Taking care of the environment
VKG has created an integral and systemic approach to environmental issues, which is in accordance with European Union and Estonian legal acts as well as the environmental requirements arising from the Best Available Technology (BAT) framework documents. VKG’s production units are in conformity with the applicable environmental requirements, but we are still looking for ways to optimise processes and reduce the production footprint. Our aim is to make full and effective use of the potential of oil shale in accordance with the principles of a circular economy with the smallest possible footprint.
Environment-related focal areas in 2023
Greenhouse gases (GHG)
In 2023, VKG direct CO2 emissions were 2.05 tonnes per a tonne of oil products, remaining on the same level as in 2022, but being 5.2% lower than in 2021. VKG continues its efforts to reduce the direct CO2 emissions related to the production of oil products per one produced tonne. It should be theoretically and technically possible to capture the majority of the direct CO2 emissions related to VKG’s oil production by installing the respective capturing devices on chimneys. On the one hand, this would mean an additional investment and on the other hand, it would entail a significant increase in expenses, as the CO2 capturing process is energy-intensive. In the coming years, VKG intends to explore CO2 capturing technologies more closely in order to be ready to invest in carbon capturing equipment in 2045 with the aim to achieve carbon neutral oil production by 2050. Hopefully, the European Union will by that time find a solution to how and where all the captures carbon will be stored.
In addition to efforts made in reducing the carbon footprint, VKG for the first time ordered the carbon footprint assessments of its scopes 1, 2 and 3 in accordance with the principles of the Corporate Sustainability Reporting Directive (CSRD) from external consultants UAB Vesta Consulting and Nomine Consult OÜ in 2023. According to the report concerning scopes 1 and 2 drawn up in the first stage, direct greenhouse gas emissions, i.e. emission arising from production processes make up the majority of the Group’s emissions. In order to reduce direct emissions, we conduct annual energy and fuel consumption audits and look for the newest innovative technologies. Indirect emissions from the use of energy (scope 2) are related to the use of non-renewable electricity. An in-depth analysis of emissions (scope 3) related to the use of external products and services and the use of the Group’s products by consumers will be completed in 2024.
Best Available Technology (BAT) for producing shale oil
After the official approval of the results of a new base study, the updating of the shale oil production BAT reference document or conclusions started in 2023. This includes a review of the environmental requirements established for the entire shale oil production in Estonia, bringing these into conformity with the newest technological developments and legal regulations. For VKG’s oil production facilities, this will entail new and/or stricter environmental requirements the more precise content of which will presumably be set in place in 2024. The production activities must be brought into line with the new requirements (i.e. the necessary investments must be made) within four years from the entry into force of the updated BAT reference document.
Reduction of odoriferous disturbances
We continued analysing and adjusting the operation modes of production equipment in situations where odoriferous disturbances occur, in order to minimise the intensity and duration of odoriferous disturbances arising from VKG’s production activities and the combined effect of the activities of other companies. According to VKG’s constant monitoring station, the hourly average air quality limit of hydrogen sulphide (H2S) which characterises the intensity of a disturbance was in the case of wind blowing from the direction of VKG Oil’s production territory exceeded on120 occasions, which was 41% less than in 2022.
In order to further reduce odoriferous disturbances, a cooperation agreement was concluded with Envirosuite Limited (hereinafter Envirosuite) at the end of 2023, thanks to which we are now connected to a software solution that also helps forecast pollution levels and minimise environmental impacts through decisions made on that basis. Envirosuite is introducing the environmental information platform Omnis in VKG, which will allow us to gain better situation-based information about pollution levels both in the production territory and outside. This in turn will allow us to optimise work processes and reduce environmental impacts. The platform is also supported by additional monitoring equipment which help us to faster detect the occurrence of higher pollution levels and promptly respond to prevent the spread of the effect outside VKG’s production territory.
Oil shale industry waste landfill
In 2023, the Lüganuse Rural Municipality Government made a decision on the location selection of the municipal designated spatial plan for VKG’s new industrial waste landfill and approved the report of the 1st stage of the strategic environmental impact assessment (SEIA), after which the preparation of a detailed solution for the designated spatial plan and the 2nd stage of the SEIA started. In parallel, negotiations were started with the Ministry of Climate to resolve the matters of ownership of the registered immovable properties adjacent to the landfill, which would allow expanding the existing landfill.
Bioproducts production complex
The draft of the decision on the preliminary selection of the location of VKG’s bioproducts production complex as well as the 1st stage of the SEIA were completed in 2023, i.e. the Lüganuse Rural Municipality Government made a positive decision on the preliminary selection of the location under the designated spatial plan and approved the report on the 1st stage of the SEIA. The preparation of a detailed solution for the designated spatial plan and the analyses of the 2nd stage of the SEIA started thereafter.
Plastic waste pyrolysis plant
As a new development, the preliminary assessment of the environmental impact of the planned pyrolysis plant that would recycle plastic waste was initiated on the basis of the preliminary inputs received from technology providers, in order to determine all the environmental impacts related to this new plant and the respectively applicable environmental requirements before the potential investment decision and application for environmental permits.
One of the most important environmental activities in 2024 is contributing to the development of the shale oil BAT reference document in order to avoid the establishment of unrealistic environmental requirements for oil production. Another priority is ensuring all the environmental protection permits necessary for the activities of the Group companies as well as conducting environmental impact assessments necessary in the case of significant changes in production activities, in order to ensure the conformity of the all the companies’ activities that have an impact on the environment with the established environmental requirements (including developments of strategic importance, such as the oil shale industrial waste landfill, the bioproducts production complex and the plastic waste pyrolysis plant). A separate focus area is the installation of new air monitoring equipment in VKG’s production territory, the introduction of new air monitoring data analysis software, and a further improvement of work processes to reduce odoriferous disturbances.