Swedish Fuel Giant Preem Cuts Jobs and Drops Fossil-Free Goal

Preem, Sweden's biggest fuel company, is cutting jobs in Sweden under its new Swiss owners. At the same time the group has quietly dropped the fossil-free pledge Preem spent years advertising at its gas stations.

The cuts are part of a hunt for roughly SEK 3 billion in savings after the takeover. CEO Dev Sanyal of the merged group, now called Varopreem, confirmed the layoffs in an interview with Swedish business daily Di, where he also warned of high fuel prices ahead. How many jobs will go, and where, has not been disclosed.

Back in September the company confirmed it had opened union negotiations after an organizational review. At the time it would not say whether anyone would lose their job.

The news landed the same day the group unveiled its new strategy to 2030. The goal: at least double EBITDA compared with 2025. Merger savings are put at close to $300 million by 2030, and more than a third of that is said to be banked already.

Varopreem also wants to grow its market share from 10 to 15 percent in selected markets, mainly aviation and shipping, but also defense. It calls itself Europe's third-largest independent refiner and says it covers about 10 percent of Europe's demand for transport fuel.

Pledge gone

Old Preem sang a very different tune. In October 2021 it pulled its climate target forward by ten years and promised net zero across the entire value chain by 2035. As late as 2024 the company was still pushing that promise in a campaign at its stations and on social media.

The new strategy has no such promise. Instead, the greenhouse gas intensity of its own production is to be halved by 2040, while the intensity of emissions from the products it sells is to drop by 30 percent. Both targets are measured from 2018.

The catch: these are emissions per unit produced, not total emissions. If volumes grow, absolute emissions can stay flat or even rise.

Two engines

Varopreem is betting on what it calls a two-engine model. One engine is conventional fuel. The other is renewable fuels, biogas and other lower-carbon energy. More than half of EBITDA in 2030 is supposed to come from the renewable side, and renewable fuel capacity is set to grow by 20 percent.

But the company is also clear that investments that boost energy security and pay back fast come first, and that existing plants should be squeezed harder before any money goes into new capacity.

Preem, which runs refineries in Lysekil and Gothenburg on Sweden's west coast, was bought by Swiss-based Varo Energy. The deal closed on January 16 this year. The merged group is headquartered in Zug and operates in 41 countries.