ESG concept.
• The UN Sustainable Development Goals under number 5, 6, 8, 11, and 12 contribute within several ESG aspects.

SOCIAL

GOVERNANCE

Effects on oil and gas production

Реализација кључних пројеката

Project	Contribution to the UN Sustainable	Benefits for sustainable development
	Development Goals and ESG aspects
Reconstruction of FCC plant	Environment	The most important project of the third phase of the Refinery modernization.
and construction of a new	The expected value of the investment is more than EUR 150 million, while the
ETBE plant in Pančevo Oil		commissioning is expected in 2027.
Refinery		The project will also have a major impact on the improvement of environmental
		protection by reducing the emissions of solid particles.
CCPP Pančevo	Environment	Combined gas-steam plant, commissioned, with an electric power of up to 200
		MW, which operates on natural gas - the environmentally cleanest fossil
		fuel (1,400 GWh - planned annual electricity production).
		The value of the project is about EUR 192 million.
Plandište Wind Farm	Environment	The project involves the construction of a wind farm with a capacity of
	102 MW, with the aim of producing electricity from renewable energy
		sources.
Solar panels5	Environment	Pilot project for the installation of solar panels on PS.
	During 2022, solar panels were installed at 8 PSs, with a total production of
	Social issues
	341,000 kWh, which will reduce CO2 emissions by 375 tonnes per year. Total
		investments of about EUR 200,000.
Digital transformation	Environment	Introduction of digital solutions and technologies that contribute to business
	efficiency and continuous work on improving the competencies and focus on
	Corporate Governance
	the safety of employees.

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5 During 2023, so far, solar panels have been installed at another 7 PSs (a total of 1,175 panels have been installed at 15 PSs, which reduce CO2 emissions by 600 tonnes per year).

Environmental

Environmental Aspect

5

Environmental protection

Environmental protection strategy by 2030

Long-term goals for reducing the negative environmental impact

Reduction of carbon	Reduction of other
intensity	emissions
and greenhouse gas	(NOx, SOx, PM, VOC)
emissions	and use of resources

Estimated required

investments to achieve goals and compliance with the requirements of the RS and EU regulations

Management of GHG emissions

	The use of high-quality and	Establishing a system for	The analysis of the
Increasing energy	eco-friendly fuels (natural	monitoring and reporting on	possibility of
efficiency in all business	gas)	greenhouse gas emission in	CO2 storage (injection of
segments	Increasing the share of RES	accordance with the	CO2 into
	energy in own energy	requirements of	geological formations)
	consumption	the EU ETC Directivе

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Environmental protection

RSD 352 million was invested in the implementation of environmental projects

during 9M of

2023.

Investments in environmental projects, mln. RSD

	534		356
320		234		315
2018	2019	2020	2021	2022

Fees for the protection and improvement of environment, mln. RSD

2022
	301
2021		282
2020		266
2019		359
2018		378

Priority courses of action by the end of 2023:

• Further reduction of pollutant emissions into the air.
• Meeting the requirements of Serbian legislation and EU best practice.
• Climate change, green agenda, projects in the field of production from RES and energy efficiency.
• Conducting internal energy audits in NIS + HIPP and FSK.
• In 2023, a total of 17 solar power plants at PS will be commissioned, with a total power of 580 kW.

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Environmental protection

Direct CO2 emissions (range 1),	Indirect CO2 emissions (range 2), in
in millions of tonnes	thousands of tonnes

Results of indicators in the field of Energy for 9M of 2023:

Electricity production, in MWh:

1.4	1.5
		1.0
2021	2022	9М 2023

				422	Pančevo Energy Plant
					Turbogenerator
				39.485	Cogenerations
				97,126	FNE
299.4	322.9	250.5		57.219
		CCPP Pančevo:
					722,953 MWh
2021	2022	9М 2023	•	Consumption of purchased electricity: 285,381 MWh
			• Natural gas consumption: 93,764,626 m3
			• Share of non-commercial fuels6 in total fuel consumption:

Amounts of disposed waste,

63.8%

in thousand tonnes

39.4			46.5
5.3			5.1
		7.1
5.6
		9M 2022	9M 2023
		Hazardous		Non-hazardous		Mining

Fulfillment of the Energy Efficiency Improvement Program 9M of 2023:

• Electrical energy: 4,051 MWh
• Thermal energy: 141,366 GJ
• Fuels: 2,271 toe
• Total: 5,996 toe

Solar power plants at 15 PSs:

• Installed power: 538 kW
• Generated electricity: 421.8 MWh

8	6 Non-commercial fuels include products from the production process such as refinery gas, coke, off gas, torch oil, and the like.

2010-2022: Quantities of emitted pollutants (SO2, NOx and PM), in tonnes

11,539

664

2,601

2012:
MHC/DHT construction
Reduction of S content in fuels,
reduction of SO2 emissions	2013:
into the air
Reconstruction of the FCC
	plant - reduction of PM

Decline in pollutant emissions into the

air compared to 2010:

SO2: 97%

NO2: 66%

-89.6%	PM: 91%

8,274

emissions

SO2

NO2

PM

2015-2019:

Using fuel oil as the dominant fuel

2018:

Washing of ejector gas on Vacuum distillation, reduction of SO2 emissions

Installation of LowNOx burners on furnaces of HDS and FCC facilities, atm. distillation, reduction of NOx emissions

DCU construction

Cessation of production of fuel oil with a high content of S, indirect reduction of SO2, NOx, and PM emissions

1,205

32

994

179

2010

2022

• Emissions of the NIS j.s.c. plants in accordance with legal norms.
• Legal obligation: monitoring/measurement of emissions of pollutants (sulphur oxides - SO2, nitrogen oxides - NO2, particulate matter - PM).
• Constant reduction of emissions into the air as a result of the implementation of environmental projects and the change of the predominant gas fuel.
• New environmental projects and technical and technological measures to reduce emissions are being implemented.

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Social

Aspect of Social Issues

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