The European energy and chemical industries are undergoing their most significant transformation in decades. In an interview, ORLEN Unipetrol’s Chairman of the Board, Mariusz Wnuk, explains how the Group is working on decarbonisation, ensuring the stability of fuel supplies for the Czech economy, and simultaneously addressing the challenges of maintaining competitiveness. He discusses the realistic implementation of the EU’s Fit for 55 package, the strengthening of trade defence instruments, and the acceleration of permitting processes.
The entire energy sector in Europe is undergoing a fundamental transformation. How can decarbonisation be reconciled with business sustainability?
Our industry is highly energy-intensive, and decision-making and investment cycles carry considerable inertia. We make investment decisions worth tens of billions of Czech crowns, fully aware that the predictability of the geopolitical and macroeconomic environment is currently limited. The ongoing transformation combines and amplifies several challenges at once, making it an almost existential issue for the entire refining and petrochemical sector. In our long-term strategy, we combine traditional fossil production with the development of low-emission and zero-emission capacities. We are gradually modernising our facilities, investing in energy efficiency, and working on the development of new segments. Over the past ten years, the volume of our investments has exceeded ten billion CZK annually, because decarbonisation for us is not only an obligation but also an opportunity to develop new business models. However, it is essential that such a business remains sustainable.
Before I ask about the key to resolving this complex situation, tell me: What is the current condition of the refining and petrochemical sectors?
The European petrochemical industry is facing its most difficult test in decades. Production has fallen to levels last seen in the mid-1990s, and key olefins such as ethylene and propylene show a long-term structural decline – all reflecting the pressure of high energy and carbon costs and global competition. In the refining segment, we have had to respond to geopolitical developments. Prior to 2022, no one anticipated that we would stop using the Druzhba pipeline. We had to prepare the Litvínov refinery, co-finance the capacity expansion of the TAL pipeline, and adjust our entire commercial and logistical chain. This occurred while refinery investments primarily focused on maintenance, given expectations that fossil fuel production will decrease over the next ten to fifteen years.
How do you view the implementation of the Fit for 55 package in the Czech context?
The Czech economy has a heavier industrial base and higher energy intensity than the EU average. Fit for 55 must be implemented in a way that does not cause a real erosion of competitiveness. Therefore, we support predictable rules for emissions trading, limiting excessive volatility in allowance prices, and reinvesting revenues back into industrial modernisation. At the same time, the transition can be approached as an investment opportunity – provided the funds flow into Czech growth sectors (construction, renewables, electrification, grids) and are accompanied by simpler administration and faster permitting processes.
So is bureaucracy the biggest barrier to investments in transformation and capacity development?
Yes. The biggest bottleneck is the permitting process; it is slow, fragmented, and administratively burdensome. We need simplified procedures, a “once only” principle when providing data to the state, the elimination of duplications, and clear rules on public support so that decarbonisation and energy-saving projects can be implemented quickly.
And what tools should Europe and the Czech Republic strengthen to protect industry from cheaper competition?
It is crucial to redefine the pace at which we aim to meet the EU’s climate targets. Import pressures from non-European regions are seriously damaging the health of the chemical industry in Europe, which faces EU regulations, bureaucracy, and high input energy costs. These pressures reduce investment in production and accelerate the shutdown of domestic operations. Meanwhile, the effectiveness of some defensive tools, such as the Carbon Border Adjustment Mechanism (CBAM), is still under discussion. This is why we support faster and more robust EU trade defence measures, for example, in the case of polyolefins and other raw materials and energy inputs essential for value chains. This is not about protectionism, but about fundamental fairness at a time when Europe is simultaneously funding a costly energy transition. We advocate that revenues from emissions trading and public support be channelled primarily into industrial decarbonisation, with predictable project rules and continued compensation for indirect costs.
Energy is more influenced by geopolitics than ever before. How does your company contribute to strengthening the Czech Republic’s energy self-sufficiency?
Both of our refineries are key elements of the Czech energy infrastructure. In a time of changing geopolitical conditions, our priority is the diversification of crude oil sources. Today, we source crude from several regions, most commonly the Caspian Sea, the Arabian Peninsula, and the North Sea, but also North Africa, as well as North and South America. At the same time, we focus on production flexibility and strengthening regional cooperation within the entire international ORLEN Group, of which we are part. At the political level, we promote systemic measures that reduce final energy prices for industry below the EU average and distribute regulated costs in a way that prevents sudden spikes. Without affordable energy, competitiveness, and thus the security and continuity of petroleum product supplies, cannot be maintained in the long term.
We have already mentioned that your refineries form part of the Czech Republic’s critical infrastructure. What security measures do you apply?
The safety of our operations is fundamental to our business, both in stable and unstable times. In physical and cybersecurity, we apply strict standards, invest in monitoring, redundancy, and automated process control, and develop specialised teams and real-time incident detection tools. Together with the Czech Police, we are working on enhancing aerial security of our sites, and with the Czech Army we recently conducted several days of exercises in both refineries, simulating a defensive military response to an intruder.
Finally, let me ask: How do you perceive the fact that your parent company, ORLEN, is the largest Polish investor in the Czech Republic?
It is both a responsibility and a commitment. Our investments strengthen the economic interconnection of both countries and regional energy stability, which is extremely important in these volatile times. The Czech market is seen in Poland as an attractive investment destination, something our Group has demonstrated since 2005, when it acquired a majority stake in the former Unipetrol, later turned into full ownership in 2018. And we intend to continue growing here – in refining, petrochemicals, energy, retail, and new technologies. But to make this possible, we now need realistic implementation of Fit for 55, a stable emissions trading system, faster administration, and stronger trade defence. The goal is simple: decarbonise smartly while maintaining production in Europe and in the Czech Republic.
