Q&A with Borealis CEO Alfred Stern

Alfred Stern is chief executive of Austria-based chemical and fertilizer company Borealis. In this interview from the K 2019 trade fair in Dusseldorf, edited for length and clarity, Stern discusses Borealis' investment plans and as his view on plastic's future place in the circular economy.

Borealis recently said it will work with Abu Dhabi's state-owned Adnoc to evaluate the feasibility of a propane dehydrogenation (PDH) and polypropylene (PP) unit at Mudra Port, India. Could you give some background into the rationale for this investment?

Earlier this year we signed a memorandum of understanding (MOU) with Adnoc to look for growth opportunities beyond the UAE, and this is one of the first things to come out of the joint activity. India is [a market] where we see continued demand growth, in particular for differentiated high-quality products that we can make with our Borstar process. We will aim this at high-quality products, that is why it is important to invest into Borstar technology here.

[German chemical company] BASF has invested into the acrylics value chain [at the same site]. What we have together is that we both need propylene, so we got together and said "can we make a world scale propylene plant in order to supply propylene for us and acrylics chain for BASF"? We are also studying if Adnoc can provide the propane to feed the plant.

Where do you see further developments out of agreement with Adnoc?

Asia and Middle East is really the focus area. We will look at other opportunities, all in Asia. The idea is to bring our Borstar, Borlink and Borceed [polyolefin] technologies and feedstock from Abu Dhabi, and to work together with local partners.

What is Borealis exhibiting at the K 2019 trade fair?

The theme, together with Borouge and Nova Chemicals, here at our joint stand is really about 'building tomorrow together' and how we can use partnerships to drive progress, not just for the plastics industry but for society as a whole. Circular economy is a big topic within that context, and we have started this very early.

Last K Show we had just announced the acquisition of [German recycler] mtm Plastics and back then I think a lot of people were wondering what we were doing. This has completely changed in this K Show, because a lot of people have realised that we are not crazy, and it is something where it is an opportunity and a necessity to drive forward.

We have officially launched our quality brand of recycled products for premium products called Borcycle. We are very involved in development with our customers and you will find here, amongst other examples, the base of a vacuum cleaner that we have developed with Bosch Siemens which is 80pc recycled content and a detergent pouch from Henkel that we have worked on that has 30pc recycled content.

Earlier this year we also announced a partnership with OMV on the ReOil process, which can take plastic waste back into oil feedstock for our Borealis Borstar plants. At this K Show we have also announced that we will start production with renewable propane from Neste , which will come out of their Rotterdam plant.

In my view there are two things to address, reducing CO2 and making plastics circular. They fit together because by making plastic circular you reduce CO2; but if you can close the loop on plastic waste as well as using renewable feedstock you further reduce CO2, so it is even better.

How quickly do you expect to bring significant quantities of these to the market?

With the Neste co-operation we will launch commercial product by the end of this year. I will not disclose numbers, but we will have the capability to ramp up relatively quickly, depending upon market demand for this. Our recycling capacity since we started in 2016 has more than doubled. We have made another acquisition — [Austrian PE film recycler] Ecoplast — and we have invested in both mtm Plastics and Ecoplast in order to increase our capacity significantly, and we will continue to push this forward.

[Reaching the EU target for 10mn t of recycled plastic being used by 2025] will for sure require a quick ramp-up and significant investment. Borealis has signed the 'Ellen McArthur Line in the Sand' pledge to quadruple capacity by 2025 and we have signed up to the EU effort to make our contribution to the 10mn target, which we would not have done if we do not believe we can do it.

But it will be very challenging. I think we are in a good position because our early start is helping us to have a clearer picture of how to push forward fast. Our cooperation with OMV is not just an idea or an MoU, there is actually a pilot plant in Schwechat that is producing actual synthetic oil. Again, we will continue to push forward the Neste co-operation.

So to what extent is there room for growth in recycling and virgin plastic demand?

Three things: Firstly, for us it will not matter where [feedstock] comes from. I am convinced that 10 years from now, in Borealis, plastic waste will be another form of feedstock, like when we added light-feedstock crackers alongside our naphtha crackers. I mean chemically and mechanically recycled plastic waste. Borcycle [blends of post-consumer recycled and virgin polyolefins] will just be another platform where we need to push the boundaries to get better technology.

Secondly, the global population will continue to grow. We are looking at 10bn people by 2025.Thirdly, hopefully the trend that we have observed of wealth going up and people coming out of absolute poverty and going up to better living conditions will continue. Today there are still 1bn people living on less than $2/d. If you live on that, you do not have shoes, transportation, water, electricity, you sleep on the floor most likely.

This will continue to develop, and if this is supposed to work in a sustainable way we will need more plastic not less.

Cars need to be lighter, the lighter they are the less energy they consume, and we will need more renewable energy, so our wire and cable and solar panel solutions will be needed. Access to water will need pipes, and plastic water pipes have the lowest leakage, are easiest to install and have the lowest cost, so there will be growth.

When I was born in 1965 there were only 3.5bn people on the planet, today more than that — 4bn — live in cities. They all want to eat, so you need to bring the food somewhere and it needs to be packaged. But we need to find ways to close the loop, you cannot just package it and throw away the packaging after.

So we are convinced that for our differentiated higher quality products there will be growth. And secondly for us it does not matter what the feedstock is, but yes the recycling content will increase.

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