LyondellBasell pursues cost savings, circular solutions, efficiencies in green pivot: CEO

This content is part of the WPC 2025 series, in which we explore key themes from the 40th annual World Petrochemical Conference.

LyondellBasell Industries is pursuing a three-pillar strategy focused on cost optimization, circular solutions and energy efficiency as it positions itself for an evolving petrochemical market and cost pressures through 2030 and beyond, CEO Peter Vanacker said March 18.

The company's first strategic pillar centers on growing and upgrading its core business through a lowest-delivered-cost model, designed to help navigate market cycles and maintain competitiveness during downturns, according to senior management, Vanacker told the WPC in Houston.

"When we grow and upgrade the core, I call it the lowest delivered cost," he said. "You want to have your asset base not too far away from the market, but at the lowest delivered cost to navigate the cycle and come out stronger when the cycle turns against you."

The second pillar focuses on building a profitable circular and low-carbon solutions business, centered around two major hubs -- one in Germany serving the European market and another being developed at a former refinery site in Houston.

"We truly believe 2026, 2030, 2035, there will be an important market for these solutions, and there will be a willingness to pay for them," Vanacke said. The company has already seen validation of this strategy, with its circular solutions business growing approximately 57% in volume terms over the past four years, he said.

The third pillar involves an employee-driven value operational efficiency program, Vanacker said. Some 12,000 employees are actively participating in efforts to boost energy efficiency, which has already yielded 1.5% improvement in energy efficiency last year, he said.

Vanacker's comments come amid growing cost headwinds in Europe and booming competition from Asian petrochemical producers which triggered LyondellBasell to announce a strategic review of its activities in Europe last year.

Separately, LyondellBasell and Covestro announced the permanent closure of their joint-venture propylene oxide/styrene monomer plant in the Netherlands.

Circular economy

On recycling, Vanacker said LyondellBasell is building what it hopes will be the industry's broadest portfolio of recycling and low-carbon technologies while navigating varying regulatory frameworks across regions.

The company's strategy encompasses mechanical recycling, chemical recycling and non-plastic waste conversion, leveraging its historical expertise in catalysis to develop innovative solutions, he said.

"We're turning around the process from building a polymer out of a monomer - we change the polymer through catalysis into a monomer again. This is not pure pyrolysis," Vanacker said, highlighting the company's differentiated approach to chemical recycling.

Recent strategic moves include the acquisition of German company APK, which brings solution-based technology for circularity to the portfolio. The company is also partnering with pyrolysis startup companies and exploring non-plastic waste streams, including used cooking oil-based renewable hydrocarbons.

The company has also invested in low-carbon propylene oxide/tert-butyl alcohol technology, which achieves a 50%-60% lower carbon footprint than conventional production methods, representing the lowest in the industry, Vanacker said.

LyondellBasell is accelerating growth in its circular and low-carbon business, with volumes jumping 65% in 2024 compared with 2023, exceeding the previous four-year average growth rate of 57%, as brand owners increasingly embrace sustainable materials, he said.

The stronger-than-trend growth reflects maturing market acceptance of circular solutions and low-carbon products, and customers are showing clear willingness to pay premium prices for sustainable materials, Vanacker said.

However, market education around lower-carbon chemical products still remains a challenge.

"It's still a lot of explanation that needs to be done to make sure that value is being added by selling those products," Vanacker said, noting that the company has established a dedicated carbon value creation team to address this challenge.