Circular Economy

Material Topic: Circular Economy

Decoupling economic growth from resource constraints by recovering and reusing byproducts or waste to make new materials and products, such as recycled or biobased polyolefins.

Key GRI

• GRI 306: Waste 2020

NaDiVeG

• Environmental concerns

Most relevant SDGs

OMV Group believes that transitioning to a circular economy will significantly reduce our impact on the environment and our CO₂ emissions. A circular economy decouples economic growth from resource constraints, while preventing the leakage of waste into the environment as much as possible and, in particular, into oceans as well as landfills. The circular economy will also curb global warming. Through the efficient use of our precious resources, we can recover and reuse byproducts or waste to make new materials and products. This approach has the potential to greatly decrease associated emissions across product value chains. In addition to recycling plastic waste and reusing it to make new materials and products, OMV Group also sees plastics based on renewable feedstock as playing a key role in the circular economy. The use of renewable feedstock lowers the demand for fossil feedstock and considerably decreases the carbon footprint. OMV Group focuses on utilizing waste biomass such as forestry residues that are not in competition with the food and feed chain, and thus do not require the use of additional natural resources such as land or water. If then recycled, such second-generation bioplastics can play a vital role in a sustainable circular economy and reduce greenhouse gas emissions on two fronts, cutting emissions in the input and in the end-of-life phase.

The creation of a truly circular economy also has wider societal implications. It will provide economic benefits to society by reducing the major financial burden of ineffective waste management systems and pollution management, and will create new business opportunities and employment at various stages of the value chain. A circular economy will also result in better living and working conditions, and in general in a cleaner environment.

Following the acquisition of a majority stake in polyolefins producer Borealis in 2020 and the consolidation of Borealis into the Chemicals & Materials segment, circular economy is now a cornerstone of the OMV Group’s Strategy 2030. OMV plans to produce 350 kta of recycled polyolefins by 2025. By 2030, that number will grow to 2,000 kta of sustainable polymers or other chemicals, in other words, polyolefin products or other chemicals derived from plastic waste (either through a mechanical or chemical recycling process) or from biobased feedstock. At the same time, the use of fossil resources will decrease, as we aim to reduce oil and gas production levels to below 400 kboe/d and reduce crude distillation throughput by 2.6 mn t by 2030. These fossil resources would ordinarily also be used to make polymers; instead, more polymers will be based on recycled waste or renewable resources such as bio-feedstock.

Target 2025

• Achieve 350 kta recycled polyolefins production

Target 2030

• Achieve approximately 2,000 kta sustainable (includes recycled and biobased) polyolefins production

Status 2021

• 91 kt of circular material (recyclates and biobased material) sold via Borealis
• Production capacity of 100 kt established at Borealis

Relevant SDGs

SDG targets:
8.4 Improve progressively, through 2030, global resource efficiency in consumption and production and endeavour to decouple economic growth from environmental degradation, in accordance with the 10-year framework of programmes on sustainable consumption and production, with developed countries taking the lead
9.4 By 2030, upgrade infrastructure and retrofit industries to make them sustainable, with increased resource-use efficiency and greater adoption of clean and environmentally sound technologies and industrial processes, with all countries taking action in accordance with their respective capabilities
12.5 By 2030, substantially reduce waste generation through prevention, reduction, recycling and reuse
14.1 By 2025, prevent and significantly reduce marine pollution of all kinds, in particular from land-based activities, including marine debris and nutrient pollution

Through Borealis, the OMV Group is promoting the circular economy across the industry, by launching initiatives and participating in activities and platforms that drive recycling options and solutions. Borealis is a core partner in the New Plastics Economy (NPEC) and a signatory to the “A line in the sand” initiative of the Ellen McArthur Foundation. Borealis has also endorsed the Ellen MacArthur Foundation’s position paper on Extended Producer Responsibility (EPR). In addition, Borealis is a member of the EU’s Circular Plastics Alliance and has signed a manifesto calling on UN member states to commit to the development of a global treaty on plastic pollution.

The OMV Group’s goal is to develop a leading position in the circularity of plastics and to offer its customers innovative solutions that advance the circular economy. To transition to a truly circular and carbon-neutral economy, a variety of solutions will be required to keep products circulating at their highest value, quality, and utility over many lifetimes. We aim to achieve circularity through the following hierarchy:

Design for Eco-Efficiency

This means adopting a design mindset from the start that sets the agenda for minimizing the use of resources and maximizing their lifetime value. The Borealis foam business is a prime example of eco-efficient polyolefin solutions. This business line is used in industries such as packaging, sports, transportation, and construction, and helps facilitate the transition to a circular economy as it is especially suited for ultra-lightweight foam applications while being fully recyclable.

Reuse

The Chemicals & Materials business helps maximize the lifetime of products already in circulation by leveraging knowledge of plastic use and processing, and by establishing systems and business models for reuse. We have been engaging with start-ups and participating in collaborative projects to develop and advance our position on the topic of reuse. For example, Borealis has been working with a Finnish start-up, Kamupak, to accelerate the use of reusable takeaway packaging in Helsinki (Finland). In December 2021, Borealis announced that it has acquired a minority stake in Bockatech, further deepening the existing partnership between the two companies. Bockatech EcoCore^® is a patented manufacturing technology that improves sustainability by creating lightweight, insulated, durable, and recyclable packaging for single-use and reusable applications. The combination of Borealis’ polypropylene material and Bockatech technology is empowering the creation of low-cost reusable food and non-food packaging.

Design for Recyclability

One of the biggest issues preventing greater recycling of plastics is that many products are not designed for recycling in the first place. For example, flexible packaging often uses layers of different materials, which makes separating and recycling the plastic content extremely difficult. The challenge is to create packaging using only one (mono) material, while maintaining or improving performance.

The recycling of plastic packaging therefore begins with design. Design for Recyclability (DfR) means designing a product so it can be collected, sorted, and recycled. DfR is an important aspect of eco-efficient design, which takes a lifecycle approach by carefully and intelligently balancing the production, use, and after-use phases of a product.

Inspired by the EU Commission’s vision for increased levels of recycling and the targets of the Ellen MacArthur Foundation’s New Plastics Economy Global Commitment, brand owners worldwide are committing to developing 100% recyclable, reusable, or compostable packaging solutions by 2025. Borealis works with partners to develop solutions that are fully recyclable. For instance, Borealis has worked with W&H, AMAT, and GEA Food Solutions to develop a monomaterial, cast polypropylene laminate, that is 100% recyclable. This is an ideal solution for the most demanding food packaging applications, because it ensures a long shelf life and high temperature resistance. Borealis has also developed 10 Codes of Conduct for polyolefin packaging designers. These Codes help designers develop packaging materials that can be successfully recycled and used again, either in the same application or in other products. The Codes are being incorporated into assessment methodologies for recyclability, for example, in future modulated Extended Producer Responsibility (EPR) guidelines for packaging.

Closing the Loop

This will first be achieved with mechanical recycling, to make products with the highest possible value and quality. Through Borealis, OMV continues to work with partners to develop newer technologies for mechanical recycling, with the objective of delivering products with near-virgin quality where possible, and with the lowest carbon footprint. (Read more in Mechanical Recycling.)

OMV also believes there is an essential role for chemical recycling to complement mechanical recycling. Chemical recycling can valorize residual waste streams from mechanical recycling, as well as mixed plastic waste streams which would otherwise go to a landfill or be incinerated. (Read more in Chemical Recycling.)

OMV remains fully committed to advancing the development of a broader and more circular offering. In the coming years, we will step up our design-for-recycling and reuse businesses for polyolefins, and develop and implement a sustainable product portfolio based on biobased polyolefins.

During 2021, the OMV Group, through Borealis, sold 91 kt of recyclates while succeeding in establishing a production capacity of 100 kt. The OMV Group’s circular economy targets, including ramping up production of recycled plastics, will help transition from a model based on the extraction of fossil resources toward one based on closed materials loops. To support this transition, Chemicals & Materials is building up its Borcycle™ portfolio (including both Borcycle™ M based on mechanical recycling processes and Borcycle™ C using chemical recycling technology) to meet growing demand for high-quality recyclates that help producers and brand owners meet environmental and regulatory challenges.

OMV also works to reduce plastic leakage. In 2017, Borealis initiated Project STOP (Stop Ocean Plastics) in Indonesia. Co-founded with SYSTEMIQ, this program aims to achieve zero leakage of waste into the environment and increase plastics recycling. Project STOP focuses on the regions with the highest leakage rates and, with the support of industry and government partners, works hand in hand with cities to create leak-free, low-cost, and more circular waste management systems. (Read more in Community Investments and on the Project STOP website.)

Governance

Circular economy has been on the OMV Group agenda since 2015, having become even more important since the acquisition of a majority stake in Borealis in late 2020. Several circular economy areas, such as mechanical and chemical recycling, are now jointly being further developed. We are in the process of building up our Group governance of this material topic. The Group’s circular economy strategy is closely intertwined with the decarbonization strategy and is overseen by Strategic Planning & Projects. We have also begun establishing dedicated departments, such as the Plastic-to-Plastic department within Chemicals & Materials.

Most of the OMV Group’s circular economy initiatives, especially regarding mechanical recycling and circular products, are run by our subsidiary Borealis. To accelerate its transformation to a circular model, Borealis has a dedicated department called Circular Economy Solutions and New Business Development. This department leads the execution of Borealis’ circular economy strategy around several thematic project focus areas, such as feedstocks for recycling or design for recyclability, as well as assisting all other Borealis business areas with industry-specific transformation. Another dedicated business team is fully focused on short- to mid-term business growth opportunities in mechanical recycling, including Borealis’ mtm plastics and Ecoplast businesses. The Circular Economy Innovation Studio at Borealis’ Innovation Headquarters in Linz remains Borealis’ spearhead for technology and innovation. In 2018, Borealis launched a dedicated communication platform, EverMinds™. This platform serves to streamline all Borealis’ circular-economy-related activities in order to boost their impact and promote familiarity with the topic. The platform facilitates deeper collaboration between Borealis and its partners in the interest of developing innovative and sustainable polyolefin solutions based on the circular model of design for circularity, reuse, and recycling. Further details on Borealis’ specific initiatives, management and governance, and development of circular products can be found in the Borealis Annual Report.

We undertake a variety of initiatives to raise awareness among employees on recycling. For instance, we published several internal blogs and held expert talks for employees on how to identify recycling codes and how to recycle the different types of plastics.