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INTERVIEW: Russian petchem Sibur working to expand environmental targets


New targets will shape Sibur's environmental initiatives

Sibur targets 40% of total PET output to be at least 25% recycled content by 2025

Developments around recycling facilities needed in Russia

  • Author
  • Alexander Borulev    Callum Colford
  • Editor
  • Jonathan Loades-Carter
  • Commodity
  • Electric Power Natural Gas Petrochemicals

Following Sibur becoming Russia's first petrochemical company to sign a loan with an interest rate tied to its sustainability performance May 12, S&P Global Platts spoke to Maxim Remchukov, Sibur's Head of Sustainable Development, about the company's plans to reduce emissions and meet sustainability targets.

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Sibur's 2025 sustainability Strategy details its aims to reduce greenhouse gas emissions per ton of production compared to 2018 levels -- one of the key performance indicators for the loan with Italian bank UniCredit -- and is based on a reduction of 5% in GHGs in gas processing per ton of manufactured product and a 15% cut in petrochemicals per ton of product sold.

"What we are doing now is we are looking at how we could make this matrix more ambitious," Remchukov added.

The company is currently working on developing the "absolute figure" targets, that will help to set the next steps of Sibur's environmental initiatives, Remchukov said, and could include transitions toward renewable energy, energy efficiency, feedstocks and carbon capture technology.

"Somewhere between August and the end of this year, the renewed environmental, social and corporate governance (ESG) strategy could be announced, and the greenhouse targets will definitely be an important part."

The main areas of the GHG reduction are energy efficiency and resources efficiency.

Sibur also wants to increase fivefold the amount of green energy in the company's energy balance by 2025 compared with 2019, with Remchukov adding that this energy is likely to be purchased by Sibur on the market rather than produced internally.

Sibur's current target for the use of recycled PET is 40% of total PET production containing at least 25% recycled content by 2025, which, according to Remchukov, the company is on track to fulfill. Remchukov added that a similar target could be set for other recycled materials such as recycled polyethylene or polypropylene.

Remchukov noted that there were limitations on the ability to recycle polyolefins compared to PET due to increased complexity regarding sorting and preparation of recycled material, which may limit the application in uses other than packaging but added "even this approach is better than burning it or putting it in landfill."

Recycling facilities needed

However, Remchukov said Russia needed to develop further recycling facilities in order to reach parity with the levels of recycling seen in the EU, adding that Russia would need to double its current PET recycling rate to supply enough recycled material to meet brand owners' expectations of recycled content in packaging.

"The system of identification, separation, preparation of the material to involve this in the recycling process, both for PET and polyolefins, has been historic in Europe for the last 20/25 years," Remchukov said. "In Russia, to 2019, we have 93% of municipal waste going to landfill. This is a totally different story [to the EU] so we really lack a lot of plastic that could be a feedstock [for recycled material] as it has been landfilled."

Remchukov said possible measures to help Russia increase its recycling target could include the introduction of the bottle deposit return scheme which currently runs in several European countries, the separation of waste streams and the introduction of further sorting facilities "reducing the landfilling of waste and increasing the useful fractions that could be recycled including plastics."

He said Sibur's internal estimate showed that the bottle return deposit scheme could lead to a PET recycling extraction rate of 40%-50% in Russia -- up from current rates of 25-30% -- and would provide producers with greater volumes of material and allow for greater stabilization of recycled feedstock prices.

The spur for further measures to increase recycling rates would be the result of demand from the market, he said, adding that the requirements of global companies were already ahead of legislation introduced across Europe.