For goals and planned key actions for 2024 and beyond, please refer to the full Combined Annual Report 2023.
The evolution of industry is having a major impact on the natural greenhouse effect. Over the last century, the burning of fossil fuels such as coal and oil has increased the concentration of atmospheric greenhouse gases (GHGs). Clearing land for agriculture, industry and other activities has also contributed to that increase. These changes to the atmosphere’s GHG composition are having major effects on the environment and society. Most importantly, our planet will become warmer, extreme weather events such as storms and flooding will become more common, and the sea level will rise.
There have been significant efforts globally to address climate change, most notably the 21st session of the United Nations Climate Change Conference (COP 21). The resulting Paris Agreement calls on all countries to keep the global temperature increase to well below 2°C and to pursue efforts to limit the increase to 1.5°C above pre-industrial levels.
Reducing the impact of climate change must go hand in hand with economic success, to ensure that industries and other organizations can afford to develop the innovations needed. As one of the largest and most diversified industries in Europe, and a significant emitter of GHGs, the chemical industry plays an important role in helping to achieve long-term GHG emission reductions in Europe and globally. Borealis is therefore committed to reducing emissions from its operations, as well as reducing and avoiding emissions in its value chain, during the life cycle of its products.
To understand its impact on climate change, a company can calculate its emissions inventory or carbon footprint using the Greenhouse Gas Protocol, which is a globally accepted methodology for these calculations. The protocol divides corporate emissions into three scopes:
This framework guides Borealis and many other companies in pursuing climate targets in a meaningful way.
In 2022, Borealis established a Climate Strategy Coordination team to drive its transformation to a net-zero business. The team is led by the Director Sustainability and Public Affairs, with the CEO as sponsor and the Executive Board as its Steering Committee. As sustainability is a core part of the Group Strategy, the topic is integrated into almost all areas of the organization. The team therefore brings together expertise and initiatives from throughout the Group’s businesses and functions, in a focused way. The team is structured according to Borealis’ emissions inventory and hotspots identified in the Group’s Scope 1, 2 and 3 emissions, ensuring that the people responsible for these areas can work together in a harmonized way, to maximize the impact for the Group. This approach fosters transparency and ownership, to enable Borealis to effectively execute its climate strategy.
To enhance the transparency and governance of sustainability, Borealis is evaluating a software tool to manage backward-looking key performance indicators and its roadmaps for further improvement.
The Climate Strategy Coordination team reports progress to the Responsible Care Committee and the Energy & CO2 Committee.
In 2023, Borealis appointed a Project Director Energy & CO2 , a newly created role to steer the Group’s energy efficiency and CO2 reduction efforts, as part of its growth and transformation ambitions.
Borealis is fully committed to reducing the carbon footprint of its operations and to achieving net-zero operations by 2050 or sooner. In 2022, Borealis launched its Group Strategy 2030, which stated its ambition to:
The Scope 1 and 2 emissions target corresponds to a reduction in emissions of 50% in 2025 and 60% in 2030, against Borealis’ base year of 2019. The reduction targets include the impact of divesting the Fertilizers, Melamine and Technical Nitrogen business in 2023.The Group has identified its preferred technologies for mitigating Scope 1 and 2 emissions in the period to 2030, based on the required product quality, the supply of feedstock, market demand, and economic and technological feasibility. Depending on the location, market, availability of end-of-life products and the legal framework, the options may include feedstock derived from biogenic materials, mechanically or chemically recycled plastics and capturing CO2 .
A real step change in Scope 3 emissions can only be achieved through cooperation across the whole value chain and Borealis is therefore working with its value-chain partners towards this goal.
Increasing Renewable Electricity Sourcing
Borealis’ 2030 renewable energy goal is an important part of the journey towards climate neutrality by 2050 or sooner. To achieve the goal, the Group will use on-site investments where possible, as well as long-term contracts known as power purchase agreements (PPAs), which source power from as close as possible to the Borealis locations where the power is used. Borealis believes that more renewable power as well as futureproof electrical grids will be needed if industries such as petrochemicals are to electrify further.
Driving Energy Efficiency
Energy consumption accounts for a significant proportion of Borealis’ total production costs. Borealis’ current ambition is 10% energy savings of the consumption of 2015 implemented by 2030. The Group sees energy efficiency as a cornerstone of its climate ambition, in line with the energy efficiency first principle, which is a priority for the EU and is supported by EU Commission recommendation (EU) 2021/1749.
Continuous improvement is the baseline to implement energy efficiency improvement and comply with ISO 50001, combined with continuous leadership engagement from key teams. Borealis’ initiatives include energy teams at each production location that drive the location’s energy planning process, increase awareness, act as a forum for energy issues and ensure ISO 50001 compliance. To progress beyond this baseline, all Borealis locations run energy screening programs at least every four years, often with third-party support, to evaluate their performance and identify ways to improve. Actions are then prioritized based on their benefit to:
Prioritization also takes account of a risk and opportunity assessment, including social, environmental and economic aspects, the total cost of ownership, the internal rate of return and organizational capacity.
Borealis has reassessed its energy ambition, to reflect the divestment of the Fertilizers, Melamine and Technical Nitrogen business and to ensure the Group leverages energy efficiency to achieve its climate ambition. Based on a thorough analysis across all locations, the Group aims to implement 10% energy savings of the consumption of 2015 by 2030.
Driving Transformation Towards a Circular Economy
To achieve its climate ambition, Borealis is also increasing its capacities for circular economy solutions and gradually introducing renewable and recycled feedstock into its own production.
Sustainable Polyolefin Products and Solutions
Borealis also plays a role in solving society’s climate challenges, by providing sustainable polyolefin solutions.
For example:
Borealis calculates its corporate carbon footprint following the GHG Protocol and includes EU ETS emissions. The Group uses a broad range of emission factors, which are a means to calculate the GHG emissions produced by a given source. Each EU member state has its own emission factors, so natural gas use in Austria, for example, would have the specific Austrian emission factor applied to it. Other emission factors are standard factors from scientific literature or inventories or are measured by a certified laboratory. All EU ETS emission factors are permitted and approved by the relevant authorities.
The Group reports:
Borealis uses 2019 as its base year for all emission scopes and its GHG targets, as 2019 was the last full year before the COVID-19 pandemic and the majority of the Group’s assets were operating for the whole of 2019. It is also in line with the base year of OMV Group, which owns 75% of Borealis, resulting in OMV Group including Borealis’ emissions in its emissions inventory and base year emissions.
Borealis will adapt its base year when needed, according to the GHG Protocol accounting rules, although any decision to shift the base year will be influenced by the materiality of the change versus OMV Group’s emissions. Under the GHG Protocol accounting rules, the divestment of Fertilizers, Melamine and TEN should be seen as a base year adjustment, the operations and emissions will no longer be part of Borealis’ inventory. Borealis’ Scope 1 and 2 calculations include all companies where the Group owns more than 50% and has operational control. Emissions of companies not under operational control or with less than 50% ownership are included in Scope 3.15 (investments).
1) Emissions are calculated following greenhouse gas protocol. Minor emissions are estimated. // 2) Scope 1 and 2 includes Rosier Group. Data is subject to minor adjustments. // 3) Indication, market based emissions will only be finally calculated end of June 2024.
1) Due to the divestment, only the first half of the year to June 30, 2023 is reported. The figures are, therefore, not fully comparable. // 2) Data is subject to minor adjustments. // 3) Estimated based on historical values. // 4) Including Rosier Group.
Scope 1 and EU ETS
Scope 1 involves direct emissions from Borealis’ sites and includes internally generated power and steam (before furnaces) and flaring, which make up a large part of Borealis’ Scope 1 emissions. Borealis takes into account all greenhouse gases in the Scope 1 calculation, as defined in the GHG Protocol 1). The Group does not report direct biogenic CO2 emissions, as they were negligible in 2023. Biomass in the feedstock is mostly allocated to the product using ISCC mass balancing.
In 2023, Borealis produced 1.325 million metric tons of EU ETS CO2 equivalent emissions. This is less than the 1.338 million metric tons in 2022. Borealis has set a target to emit no more than 1.477 million metric tons of EU ETS CO2 equivalent emissions in 2024.
1) CO2, N2O, SF6, HFC, PCF, CH4
Scope 2
Scope 2 emissions involve indirect CO2 equivalent emissions caused by Borealis’ consumption of externally generated electricity, external steam and energy that the Group purchases and brings into its facilities from other sources. It is expressed as market-based or location-based emissions, as defined in the GHG Protocol.
Borealis’ main sources of energy are electricity, heat (primarily from steam), natural gas and fuel gas. The Group documents, tracks and follows up on all sources of energy each month, for every location. Data on all of Borealis’ energy consumption is collected as it is metered, then converted to the equivalent in primary energy using the Group’s environmental data management tool. This allows Borealis to summarize different energy sources using one consumption figure, enabling it to compare performance across its plants and production lines.
Borealis tracks energy consumption and the realized energy improvement projects using both primary and final energy, which is the actual energy consumed. This provides insights to identify and prioritize energy improvement opportunities and continuously reduce emissions. Some emissions from energy (Scope 2 – market-based) can only be estimated until data from suppliers are final, at the end of Q1 of the following year. Borealis therefore finalizes its corporate carbon footprint for the previous year by the end of June. ETS emissions are externally verified by EU member states. Scope 2 emissions (location-based) for BC and PO in 2023 were 0.601 million metric tons. Scope 2 (market-based) emissions in 2023 are estimated to be 0.878 million metric tons CO2 , which was less than the 0.933 million metric tons in 2022.
1) Due to the divestment, only the first half of the year to June 30, 2023 is reported. The figures are, therefore, not fully comparable.
1) Due to the divestment, only the first half of the year to June 30, 2023 is reported. The figures are, therefore, not fully comparable.
There is a decrease of 99 GWh primary energy in yearly energy consumption for BC and PO, due to reduced operations because of lower market demand and implemented energy efficiency measures. In 2023 BC and PO sold 64 GWh in the form of steam or heat, 13 GWh of electricity and 44 GWh of cooling capacity. The energy efficiency improvement is calculated by summing individual project’s energy savings compared to business as usual and dividing the total by the Group’s absolute energy consumption in 2015, the baseline year. In 2023, Borealis implemented projects that will generate 153,348 MWh of yearly final energy savings. This brings the total energy saving to 5.3%, against the objective of 10% by 2030.
1) Due to the divestment, only the first half of the year to June 30, 2023 is reported. The figures are, therefore, not fully comparable.
Non-renewable resources: The amount of commercial liquid fuels used is insignificant. Fuels and steam consumed are mainly used for processes. Data for cooling consumption are currently not available.
Renewable power sourcing ambition is expressed as a percentage of the power used in the BC and PO businesses that is from renewable sources such as wind, solar, biomass or hydro and connected directly to Borealis’ internal grids or sourced on the European markets through power purchase agreements (PPAs) covered by guarantees of origin. Borealis intends to reach 100% by 2030 and is exploring co-ownership of renewable power assets.
Final energy consumption of BC and PO: 2,606 GWh electricity, 892 GWh steam, 6,805 GWh fuel gas and 514 GWh natural gas. Energy consumption is converted into primary energy as follows: fuels (including natural gas): 100% conversion to energy, factor 1; steam 90% boiler efficiency, factor 1.11; electricity: 40% efficiency, factor 2.5.
Final energy consumption of Fertilizers, Melamine and TEN: 264 GWh electricity, 29.7 GWh steam, 171 GWh fuel gas and 1,651 GWh natural gas. Energy consumption is converted into primary energy as follows: fuels (including natural gas): 100% conversion to energy, factor 1; steam 90% boiler efficiency, factor 1.11; electricity: 40% efficiency, factor 2.5.
1) Polyolefin production intensity is referenced to sum of all assets producing plastics.
1) Hydrocarbon production intensity is referenced to the sum of production of ethylene, propylene and aromatics from all assets.
1) Due to the divestment, only the first half of the year to June 30, 2023 is reported. The figures are, therefore, not fully comparable.
Scope 3 emissions include other indirect emissions in the value chain, both downstream and upstream. For Borealis, the following Scope 3 categories (out of 15 listed in the GHG Protocol) are material and therefore included in the calculation under the GHG Protocol:
Categories 6 ,7, 9, 13 and 14 are not included in the calculation, as they are not material for Borealis.
As Borealis transitions to being climate neutral by 2050, circular and bio-based materials will be key levers for reducing GHG emissions. The Group has therefore opted to calculate Scope 3 category 12 (end-of-life treatment of sold products) based on the recycled and biogenic content of its products. By taking this conservative and fully transparent approach, Borealis is assuming the burden of recycling and emissions in its own circular transition. This approach is also known as the circular product cut-off methodology.
Borealis uses general mass and spend-based emissions factors to calculate Scope 3 emissions. In future reporting, the Group will strive to include supplier and customer-based emission factors, when they become available. A major part of Borealis’ Scope 3 emissions falls into category 15 (investments). This includes the Group’s stake in Borouge, as a result of which 36% of Borouge’s Scope 1, 2 and 3 emissions are taken into account. Borouge’s Scope 3 emissions are extrapolated by using the same ratio of Scope 3 to the total of Scopes 1 and 2 as Borealis, while excluding category 15. A similar approach is taken for Borealis’ financial stake in Baystar™ in Texas, US.
In 2023, Borealis worked to reduce its energy consumption and greenhouse gas emissions through the following initiatives:
1) Reductions occurred directly as a result of reduction initiatives (revamp of cracker furnace and improved control of fuel combustion) // 2) All Kyoto gases are included. Base year: 2019 (most representative year before COVID). Reductions took place in Scope 1 and 2.
1) Total production includes PO, BC, COM (compounding activities) and CES. Scope 1 and Scope 2 (location-based) are included in the intensity ratio. All Kyoto gases are included. // 2) Total production includes Fertilizers, Melamine and TEN. Scope 1 and Scope 2 (locationbased) are included in the intensity ratio. All Kyoto gases are included. // 3) Due to the divestment, only the first half of the year to June 30, 2023 is reported. The figures are, therefore, not fully comparable.
Borealis participates in several initiatives to raise awareness and foster learning, both within the Group and externally. These include:
Taking part in “Sustainable Plastics Industry Transformation”, or SPIRIT, a collaborative research and development program driving the transformation of the plastics industry in Finland through four main activities:
The project has a funding commitment from Business Finland and aims to accelerate learning in the Finnish industry, in collaboration with other partners. More than ten partnership projects have already begun, involving tens of research organizations and value chain partners. Learning is also shared within the Group.
Borealis’ energy and climate objectives for 2024 are to:
