Dear colleagues, professional public,

when I wrote this speech, it was the beginning of February, and the world was different. Now at the end of March, when the annual report summarizing the last year goes to press, I must mention how our lives have changed in just one month. I am an eternal optimist and believe that everything will end well, but today’s reality does not help me very much in optimism. I do not want to turn to geopolitical analysis; I want to mention the fact that the current conflict in Ukraine also has a significant impact on the petrochemical industry, of which we are part. In these challenging times, our common task is to ensure business continuity and supply the region with energy. The burden of responsibility lies with the companies operating the refineries. SLOVNAFT, a.s. and its refinery is in a unique position in Slovakia as it plays a crucial role in securing the region’s supply. The MOL Group, of which SLOVNAFT is a member, has sufficient oil pipeline capacity to secure supplies to its inland refineries via the Adria oil pipeline, which flows into the port of Omišalj in the Adriatic Sea. Here I want to emphasize that despite this unprecedented situation, it is in the interest of all member companies of our Association to fulfill their obligations so that customers feel the consequences of this challenging situation as little as possible.

And now, I will return to the evaluation of the year 2021, when the coronavirus pandemics and legislative measures contained in the “Fit for 55” package aimed at meeting the Green Deal’s goals were still the most significant themes.

In 2021, we again witnessed either partial or complete closures of the economy in various areas, which resulted in a dramatic drop in demand for transport.

It was all the more critical to ensure a reliable supply of fuels for the transport of key goods, which contribute to the provision of the necessary social and health needs of the population. On the other hand, it was necessary to meet the increased demand for raw petrochemical materials needed to produce basic products and materials during an emergency, whether in healthcare, food industry, or gastronomy.

While in 2020, we reacted rather reactively to the unexpected situation, in 2021, we proceeded proactively based on the gained experience. We quickly adapted the production cycle to changes in demand, and we also used our flexible logistics and distribution system to deliver products where needed.

In addition, we have activated safety protocols to protect our employees and suppliers from the spread of the disease and ensure the reliable and safe operation of all parts of the production and supply chain with a limited number of employees.

When solving operational problems, we do not forget the strategic goals either, as they did not disappear with the pandemic. Since the EU unveiled its ambitious plan of becoming a world leader in addressing the global challenge of climate change, we have been on the brink of revolutionary change, not least in the petroleum industry.

In 2021, the European Commission published a package of legislative proposals, „Fit for 55“, which should lead to a 55% reduction in European greenhouse gas emissions by 2030 compared to 1990. I remark that this goal is only one step toward achieving carbon neutrality by 2050, to which the EU has legally committed.

The vision is clear, and goals are set. However, the way we will achieve this together is still a big question mark.

Our Association welcomes the „Fit for 55“ package and considers it a step in the right direction. However, the proposals themselves are the source of concern, as they do not fully recognize the fundamental contribution of renewable and low-carbon liquid fuels to transport decarbonization.

Even the current approach, which focuses only on exhaust emissions from new vehicles (so-called tank-to-wheel), does not consider the benefits of all possible decarbonization technologies, which reduces the overall potential for achieving climate neutrality. In this sense, an approach that also takes into account the carbon footprint of the relevant technologies and fuels at all stages of their life cycle – from the extraction of raw materials to their use (so-called Well-to-Wheel) – seems to be fairer.

We feel a preference for electromobility as the main tool for achieving these goals, but let us be honest that today there is no alternative to liquid fuels for air, sea, and long-distance road freight.

The refinery industry’s vision of contributing to the common goal mentions the importance of using a whole set of tools to tackle climate change, including hydrogen, biomass, waste, and the aforementioned low-carbon liquid fuels and products.

In this context, I would like to mention the joint letter of the six environment ministers (V4, Bulgaria, Romania) sent in July 2020 to the Vice-President of the EC, Mr. Frans Timmermans, on the Impact Assessment paper, from which I quote: “The Impact Assessment should represent some of the options we can follow, but it should not predetermine our choices. Financial capacity and specific national conditions should play an important role in assessing these options. This should not preclude any technology that could be used to achieve this goal. ”

I can only agree with this appeal. It is said that in an ever-changing environment, not the biggest or strongest will survive, but those who can best adapt to change. We are ready to change, and as a responsible partner in the mobility sector, we want to be part of this process.

Therefore, it is essential for us that the support mechanisms that determine the process of transforming climate neutrality are set up fairly for all sectors and technologies.

I am convinced that the development of a diversity of energies and energy carriers will give the economy flexibility, resilience, and the market’s ability to choose the optimal solution for each sector and application to contribute to the protection of the environment that belongs to us all.

In conclusion, I would like to thank all members, followers, co-workers and especially employees of expert commissions, including a two-member team of the Association, for another professionally managed year and wish them a lot of optimism and strength for further work in 2022.

Ľuboš Dinka

                                                                                                                                                                                                                                                                                                                                                           Chairman of the Executive Board

    SAPPO

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