Environment

Emissions reduction

Climate action and cutting greenhouse gas (GHG) emissions is a global challenge that needs to be addressed through joint efforts. Naftogaz is aware of its role in addressing the climate change, which is to supply gas as a less carbon-intensive fuel to facilitate energy transition. The company supports Ukraine’s goal of achieving climate neutrality no later than 2060.

In 2021, Naftogaz set a goal of reaching net zero GHG operational emissions by 2040. We are currently elaborating a comprehensive de-carbonisation plan that will account for the benefits and lessons learned from the international best practices and standards.

First of all, the company monitors and reduces direct GHG emissions (Scope 1). We achieve this by reducing methane leaks and well blow-downs. As a result, the company does not only mitigate its impact on the environment, but also cuts on inefficient use of resources. Therefore, to reduce methane emissions, Naftogaz:

• Reports under the Oil and Gas Methane Partnership 2.0 framework, which allows for the development of the most effective solutions to significantly reduce methane emissions.
• To fulfill Ukraine’s international climate commitments and reduce the environmental impact of its operations, the Company, in cooperation with the European Investment Bank (EIB), is developing a decarbonization strategy for Naftogaz Group. This funding comes via the “EU for Ukraine” advisory programme, specifically aimed at helping Naftogaz develop a comprehensive decarbonization strategy to align with EU climate policies. The implementation of the strategy will enable Naftogaz to reduce greenhouse gas emissions, deploy advanced energy efficiency solutions and projects, scale up renewable energy generation, and identify a portfolio of projects and initiatives. It will also establish measurable and achievable carbon neutrality targets, supporting Naftogaz Group in its transition toward carbon neutrality.
• Applies gas artificial lift technologies (plunger-lift, capillary-injection systems).

Naftogaz also supports Ukraine’s joining the Global Methane Initiative, as presented during the UN Climate Change Conference in Glasgow (COP26) in November 2021. This should result in 30% methane emissions reduction in Ukraine by 2030.

By Order No. 607 dated July 7, 2023, the Cabinet of Ministers of Ukraine approved the Action Plan for implementing Ukraine’s climate policy as part of its participation in the Global Methane Pledge initiative to reduce methane emissions. Despite martial law, the Company submits annual reports on the implementation of the Action Plan under the Global Methane Pledge.

Second, the company will increase renewable energy generation for its own consumption, as well as implement energy-efficient solutions in production processes to reduce indirect emissions (Scope 2).

Third, Naftogaz sees the development of low-carbon businesses as a key driver for a climate-neutral future that will reduce emissions from end user consumption (Scope 3). The company prioritises bioenergy and hydrogen as its new energy source types, given the growing demand and the de-carbonisation opportunities for the carbon-intensive sectors.

• First pilot projects are underway together with international and national partners. In particular, Naftogaz signed memoranda with the German RWE to implement hydrogen projects. In addition, the company joins the Austrian RAG, the Slovak Eustream, the German operator Bayerngas, and a number of other companies in the Eco-Optima project focused on hydrogen production and storage in Ukraine.
• Naftogaz explores innovative technologies, including carbon capture, utilization and storage, as well as ways to utilize them in the national context.

An important component of the company's profile is energy services to end consumers. In addition, Naftogaz develops projects to remove GHG from the atmosphere (offsetting).