Questions and Answers Before the the Shareholders' Meeting 2019
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Eni SpA Ordinary Shareholder's Meeting 14 May 2019 Answers to the questions received prior to the Shareholders' Meeting, pursuant to art. 127-ter of Italian Legislative Decree No. 58/1998 Ordinary Shareholders’ Meeting of Eni SpA 14 May 2019 Answers to questions received before the Meeting pursuant to article 127-ter, Legislative Decree no. 58/19981 Page Fondazione Finanza Etica.…………………………………………………………………………………….………...2 Tommaso Marino…..…………………………………………………………………………………………….……….26 Domenico Nardozza.…………………………………………………………………………………………….……….48 Re:Common…………………………………………………………………………………………………………………62 Giulio Sapelli.……………………………………………………………………………………………………………..119 Marco Bava…………………………………………………………………………………………………………..……121 D&C Governance Technologies……………………………………………………………………………………..181 1 The English text is a translation of the Italian. For any conflict or discrepancy between the two texts the Italian text shall prevail. Shareholders’ Meeting 2019 1 Shareholder Fondazione Finanza Etica (as founding member of the European network of active shareholders SfC - Shareholders for Change and in collaboration with the association A Sud) 1. Eni's wind and solar capacity in 2018. During the meeting between Eni and Fondazione Finanza Etica, held in San Donato Milanese on Friday 9 June 2017, Eni's management presented to the Foundation a comparative graph of the wind and solar capacity of Eni and its main competitors at 2016 (see image below). 1.1 Is it possible to obtain an updated version (at 31.12.2018) of this graph? Answer See answer to question 1.2 1.2 How has Eni's wind and solar capacity evolved compared to its competitors in absolute and percentage terms from 31.12.2016 to 31.12.2018? Answer to questions 1.1-1.2 Shareholders’ Meeting 2019 2 At 31 December 2013, Eni had an installed solar photovoltaic capacity of 40 MW (35 MW in Italy and 5 MW in Algeria) with projects under construction of approximately 160 MW (of which 50 MW wind in Kazakhstan). The design pipeline at 2022 provides for a total installed capacity of over 1.6 GW with ambition at 5 GW by 2025. Compared to what was declared in 2017, the company's commitment in the renewable energy sector has considerably increased in line with the ever increasing commitment in pursuing the objectives of decarbonisation and reduction of the carbon footprint. BP at 12/31/2018 has an installed capacity of approximately 1.5 GW of which: - 1 GW in onshore wind, after the sale at the end of 2018 of about 400 MW; - 0.6 GW in solar, thanks to the acquisition of 43% of Lightsource. Currently, it has not declared projects in development. From 2016 to 2018, it increased its capacity overall by entering solar and reducing wind exposure. Shell at 12/31/2018 has approximately 0.6 GW installed, mainly consisting of wind projects (over 400 MW). In 2018, the company increased its interest in solar power by acquiring 43.86% of Silicon Ranch and 49% of CleantechSolar. Shareholders’ Meeting 2019 3 From 2016 to 2018, it maintained its presence in wind stable by entering solar with a capacity of about 0.1 GW . Equinor (formerly Statoil) at 31/12/2018 has almost 0.6 GW of installed capacity and is the most exposed company on offshore wind. From 2016 to 2018, it approximately doubled the installed capacity. Total has an installed capacity of approximately 0.7 GW. From 2016 to 2018, it recorded significant growth also thanks to recent acquisitions (23% of Eren, 100% Direct Energie and 23% of Novenergia). On the other hand, the renewable energy initiatives of the American Chevron and Exxon remain limited, despite the fact that in 2018, they strengthened their strategies for the reduction of the carbon impact and decarbonisation of assets, also thanks to their entry into the Oil & Gas Climate Initiative (OGCI). Questions submitted in collaboration with the association A Sud 2. Decarbonisation 2.1 In the 2019-2022 four-year investment plan, which provides for investments of approximately € 33 billion, 3 billion is dedicated to the decarbonisation process. Exactly what are they directed at and in what proportions? What is the amount and what are the investments planned in the production of energy from renewable sources? Answer The € 3 billion that Eni will invest in the next four-year period will be allocated for around € 0.7 billion to flaring down and energy efficiency projects, for € 2.1 billion to circular economy initiatives, such as "waste to fuel" projects and biofuels and green chemistry, as well as the development of renewable energy projects. Finally, about € 0.2 billion relating to research and development initiatives and partnerships such as those relating to nuclear fusion developed in collaboration with the Massachusetts Institute of Technology (MIT) or to the OGCI for the development of new technologies for the reduction of carbonic impact. 2.2 What percentage of investments (dedicated to the decarbonisation process) envisaged Shareholders’ Meeting 2019 4 in the 2019-2022 strategic plan refers to activities in Italy? For what kind of activity? Answer Italy plays a fundamental role in the development of decarbonisation initiatives; of the planned € 3 billion, 40% relates to activities in Italy. In particular, these initiatives relate to: i) renewable energy projects carried out at our sites with a view to transforming and extending their useful life; ii) the construction of plants for the recovery and transformation of the organic fraction of solid urban waste into bio-oil; iii) the conversion of traditional refineries into bio-refineries using proprietary Ecofining technology; iv) water treatment and re-use facilities in order to minimize the impact of industrial activities; v) widespread energy efficiency measures. 2.3 In the last three years, how much has ENI invested annually in green marketing campaigns? And how much has it invested in decarbonisation projects for each year over the same period? What kind of projects has it invested in? Answer Eni has always been attentive to sustainability issues that are also referred to in the area of communication. Considering the last three years, strictly environmental issues have been considered, especially in 2016 and 2017. In this sense, expenses in advertising campaigns were equal to: - 2016 about EUR 21 mln; - 2017 about EUR 18 mln. In 2018, however, around € 7 million was allocated to these issues. Eni has increasingly invested in decarbonisation projects from around € 50 million in 2016 to around € 300 million in 2018 for a cumulative amount in the last three years of around € 0.5 billion. The investments concerned in particular the conversion of traditional refineries into bio refineries, energy efficiency and flaring down operations as well as green chemistry initiatives. 2.4 Of the 5 GW of installed capacity by FER envisaged as a target for 2025, how much is expected to be realized in Italy? Answer The plan envisages for the next four years an installed capacity of 2022 in Italy of 270 MW and an overall target of 1.6 GW. Shareholders’ Meeting 2019 5 To achieve the ambition of 5 GW by 2025, we will develop a pipeline of projects that for Italy provides for our continuous commitment to grow in the territory (to reach ~10% of the total target). To this end we will leverage on our distinctive model, acquired competencies and strategic partnerships (among which we can mention those signed for example with CdP, Terna and Fincantieri). 3. Activities of ENI in Gela, Sicily. 3.1 What is the origin of palm oil currently located in the perimeter of the former Gela refinery? ENI claims that it does not derive from monocultures located in India and Indonesia. Can you prove it? How? Answer The palm oil currently stored for future use in the Gela green refinery is of Indonesian origin. To ensure sustainable management throughout the supply chain, Eni applies selective criteria for suppliers and binds them to specific international standards, such as: • that biomasses do not come from cultivated areas obtained from the conversion of areas characterized by high carbon absorption, such as wetlands and forests; • that biomasses do not come from cultivated areas obtained from the conversion of areas characterized by high biodiversity or ecosystems of recognized naturalistic value; • that biomasses are certified according to European or international recognized sustainability standards, systematically verified through independent audits. The certification schemes applied include, among other things, compliance with criteria on working conditions in relation to the most vulnerable categories, and on the rights of local communities. Eni commits the selected suppliers to mutual cooperation to improve supply sustainability where possible, and collaborates with stakeholders and subject matter experts to improve their knowledge and ensure the implementation of the most advanced standards; it promotes the development of the best technological solutions also through its own research units, and continues in the search for alternative feedstock to the food supply chains. Having said this, it should be noted that the Gela green refinery was designed to be very flexible and will be able to process a wide variety of unconventional and advanced feedstock, thus progressively making the use of palm oil marginal. 3.2 At the moment - with the green refinery inactive (more than a year and a half later than the time schedule of 6 November 2014, and with an uncertain start date), construction work on the Argo Cassiopea pipeline not yet started and the testing of guayule of which Shareholders’ Meeting 2019 6 there is no news - can we say that the one in Gela is, in fact, a coastal deposit? Answer We invested about € 270 million for the conversion of the Gela refinery into green refinery, which will be undergoing commissioning for a few more weeks. The construction activities of phase 1 of the project, which envisages upgrading the existing assets of the refinery to be able to initially process first-generation feedstock, were launched at the beginning of April 2016, immediately following the conclusion of the authorization procedure for phase 1.