Last year’s results, announced at Borealis’ bi-annual business and project update, were an all time high for the company, according to Thomas Gangl, CEO. This success was not only in terms of financials, but also regarding the progress made in regard to sustainability and the transition to a more circular economy for plastics.
But first, the financial results. The market development for polyolefins was truly exceptional last year, said Gangl. “Mid-year, we saw a huge spike in the margins. A number of factors came together that produced the highest result ever shown by Borealis. We contributed nearly €2 bn to the end result of OMV Chemical & Materials for 2021.”
As Mark Tonkens, Borealis CFO, explained: “It was a stellar year and in an absolute sense, to see a financial performance like this again in the future will mean that we will have to grow, as the likelihood that we will ever get such average high margins ever again is extremely unlikely. Not that I have any signals that 2022 will not be good, but the specific constellation of factors we saw in 2021 - the tight market, the logistic constraints, operating in sectors like packaging and health care, that were in high demand during the Covid pandemic – that propelled the result to a record high, no, I don’t see that happening.”
In terms of sustainability, major steps were taken. Borealis announced its investment in Belgium-based Renasci, a recycler that has developed a so-called Smart Chain Processing concept to maximise material recovery, with as ultimate goal, zero waste, and the company started exploring the use of biobased feedstocks. “These were smaller-scale activities,” said Gangl. “We’re also moving ahead on improving the quality of our mechanically recycled materials; as well, OMV announced it was scaling up its ReOil recycling technology at the Schwechat refinery, with plans to build a demo plant with a capacity of 16,000 t/year that will start operations in 2023.” For OMV this represents the next step toward an industrial-scale plant planned for 2026.
As far as recycling is concerned, production is currently in the region of 100kT. The goal is to reach 350kT by 2025, said Gangl.
Progress in sustainability is also being made in other areas, he added. “The project STOP in Indonesia is yielding real results. The pilots have allowed a growing number of peopleto gain access to a waste management system.”
What about the ambition to reduce the carbon footprint of Borealis’ operations? After all, the company has a number of expansion projects lined up that will lead to a rise in carbon emissions, such as the construction of Borouge 4.
“We signed a strategic partnership with ADNOC that will see a $6.2 billion investment being made in the fourth Borouge facility – Borouge 4 – at the polyolefin manufacturing complex in Ruwais, United Arab Emirates. But we also have the opportunity there to take some important steps towards carbon capture sequestration. We have initiated a study to see if it is possible to integrate such a unit there. If so, it will reduce the CO2 footprint by 80%, which is massive so for us,” Gangl explained. For now, he added, the CO2 that is extracted via this system will be put back into the ground, although the company hopes to explore carbon capture utility technology in the future.
The sale of the fertiliser business, announced 3 February, will also serve to substantially lower the company’s carbon emission levels, ‘reducing our CO2 footprint by more than 50%’, said Gangl. In that sense, the sale will both enable Borealis to advance its goal of reducing its CO2 footprint immediately and free up resources to concentrate on promoting the sustainability of the polyolefins business.
“We will also be issuing a scope 3 mission statement with this year’s end of year results. It is something we are following up on continually. Our journey to net zero is building up - we’re looking at initiatives on all sides, from alternative feedstocks where possible, and on the other hand, activities such as carbon capture sequestration or utility. The combination will enable us increasingly to bring our emissions down accordingly.”