Chemical Recycling

Chemical recycling comes into play when mechanical recycling reaches its limits, for example in products where multiple types of plastics are used together. While most rigid plastic waste can be processed quite effectively through mechanical recycling, flexible materials (e.g., plastic film) are still predominantly incinerated or sent to landfill. Chemical recycling is the only way of overcoming this challenge. It involves altering the chemical composition of the plastic to produce pyrolysis oil from plastic waste. This synthetic oil can then be used to make any type of plastic or product. Because the quality of these products is effectively comparable to virgin plastics, they can also be used in tightly regulated areas such as the food and medical industries. Plastic waste thereby becomes a valuable raw material.

OMV has been exploring the potential for utilizing post-consumer plastics, i.e., polyethylene, polypropylene, and polystyrene, through chemical recycling since 2011. The Austrian Research Promotion Agency has also contributed to this effort with subsidies covering part of the project investment. The first test facility was launched in 2013. In 2018, the next-level test facility – the ReOil®^® 100 pilot plant – began fully refinery-integrated operation with a processing capacity of up to 100 kg/h and a production capacity of up to 100 l/h of pyrolysis oil.

In 2021, the final investment decision (FID) was made to build a prototype of a ReOil®^® demonstration plant at an intermediary refinery scale with a design capacity of 16 kta. This plant, called ReOil®^® 2000, will be fully operational in 2024. To finance this project, OMV entered its first-ever green loan agreement. This is aligned with the green loan principles and is based on a green and project-specific external due diligence appraisal, called a second party opinion, and a project-specific green financing framework. The plant will be fully integrated within the petrochemical production units at the Schwechat refinery in Austria, enabling OMV to guarantee the best use of resources, maximum efficiency, and the highest industrial safety standards, while creating around 50 new jobs. It represents a crucial step in developing ReOil®^® into an industrial-scale chemical recycling technology with a processing capacity of up to 200 kta.

The pyrolysis oil produced in the ReOil®^® plant is further processed into monomers in the refinery’s steam cracker to produce high-quality base chemicals for the plastics industry. At Borealis, these monomers are then converted into high-grade polymers. Borcycle™ C represents the portfolio of chemically recycled polyolefins that Borealis is offering to the market. These products are suitable for very demanding applications such as food contact materials. Borcycle™ C is not only the label for the portfolio of chemically recycled products offered to its customers, but also the designated name for Borealis’ own technology solutions for chemical recycling. Along with Borcycle™ M, in which “M” stands for mechanical recycling, it forms the Borcycle™ portfolio of all-round polyolefin solutions for plastics circularity based on the Borcycle™ technology suite launched in 2019.

Management and Due Diligence Processes

Selection of Feedstock

The ReOil®^® facility can process different forms of plastic waste, ranging from household waste to waste from commercial and industrial sources. The main feedstocks are polyethylene (e.g., films), polypropylene (e.g., food packaging and car parts), and polystyrene (e.g., packaging and insulation materials). Currently, the recycled feedstock is sourced almost exclusively from Austrian waste sorting facilities. With regard to the ambition of developing an industrial-scale ReOil®^® plant and the resulting need for more feedstock, the geographical scope for feedstock sourcing will be expanded and countries neighboring Austria will be explored.

Technology

Plastic is an excellent heat isolator with poor heat transfer properties, compared with glass or metal. These properties, which make plastic desirable in everyday life, also make it difficult to break down. OMV’s proprietary ReOil®^® technology is based on pyrolysis, a well-known refinery process during which thermoplastics are first melted and then cracked at a temperature of about 400–450°C. This means that long-chain hydrocarbons are cracked into shorter-chain light hydrocarbons. One of the inherent challenges in pyrolysis stems from the fact that, compared with glass or metal, plastics are notoriously difficult to melt, and once melted, are highly viscous, which impairs the heat transfer necessary for pyrolysis. The ReOil®^® technology is unique compared to that of competitors because of the use of an innovative heat transfer technology, which allows the viscosity of the molten plastic to be reduced and thus heat transfer to be improved. As a result, the ReOil®^® process is scalable to industrial scale (up to 200 kta). Thanks to the integration into OMV’s refinery in Schwechat, Austria, ReOil®^® also achieves higher yields than other non-integrated chemical recycling technologies.

Certification

The ReOil®^® pilot plant and the ReOil®^® 2000 demo plant are both certified according to the International Sustainability & Carbon Certification (ISCC). ISCC PLUS is a sustainability certification that is well-recognized by all stakeholders in recycled and biobased materials, providing traceability along the supply chain and verifying that companies meet environmental and social standards. Compliance with the certification means that for each ton of circular feedstock fed into the ReOil®^® plant and replacing fossil fuels, a certain proportion of the output can be classified as circular by using the mass balance approach.

Emissions Reduction

In 2021, OMV commissioned a life cycle assessment (LCA) to determine the CO₂ reduction potential of its ReOil®^® chemical recycling technology versus incineration. The LCA was conducted by the Fraunhofer Institute for Environmental, Safety and Energy Technology (UMSICHT) and the Fraunhofer Institute for Chemical Technology (ICT) according to ISO standards 14040 and 14044, and independently peer-reviewed by three world-leading institutes. The LCA analyzes the different treatments of one ton of pre-sorted mixed plastic waste on waste-to-gate level, starting with the collection of waste and ending with the production of polymers and energy. The LCA compares two systems ensuring the same outputs: (i) a linear economy, where waste goes to incineration producing thermal energy and electricity, and where polymers are produced from fossil sources, vs. (ii) a circular economy, where these waste streams are chemically recycled, and the same amount of thermal energy and electricity is produced based on the expected future energy mix in Austria. The LCA shows significant benefits of the circular economy system: 34% of CO₂e emissions could be saved by 2030 if waste streams that are currently going to incineration are chemically recycled using the ReOil®^® technology.

2023 Actions

The following key activities were carried out across the Group in 2023:

• In October 2023, OMV announced the final investment decision to build an innovative sorting plant developed by Interzero, Europe’s leading provider of circular economy solutions, to produce feedstock for chemical recycling. For that purpose, OMV and Interzero established a joint venture, in which OMV holds 89.9% of the shares and 10.1% of the shares belong to Interzero. OMV will invest over EUR 170 mn in building this state-of-the-art facility in Walldürn, southern Germany, which will also lead to the creation of around 120 new jobs on site. With a processing capacity of up to 260,000 t of post-consumer mixed waste plastic per year, this fully automatic sorting facility will be the first of its kind to produce feedstock for OMV’s chemical recycling on a large industrial scale. The innovative sorting process used in the new facility will make it possible to recover a polyolefin-rich fraction from a waste stream that currently ends up in thermal recycling due to its unsuitability for mechanical recycling. This process has already been tested on an industrial scale and the product has been successfully processed as feedstock in OMV’s ReOil®^® pilot plant. Construction began in Q4 2023 and production is expected to start in 2026. The strategic partnership between OMV and Interzero combines the complementary strengths and capabilities of both parties, with the joint aim of taking another step toward a world without waste.
• In October 2023, OMV and Wood, a global leader in consulting and engineering solutions in energy and materials markets, signed a mutually exclusive collaboration agreement for the commercial licensing of OMV’s proprietary ReOil®^® technology, following a Memorandum of Understanding that was signed between the two parties in November 2022. The companies will bring the ReOil®^® technology to the global market together utilizing Wood’s proprietary heater technology and will establish a joint technology and engineering delivery team to support clients throughout the whole process of adopting and successfully implementing the technology at their sites. In addition, Wood will work with ReOil®^® licensees to provide full asset life cycle support globally.
• In early 2023, Borealis announced the capability to use its proprietary Borcycle™ C chemical recycling process to recycle cross-linked polyethylene (PE) types such as XLPE and PE-X into recycled polyethylene. Thanks to its suitability for high-performance applications, the recycled PE obtained from the pyrolysis process can replace virgin PE in the manufacture of XLPE and PE-X for use in the wire and cable and infrastructure industries respectively. Using ISCC PLUS certified grades in the Borcycle™ C portfolio enables customers to capitalize on circular solutions while at the same time maintaining high application quality and meeting industry standards.
• Borealis entered into a partnership with Renasci in 2021 to work on the innovative Smart Chain Processing concept, including a plastic to pyrolysis oils process. In 2022, Borealis acquired a minority share in Renasci, which it increased to a majority shareholding of 50.01% in early 2023. The participation in Renasci was further increased in Q4 2023 to approximately 98%. The investment gives Borealis greater access to chemically recycled feedstock, thereby strengthening the Borcycle™ C portfolio.
• In February 2023, Neste, Borealis, Uponor, and Wastewise successfully produced pipes made of cross-linked polyethylene (PE-X), which was based on feedstock gained from chemically recycled post-industrial waste plastic from PE-X pipe production using the ISCC PLUS-certified mass balance approach. PE-X pipes are an important contributor to energy-efficient heating and safe plumbing due to their robustness, temperature resistance, and longevity, yet the interconnected polymer chains make them nearly impossible to recycle using conventional recycling technologies. The project shows that chemical recycling can close the circularity loop for hard-to-recycle waste plastic, turning it into high-quality polymer feedstock and enabling the consecutive manufacturing of products with quality and properties identical to those in their previous life.

Outlook

Since the first ReOil®^® trials in OMV’s own laboratory, there has been a lot of ongoing development. The ReOil®^® 2000 plant will become operational in 2024 at OMV’s refinery site in Schwechat, Austria, with a capacity of 16 kta. The next step is the development of an industrial-scale ReOil®^® plant with a planned capacity of 200 kta. Furthermore, the first ReOil®^® licenses are due to be launched to the market over the course of 2024, marking an important milestone in promoting circularity and chemical recycling in the industry.