Deep dive into the decarbonization strategy of a European refinery

Show Notes

European refineries are under pressure to decrease their greenhouse gas (GHG) emissions and to produce high amounts of renewable fuels for transport and as feed for the PetChem sector. This is not a trivial challenge. But some refineries have implemented ambitious sustainability strategies in order to answer this call. 

 

In this episode, Sylvain talks to Michael Kraussler and Ventsislav Mishev from energy and chemicals company OMV about their decarbonization journey – past, present and future. They look at the overall plans and targets, as well as details of key projects.

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Mikala Grubb: 00:13

In Europe, refineries are under pressure to decrease their greenhouse gas emissions and produce high amounts of renewable fuels for transport and as feed for the petrochemical sector. This is not a trivial challenge. Some refineries have implemented ambitious sustainability strategies in order to answer this call. In today's episode of the Fuel for Thought podcast, Sylvain will talk with Michael Kraussler and Ventsislav Mishev from energy and chemical company OMV about their decarbonization journey, past, present, and future. They will look at the overall plans and targets as well as details of key projects.

Sylvain Verdier: 01:01

It is my pleasure today to welcome 2 guests and friends from, OMV, Ventsi Mishev and Michael Kraussler. Gentlemen, how are you doing today?

Ventsislav Mishev: 01:11

Well, thank you, Sylvain, first for the invitation. Ventsi speaking here. It's a pleasure to be with you. All good. Working hard on our strategy. First of all, looking forward to the weekend. And, happy to be here and to contribute to your wonderful podcast.

Sylvain Verdier: 01:25

Thank you, Ventsi. Michael, are you also ready?

Michael Kraussler: 01:28

I'm also ready. Thank you very much for this opportunity, Sylvain. Also working hard on OMV strategies, at the moment. And, yeah, looking forward to this podcast where, by the way, I'm a big fan of it. Really liking to contribute.

Sylvain Verdier: 01:42

Oh, thank you. I'm blushing. So today, we will talk about OMV with Ventsi and, Michael. We'll talk about the strategy, various decarbonization projects, how it's implemented in the refineries, and maybe some future plans. But first of all, can you say a few words about, yourselves briefly and then about OMV, your company, what is it you are doing, what type of fuels you are doing now?

Sylvain Verdier: 02:03

Michael, do you want to start with a few words about yourself?

Michael Kraussler: 02:06

I can start. My name is Michael Kraussler. I've worked in OMV since 2018. My background is chemical and process engineer. I've worked in the technical development department in OMV's refining division, which means, I'm beside other topics responsible for project development in the early project phases, but we are also supporting the projects over the whole project life cycle with technical, in technical topics.

Michael Kraussler: 02:33

So mainly our when in our department, the main task for us is to select the proper technologies for the different projects.

Sylvain Verdier: 02:43

I see. Thank you. What about you, Ventsi? How long have you been in, working for OMV?

Ventsislav Mishev: 02:49

So my journey with OMV started back in 2015. So it's been 7 years now for myself. My background is physics. I'm a physicist. When I started my work with OMV, my first position was in the refinery, looking to optimize our petrochemical assets, the Shekhar Refinery, that is.

Ventsislav Mishev: 03:09

And moving forward then to some central positions again, focusing strong build petrochemicals. And for the last, I would say, 2, two and a half years, my main focus has been, strategic developments, to sustainables, so renewable fuels, renewable chemical feedstocks. And this is also part of my current position. I'm heading a department called biogrowth, and we're looking to, roll out and enable the strategy that we have communicated in March to our investors.

Sylvain Verdier: 03:46

Can you say a few words about OMV? So what kind of fuels and chemical you are producing? Do you have many refineries? Maybe some of our listeners do not know, your company so well. So I don't know if, Michel or Wensy, you want

Michael Kraussler: 03:57

to start. Wensy, take you the more general part, and I will, make a deep dive related to our refineries then maybe.

Ventsislav Mishev: 04:04

That is that is excellent, Michael. Let's say it like this. I'm just gonna mention the number of refineries that we have in Europe. There are 3 of them located in Austria, Southern Germany, and Romania. So starting from our biggest refinery, that's the Schwechat refinery close to Vienna.

Ventsislav Mishev: 04:22

We also have the refinery in Southern Germany in Buchhausen, which is right at the border with Austria. And also, we, own Petrobrassee refinery, which is about 50 kilometers to the north of Bucharest. What do we produce at the moment? So we have a very broad portfolio of both fuels and, petrochemicals, also in the only on the refining sites. I'm not speaking now on the petrochemicals.

Ventsislav Mishev: 04:47

If this is wished for, we can do that, of course, as well later. So we have a production of about 12,000,000 tons of fuels, mostly diesel and, gasoline. So 7,000,000 tons of diesel roughly within Europe and 3,000,000 tons of gasoline and also about 2,000,000 tons of jet fuel. We also have specialty products, bitumen and also calcined. And we're looking forward, of course, to dive into a new journey now into sustainables.

Ventsislav Mishev: 05:20

We also have, flagship projects on this, which we would like to talk about later. And, naturally, a strong petrochemical integration is key for us. This is also part of our strength. With Borealis and also with our 2 steam crackers, collocated with the refineries in Schvegett and Bokhalsen. And, we also have a strong integration already on these two sides with Borealis.

Sylvain Verdier: 05:42

Mikael, do you have anything else to add to what Wencesh just mentioned?

Michael Kraussler: 05:46

Yes. Wencesy explained very detailed our our refinery configuration, our refining business. But OMV is not just the refining business. We we have in in total 3 big, business segments, which is the chemicals and materials segment, the refining and marketing segment, and the exploration and production segment. Chemicals materials is mainly related to our daughter company, Borealis, yeah, as already discussed.

Michael Kraussler: 06:11

The refining and marketing segment covers our fuels and refining business. And then we have a 3rd pillar, the exploration production business, which is, yeah, also known as the upstream business for extracting oil and gas and selling it on the global market.

Sylvain Verdier: 06:29

Perfect. Ventsi mentioned already briefly the strategy for 2,030 and so forth. So because now you are mostly working with fossil fuels. So what is this strategy about? Do you have any specific objectives in terms of specific fuels you want to make or chemicals?

Sylvain Verdier: 06:50

If you can, elaborate a bit about this, I think that would be really interesting for our listeners to know more.

Michael Kraussler: 06:56

I mean, I can give you a very rough overview of overall OMV strategy, and maybe Wences can say a little bit more to the refinery strategy than also to refining strategy. So overall, the the OMV strategy target, the priority is to become, net 0 by 2,050 in scope 1, 2, and 3 emissions. And this we want to achieve by 4 pillars, I would say, which is the first one is strengthen our chemicals, and materials portfolio. The second one is we want to become a leading European producer of sustainable fuels.

Sylvain Verdier: 07:33

Mhmm.

Michael Kraussler: 07:33

3rd pillar is establishing a global leadership position in the circular economy. And the 4th pillar is to achieve this net zero target, of course, reduce our fossil production and our fossil processing.

Sylvain Verdier: 07:47

Very good. Ventsi, anything to add to what Mikael just said?

Ventsislav Mishev: 07:51

Yes. Michael already outlined how the company envisages itself 30 years from now and onwards. And, I would just do a deep dive on the refining strategy and focus on one of the first key steps time wise, which is 2030. So by 2030, we have communicated a strategic objective of producing 1,500,000 tons of renewable liquids. And these liquids, the split that we're looking at is roughly 400 kilotons per year for the road sector, then 700 kilotons for aviation, sustainable aviation fuels, and more than 300 kilotons of, renewable chemical feedstocks.

Ventsislav Mishev: 08:40

We see, our one of our key strengths in this triangle being able to play around road, aviation, and chemicals due to our strong integration both as Michael nicely said before with with our marketing and trading retail arm with the road fuels, also our strong aviation, captive markets in Munich and Vienna, and, naturally, our chemical integration with Borealis and our other partners. Mikael, you mentioned 4 pillars, 4

Sylvain Verdier: 09:07

segments, fuels, petchem, and so forth, and net 0 in 2050. So which of these 4 segment is emitting Marsau? Do you know that? Is it mostly upstream production, or is it the refinery? Do you have any numbers about that?

Michael Kraussler: 09:25

No detailed numbers in in my head, but, that's, I mean, we have to reduce in every segment, of course. And and, mention mentioned in detail, explained a little bit the refining strategy, of course, are to to other, divisions, exploration, production, and chemicals and materials also have, strategies in place to reduce greenhouse gas emissions. For example, exploration production division is on a way to to come to a 0 flaring, has a strategy of of 0 flaring initiative, yeah, to to reduce methane and flaring emissions. In exploration and production, we also want to tackle the geothermal and CCS topics.

Sylvain Verdier: 10:11

Mhmm.

Michael Kraussler: 10:11

And chemicals and materials division, they also go towards renewable feedstock, but also have very high, very high level. They are also tackling the circular economy business model to come down with the emissions. So in total, all, yeah, 3 divisions of OMV have certain, aims and approaches how to tackle this, net zero target in 2050. I think together, everyone has to, yeah, to contribute to this. Otherwise, I think this is not possible to achieve.

Sylvain Verdier: 10:43

Yes. Agree. Agree. Before we deep dive into what's happening in the refinery and the chemical segments, one of the main question I have and many people have is a feedstock. For example, you mentioned 1,500,000 ton in, 2030 of renewable fuels.

Sylvain Verdier: 10:58

Can you say a few words about which feedstocks you plan to use and, yes, also maybe for plastic and circularity? Is there anything you can, help us with maybe?

Ventsislav Mishev: 11:09

I think there is, the keyword here is feedstock agnostics

Sylvain Verdier: 11:14

Mhmm.

Ventsislav Mishev: 11:15

In this case. We want to be as flexible as possible, and we want to look broad. And I'll give you our reasoning. There's a clear drive within the whole industry in Europe to reduce fossil fuel outputs, to reduce GHG emissions.

Sylvain Verdier: 11:38

Mhmm.

Ventsislav Mishev: 11:38

And what we have seen is that, of course, there are already very well developed pathways that can be used such as hydro processing, where hydro has been a long standing trustee partner of us, and we have a flagship project together, which we'll talk on about later. But we also want to go into, more advanced feedstock types, such as going to into difficult to process biomass, such as residues from the agriculture industry or forestry industry, or some off streams which, are not that, let's put it this way, that easy to process. Similarly, also for the circularity, for the circular economy in chemicals, there are well developed mechanisms today even for recycling certain kinds of plastics in terms of, when I think about mechanical recycling. However, there there is always a gap if you think about what is left, which has not been recycled from mechanical recycling, and you have to look again into more difficult technological pathways. And this is where we have invested a lot of effort into development.

Ventsislav Mishev: 12:42

So in a nutshell, the type of feedstocks we want to have are for sure sustainable, acceptable also by the regulators. We do not compromise on that. We want to to be fully transparent and also to enable our customers to benefit from this transparency. At the end of the day, we do it because the, because our customers need it and our customers want it in society as well in general.

Sylvain Verdier: 13:06

Good. Thank you. But very interesting to hear that you are looking a full range of feedstock, also a lot of waste and residues. So excellent. Okay.

Sylvain Verdier: 13:19

Let's talk about what's happening in the in your refineries. So you mentioned 3 refineries. Right now, what kind of, are you producing biofuels already? Is it more, I don't know, ethanol, fame, biodiesel, or are you already producing renewable diesel? Are you doing co processing?

Sylvain Verdier: 13:35

So yeah. What's already happening?

Michael Kraussler: 13:38

So maybe I can I can take this one, Quincy? That's for you, Michael. Go ahead. That's for you. Come on.

Michael Kraussler: 13:44

Okay. So so we are currently, have a co processing initiative ongoing, co processing project, to produce, SAF. Yeah. First volumes have been delivered in this year

Sylvain Verdier: 13:55

Mhmm.

Michael Kraussler: 13:56

To our, yeah, close airport, in Schwechat Refinery, which is the airport of Vienna. We also have a a co processing project in development, which will hopefully start up next year. Yeah. It it's co processing to produce renewable diesel or HVO. Mhmm.

Michael Kraussler: 14:14

And regarding FAME, so biodiesel, we do not directly produce it ourselves. Yeah. We are relying here on long term partnerships to to source the biodiesel to fulfill our blending, bio quota mandates. Ethanol, similar topic currently. Yes.

Michael Kraussler: 14:31

We are sourcing ethanol for gasoline planting to fulfill our quota, but we're also developing, ethanol related projects, especially advanced ethanol projects are in our project pipeline, and we're active on that as well.

Sylvain Verdier: 14:46

I see. Ventsi, you mentioned around 12,000,000 tons of fuels produced yearly. I don't know if it's for the 3 refineries or just for 1, but what is the share of, renewable fuels all in all right now? Is it a few percent, or do you have these numbers top of your head?

Michael Kraussler: 15:01

Not exactly, but, currently, we are, quite, quite on spot on fulfilling our, renewable quotas we are obliged to fulfill. Yeah.

Sylvain Verdier: 15:12

Of course. So it should be possibly around 10%, I guess. Yeah. So in energy content. Good.

Sylvain Verdier: 15:17

Very good. So you mentioned that you want to produce 1,500,000 ton in, 8 years now. So what are the project in the pipelines to produce, yeah, all these renewable road transport, fuel, SAF, and also renewable chemicals? Should we start with road transport, maybe fuels?

Ventsislav Mishev: 15:37

For sure. Yeah. I think that's one that I really would like to talk about. In particular, in this setting is our, the project that Michael mentioned, the crop processing at our post treatment unit in the Shekhar Refinery, which is being constructed and, where we are partners on this. So this is something which is a flagship for ourselves because this is actually the first, I call it major.

Ventsislav Mishev: 16:02

I do not want to disregard the importance of our co processing SAF initiative that we have started, that Michael elaborated upon. But here, with this co processing, the the processing capacity is going to be up to 200, uh,000 tons of renewable feedstocks, and which is a significant amount, which would lead in at full capacity to about 170 kilotons of hydrogenated vegetable oil, which is, if you wish to call it like this, 2nd generation biodiesel or we call it renewable diesel. So this is one of the key projects that we have in our portfolio. This is not all. We have, also clearly stated, for instance, in, in the Petron strategy, downstream strategy, that there is a very strong drive towards advanced ethanol and towards HVOA and SAF.

Ventsislav Mishev: 16:50

So there, the numbers are, up to 450 combined HVOA with SiF and 150 kilotons of advanced ethanol in by 2030. So again, you can you can see a flavor of which, of which, let's put it this way, projects and geographical, geographical positions we're looking at. And we also have other, projects in mind, which are either more nascent. I mean, there are very interesting, looking also towards as a different important topic, such as, technological development. Glycerin to proper know.

Ventsislav Mishev: 17:28

This is a project that we're developing in house, where we have taken final investment decision on a pilot plant to demonstrate the, the suitability and the, of course, profitability and, technical readiness of the technology. And, this is something that has us very excited because Propanol is also an excellent, an excellent advanced fuel, which can be used as blending component for gasoline. So this gives a flavor of, what we have and what we what we can share at the moment. Of course, we don't stop here. We also have different initiatives, in the in the pipeline, but more on that, I think, will be coming in later as time progresses.

Sylvain Verdier: 18:09

Yes. Exactly. So I guess, you could use some of the existing equipment, but you also have to build, new infrastructure, new equipment. And maybe some of the refineries out there listening are wondering, are going through the same challenge. So could you say, yeah, some of the challenges you have encountered when it was using existing equipment or building new equipment?

Sylvain Verdier: 18:29

I don't know. Mikael, can you say a few words?

Michael Kraussler: 18:32

Yes. Okay. I can say a few words. So, yes, you're right. All all projects we are we have in the pipeline currently, it's either revamp projects of existing, units or equipments and but also greenfield, projects you have in the pipeline.

Michael Kraussler: 18:46

I mean, one important lesson we learned on our journey is that renewable feedstocks are not crude oil feedstock. And I say this especially with respect to contaminants and and behavior at elevated temperatures and so on. Yeah. So, very important aspect from our perspective is, have the material of construction, the right one in place. Otherwise, you can you you can have quite some issues.

Michael Kraussler: 19:17

Go to the right people so they can support you with this with this issue. Yeah. That's one one big recommendation. And another big topic, was, at least for for for us, yeah, analytical capacities. Because, as I said, renewable feedstock is not crude, oil feedstock.

Michael Kraussler: 19:36

So different lab equipments, different analytic capacities are required to properly characterize those those feedstock and to be able to judge, is it possible to process this in in existing units, or do we need new units, and so on. So, this is a very important topic, the analytical capacities, or to to to be able to to analyze the renewable fields.

Sylvain Verdier: 20:01

Yeah. I agree. I'm a big fan myself of analytical chemistry, and, also I've been discussing that with many, partners about the AirAsia equipment and new ones and so forth and understanding the, yeah, the new feedstock. So I totally agree.

Michael Kraussler: 20:14

You have to understand what you feed to your unit.

Sylvain Verdier: 20:17

Exactly. It's all about chemistry. We're chemical engineers and physicists here talking. So we know it's about understanding what's happening. Ventsi, Michael just elaborated on technical side, but are there other nontechnical, new competencies you had to develop in OMV when entering this world of, renewable fuels and chemicals?

Ventsislav Mishev: 20:36

Yes. For sure. So I I see, in addition to what Michael just elaborated upon, I see also, other competencies which had to be built from scratch such as understanding different certification schemes, ISCC Plus, ISCC EU, also life cycle analysis and GHG calculations. And not only this, also look looking towards the customers. How do we market these products?

Ventsislav Mishev: 21:00

What do we produce at all? How do you position yourself in terms of business development for renewable fuels and renewable chemicals? Understanding your product and building a strong connection and building a sound selling proposition to a customer, enabling him to understand what he's actually getting in his hands in terms of sustainability. There is also definitely a new competence that was established in the past, I would say, years and will continue to be established in the future.

Sylvain Verdier: 21:29

Good. Perfect. Thank you, Ventsi. Earlier, we mentioned circular economy and one of your key flagship project, this rearm project. So it's to use plastic waste and make plastic again out of it.

Sylvain Verdier: 21:47

I don't know. Mikael, can you say a few words about this project, what it's about, and, maybe some typical capacity and status of the project?

Michael Kraussler: 21:55

I can. Yeah. So, currently, this circular economy project in OMB, we call this re oil. Mhmm. Re oil.

Michael Kraussler: 22:03

OMB's re oil technology is our proprietary technology for producing plastics, pyrolysis oil, and it's currently under development. And in 2018 so when I started the OMV, also the re oil pilot plant was started up. It's a unit with about 100 kilogram per hour of of plastics feed capacity. This is currently located within the refinery borders. Yeah.

Michael Kraussler: 22:30

So it's directly in our refinery, integrated in our refinery, and it's it's operating next year. In 2023, we will have the next evolutionary step being started up. It's the reoil demo unit. Yeah. It has roughly a capacity of 2,000 kilogram per hour of capacity, plastic feed capacity.

Michael Kraussler: 22:52

It will also be fully integrated with our refinery. It will involve pyrolysis oil, hydro processing to upgrade the feed. And the next step is already, going to be developed. Yeah. Next step will hopefully in 2026, our industrial scale, re oil plant, with a annual capacity of roughly 200,000 tons of plastic waste.

Michael Kraussler: 23:17

And this figure is roughly 1 quarter of the Austrian plastic waste, which is available today.

Sylvain Verdier: 23:25

Very interesting. And the idea is to make a fit clean enough to put in your steam cracker so you can make ethylene and propylene and what's not, and you can make plastic again. Is that correct?

Michael Kraussler: 23:34

That's correct. Yes. That's correct. Yeah. So circular economy, the main aim is to bring this circular plastic pyrolysis oil back into the chemical segment.

Sylvain Verdier: 23:44

Good. And here, your integration with the borealis that we mentioned in the introduction is actually quite relevant. Ventsi, any additional words on this circular economy project with plastic?

Ventsislav Mishev: 23:56

Not too much. Maybe I would like to highlight once again the, importance here of the supplementary disciplines such as certification and, the ability to calculate the GHG emission reductions that's come out of this circularity since this is at the end of the day, the main driver behind, the project and the main driver behind the whole circular idea to become more sustainable. And this is something where we've learned a lot, and we are cooperating closely with our Borealis colleagues in order to make it clear and transparent for our final downstream customers about what we are striving to achieve and why it is important and also very, very good for, basically for society and for all of us.

Sylvain Verdier: 24:47

So we discussed a bit what's happening in the refinery, in the petchem sector and, but let's open up the discussion a bit. So, for example, let's talk about hydrogen. Have you given any thoughts about your hydrogen strategy? Bencie, any words about that maybe?

Ventsislav Mishev: 25:01

Yeah. So definitely hydrogen, we we see it as a key enabler for the fossilizing, the transportation, and also the energy sector. We see it many folds, actually. On one hand, when we think about transport, we think that hydrogen is going to play a strong role, particularly for the heavy duty transport. So this is something we are looking at, how we can, we can play here.

Ventsislav Mishev: 25:24

In terms of energy, we also see hydrogen as a highly interesting energy carrier and also utility in the refinery. And we do have actually a project, a first, a first green hydrogen project coming on stream soon, next year. And, I think that, Michael can say a little bit more about this one.

Michael Kraussler: 25:44

I can say a little bit more. Yes. So it will be an electrolyzer project next year, coming on stream, hopefully, in Flesherd refinery with a roughly capacity of 1,500 tons of green hydrogen per year, versus, yeah, conventional SMR hydrogen. This, should enable us to, yeah, save around 15,000 tons of CO 2, emissions per year. And, yeah, as as Wenjie said, the expected start up is second half of next year.

Michael Kraussler: 26:13

I'm really looking forward. Part of this hydrogen which is produced will be, sent to the refinery hydroprocessing units, and, another part of the hydrogen volume which is produced will also be used for, say, our hydrogen initiatives in the road transportation sector. We have there a few initiatives ongoing. One of them to mention is the h two Accelerate initiative where we have, yeah, partners over the whole industry, truck manufacturers, other oil companies, gas companies. Another initiative we have ongoing related, hydrogen in road transportation is with the Austrian Post company.

Michael Kraussler: 26:52

Yeah, and and focus is here to supply hydrogen for heavy goods related transportation.

Sylvain Verdier: 26:58

I see. Thank you. What about the Power 2 x? So, I don't know, E Jet or e something. Is it also something you are looking at, Ventsi?

Ventsislav Mishev: 27:08

Yes, Ivan. So power to x is also indeed part of our thinking and of our ideas. We are part of a prominent consortium, cleantech, in Southern Germany, where we're looking at an opportunity to build in the future, power to x, in particular focusing on EJET, so, a PetroSaf plant. We're also well aware that these are nascent technologies. So this is, this is, a field where we see also room for a technological development where we would, like to actively participate ourselves.

Ventsislav Mishev: 27:43

And we have also different initiatives in this regard. We are also quite clear about the difficulties and limitations that we're facing. At the end of the day, you know, every single power to lick to liquids application, you have 2 main challenges. One of them is the technology, and the other one is the price of your renewable power and its availability. So this is these are the 2 things that, make it challenging, but we are indeed looking at this, and we are confident we will be able to come up with a with a solution in due time.

Sylvain Verdier: 28:14

Perfect. Thank you, Ventsi. Michael, a question for you about, electrification of the refinery. Is it something that you are looking at or it's not, a hot topic because it would not decrease, JG so much?

Michael Kraussler: 28:29

No. That is a very hot topic currently, also in our refineries. So, because currently, a lot of, let's say, turbo machinery, units, yeah, compressors and so on are driven by steam, high pressure steam. And this high pressure steam is produced in a power plant. So, yeah, it's fossil fired.

Michael Kraussler: 28:49

Yeah. So, electrification is definitely one one key step, to come down with the greenhouse gas gas emissions in the refineries. And there are several initiatives ongoing, currently, actually, at all our, refining sites to drive forward the electrification of certain units or certain equipment. Especially in Austria, this is a a good lever to come down with the emissions because the, yeah, renewable share in in Austrian electricity grid is is around 80%. 80%.

Michael Kraussler: 29:24

Yeah. Which is yeah. On average, yes. But that's quite high. So Yes.

Michael Kraussler: 29:30

It would be a very, very nice, lever for us to come down with the emissions.

Sylvain Verdier: 29:34

I see. Thank you. So we're approaching the end of this podcast recording, and I would like to end up with a more open question. Some of the refineries listening to us might be at the beginning of this, grain transition. So what would you recommend them if they are just thinking, okay, how can we decarbonize or defossilize, as you said, Ventsi?

Ventsislav Mishev: 29:59

Gladly, Sylvain. It's an excellent question.

Sylvain Verdier: 30:01

It's not an easy one.

Ventsislav Mishev: 30:02

Hard and easy one, I know. But you know, there is there is one thing which about hard questions. They're hard for everyone. It it's going to take effort on everybody's side. All of us, refiners in the industry have to reinvent, even reimagine themselves.

Sylvain Verdier: 30:18

Thank you. Michael, what would you recommend these refineries who are just thinking how they can decarbonize or defossilize? Any wise words for them?

Michael Kraussler: 30:27

Yeah. Wise words. The first the first one, I think, based on our experience, please start early enough with this. Mhmm. Trans transformation topics.

Michael Kraussler: 30:38

So and the second one, is also related to the competencies we discussed before, yeah, in the podcast. Mhmm. Is ensure the proper and right staffing, of your project and and your your initiatives you have there. Because it's a lot of new topics which come up to a refinery if if you step into the renewables business.

Sylvain Verdier: 31:01

Mhmm.

Michael Kraussler: 31:02

And and you want to make sure that you have the the expertise and all the proper people right at hand, if you need them.

Sylvain Verdier: 31:09

I think it does sound good. Wise words, Michael. Vensi, anything else to add to what Mikael just said?

Ventsislav Mishev: 31:15

Yes. I would say to everybody, be bold when reimagining and reinventing yourself. Think hard about what you want to be in the future. Put yourself in 2030, 2040, 2050, and think, where do I want to be? And then start working towards getting them.

Ventsislav Mishev: 31:34

That's what I can give as an advice. That's more or less the approach that we took when we were creating our strategy.

Sylvain Verdier: 31:42

Michael, I don't have any further question for today. I would like to thank you for spending time with us and, enlightening us about, OMV and your strategy and all your projects. It's definitely interesting journey. And, yes, thank you again for today. Have a good day.

Sylvain Verdier: 31:58

Bye bye bye.

Michael Kraussler: 31:59

Thank you, Sylvain. Bye.

Ventsislav Mishev: 32:00

Goodbye. It's been a pleasure, Sylvain.

Michael Kraussler: 32:02

It was a pleasure. Thank you again for invitation. Bye.

Ventsislav Mishev: 32:04

Bye.

Sylvain Verdier: 32:05

Thank you. Our pleasure. So, Mikala, what do you think about this discussion we just had with, Michael Evenzi?

Mikala Grubb: 32:17

I think, what what struck me the most is the many projects and products OMV are looking at. It is not solely focusing on, for example, renewable diesel or sustainable aviation fuel or feedstock for the petrochemical, part. It's all. It's everything. And and I think this this is also and and it also goes for the feedstock types.

Sylvain Verdier: 32:48

Yes. They look at, so renewable feedstocks. They look at plastics. They also have some project about green hydrogen, so renewable power and everything. They're looking at all solutions because it's always what we say.

Sylvain Verdier: 32:59

There's no silver bullet. There's not one, size fits all. You need to look at everything. So it's it's really key. And many of these projects also have a small size to start with because it's new technology.

Sylvain Verdier: 33:10

So you need to start small. Yeah. But don't bet all your money on the on one horse. I think

Mikala Grubb: 33:15

you need

Sylvain Verdier: 33:16

all solutions. I think one different that OMV has is that they're also quite integrated with the petrochemical industry. So it gives them also more flexibility and, more leverage, I think, to do different things.

Mikala Grubb: 33:29

To have a a somewhat broader product portfolio because they are not only targeting the transport fuel industry, but also the petrochemical. I think you're right in that. And and it might also provide them with a a somewhat broader perspective also, on on what is needed. And Yeah.

Sylvain Verdier: 33:48

They've done a lot of homework, I think, like many other refineries say. Okay. Where do we want to be in yeah. Where are we now? Where do we want to be in 2030, 40, 50?

Sylvain Verdier: 33:57

Not only looking at, legislation, of course, but more also of, yeah, soul searching exercise, I think.

Mikala Grubb: 34:04

Yes. And I think that is one of the things that struck me with, I think it was Michael who said, we have imagined where we want to be in 2030, in 2040, and in 2050. And I think this has paved the way. And and this, again, seems to be parallel to what Pream did in our in our podcast with Pream some seasons ago.

Sylvain Verdier: 34:26

Yes.

Mikala Grubb: 34:26

That that Pream had also said, where do we want to be?

Sylvain Verdier: 34:30

Yes. And the people also look at, okay. Which feedstock do we have? Okay. Northern Europe, maybe more forestry residue.

Sylvain Verdier: 34:37

If you are in Austria, okay, what do you have? Is it I don't know. Is it plastic? Is it municipal solid waste in Germany? Because of regulation, could be sewage sludge and so forth.

Sylvain Verdier: 34:46

So what do you have around you? There's not one model for people have to be I think if refineries want to survive, they have to be very, yeah, imaginative and be creative. Yeah. And it's, of course, it's heavy on investments, but they have to do it.

Mikala Grubb: 35:01

The gain is gonna be huge. And and I think for companies that and, again, it it reemphasizes this point is that that you need an overall strategy for your refinery or for your entire organization on how to move forward because, otherwise, you are, you're not gonna get there.

Sylvain Verdier: 35:21

No. And it's we often say, you and me you and I, that, yeah, you should not see the problem but the opportunities. And it's true. Like, I was in Latin America a few weeks back and people saw the the opportunities. They said, okay.

Sylvain Verdier: 35:34

What can we do? We have this. How can we do that? And this energy is also seen in, some European refineries. Yes.

Sylvain Verdier: 35:40

So it's really, really, really important. People have to be creative. And not only that, but also they need to understand, and it's what we see, that they need to work with they need to leave their comfort zone and work with people outside the usual, suspects they work with. So let's say you are in plastic. Okay.

Sylvain Verdier: 35:57

You need to talk to plastic management people how to solve the plastic, and you need to make alliances. And, it's really something we see out there, and we're also doing it ourselves. But it's really, yeah, work together. Not one company can, can do it all.

Mikala Grubb: 36:11

And I also think that we also see that happening often is that there are so many choices to be made that it sometimes, the process takes a little bit longer than than it than it would in a in a in a fossil world, because there are many value chains that needs to be established, that needs to be built up. And and I really think that if you're imagining the refinery of the future, like, what does it take? What what will you do? And, I think one of the key decisions that each refinery needs to take because we will be dependent on fossil sources for a long time. That's I I can't That's how

Sylvain Verdier: 36:50

it is.

Mikala Grubb: 36:50

That's how it is. It's it's a fact of our our lifestyle.

Sylvain Verdier: 36:54

Yes.

Mikala Grubb: 36:54

But, first of all, take the choice. Do you want to go 100% fossil free? Or do you wanna coproduce with fossil? Mhmm. And how is that then gonna affect your decisions down the road?

Mikala Grubb: 37:10

Also, what assets do you have? How much money do you have to invest? Also, are there partners out there that can help you get there faster, not cheaper? Sorry. Yeah.

Mikala Grubb: 37:23

Yeah. So this this question is, what what will you do? What will you produce? Where do you wanna be?

Sylvain Verdier: 37:31

I think I hope this, yeah, podcast episode will inspire some of our listeners also outside Europe to start this, as I said, soul searching journey. Like, where do I want to be in 2050? And it's,

Mikala Grubb: 37:44

and and I think also even for the places that don't have a legislation in place yet, but have the realization that for the pretty high likelihood, it'll come. Yes. So what are you gonna do?

Sylvain Verdier: 37:58

Exactly. And, also, there's a profit to make. Like, you can export to, regions, Europe, Canada, US to some extent. You can also export that. So there's a lot of potential out there.

Sylvain Verdier: 38:09

So it's not only, yeah, progressive point of view. It's also very business oriented, I think.

Mikala Grubb: 38:14

Yes. And and very interesting. So I I look forward to follow OMV on their continued journey in in this, in this path.

Sylvain Verdier: 38:24

Yeah. I totally agree. Thank you, Michael. Well, that just about wraps up this episode of the Fuel For Thought podcast. I hope you enjoyed it.

Sylvain Verdier: 38:33

We'd be happy to help you if you have any questions. And don't forget to like and share the podcast with your colleagues, friends, and family. Next time, I'll be talking EU legislation with some of the most knowledgeable experts on this topic, Adriana Gerena Barena from Hydrogen Denmark and Ian Moore from AdVision. So be sure to tune in for the kind of insider expertise you can only get on the Fuel Faucet podcast. Until then, from Mikaela and me, it's time to say thanks for listening, take care, and goodbye.

Sylvain Verdier: 39:03

Bye bye bye.

Mikala Grubb: 39:03

Bye bye.