Eni is aware of the need to maintain a responsible approach to the issue of biomass that goes beyond mere compliance with the law. Therefore, to ensure sustainable management right throughout the supply chain that involves converting certain refineries into biorefineries, it has outlined a series of general principles and selective criteria to be adopted, as well as some specific to palm oil. Furthermore, where deemed necessary, Eni will evaluate the need to define specific policies for other biomasses used. The rules Eni follows meet sustainability standards when it comes to selecting suppliers and defining the clauses of biomass supply contracts and guarantees the following where certified raw materials are concerned:

• that they do not come from cultivated areas obtained from the conversion of areas characterised by a high carbon content, such as wetlands and forests;
• that they do not come from ecosystems characterised by high levels of biodiversity, such as areas covered by primary or secondary forest or in any case from ecosystems of recognised natural value;
•  that specific certification schemes are, where applicable, certified according to sustainability standards recognised at European or international level.

Furthermore, Eni promotes the use of raw materials that:

• do not lead to a change in the use of the soil such as to cause its impoverishment or potentially hinder it by adopting good agronomic practices;
• do not reduce the availability of water resources in competition with the agri-food chain;
• come from land that is used in accordance with the internationally recognised rights of local populations and indigenous peoples, starting with free, open and informed prior consultation in full knowledge of the facts;
• are produced in a sustainable manner that is environmentally friendly and meets the relevant social requirements, including workers' rights and the protection of health and safety.

Eni guarantees the following with regard to the use of biomass at its plants:

• Compliance with the principles of traceability and transparency;
• Continuous promotion of the optimisation of raw material usage, minimising consumption and waste and maximising efficiency;
• The creation of products whose use is in keeping with the applicable sustainability standards;
• The adoption of the best applicable technologies;
• Adaptation to the sustainability criteria outlined in the RED recast (Directive 2018/2001).

Eni endeavours to:

• ensure the transparency and disclosure of information relating to the biomasses used and the country of origin, providing this information at least once a year (for 2019 data see Eni for Performance 2019);
• select suppliers according to high sustainability standards and mutual cooperation to improve the sustainability of the supply;
• collaborate with stakeholders and experts in the field to improve its knowledge and ensure compliance with the most advanced standards within the company;
• develop the best technological solutions, including through its own research units;
• continuously improve its procurement process in order to reduce the use of biomass that can generate competition with agri-food chains and to continue the search for alternative feedstocks;
• promote, where appropriate, the use of product life cycle studies in order to monitor and reduce the associated environmental impacts;
• gradually increase the share of advanced and low-ILUC feedstocks, in line with what is defined in the 2030 objectives of the RED recast (Directive 2018/2001).

We have converted two traditional refineries into biorefineries using the Ecofining™ technology developed by Eni's research in conjunction with UOP. We did this to address the challenges posed by the structural crisis in refining and to comply with the requirements of European legislation on the quota of energy produced from renewable sources, anticipating the energy transition pathway. This strategy has enabled us to directly produce the quota of HVO (hydrotreated vegetable oil) biofuel necessary to comply with the legislation. Thanks to the proprietary technology that Eni uses, HVO is produced with a higher calorific value than the biofuels commonly available on the market. Eni currently uses mainly palm oil to produce HVO but aims to make the biorefineries palm oil-free by 2023. Thanks to the flexibility of the Ecofining™ technology that allows us to process various types of biomass, Eni is increasing the use of alternative feedstocks (such as used cooking and frying oils, animal fats and waste from vegetable oil processing) by experimenting with advanced feedstocks (such as algae and waste oils, lignocellulosic material and bio-oils). Eni’s biofuel production complies with the requirements set by the EU voluntary schemes for compliance with sustainability criteria and the reduction of climate-changing gas emissions pursuant to the European Union’s Renewable Energy and Fuel Quality directives.

Eni is committed to procuring palm oil produced in a sustainable way and in accordance with the relevant social and safety requirements. Through its subsidiary Eni Trade & Biofuels, it favours direct producers of palm oil, and in any case ensures traceability along the supply chain. Suppliers must guarantee the traceability of the feedstocks supplied by applying the mass balance approach based on the transparent, accurate, timely and detailed reporting of the biomass chains of custody, as well as the safeguarding of the mass balance principle that ensures the legitimacy of any claims of sustainability. All suppliers must comply with national and local laws and regulations, as well as the requirements defined by Eni. With reference to human rights, in addition to the minimum set of international standards indicated by the UN Guiding Principles for Business and Human Rights and in consideration of the risks specific to the sector, we adopt the additional criteria provided for by the ISCC-EU certifications¹. Eni is committed to working with its suppliers to improve the sustainability of the palm oil supply chain through continuous dialogue aimed at gradually improving sustainability criteria.

Palm oil is procured directly by the Eni Trade & Biofuels subsidiary. 100% of the palm oil Eni purchases on the market is certified according to the International Sustainability & Carbon Certification - ISCC-EU scheme (a voluntary scheme recognised by the European Union), guaranteeing, where the EU certification is applied, that:

• palm plantations are not located on land of high value in terms of biodiversity and/or with a high carbon stock;
• the reduction in greenhouse gas (hereinafter GHG) emissions complies with the applicable legislation with respect to emissions deriving from the use of fossil fuels;
• no deforestation has occurred in certified areas since 2008.

Eni started tracing 100% of the mills and plantations from which the palm oil used in its biorefineries comes in 2020.

Eni is committed to:

• improving the traceability of the palm oil it purchases and the sustainability of the supply chain through the direct involvement of and continuous dialogue with suppliers;
• disclosing the amount of palm oil purchased and the countries of origin of the batches purchased every year.

Eni has obtained sustainability certification for its plants that process palm oil (according to the 2BSvs-Biomass Biofuels Sustainability voluntary scheme, ISCC-EU and the Italian National Certification System SNC2019, in addition to the certification of the environmental management system according to the ISO 14001 standard and EMAS registration for the Venice biorefinery) and undertakes to maintain these certifications over time, adapting them to the updates required by the relevant EU legislation and the certification schemes. Eni also carries out studies on the life cycle of products to monitor and reduce their environmental impacts.

We are committed to participating in multi-stakeholder international initiatives and to continuing dialogue with subject matter experts and stakeholders to improve knowledge and ensure that the most advanced standards are implemented within the company.

Eni undertakes to communicate transparently, once a year, on the progression of its palm oil procurement process and the progress made in improving the sustainability of the palm oil supply chain.

(1) ISCC-EU These criteria, in line with international standards, relate both to the protection of workers, and in particular to working conditions and the consideration of vulnerable categories (such as women and migrants), and to the rights of local communities, with particular reference to their consultation and the processes by which the land on which the biomasses are produced is acquired.