ORLEN meets the 2008 National Index Target (NCW)
PKN ORLEN has reported on last year's results of implementing its biofuel strategy. The National Index Target (NCW) was met with biocomponents making up 3.46% at a total cost of PLN 63m.
In line with the strategy of implementing biofuels and biocomponents adopted in 2007, the Group has been consistently pursuing its development programme in this field.
Last year was the first full period of implementing the National Index Target (NCW). Under the adopted strategy, actions were aimed at increasing the level of biocomponents in traditional fuels and at popularising biofuels.
In 2008, all fuel terminals were adjusted to blending esters with Diesel oil, ending an investment launched in 2006. With these investments completed, PKN ORLEN's logistics network now complies with the requirements of the Biofuels Act at an optimum level. CAPEX topped PLN 80m.
Last year, the Company used over 100,000 tonnes of bioethanol to produce petrol and over 200,000 tonnes of esters to produce Diesel oil. Additionally, a new fuel called BIOESTER was on sale (a standalone fuel). Introducing the sale of esters, and the resulting adjustment of petrol stations resulted in capital expenditure of approx. PLN 4.5m.
In 2008, Bioester was available at 221 Bliska petrol stations and in the wholesale network. Bioester reduces the emission of carbon oxides, particulates and sulphur compounds.
Introducing biocomponents to fuels boosts production costs due to the higher price of biocomponents as compared to oil-based ones. Despite the available excise duty reliefs, the cost of introducing biocomponents to fuels topped PLN 63m in 2008.
Other ORLEN Group entities, i.e. Unipetrol (the Czech Republic) and Mažeikiu Nafta (Lithuania), are also obliged to meet the new level of biocomponents in fuels. In 2008, both the companies observed the national requirements for the level of biocomponents by means of introducing bioethanol and ETBE to petrol, and esters to Diesel oil.
In 2009, PKN ORLEN will face more challenges since in Poland renewable fuels will have to make up 4.6% (compared to 3.45% in 2008), and also due to more restrictive regulations introduced in the Czech Republic. In Poland, we are planning to use over 130,000 tonnes of ethanol to produce petrol and approx. 420,000 tonnes of esters as an additive to the production of Diesel oil and as a standalone fuel. This year we also wish to increase the number of Bliska petrol stations offering Bioester to 300 facilities.
Achieving such a high target will be difficult in the light of valid standards for liquid fuels, whereby biocomponents can make up to only 5% of the volume. Therefore, the Company expects that with the introduction of two new Fuel Quality Directives and a Renewable Energy Sources Directive, new regulations will quickly follow allowing the increased level of biocomponents in fuels.
