Circular Economy

The OMV Group believes that transitioning to a circular economy will significantly reduce its impact on the environment and its GHG emissions. A circular economy decouples economic growth from resource depletion by keeping materials, resources, and products in circulation and by preventing the leakage of these resources into the environment as much as possible, particularly into the oceans and landfill sites. Transitioning from a linear “take-make-waste” economy to a circular “reduce-reuse-recycle” economy will also help curb global warming. Through the efficient use of precious resources, it is possible to recover and reuse by-products or waste by transforming them into new materials and products. This approach has the potential to greatly decrease associated emissions along product value chains.

In addition to recycling plastic waste and reusing it to make new materials and products, the 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 carbon footprints. The OMV Group focuses on utilizing waste biomass, such as residual forestry matter that is not in competition with the food and feed chain, and thus does 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.

Sustainable polyolefins production capacity

In kt

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 along the value chain. A circular economy will also result in better living and working conditions, and an overall cleaner environment.

Following the acquisition of a majority share in the polyolefins producer Borealis in 2020 and the consolidation of Borealis into the C&M segment within OMV, circular economy is now a cornerstone of the OMV Group’s Strategy 2030. By 2030, the aim is to establish a production capacity of 2 mn t of sustainable polymers and chemicals per year, i.e., polyolefin products or other chemicals derived from plastic waste (either through a mechanical or chemical recycling process) or from biobased feedstock. In parallel, the use of fossil fuels will decrease, as the aim is to reduce oil and gas production levels to around 350 kboe/d and reduce crude distillation throughput by 2.6 mn t by 2030. These fossil fuels would ordinarily also be used to make polymers; instead, more polymers will be based on recycled waste or renewable resources such as biobased feedstock. In 2023, the OMV Group established a production capacity of 195.9 kt of sustainable (including recycled and biobased) polyolefins and other chemicals.

Through its subsidiary 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), a member of the EU’s Circular Plastics Alliance, and, as a member of the Business Coalition for a Global Plastics Treaty, supports the development of the UN treaty to end plastic pollution.

The OMV Group’s goal is to take on a leading position in the circularity of plastics and to offer its customers innovative solutions that advance the circular economy. In order 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. This can only be achieved by using a full suite of different, complementary technologies that come into play in a cascading way. This integrated approach is embodied in the Circular Cascade Model.

Design for Eco-Efficiency

This means adopting a fundamental design mindset that starts with minimizing the use of resources during production and maximizing the product’s lifetime value. 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 to ultra-lightweight foam applications while being fully recyclable.

In 2023, Borealis increased its participation in Bockatech EcoCore^®, a patented manufacturing technology for foamed articles that uses Borealis’ HMS (high melt strength) polypropylene. The aim is to enable a greater number of global customers, value chain partners, and supply chain players to benefit from a broader range of lighter foam-based applications, primarily in the packaging sector.

Reuse

Reuse is a core element of circularity, as circular change starts first with reduction and reuse, before recovery and recycling close the loop. This step aims to maximize and extend the lifetime of products that are already in circulation. This will be fostered by leveraging knowledge of plastic use and processing, and by establishing systems and business models designed to encourage reuse.

Partnerships are vital for broadening knowledge about reuse activities and ensuring sustainable growth. In 2023, Borealis further strengthened its commitment to the reuse principle by engaging in several collaborative projects with value chain partners. For example, Borealis joined the 4everPack consortium, a two-year research program run by the Finnish institute VTT and funded by Business Finland. The project aims to replace the linear economy with a fully circular model, focusing on the reusable packaging value chain. Borealis will provide its know-how and expertise in innovative material and packaging design for the selected reuse systems.

Design for Recycling

A key challenge in increasing the recycling of plastics is that many products are not intentionally 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 that uses only a single material, while maintaining or even improving performance. Thus, Design for Recyclability (DfR) empha­sizes that a product must be designed with the intention that it can be easily collected, sorted, and recycled. DfR is an important aspect of eco-efficient design and takes a life cycle 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, brand owners worldwide are committing to developing 100% recyclable, reusable, or compostable packaging solutions by 2025. To further DfR, Borealis developed and actively promotes its 10 Codes of Conduct for polyolefin packaging designers. These help designers develop packaging materials that can be successfully recycled and used again, either for 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.

Borealis also applies its innovation activities to offer alternatives to materials and material combinations that are not recyclable today and collaborates with value chain partners to expand its range of fully recyclable, mono-material solutions. At the Plastics Recycling Show Europe 2023, Borealis launched a new mono-material pouch containing over 95% polypropylene (PP), which is fully designed for mechanical recycling. This could help meet the ambitious recycling and waste reduction targets set out in the EU’s Packaging and Packaging Waste Regulation, as well as eco-modulation criteria for EPR programs.

Borealis is an active member of the HolyGrail 2.0 (HG 2.0) digital wan already to more than 170 members, including over 40 brand owners and retailers. This initiative, which is driven by the AIM (European Brands Association) and powered by the Alliance to End Plastic Waste, is a pilot project working to prove the technical viability of digital watermarks (i.e., almost imperceptible postage stamp-sized codes on the packaging) for the accurate sorting of packaging waste as well as to prove the economic viability of the business case on a large scale. In 2023, digital watermarking initiative Holy Grail 2.0 entered the final phase of research and development trials to validate the technology at the highest technical level and prepare it for market entry. Borealis will perform recycling tests on the PP film and polyethylene flexibles generated by the sorting trials conducted by Hündgen Entsorgung, who is using the packaging volumes put on the market by Holy Grail 2.0 brand company members in Germany and Denmark.

Closing the Loop

The potential for product reuse also has its limits. This is when the steps of recovery and recycling come into play in the circular cascade model in order to close the loop on plastic waste. The OMV Group is fully committed to broadening the range of circular products. It therefore ranks the development of mechanical and chemical recycling equally, as they are seen as complementary to each other. The Group’s ambitions in the area of mechanical recycling lie with its subsidiary Borealis, which continues to work with partners to develop new 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).

Chemical recycling can extract value from residual waste streams from mechanical recycling and mixed plastic waste streams, which would otherwise be sent to landfill or be incinerated. This process involves changing the chemical composition of the plastic. The resulting synthetic pyrolysis oil can then be used again to make any type of plastic or product. Since it is practically comparable to virgin plastics, it can also serve a more diverse field of applications (read more in Chemical Recycling).

There is rising demand for both high-quality recyclates and product-based solutions for renewable feedstocks. The OMV Group is committed to supporting producers and brand owners in meeting environmental and regulatory challenges and is therefore continuously developing its circular and renewable product offering. The wide range of mechanically recycled products falls under the Borcycle™ M umbrella, and chemically recycled product solutions are in the Borcycle™ C portfolio. Borealis also offers and markets circular polyolefin products based on renewable feedstock: Bornewables™(read more in Renewable Feedstock).

Borvida™ represents the portfolio of circular base chemicals. Borvida B, from non-food waste biomass, and Borvida C, from chemically recycled plastic waste, are the first products in the portfolio. In the future, it will be expanded to include Borvida A, from atmospheric carbon capture.

The OMV Group is also committed to reducing 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

The circular economy has been on the OMV Group’s agenda since 2015, and has become even more important since the acquisition of a majority share in Borealis in 2020. Several aspects of the circular economy, in particular mechanical and chemical recycling, are now jointly being developed further.

With the new Strategy 2030, which was introduced in March 2022, OMV emphasized once again the importance of a circular economy for a sustainable chemicals business going forward. This is the reason why the OMV Group plans to implement a fundamental strategic shift from a linear toward a circular business approach. The C&M business segment will act as the growth engine of the Company. It is to be substantially strengthened, expanded, and diversified, with the aim of developing into a leader in high-quality polyolefin solutions, as well as renewable and circular chemicals and materials. In order to implement this strategy, a new target operating model was defined. This new organization came into effect in 2023 and forms the backbone of the strategy execution.

The C&M segment continues to cover the entire chemicals value chain, including responsibility for capturing value from the circular economy. As one of the focus areas in the C&M segment, Circular Economy forms a separate business unit. This unit covers business development activities, as well as activities related to circular feedstock.

The department covering the further development of OMV’s ReOil^® technology is now allocated to the new corporate unit Innovation & Technology, and with that has moved into the direct responsibility of OMV’s CEO. Among other things, the new licensing business will also be managed by a separate department within this unit in order to license sustainable technologies developed by OMV to the wider industry. The establishment of a dedicated corporate function focusing on innovation and technology under the leadership of the CEO is based on the idea that the transformation will be fueled by a high degree of innovation and new technologies, while maximizing the value of the life cycle management of current technologies and the new organization will strengthen these capabilities across the Group.

Most of the OMV Group’s circular economy initiatives, especially those regarding mechanical recycling and circular products, are run by Borealis. To accelerate its transition 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 based on several thematic project focus areas, such as recycling or design for recyclability, in addition to assisting all other Borealis business areas in their industry-specific transitions. A 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, Austria, remains Borealis’ spearhead for technology and innovation, while the Digital Studio in Brussels, Belgium, is creating digital solutions for circularity. This setup enables Borealis to constantly learn and push innovation boundaries, while the business grows by offering customer-centric circular solutions that satisfy today’s needs.

In 2018, Borealis launched a dedicated communication platform, EverMinds™. This platform serves to streamline all of 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, governance, and development of circular products can be found in the Borealis Annual Report.

The OMV Group has a variety of initiatives in place to raise awareness about recycling among its employees, specifically with regard to recycling of plastics. For instance, informative internal blogs are regularly published, and expert talks are organized with the aim of better informing employees on how to identify plastic recycling codes and the etiquette on how to correctly separate different types of plastic waste so that they will eventually be recycled.

From June to September 2023, the newly launched Sustainability Academy provided a series of online training courses on circular economy and sustainable products. The learning path was designed to offer interested colleagues from all divisions information on and insights into the circular economy and give a more detailed overview of ongoing projects related to this material topic within the OMV Group. The training package included online learning material as well as several internal and external instructor-led sessions that focused not only on introducing the concept of the circular economy, but also on providing a deeper dive into topics such as mechanical and chemical recycling. In addition, external factors like sustainability certifications and EU policies and regulations were introduced and discussed. Around 630 participants from across the OMV Group registered for the instructor-led sessions, emphasizing employees’ interest in this topic.