Oversight and management of GHG emissions

The Executive Committee and Sustainability Committee regularly receive updates on GHG performance metrics, progress on the Sustainability Roadmap, and significant climate-related risks and opportunities.

Additionally, the Risk Management Committee supports and monitors the development and implementation of Galp’s risk management strategy and policy.

Climate-related impacts, risks and opportunities

Galp identifies, assesses, and manages its climate-related impacts, risks and opportunities through complementary methodologies and tools, including double materiality assessment and Company-wide and project-specific risk assessments, which account for emissions and the impact of carbon prices.

To address the risks and opportunities associated with the transition to a low-carbon economy, Galp actively monitors political, technological, market and legal developments, and reputational risks within the sector and integrates these insights into the analysis of the current portfolio and business cases for new investments.

Climate change mitigation at Galp

The current volatility in energy markets and geopolitical instability have posed significant challenges associated with unpredictable market dynamics and uncertain macroeconomic scenarios. While Galp continues to be invested in long-term sustainable value creation and decarbonisation, this requires a progressive and pragmatic approach, balancing continuous investments in low-carbon solutions with the need to maintain secure and affordable energy supplies, in line with strategy execution.

Therefore, Galp is maturing its energy transition plan, considering as well the ongoing evolution of its portfolio following the recent potentially transformative Mopane discovery in Namibia and the lower execution of renewables projects. The Company will continue to follow market demand and regulatory developments in the energy transition space, while ensuring a disciplined execution of new projects and key investments. Galp estimates to publish its energy transition plan upon maturing its portfolio assessment, ensuring alignment with disclosure requirements.

As part of its progress towards a lower carbon energy system, the Company aims to ensure the resilience of its portfolio by being involved on the development of projects to reduce the carbon intensity of its activities and progressively reduce emissions from its energy supply operations, whilst increasing the integration of renewable energies.

Galp's upstream projects have a carbon intensity close to 50% lower than the industry average (based on the comparison with data provided by the International Association of Oil&Gas Producers), and the company continues to focus on ensuring the resiliency and high efficiency of its future developments.

On the downstream industrial side, Galp has been progressively reducing its activities’ carbon footprint and continues to be actively involved in the development of initiatives that will allow to further reduce emissions and increase the production of energy products with lower carbon intensity . A clear example of that are the large scale projects currently being built in Sines, our key industrial site, including the first 100 MW electrolysers for renewable hydrogen production and an 270 ktpa capacity advanced biofuels unit, capable of producing low carbon fuels for road, aviation and maritime transport. Additionally, further investments in operational energy efficiency and electrification are planned to take place at Sines.

Moreover, Galp has been developing a significant renewable power generation capacity, which plays a crucial role in supporting the development of other lower carbon businesses across the group.

Investment criteria and ESG integration

The Company's investment criteria promote investments in value-accretive opportunities and projects that align with Galp’s strategy, ESG standards, and regulations. This ensures that projects are resilient, deliver favourable returns, and adhere to the Company's risk appetite, strategic objectives and sustainability guidelines and policies.

Each material project undergoes an evaluation, including alignment with the EU’s Sustainable Investment Taxonomy and an ESG risk analysis, incorporating the impact of GHG emissions and other ESG risks into the forecast of the project’s Free Cash Flow.

Integrating carbon pricing in investment approval

Galp recognises that internalising the costs of GHG emissions, such as through an internal carbon price, is a powerful mechanism for evaluating climate-related sustainability and incentivising investments in lower-carbon solutions. By incorporating a global carbon price into the evaluation of new projects and modifications to existing ones, where such mechanisms are applicable, and analysing the impact of related emissions within its decarbonisation metrics, Galp ensures that low carbon intensity projects are prioritised when investment criteria are met.

The carbon pricing assumptions adopted by Galp are aligned with external long-term energy transition scenarios, reflecting current legislative frameworks and proactively anticipating future regulatory developments.

Climate risk assessment

Galp has worked continuously to improve its processes for identifying and quantifying the climate-related risks and opportunities it faces. The Company will reassess climate-related risks to gain deeper insights into the resilience of its current and potential assets, as well as its strategy. It will consider different climate scenarios, including credible net zero and high emissions scenarios, quantifying the financial impacts of the main identified risks.

Previous assessments of physical climate risks have indicated that the Organisation has relatively low exposure to chronic physical risks. The most significant acute physical risks identified were extreme wind and rainfall events. Although with low impact, these events do have the potential to damage facilities and equipment, disrupt port accessibility due to changes in swell patterns, interrupt operations and logistics chains, and compromise the supply of raw materials.

Climate related metrics and targets

Galp monitors its emissions and decarbonisation progress through several Key Performance Indicators (KPIs) and Objectives and Key Results (OKRs). These metrics include those aligned with the Sustainability Roadmap as well as project and business-specific measures.

As Galp matures its energy transition plan and decarbonisation efforts in light of the potential portfolio evolutions, the Company is reassessing its emission reduction targets to ensure ambitious but credible objectives. A comprehensive analysis is underway to collect data and insights that will support a target setting process, ensuring future targets are robust and in line with Galp’s long-term strategy and sustainability vision.

Galp’s strategic direction remains clear. The integration of low-carbon energy solutions will be fundamental to addressing energy-transition related challenges and opportunities. It will also enable the continued decarbonisation of the Company's portfolio and energy supply, responding to customer needs and upholding an alignment with society and EU targets.

Galp recognises the need for standardised methodologies for GHG and target setting within the oil and gas sector. Such harmonisation would improve comparability of performance and emissions targets across the industry, particularly those addressing indirect value chain emissions (Scope 3). The Company actively monitors developments around emerging voluntary reporting frameworks, target-setting standards, and relevant regulations.

GHG Emissions

Gross Scopes 1, 2 and 3 GHG emissions

Galp calculates Scope 1, 2, and 3 emissions in line with international standards, including the GHG Protocol and IPIECA's Oil and Gas sector guidance. Emissions are estimated for CO₂, CH₄, and N₂O, converted into CO₂-equivalent using IPCC’s AR6 Global Warming Potentials.

Scope 1 & 2

Emissions are based on primary energy consumption data, converted using appropriate factors. In refining processes, mass balances are used where applicable. Conversion factors are sourced from: primary data from direct analysis of fuels (e.g., for refinery emissions); national emissions inventory reports; and other public data, when necessary. Scope 2 emissions are reported using both:

Market-based method: Uses supplier-specific emission factors. Galp has sourced 100% renewable electricity (with guarantees of origin) for all operations in Portugal since 2021 and for renewable energy parks in Spain since July 2024.
Location-based method: Uses publicly available data from the local electricity grid.

Scope 3

Galp reports Scope 3 emissions for material categories, calculated from activity data (c.84% in 2024), by applying the adequate conversion and emission factors. Key categories include:

Category 1 - Purchased Goods and Services: Life-cycle emissions of fuels/raw materials acquired from 3rd parties for processing and re-sale (e.g. natural gas, LNG, crude, diesel, jet, biofuels, etc.).
Category 3 - Fuel and Energy-related activities: Life-cycle emissions from the production of electricity acquired for re-sale.
Category 4 - Upstream transportation and distribution: Emissions from the transportation of imported raw materials and fuels, and the distribution of liquid and gaseous fuels.
Category 6 - Business travelling: Emissions from air and rail travel by employees.
Category 10 - Processing of sold products: Emissions from the processing of produced crude oil sold to third parties.
Category 11 - Use of sold products: Emissions from combustion of sold energy products, applying IPIECA's net volume accounting method. This includes refinery throughput and sold gas volumes, since these are the points in the corresponding value chains where the largest amount of potential sold product is transferred.

The excluded categories are considered not material to the oil and gas sector or to Galp specifically.

Organisational boundaries: The emissions reported are estimated in an operational control approach but also include emissions from Upstream assets based on Galp’s equity participation, as well as emissions from operated exploration campaigns.

Methane

The Company’s methane emissions have a relatively low weight in its operational emissions (<1% of total scope 1 and 2 emissions in 2024) and are mostly associated with non-routine flaring in nonoperated upstream assets. Notwithstanding this, Galp aims to reduce methane emissions from its operated assets in line with industry expectations.

All operators of Galp's producing upstream assets are signatories to the OGCI Methane Reduction Initiative, the Oil and Gas Methane Partnership (OGMP) 2.0 and the Oil and Gas Decarbonisation Charter, meaning they are committed to improving measurement and reporting of these emissions, to end routine flaring in upstream operations and have near-zero upstream methane emissions by 2030.

Acting on methane emissions

The Sines refinery is the asset operated by Galp where methane emissions are most relevant. As such, several measures have been put in place to mitigate these emissions over the years. The refinery has installed a flare recovery unit in one of its flares to reduce flaring and associated methane emissions, as well as a vapour recovery unit to minimise the emissions of diffuse volatile organic compounds (VOC) including methane from loading and unloading hydrocarbons.Fugitive and diffuse emissions are also monitored and addressed by its annual LDAR (Leak Detection and Repair) Program. The refinery is developing a VOC management plan for the integrated management of all fugitive and diffuse emission reduction and monitoring initiatives of to further minimise operating VOC emissions.

Galp’s Carbon Footprint

1	Gross Scopes 1, 2, 3 and Total GHG emissions (tonCO2e)	2024	2023	Retrospective (2024/2023)
2	Scope 1 GHG emissions
3	Gross Scope 1 GHG emissions	3 128 177	3 013 837	4%
4	By business unit:
5	Upstream	462 352	627 555	-26%
6	Industrial & Energy Management	2 660 016	2 379 678	12%
7	Commercial	182	222	-18%
8	Renewables & New Businesses	152	491	-69%
9	Others	5 476	5 891	-7%
10	By source:
11	Combustion	1 902 670	1 846 549	3%
12	Flaring	174 913	304 195	-42%
13	Fugitive	13 865	5 892	135%
14	Venting (E&P)	-	-	-
15	Process	1 036 730	857 201	21%
16	Percentage of Scope 1 GHG emissions from regulated emissions trading schemes (%)	84%	78%	8%
17	Scope 2 GHG emissions
18	Gross location-based Scope 2 GHG emissions	24 421	35 855	-32%
19	Gross market-based Scope 2 GHG emissions	8 820	9 848	-10%
20	By business unit:
21	Upstream	-	-	-
22	Industrial & Energy Management	450	571	-21%
23	Commercial	7 597	8 168	-7%
24	Renewables & New Businesses	738	1 101	-33%
25	Others	35	8	338%
26	Significant Scope 3 GHG Emissions
27	Gross indirect (Scope 3) GHG emissions	42 717 945	39 547 268	8%
28	By business unit:
29	Upstream	1 166 581	1 166 335	0%
30	Industrial & Midstream	34 388 514	30 154 790	14%
31	Commercial	7 155 299	8 218 529	-13%
32	Renewables & New Businesses	323	1 099	-71%
33	Others	7 229	6 514	11%
34	By category:
35	1. Purchased goods and services	3 525 839	4 145 841	-15%
36	3. Fuel and energy related activities (not included Scope 1 or Scope 2)	1 781 707	963 146	85%
37	4. Upstream transportation and distribution	576 150	707 705	-19%
38	6. Business travelling	7 229	6 514	11%
39	10. Processing of sold products	1 166 581	1 166 581	0%
40	11. Use of sold products	35 660 439	32 557 728	10%
41	Total GHG emissions
42	Location-based	45 870 544	42 596 960	8%
43	Marked-based	45 854 943	42 570 954	8%

Avoided emissions

Galp estimates the impact of several of its low carbon solutions by publishing a yearly estimate of the emissions avoided by their implementation. This estimate is calculated based on a reference scenario where these solutions and products would not have been implemented during the year they were sold or executed. The company takes into consideration emissions avoided through the integration and sales of biofuels for transportation purposes, the delivery of electricity for electric mobility, the production and sale of renewable electricity and the supply of decentralised energy production and energy efficiency services.