Interview: Borealis to increase circular production sixfold by 2025 in new 2030 strategy

Austria-based polyolefins producer Borealis is to increase its production of circular products sixfold by 2025 to 600,00 mt/year and to 1.8 million mt/year by 2030, the company said in its new 2030 strategy.

In an interview with S&P Global Commodity Insights following the release, CEO Thomas Gangl said the increase in circular product production would come form a variety of mechanically recycled, chemically recycled and green feedstocks, while he also noted other initiatives in the 2030 strategy, such as increasing its share of renewables used in polyolefins and hydrocarbon production to 40% by 2025 and 100% by 2030 from its 2021 total of 25%, and its aim to more than halve Scope 1 and 2 emissions to under 2 million mt by 2030.

"We are talking here about 2025, which is just around the corner, we are not talking about 2050 where everybody can make bold statements," Gangl said.

"This topic is not going away. It's there and will stay there. Therefore, I think it's right to commit to targets which are challenging but doable, and to invest and shift investments in that direction."

Achieving the circular production increase would result from a mix of mergers and acquisitions, capacity expansion, and joint ventures, noting that the increase would result from a mixture of projects rather than from a single site.

"We are using our partnership with OMV for the ReOil plant at Schwechat, we have our Stenungsund chem recycling study ongoing and we will also need to work on mechanical recycling. On one hand that will be organic growth, but we will also look for M&As as it is not enough time to grow everything by ourselves... In this business you don't have big companies you can buy, it has to be smaller units where you bring in your know-how to make it more profitable and reliable in terms of operations," Gangl said.

He added that circular production would remain focused on Borealis' strengths of polyolefins polyethylene and polypropylene, though he noted that the company could process products such as polystyrene using chemical recycling methods and increase production of products such as phenol, acetone, ethylene and propylene using green feedstocks, or sourced from other partner companies.

Supply lag

Gangl said that supply would continue to significantly lag demand during the next decade and, though noting increasing prominence of circularity among producers and brand owners was driving investment in the sector, regulation would remain a key factor in providing supply.

"One key element is policy topics: we need to make sure that the material will be available for recycling and not just for producing energy. Burning plastic, for example, is something that will have to be avoided to keep the material in the loop. Therefore, you need to have the right regulations in place. Otherwise, if it's just the cheapest way to burn it, it will be difficult to get the material."

The 2025 expansion in circular production would be primarily driven by increases in Europe, Gangl said, with 2030 targets more globally focused amid an ongoing rapid expansion of demand and supply of product in Asia which would lead Asia to become a leading circularity player over the coming decade.

"Even if Europe is really turning much quicker now in the next years into the circular and renewable area, the volumes in absolute terms in Asia will be much higher," he said.

The 2030 strategy also recorded Borealis' aims to increase its global footprint by expanding the company's presence in Asia, the Middle East and North America, with two of Borealis' three major growth projects taking place in the regions.

Subsidiary Borouge's $6.2 billion Bouruge 4 growth project was on track to come online in 2025, with the project constructing a 1.5 million mt ethane cracker and two polyethylene plants making the site, which already has three units, the world's largest single-site polyolefin complex at 6.4 million mt/year.

A 480,000 mt/year polypropylene unit at the Borouge Ruwais site came online in February, taking the subsidiary's polyolefins production capacity to 5 million mt/year.

Borouge is 36% owned by Borealis with 54% owned by partner ADNOC.

Meanwhile, activity on the 50% owned Baystar joint venture with TotalEnergies in Pasadena, Texas, was being finalized Gangl said, with CFO Mark Tomkens saying in February the cracker and new PE unit were due to come online in Q2 and Q3 respectively.

The Baystar 1 million mt/year ethane-based steam cracker will provide feedstock to the existing 400,000 mt/year existing Borstar polyethylene units as well as to the new PE unit which will more than double the site's polyethylene capacity to 1.025 million mt/year.

"We have geographic expansion with Borouge 4 as part of a huge investment in the ME, we are finalizing activity on Baystar project, next year we will finalize the Kallo PDH [unit] but we will also have to expand to the Asian market and grow the business there," Gangl said.