Environment and climate
Preem strives to stay one step ahead of its competitors on environmental and climate issues. For instance, we were among the first in the world to produce unleaded gasoline and low-sulfur diesel, also we started producing our own renewable fuels in 2010. At the moment we have zero tolerance for severe environmental incidents and continuously improve in areas such as product development, energy efficiency and use of resources.
Materiality and risk
Preem’s undertakings include processes and products that can cause severe environmental damage if handled incorrectly. Our business still has an impact on the environment and climate even when our work is impeccable (exemplary). Refining entails energy-intensive processes and Preem’s refineries are among the most energy-intensive basic industries in Sweden. This makes our efforts to increase energy efficiency of the utmost importance in reducing carbon dioxide emissions. We make a difference for Sweden when we find ways of reducing our environmental impact.
Our refineries are subject to far-reaching, statutory environmental and climate requirements, and we strive to ensure compliance with them daily. However, if Preem is to achieve its vision of leading the transition toward a sustainable society, merely complying with the requirements will not be enough. We must exceed them.
Governance and activities
Preem requires an environmental permit to operate. Environmental permits are issued by the courts or by the Environmental Permit Office at the County Administrative Board for activities that meet various types of environmental impact requirements. These requirements are based on national and EU legislation and on Swedish and EU environmental targets.
Preem has a monitoring program in line with the Swedish Environmental Code that insures compliance with the permit requirements. We also submit monthly reports to the county administrative board and other permit authorities. If Preem’s emissions exceed the agreed limits, such as in connection with an operational disruption, we follow up with an incident report to the permit authority and with an internal investigation.
Policy and management system enables internal follow up
Preem also has an internal goal to maintain a margin of error by being well under the environmental requirements set by our environmental permit. These efforts resulted in the introduction of Preem’s new Safety, Health and Environment Policy in January 2017. The goal of this policy is to strengthen and update our safety, health and environment efforts. Preem’s management system helps us to stay on top of environmental issues based on the policy, such as identifying, meeting and evaluating the environmental targets, and to make continual improvements. The management system is certified to ISO14001.
Environmental Aspect Model helps identifying environmental impact
The “Environmental Aspect Model” serves as the basis for environmental issues in Preem’s management system. This model uses Preem’s value chain to identify where our environmental impact occurs and how we can work to reduce our negative environmental impact throughout the chain. The model thus also serves as a basis for decision making on environmental targets and other targeted activities.
The way Preem follows up its own environmental targets serves as a good example of our ongoing improvement efforts. Senior Management pursues strategic goals such as increasing renewable fuel sales in its scorecards. It also uses a quarterly management review to go over important environmental issues as well as potential and ongoing environmental investment projects.
Climate impact and atmospheric emissions
Preem’s business has a high environmental and climate impact, both in terms of its operations and products sold. Carbon dioxide dominates atmospheric emissions. The climate is thus high on our agenda and we work hard to measure and improve our climate impact. For instance, we monitor carbon dioxide emissions from our refineries. Reducing nitrogen and sulfur oxide emissions is also a priority for us.
Thanks to our systematic climate efforts, Preem’s refineries are among the most environmentally efficient in Europe. Compared with the average refinery in Western Europe, they emit:
Decreased emissions through new technologies
Preem also monitors carbon dioxide emissions from our land and sea transportation activities. Of Preem’s transportation activities, 93 percent are by sea, which is a more climate-optimized method of transportation than trucks. But there is also room for improvement there, and we continuously invest in new technologies and methods that can reduce our carbon dioxide emissions.
For example, we played a part in developing Tern Ocean, a new type of vessel that Preem uses. Tern Ocean can run on liquefied natural gas (LNG) and is currently the most efficient and environmentally optimized vessel in operation. In comparison to a conventional vessel, Tern Ocean reduces sulfur oxide emissions by 99 percent, nitrogen emissions by 97 percent, carbon dioxide emissions by 40 percent and particulate emissions by 99 percent.
We also employ “slow steaming” to utilize our fuel more efficiently and reduce carbon dioxide emissions. Slow steaming means that the vessel adapts its speed to arrive at its destination port at an exact time instead of anchoring and waiting for a dock to be available. In 2017, slow steaming reduced carbon dioxide emissions by 960 metric tons, which is equivalent to around SEK 1.1 million in reduced fuel consumption.
Carbon dioxide emissions from Preem’s operations
The table specifies total CO2 (kton) emissions for Preem’s business divided between refinery, transportation by land and transportation by sea. The decreases are results of more efficient transportation planning, increased energy efficiency at the refineries and a higher share of natural gas instead of hydrogen in production.
Discharges to land and water
In addition to atmospheric emissions, Preem’s operations can cause discharges to both land and water in the form of spills and wastewater. We always aim to conduct our operational processes in a way that minimizes the risk of environmental impact and environmental incidents. An example of our focus on safety is that Preem’s ships on long-term leases must have a double hull design to reduce the risk of spillage. The ships are not permitted to be more than 20 years old.
Read more about our safety efforts here.
The severe environmental incident measures major environmental incidents, that is, incidents that could lead to breaches of regulations or laws (with Preem convicted of a crime) or could harm Preem’s brand. Preem had 0 incidents in 2017, which is an indication to the effectiveness of our efforts to reduce the risk of environmental incidents.
Use of resources and energy consumption
A business’s climate and environmental impact is closely linked to its energy consumption and use of resources. Preem’s refineries account for 80 percent of Swedish refinery capacity, and fuel production is an energy-intensive industrial process. This is why we always seek various ways to improve the efficiency of our business.
Preem works continuously with energy mapping. In 2017, we conducted detailed energy mapping of the Gothenburg refinery with a focus on significant consumers of energy. We use the analysis to identify areas in need of improvement and invest in both new technology and improved working methods. Similar mapping is planned for the Lysekil refinery in 2018.
Surplus heat becomes district heating
The energy mapping processes will be supplemented with monthly follow-ups and analyses of our energy efficiency, which will also be used as a basis for implementing improvements. Such actions may include finding areas of application for the surplus heat generated by our production processes.
We currently export surplus heat from Preem’s Gothenburg refinery to the district heating network. We deliver 291 GWh of heat, enough for around 20,000 homes, and an additional 220 GWh for industrial purposes.
We also use 41 GWh of surplus heat from the Lysekil refinery and deliver some of it to the municipal district heating network. However, we are not located as close to other industries in Lysekil as in Gothenburg, so we are working on developing solutions for handling and delivering more district heating. These efforts will continue in 2018.
The table displays the energy consumption of the Lysekil and Gothenburg refineries. The total energy consumption of the refineries is down from 2016.
The energy intensity index (EII) is a benchmarking index where energy consumption is standardized so that all refineries can compare their efficiency/energy intensity regardless of their size or complexity. A lower value means that the refinery is more efficient, i.e. less energy-intensive. The results speak to the effectiveness of Preem’s efforts to improve efficiency and thus reduce energy use. The targets for 2017 were 80.5 in Lysekil and 86.6 in Gothenburg.
Climate impact due to carbon dioxide emissions is a global issue. We minimize our negative environmental impact by locating our production in Sweden where environmental requirements are the highest. Preem’s refineries are among the most energy and environmentally efficient in Europe. In fact, our refineries emit 17 percent less carbon dioxide per quantity produced than the average refinery in Western Europe. Carbon dioxide emissions will increase if we relocate our production elsewhere. It would also be detrimental for the environment since it might lead to higher levels of carbon dioxide emissions.
New projects reduce environmental impact
Preem will continue improving processes and investing in new technologies that make it possible to reduce our environmental and climate impact. The projects we are planning for coming years include installation of a hydrogen production plant to enable increased renewable fuel production, installations to improve atmospheric emission measurements and reconstruction to increase the operating reliability of the wastewater treatment plants.
Nevertheless, crude oil will always have a heavy environmental and climate impact no matter of the improvements we make to the efficiency of our own business. Therefore, our future environmental efforts will also be focused on increasing the proportion of renewable raw materials in our production – read more about this here. However, finding sustainable alternatives to crude oil in sufficient volumes remains a challenge.