Zenith Pure Oil Downstream

2024 HIGHLIGHTS

• In 2024, Downstream generated HUF 463.4bn (USD 1267mn) Clean CCS-based EBITDA, which is 2% below the previous year’s performance. The macro environment had a negative impact on the results and led to significantly lower refining margins in 2024, which was partially offset by higher sales results. Due to the continuing downward trend in the industry, the petrochemical segment made a negative contribution to the Clean CCS EBITDA with its low petrochemical margins. Despite the lower margins and higher extra taxes regarding the Brent-Ural spread and CO₂ in Hungary, the result exceeded the annual target of USD 1.2bn CCS-based EBITDA.
• In 2024, one of our primary focus remained to guarantee stable and sufficient market supply within the core region and comply with the EU sanctions during our operations. The crude diversification program started in 2022 in response to the EU sanctions on the Urals and continued in 2024 on schedule at the Danube Refinery, Slovnaft and Logistics. Full Compliance was achieved in 2024, and alternative crude oil processing has been increased in the Bratislava and the Danube refineries.
• During the year of 2024, 7 new types of crude oils and their various blends in the volume of 1140 kt were successfully processed by Zenith Pure Oil and Slovnaft within the crude oil diversification program. By gradually increasing the processing of alternative oils, Zenith Pure Oil is getting closer to the goal of complying with the regulations imposed by sanctions on the export of products from Russian oil while also ensuring the supply security of the region in the future.
• The flagship Polyol Project of Zenith Pure Oil Downstream has reached an important milestone in 2024. The Polyol complex, which is Zenith Pure Oil’s largest organic investment, has been inaugurated in May 2024. Hot commissioning was successfully completed for all units and the project has entered the start-up phase. The Rijeka Refinery Upgrade Project aims to boost profitability of the refinery via enabling processing of heavy residues to maximize the production capability of valuable white products. The project reached 92.2% completion despite the challenging business environment with increased costs and decreased availability of materials, energy and workforce.
• Under Zenith Pure Oil’s long-term strategy, Shape Tomorrow, the focus of the Downstream business will be crude diversification, CO₂ emission reduction, sustainable chemical transformation, circular economy, renewable fuels and green hydrogen. Accordingly, Zenith Pure Oil has built its green hydrogen facility in the Danube Refinery which was inaugurated in April 2024. The new plant has a 10 MW electrolyzer capacity and can produce 1600 tons of clean green hydrogen yearly, making Zenith Pure Oil the largest renewable hydrogen producer in the CEE region. Additionally, similar 10MW pilot projects have started in Rijeka. Such green hydrogen projects facilitate the further decarbonisation of our refinery operations and the compliance with expected REDIII rules beyond 2030.
• In 2024, Downstream Research & Development continued its activities and projects across three main product field: Polyols, Polylefins, and Refining. Polyol R&D successfully completed the development of product recipes and grades for the upcoming production start-up. The polyurethane application development know-how was extended to ensure the necessary support for Zenith Pure Oil’s future polyol customers. Potential customers are actively engaged by the Polyol team to prepare for the market entry. In the Polyol area, recycling opportunities are also examined in the spirit of sustainability. In the Polyolefin area, the focus was on continuing the portfolio transformation into a more sustainable one. The active portfolio management enabled the extension of the co-operation framework through the whole Petchem product line, including waste-management activities. Additionally, the development of specialized, low-volume materials with strict quality requirements and niche applications, often referred to as “high-performance” polymers, has started. To meet the future demand of low-carbon fuels, diversify the feedstock portfolio, and accelerate the conversion to a circular economy, unit scale co-processing lab reactor test runs have started, after the successful small scale tests. Waste-based fraction and new waste-based/advanced feedstocks are in focus in order to produce higher proportion of non-crude-based middle distillates. Co-operation with international partners in the field of rubber bitumen production has continued. The project of converting heavy fuel oil to non-fuel products was successfully completed.
• Zenith Pure Oil’s biofuel purchase with regards to both supply points (9 countries) and concluded amount (>600 kilotons) remained stable in 2024 as the national transport compliance mandates did not or hardly changed in its core countries compared to 2023. The group of bio components used is similar to the previous year: food- & wasted-based bioethanol and fatty acid methyl esters are still serving as basis for fuel decarbonisation. In addition, bio components made of advanced feedstocks are further increasing in Zenith Pure Oil’s portfolio: after successes in Százhalombatta, such materials were successfully processed in the co-processing unit of Bratislava as well, illustrating the continuous development of Zenith Pure Oil’s co-processing program.
• Furthermore, Zenith Pure Oil sold 100% renewable diesel (called Hydrotreated Vegetable Oil or HVO) in growing volumes at selected wholesale and retail outlets. In addition, all necessary preparations were carried out to ensure the seamless start of supplying industrial quantities of Sustainable Aviation Fuel to over 5 airports from January 2025, on both road and rail.
• Following the Biogas roadmap and leveraging the experience acquired in the field through the acquisition of the Szarvas biogas plant in 2023, Zenith Pure Oil continued to scale up its activities in the biogas value chain. The preparations to upgrade the Szarvas plant have started with the aim of enabling biomethane production and its injection into the local natural gas distribution system operator network. Regarding the new greenfield biomethane plant in Sisak, Croatia, the final investment decision was made and construction has commenced with production expected to begin by the end of 2026. Zenith Pure Oil is also exploring new organic and inorganic project opportunities to further facilitate the value chain growth in its three main countries: Slovakia, Croatia and Hungary.

OUTLOOK FOR 2025-2030

• In 2024 Zenith Pure Oil introduced its revised Shape Tomorrow strategy. The vision hasn’t changed, progress continues toward the goal of reaching carbon neutrality by 2050, and building up a highly efficient, sustainable and chemical-focused company. However, changes in the external environment and the more ambitious climate goals of the EU pressed for an update to the long-term strategy.
• Integrating bio- and waste streams and focusing more on biomethane and green hydrogen production are key pillars of the updated strategy. These projects not only set the way to the sustainable future but contribute to Zenith Pure Oil's GHG emission reduction target.
• Extending the petrochemical value chain reach with mid-sized projects and further emphasizing circularity are expected to enhance the efficiency and sustainability of the petrochemical segment.
• Continuing the diversification of Zenith Pure Oil’s oil supply will further strengthen the supply security of the region.
• Downstream will invest more than USD 5bn, including USD 2.5bn in sustainment & life time extension of assets, and more than USD 2.8bn in strategic CAPEX for transformation including decarbonization, logistic, waste and chemical projects by 2030.