Reporting

In preparing public carbon reporting, we strive for fuller disclosure of climate data in accordance with the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD) and the new benchmarking system for companies to ensure “net zero” emissions under the Climate Action 100+ initiative.

In 2020, in preparation for the development of the climate strategy and the setting of a new GHG reduction goal, we performed a full inventory of emission sources and calculated emissions of the three types of GHG emissions (methane, carbon monoxide, nitrous oxide) in accordance with the new methodological approaches (GHG Protocol) and the recommendations of Russian regulatory documentsThe Greenhouse Gas Protocol: A Corporate Accounting and Reporting Standard Revised Edition; Methodology and Guidelines for Quantifying Greenhouse Gas Emissions by Entities Engaged in Economic and Other Activities in the Russian Federation approved by Order of the Ministry of Natural Resources and Environment of the Russian Federation of June 30, 2015 No. 300.. The data is consolidated based on the “operational control” criteria. Based on the results of the adjusted methodological approach to the consolidation of GHG emissions data, indicators for 2016–2020 are presented in the approved reporting boundaries.

The inventory data reflects a consistent decrease in GHG emissions (Scope 1 + 2) for LUKOIL Group between 2017 and 2019Methodological Guidelines for Quantification of Indirect Energy Emissions of Greenhouse Gases approved by Order of the Ministry of Natural Resources and Environment of the Russian Federation of June 29, 2017 No. 330; 2006 IPCC Guidelines for National Greenhouse Gas Inventories.. The reduction in direct emissions is mainly due to an increase in the share of APG utilization.

The reduction of indirect (energy) emissions was achieved as a result of the implementation of APG utilization and energy efficiency programs at production and processing entities.

Details are in the “APG utilization and flaring reduction” and “Energy conservation” subsections of this section of the Report.

GHG emissions of LUKOIL Group
Indicators 2016 2017 2018 2019 2020
Scope 1. Direct gross GHG emissions, million tonnes of СО2E 40.150 40.448 39.599 39.796 36.705
including by GHG composition
СО2, million tonnes of СО2E 38.574 39.024 38.615 38.999 35.764
Methane (CH4), million tonnes of СО2E 1.545 1.396 0.959 0.772 0.916
Share of methane, % 3.8 3.5 2.4 1.9 2.5
Nitrogen monoxide (N2O), million tonnes of СО2E 0.031 0.028 0.025 0.025 0.024
Other GHGs 0 0 0 0 0
Scope 2. Indirect (energy) GHG emissions (СО2), million tonnes of СО2E 10.435 10.450 8.947 8.636 6.947
Scope 1 + Scope 2, million tonnes of СО2E 50.585 50.897 48.546 48.433 43.651
Total energy consumption (purchased and internally generated) within the calculation of GHG emissions (Scope 1 + Scope 2), excluding mobile sources, million GJ NA NA 502 502 465
Notes.
1. Detailed data, including the reporting boundaries, are given in Appendix 7.
2. In the LUKOIL Group Sustainability Report 2019 data on GHG emissions (Scope 1) were presented based on calculations in accordance with the previously used methodology: “Methodology and Guidelines for Quantifying Greenhouse Gas Emissions by Entities Engaged in Economic and Other Activities in the Russian Federation” approved by Order of the Ministry of Natural Resources and Environment of the Russian Federation of 30 June 2015 No. 300. The 2019 Report contains the following information: 2016 — 38.02 million tonnes CO2E; 2017 — 37.85 million tonnes CO2E; 2018 — 36.44 million tonnes CO2E; 2019 — 37.22 million tonnes CO2E.
3. In 2020, the reduction in GHG emissions was mainly driven by a decrease in demand and production of major types of products due to the pandemic.
4.The increase in CO2 emissions in 2017 was caused by a rise in exploration and production drilling in the Exploration and Production business segment.
5.The 2020 results are not indicative because they are mainly driven by changes resulting from the pandemic.
6.In the LUKOIL Group Sustainability Report 2020, the indicators of greenhouse gas emissions were adjusted compared to those presented in the Annual Report of PJSC LUKOIL 2020.
Greenhouse gas emissions (Scope 1) of LUKOIL Group, by type of activity and geography, million tonnes of CO2E
2016 2017 2018 2019 2020
Russian entities 33.765 34.043 33.403 32.851 30.780
Exploration and Production 10.883 10.043 9.833 10.065 9.920
Oil Refining and Petrochemicals, KGPZ and LLK International 10.170 11.454 11.271 11.217 10.770
Power Generation 12.625 12.468 12.213 11.479 9.980
Transportation 0.086 0.078 0.087 0.091 0.111
Foreign entities 6.385 6.405 6.196 6.945 5.924
Exploration and Production (Uzbekistan, Central Asia) 0.043 0.223 0.393 0.360 0.297
Oil Refining and Petrochemicals (EU countries) 6.342 6.181 5.803 6.585 5.628
Share of emissions (Scope 1) accounted for by countries where the regulation of GHG emissions has been implemented (Romania, Bulgaria, Italy), % 16 15 15 17 15
Note.
The 2019 growth in GHG emissions of the Exploration and Production business segment was due to the growth of exploration and production drilling and the increase in production mainly in the Caspian Region and the Komi Republic, as well as the commissioning of additional power capacity at oilfields, which led to an increase in diesel fuel consumption. The increased GHG emissions at oil refining and petrochemical entities in 2017 were caused by production of the largest volume of high value-added products between 2016 and 2019.
Specific GHG emissions, by types of activity (Scope 1 + Scope 2)
Business segment/ business sector 2016 2017 2018 2019 2020
Exploration and Production across LUKOIL Group
tonnes СO2E / thousand BOE 25.396 23.954 21.106 21.009 21.622
tonnes СO2E / GJ 4.334 4.008 3.602 3.585 3.690
Oil Processing and Petrochemicals across LUKOIL Group (excluding LLC LUKOIL-KGPZ and LLC LLK-International)
tonnes СO2E / tonne of processed raw materials 0.281 0.293 0.282 0.291 0.305
Power Generation (Russian entities)
tonnes СO2E / MWh of generated electrical and heat energy (excluding emissions of LLC LUKOIL-ENERGOSETI) 0.341 0.340 0.323 0.328 0.350
Note.
The increase in specific GHG emissions in all business sectors in 2020 was related to a decline in production due to the pandemic and the need to maintain the working capacity of production units and technological processes, as well as to rising complexity of production processes and an increase in the refinery yield at oil refining and petrochemicals entities.