For goals and planned key actions for 2024 and beyond, please refer to the full Combined Annual Report 2023.
To manufacture and deliver its products, Borealis purchases and sources feedstock, electricity and utilities, such as steam, nitrogen and boiler feedwater. The products and services the Group procures have an important influence on its financial results and business performance, including critical areas such as safety, environmental impact, quality and customer service. The Group therefore carefully manages its sourcing activities to optimize performance in these areas, by developing specific sourcing strategies for individual product and service categories. Borealis also looks to further improve the reliability of its feedstock supply by approving alternative sources.
The Base Chemicals (BC) organization manages the sourcing of feedstock, electricity and utilities. Dedicated teams source feedstock and cracker products for the BC business and assets, as well as electricity and utilities for both the Polyolefins (PO) and BC assets. The Senior Vice President BC is accountable for the BC business and organization.
In the PO organization, the Circular Economy Solutions and New Business Development group coordinates the sourcing of plastic waste feedstock for the mechanical recycling assets. The mtm plastics, Ecoplast and Renasci N.V. businesses carry out day-to-day procurement of plastic waste at site level.
Olefins and Polyolefins
Borealis sources hydrocarbon feedstocks, such as naphtha, butane, propane and ethane, and converts them into ethylene, propylene and a range of coproducts through its olefin units. The Group’s main focus is on the quality, availability, logistics and cost of feedstock. Global sourcing is crucial, as it gives the Group a more diversified supplier base, so it can obtain the right quality, remain competitive and avoid supply disruptions, especially since the Russian embargo on several oil products.
A dedicated team of feedstock traders and product managers sources the whole Borealis feedstock range. Feedstock and olefins required for Borealis’ olefins and polyolefin production plants are either sourced on an arm’s-length basis from OMV Group or purchased globally via strategic long-term supply agreements, short-term contracts and spot trading, covering deliveries from the US and Europe.
Since March 2022, Borealis has phased out all products with Russian origin from its portfolio. This was unchanged during 2023 and Borealis is designing its future feedstock sourcing to remain independent from Russian-originated products. The Group’s production site in Porvoo (Finland) was previously closely linked to Russian supplies and is in a so-called ‘ice class’ restricted area, which makes seaborne deliveries difficult in wintertime. Borealis has therefore contracted ice-class-sized vessels, to guarantee security of feedstock supply during winter. In summer, the vessels are used for other purposes.
The cost of feedstock is closely linked to swings in the crude oil price. Borealis therefore implements hedging strategies and ensures that it develops and maintains a high-performing commercial sourcing team. The Group actively screens new markets, maintains its market knowledge by subscribing for reports and attending industry and market conferences, and engages with industry partners to share best practices. Borealis is a member of several industry groups, such as the European Chemical Industry Council (CEFIC), and takes part in industry gatherings such as the European Petrochemical Association and the European Petrochemical Luncheon.
As part of its journey towards increased sustainability, Borealis has maintained International Sustainability & Carbon Certification PLUS (ISCC PLUS) accreditation in its plants in Kallo (Belgium), Beringen (Belgium), Schwechat (Austria), Burghausen (Germany), Porvoo (Finland) and Stenungsund (Sweden), and secured renewable feedstock deliveries in all European locations.
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 Feedstock
Sourcing Using ethane as primary feedstock contributes to the competitiveness of Borealis’ European cracker assets. It was not possible to source ethane on the European market in 2023, as practically all ethane originating from the North Sea shelf is being rejected in natural gas. Consequently, Borealis imported all its ethane requirements from the US, under its long-term supply agreement for US-sourced ethane. Despite high shipping rates and soaring prices, ethane remained competitive in 2023. Both propane and butane were advantageously priced compared to naphtha and the Group therefore maximized their use. The Very Large Gas Carrier “Oceanus Aurora”, which the Group ordered to supply the new PDH plant in Kallo, was delivered in Spring 2023. The Group is currently using the carrier to supply its other locations, until the new PDH plant starts operation in the first half of 2025.
Renewable Feedstock Sourcing
Borealis’ suppliers produce ISCC PLUS-certified hydrocarbons entirely from renewable raw materials, such as waste and residual oils and fats. Borealis then converts the hydrocarbons into ISCC PLUS-certified cracker products, phenol and acetone, which are finally used to produce high-performance plastics and chemical intermediates.
During 2023, Borealis further increased the volume of renewable feedstock sourcing by signing new supply agreements, including one for e-Naptha, the world’s first CCU-based steam cracker feedstock volume. Borealis also sourced its first CTO feedstock at a competitive premium. In total, Borealis contracted for around 36,000 metric tons of renewable feedstock during the year, primarily for feedstocks derived from used cooking oil.
Chemical Recycling
Borealis’ portfolio of Borcycle™ C products is based on chemically recycled plastic waste, enabling the transformation of this waste stream into circular high-performance products and applications.
Chemical recycling of plastic waste complements mechanical recycling and is an essential part of Circular Economy Solutions. By converting plastic waste into liquid hydrocarbons known as pyrolysis oil, it allows material circularity for sensitive applications, such as food contact packaging and medical products.
Chemical recycling technology is still developing towards reaching industrial scale and the desired operational performance. The regulatory framework for the chemical recycling industry is also yet to be fully established in the EU and other regions, resulting in some uncertainty and increased risk for investments.
In 2023, Borealis took full control in Renasci N.V. and continued to develop Renasci’s high-tech recycling center in Ostend, Belgium. This secures greater access to chemically recycled feedstock, according to the ISCC PLUS mass balance methodology.
In addition, Borealis expanded its circular feedstock network with suppliers such as OMV, Neste and Shell, as well as independent chemical recycling companies. This further supports Borealis’ aim to become one of the leading global suppliers of chemically recycled base chemicals and polyolefins.
As most of the pyrolysis oil currently produced requires additional purification before it can be used in cracker furnaces, Borealis is working with partners to develop a reliable and effective processing route for chemically recycled materials. Borealis is also investigating the viability of constructing its own chemical recycling plant at its locations.
Borealis sources plastic waste feedstock for its mechanical recycling operations, mtm plastics in Germany and Ecoplast in Austria. These sourcing activities focus on post-consumer plastic packaging waste, from multiple suppliers.
One key activity is Recelerate, a joint entity Borealis established with Reclay Group (Germany) in 2022. Recelerate aims to close the loop on plastics circularity by rethinking the way that plastics are collected, sorted and processed, in order to significantly increase the amount of light packaging waste that is actually recycled.
The Group is also looking into new plastic waste feedstock sources, including closing the loop with customers and other value chain partners, to efficiently source this feedstock and further increase mechanical and chemical production capacities.
Borealis sources electricity and utilities needed for its production processes. The Group’s electricity contracts are generally spot-indexed and contracted on a one to three-year basis. Commodity pricing risk is managed using financial risk instruments.
The Group is actively scouting for industry alliances to prepare for a carbon-neutral future and aims to obtain 100% of its electricity from renewable sources by 2030, as part of the Group Strategy 2030.
During 2023, Borealis continued to develop PPAs to source renewable electricity on a longer-term basis. In Sweden, Borealis signed a new onshore wind PPA with Axpo, a Swiss energy supplier and a new hydro PPA with Vattenfall. In Finland, Borealis signed two new PPAs with Axpo and Alpiq. And in Belgium, Borealis signed a new onshore wind PPA with Wind Aan de Stroom.
During 2024, Borealis intends to:
Health, Safety, Security and Environment (HSSE)
Circular Economy
Cost efficiency
Human Rights
For goals and planned key actions for 2024 and beyond, please refer to the full Combined Annual Report 2023.
Borealis aims to foster innovation, maximize value contribution and enable supply chain growth. It achieves this by applying its sourcing and logistics expertise, to ensure that the highest-quality materials and services are provided throughout the supply chain.
Sustainable procurement means caring about the environmental, social and economic impacts of the goods and services the Group intends to purchase. Borealis also aims to foster innovation, maximize value contribution, and enable supply chain growth by applying its sourcing and logistics expertise to ensure that the highest-quality materials and services are provided throughout our supply chain. It is of paramount importance that the organization is fully compliant with all applicable legal requirements, as well as with the Group’s internal safety, environmental protection, and human rights standards, when managing its supply chain.
By integrating sustainability requirements throughout its supply chain (for example through audits, assessments and sustainability criteria in sourcing), Borealis aims to drive positive change in the sustainability performance of its suppliers and contractors, while mitigating potential negative impacts. The Group purchases goods and services for all business areas including, among others, those related to raw materials, IT, consultancy, engineering and logistics.
To drive value creation and foster synergies, OMV and Borealis have set up an integrated procurement organization and adopted a One Procurement Directive, which applies across the OMV Group, including Borealis. The Directive sets out the framework, principles, and rules for managing procurement activities and establishes the minimum requirements within the procurement process. A Sustainable Procurement & Supplier Innovation department was also established in 2022, to help meet OMV Group’s sustainable procurement ambitions and targets for 2025 and 2030.
Within Borealis, Polyolefins (PO) is responsible for procurement at Group and location level, with the exception of Base Chemicals (BC) trading activities, which the BC organization manages directly. Procurement’s organizational structure includes separate areas for chemicals and packaging, business services and operations and materials, as well as engineering project services.
Borealis follows a defined process when purchasing goods and services to ensure legal compliance, product quality, consistency, reliability of supply and sustainability. To get the best value, Borealis applies the Total Cost of Ownership philosophy. This requires the Group to consider the full costs it will incur during the lifetime of the product or service, rather than looking only at the upfront cost. When defining and adopting sourcing strategies, Borealis also considers market and technology intelligence and supplier innovation potential.
After defining Borealis’ procurement needs (including scope and specifications), reviewing the supply market and defining the sourcing strategy, the suppliers are selected. This includes the use of questionnaires and on-site audits for supplier qualification.
Every year, Borealis defines a set of strategic suppliers based on criteria such as revenue, innovation, impact on operability and potential for growth. The Group uses a supplier relationship management process for strategic suppliers (see below), which combines KPI-based performance management with supplier segmentation and professional knowledge of business risks. Activities with strategic suppliers can include top management meetings and common innovation programs. On a monthly basis, Procurement monitors the performance of around 100 strategic suppliers, evaluating risks and taking mitigating actions where needed.
The procurement process takes account of sustainability aspects, and these are reflected in Borealis’ Ethics Policy for Business Partners, which is published on the Group’s website. It defines the Group’s approach to key aspects of business ethics when sourcing, such as anti-corruption, anti-slavery, compliance and child labor, as well as health, safety and the environment. New major and strategic suppliers must agree to the policy by signing the contract.
Policies and Commitments
To mitigate supply chain risks, including forced labor, slavery, human trafficking and corruption, Borealis requires suppliers to meet relevant legal requirements and the Group’s rules and standards. Suppliers are obligated to fully comply with Borealis’ Code of Conduct, with supply chain partners also being required to sign the Code of Conduct. Suppliers must accept the Group’s General Conditions of Purchase, which further detail Borealis’ business standards (for example on labor rights), as an integral part of its contractual agreements. Borealis reserves the right to terminate relationships with suppliers if it discovers non-compliance with its policies or if suppliers fail to address non-compliance in a timely manner.
Supplier Relationship Management (SRM)
The Group developed a new SRM framework in 2022 and rolled it out in 2023, including the contract management procedure. The framework supports Borealis in managing its strategic relationships with the pool of suppliers that show the most potential and bear the most risk within the supply chain. Within the framework, sustainability is part of the supplier segmentation and supplier portfolio management processes.
To become a leader in the circular economy, Borealis needs to help its suppliers unlock their potential for creating innovative solutions. The supplier innovation process is therefore a crucial component of the SRM, strengthening partnerships between the business, Procurement and suppliers. During the supplier segmentation process, the Group measures suppliers on their innovation potential. The Group also has a heavy focus on innovation in its interactions with strategic clusters of suppliers, in order to leverage the most important suppliers for the organization.
Prequalification
As part of its supplier prequalification process, Borealis collects information directly from potential bidders in SAP Ariba and uses it to evaluate their compliance with the Group’s HSSE and sustainability requirements. Only those that meet the standard are considered for future collaboration.
Prequalification is based on a standardized list of elements and objectives that align with:
Suppliers located in a high-risk country are asked to submit a positive TfS Audit and Assessment report, which is particularly important for suppliers of chemicals and packaging. Borealis categorizes high-risk countries by considering human rights, environmental and ethical aspects.
Supplier Selection
Following prequalification, Procurement and business representatives select the best suppliers, based on a predefined set of commercial and technical criteria during a tender process. To support Borealis’ Sustainability Targets 2030 and the Sustainable Procurement ambition to give sustainability a “value” in sourcing, Procurement has included two criteria in the commercial evaluation to assess bidders’ sustainability performance. These criteria are the supplier’s EcoVadis score or participation in a Together for Sustainability audit and participation in the climate change questionnaire either directly at our request or via CDP Supply Chain.
Borealis’ Procurement organization conducts full-scope supplier audits either as part of the prequalification process or during contract execution. The aim is to measure suppliers’ performance and define actions that will enable them to optimize their performance and meet Borealis’ requirements. The audits pay special attention to the financial stability of suppliers, their strategy and organization, supply chain, sustainability (such as human rights, carbon footprint management, environmental management, certifications, and social responsibility), and their cybersecurity performance. All full-scope audits run by Deloitte are done remotely.
Each audit finding classified with a red flag will be followed up and analyzed by Procurement in collaboration with business representatives and any other relevant function, such as HSSE, Legal, Internal Audit, and Compliance. Information on the outcome of the audit is made available to the supplier, and the supplier is requested to submit a corrective plan with concrete measures and an implementation timeline. The full scope audits performed in 2023 resulted in no follow-up measures.
In 2023, based on the feedback received from suppliers and internal stakeholders, Borealis revised its audit approach. The scope of the audit is now defined based on a set of criteria, such as the type of goods and services purchased from the supplier, the supplier’s size, and whether it is a single source supplier. This new approach has increased Borealis’ flexibility to adjust the audit scope to reflect the risks related to the supplier and dramatically reduce the effort for low-risk suppliers.
In addition to the full scope audits, Borealis also performs Together for Sustainability (TfS) audits on selected raw materials suppliers. These audits are performed on site and in 2023 there were 8 audits. All of the audits resulted in corrective action plans and the suppliers have three years to implement them.
Understanding a supplier’s risk is an important factor in deciding whether and how Borealis does business with it. Since 2019, the Group has received daily alerts about its registered suppliers through SAP Ariba. These alerts enable Borealis to monitor supplier risks in four categories: Environmental and Social, Finance, Regulatory and Legal, and Operations. The risk alerts help the Group to apply a preventive risk management process. Furthermore, OMV has a screening process to ensure that parties sanctioned by the EU or international organizations, such as the United Nations, are not accepted as procurement partners.
TfS is a joint initiative and global network of 50 member companies (2023 status), which sets global standards for the environmental, social and governance performance of the chemical industry’s supply chains. It enables its members to implement sustainable procurement by sharing the results of standardized supplier audits and assessments, performed by independent experts. TfS is based on the principles of the UN Global Compact and Responsible Care. Since Borealis became a fully consolidated member of the OMV Group, its membership of TfS has been elevated to OMV Group level.
OMV Group Procurement has set the following TfS-related targets:
1) TfS Audits are conducted by an approved external auditor and can be on-site, remote or a hybrid of the two. They cover a single or combined business location such as a production site or warehouse. Sustainability performance is verified against a defined set of audit criteria. // 2) TfS Assessments are conducted by TfS partner and service provider called EcoVadis, a global leader in CSR assessments, via a secure online platform. The assessment questionnaire is adapted to the size, country of origin, and business sector of the company being assessed and results in a score at the end (the EcoVadis score).
Borealis aims to continuously manage and decrease the carbon volume of its purchased goods and services. Working with its suppliers can enable the Group to define joint low-carbon initiatives, to continuously decrease carbon emissions in the supply chain and meet its Paris Agreement commitments.
As part of its CDP Supply Chain membership, in 2023 OMV Group invited 395 suppliers to respond to the CDP’s climate change questionnaire. Of these, 188 were Borealis’ suppliers. The suppliers were selected based on the spend, estimated carbon emissions and the carbon intensity of their goods and services. In addition to reporting their emissions, suppliers were asked whether they have carbon reduction targets and to share any initiatives or projects to reduce carbon emissions that they would like the Group to join.
OMV Group works with its suppliers to improve their overall sustainability performance. For instance, in 2023, individual meetings and webinars were offered to suppliers to help them understand the requirements of the CDP climate change questionnaire or the TfS Assessment, and why this information is important to the Group. Additionally, sustainable and low-carbon procurement were included in the agenda of the annual strategic supplier meetings.
Borealis aims to support the communities around its locations and to foster their economic development. The Group defines local procurement as when the supplier and the ordering entity are in the same country. Local procurement strengthens the local economy, meets community expectations and has helped to reduce business disruption for Borealis in recent years. It also has the potential to reduce the Group’s carbon footprint, particularly due to shorter transportation distances. Borealis’ spend with local suppliers in 2023 was 55.2%.
Following the previously reported case of alleged human trafficking practices by a subcontractor at Borealis’ propane dehydrogenation plant construction site in Kallo, Belgium, the Group implemented the following measures at the beginning of 2023 to prevent it from happening again:
In 2023, Borealis continued to actively engage with its suppliers and its own buyers on sustainable procurement and supplier innovation practices. Over 200 procurement colleagues from Borealis, OMV and OMV Petrom participated in several awareness sessions.
In October 2023, the Group organized its second Supplier Sustainability and Innovation Day, to interact and exchange experiences with suppliers and build a stronger and more sustainable supply chain. More than 350 suppliers and employees attended the event, which addressed topics such as climate change, the circular economy and innovation.
1) The two new suppliers screened in 2023 did not meet the environmental requirements due to missing ISO Certificates and environmental/HSSE policies. Thus, they were rejected during the prequalification phase and were not invited for tenders.
1) The three suppliers were assessed with less than 30 points in the EcoVadis rating. The negative social impacts identified relate to the dimensions Ethics and Labor.
Chemicals play a vital role for Borealis, giving unique product properties which enable the Group to produce value-added specialty products. A reliable supply of these materials, on time and in accordance with the agreed quality and quantity, supports Borealis’ operational excellence. Packaging materials are needed for all solid products that Borealis delivers to customers. They are essential for protecting Borealis’ goods in transit and for preventing spills such as pellet loss into the environment. They also help customers to dose the goods accurately and are a vital means to support Borealis’ ambition to continuously reduce transport energy consumption. The Group continuously looks to balance the cost of packaging with the volume of material used and its functionality, such as the packaging’s ability to prevent damage, contamination or pellet spills. Packaging is an important part of the Group’s approach to contributing to a circular economy, and where possible, Borealis uses reusable packaging, such as pallets, and its own recycled material to produce packaging material.
With a prolonged and deeper economic downturn and weak market demand, Borealis started a cost reduction program called Chem 2.0 in September 2023, with the aim of creating higher value from renegotiated chemicals contracts with reduced prices.
To achieve this, the Group set up a project team with chemicals category managers fully in charge, including peer coaching by OMV Procurement sparring partners and business involvement through Borealis’ Product Asset Management team (PAM). The project has involved baseline setting and negotiation preparation training, including two external workshops. The project completed in mid-December 2023.
Borealis uses dedicated procurement teams to source its raw materials and packaging for polyolefins, primarily from suppliers in Europe, North America, Japan, China and South Korea. The Group maintains a list of prequalified suppliers. Safeguarding competitive pricing in a high-inflation environment for raw materials, goods and services was the major challenge throughout the year, both in C&P and other procurement activities.
The European Council Directive 94/62 Consolidated reinforces the mandatory requirements for packaging allowed on the EU market. The Directive also considers other measures such as environmental taxation, which will increase taxes on waste packaging. Under the Directive, EU member states should take the necessary measures to attain the following targets:
Borealis works with Pallet Return System (PRS), an initiative of the polymer industry, dedicated to providing full-service, sustainable pallet pooling solutions. PRS collects and repairs pallets and brings them back in a pool for all their customers. Approximately 50% of all Borealis’ used pallets are returned and reused in the pool. In 2023, PRS collected 497,000 pallets from our European customers.
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.
In 2023, as part of the new organizational set up, technical procurement in Borealis is covered by two procurement units: Operations & Materials and Engineering. Operations & Materials encompasses all procurement activities related to the maintenance and growth investments of Borealis’ assets globally. This includes engineering, construction contracting and procurement of equipment, materials, industrial services and spare parts.
Major engineering services or engineering, procurement, construction and management contracts are sourced globally, while maintenance services are predominantly sourced within Europe.
In 2024, the Integrated Procurement Organization will focus on:
Polyolefins (PO)
Base Chemicals (BC)
For goals and planned key actions for 2024 and beyond, please refer to the full Combined Annual Report 2023.
Borealis’ Base Chemicals and Polyolefins businesses transport up to 8.1 million metric tons of finished products to the Group’s sites or customers each year. This means that potential negative impacts on the environment and people can occur, due to CO2 emissions and spills or losses during transportation.
Borealis outsources its logistics services to external suppliers. When awarding contracts, the Group takes costs, service, quality, safety and sustainability into account. The weighting applied to each factor depends on the business’s needs, as well as customer requirements, the type of products transported (dangerous or non-dangerous) and the business environment. However, logistics services must always meet Borealis’ safety, ethical and environmental standards.
The primary sustainability aspects of logistics that Borealis needs to address are:
Each business area sources its own logistics requirements, with the respective Senior Vice President having overall responsibility for their organization.
In Base Chemicals, logistics contracts for all modes of transport (sea, pipelines, rail, trucks and storage facilities) are managed by the Supply Chain Manager, reporting to the Head of Optimization & Supply Chain, with logistics coordinators in Belgium, Sweden and Finland responsible for the day-to-day execution of the transport agreements. The Supply Chain team also includes a Transportation Safety Expert, responsible for vessel vetting, transportation safety audits and incident management.
In Polyolefins, global logistics sourcing is part of the Product Asset Management and Supply Chain (PAM/SC) organization, and there is also a strong link to the procurement organization. The sourcing function works with four category managers, who are responsible for bulk transport, palletized transport, maritime (container) transport and external warehouse management.
The PAM/SC organization also includes the site logistics organization, which is responsible for on-site activities such as loading, storage, dispatch, packaging and order execution. Each major site has a logistics manager reporting to a corporate site logistics manager, to align processes and procedures.
Stakeholders such as sales and planning are part of the sourcing team and take part in defining the strategy and goals. This structure means they are also informed on the actions taken.
Polyolefins
Polyolefins has approximately 130 providers of road, container and maritime transport, warehousing and on-site logistics services. Approximately 40 partners are responsible for 80% of the business, with the largest accounting for 7%.
All of Polyolefins’ partners are either Safety & Quality Assessment for Sustainability (SQAS) qualified, certified by maritime or other qualification bodies, or are qualified via EcoVadis, the world’s largest provider of business sustainability ratings.
Base Chemicals
Base Chemicals has long-term strategic logistics partnerships for its sea transport, pipelines, rail and truck deliveries. These partners are encouraged to obtain sustainability ratings from EcoVadis, while road transport companies must have an SQAS assessment.
Borealis tracks the fleet’s safety performance and energy efficiency, as well as promoting the use of environmentally friendly bunker solutions. The Group also uses its dedicated time charter vessels, Navigator Aurora and Oceanus Aurora, as well as shorter-term time charter options (lasting six to twelve months) to source US-based ethane or liquefied petroleum gas (LPG) for its flexible crackers in Stenungsund (Sweden) and Porvoo (Finland).
1) Total Base Chemicals volume transported (all INCOTERMS) is 7.6 mn metric tons, of which 4.8 mn metric tons were transported via own contracted transport. // 2) Due to the divestment, only the first half of the year to June 30, 2023 is reported. The figures are, therefore, not fully comparable.
Improving Delivery Reliability
During 2023, the Polyolefins organization achieved improved reliability in its deliveries to customers, with the proportion arriving on time up to 4 percentage points higher than last year, and both long-distance and short-distance deliveries improving. This was primarily the result of reduced market demand resulting in more capacity, as well as Borealis’ increased focus on intermodal routes.
Securing Charter Vessel Capacity for BC
As noted above, Borealis uses short- and long-term VLGC time charter agreements to transport LPG from the US to the crackers in Finland and Sweden. The volumes transported in this way increased from 2022, as the war in Ukraine led Base Chemicals to stop sourcing some feedstock for the Finnish cracker from Russia, with these volumes replaced by US sources. The total estimated volume shipped in 2023 was 1.6 million metric tons.
Since June 2023, Borealis has operated a newly built time charter vessel to support its LPG needs. The new vessel has a dual-fuel option, allowing the engine to run on LPG instead of conventional gas-oil-based bunkers, helping to reduce the Group’s environmental footprint.
Projects to Reduce CO2 Emissions in Polyolefin Logistics
During 2023, Borealis continued its strategy to increase its use of low-emission transport modes, such as electric trucks and the European waterway system. Polyolefins also increased its volumes with partners who are part of the European Responsible Care® program.
Logistics Set Up for Renewable and Chemically Recycled Feedstock Sourcing
During 2023, Base Chemicals further developed its supply chain solutions for transporting renewable feedstocks such as bio-diesel and bio-propane to its production locations in Porvoo (Finland), Stenungsund (Sweden) and Kallo (Belgium), as well as for customer deliveries. A dedicated supply chain solution has been set up for chemically recycled feedstock from Renasci N.V. to the Porvoo cracker, via a multimodal solution with iso-containers and vessels.
Operation Clean Sweep
Borealis is fully committed to zero pellet loss and therefore takes part in Operation Clean Sweep® (OCS), an international program to mitigate pellet loss. During 2023, based on a lesson learned, Borealis increased the number of spot checks at its locations on the quality of bulk truck cleaning, in relation to pellet spills during filling. All reported deviations are entered into Borealis’ carrier performance rating system, which also includes hauler consequence management.
Improving Polyolefin Circularity through the PackCycle Project
Borealis launched the PackCycle project in 2020, with the aim of improving the circularity of the flexible packaging used in transporting and distributing the Group’s products to its customers, such as plastic sheets used in pallet packaging. As part of this, Borealis continues to support the adoption of post-consumer recycled (PCR)-based plastic sheets at sheet producers and users, in line with its EverMinds™ ambition to accelerate action on circularity of plastics across the value chain. During 2023, the Group successfully introduced PCR material content in the coverhoods and topsheets for its end products as well as for its form-fill-seal packaging for non-prime materials. For 2024, the focus will be on further introduction of stretch hood film for packaging.
Transportation safety is key for Borealis. The Group requires all logistics partners to report the following accidents and spills to the environment that occur during transportation:
Within 24 hours of an accident, the logistics partner must send a report to Borealis which includes information on the cause of the accident. The Group collaborates closely with its supply chain contractors and has a process to define improvement actions for every incident.
Borealis looks to continuously improve transport safety in different modes of transport, as a submitting member of the Oil Companies International Marine Forum, Chemical Distribution Institute and European Barge Inspection Scheme. As part of this, the Group follows an annual transport safety audit plan. In 2023, Borealis performed four transportation safety audits. Borealis also carries out regular vetting inspections on sea-going tankers and inland barges, with every vessel and barge requiring Borealis’ approval. An online vetting system, called Mainstay, is used to vet the vessels and barges in BC’s supply chain. Contracted shipping companies also regularly undergo a Tanker Management and Self-Assessment audit.
In Polyolefins, the logistics safety boost plan resulted in further improvements in logistics safety, with a 30% reduction in severe and medium incidents. This led to Borealis finishing runner up in an HSE excellence award for 2023. The improvement was mainly due to increased visibility on site and Borealis continues to work with its logistics partners to achieve further gains. During 2023, the Group also further strengthened its concept for on-site logistics safety audits, with respect to both safety processes and working practices.
Borealis tracks the transport safety performance of its logistic providers using a key performance indicator (KPI) based on definitions provided by CEFIC to classify incidents.
Spills or Losses During Transportation
Spills of hydrocarbons are potentially dangerous and may create significant exposure for people and the environment, given the nature and volumes of the products being moved. Borealis therefore has extra-high precautionary safety measures, which it follows up with supply chain contractors to mitigate the risks of spills, including pellet spills.
1) Incident for PO also includes near miss incidents. // 2) Due to the divestment, only the first half of the year to June 30, 2023 is reported. The figures are, therefore, not fully comparable.
Wherever possible, Borealis seeks to transport products off-road via rail, barges, vessels or pipelines, and aims to optimize logistics by using terminals which are closer to the customer, requiring shorter transport distances.
Deep sea shipping produces significant emissions of CO2 , sulfur oxides and nitrous oxides, which will be subject to stricter global targets in the future. From 2024, an ETS for maritime operations will be introduced for all shipments calling at European ports. When contracting new long-term shipping capacity, a key decision element therefore is the option to run ships on cleaner gas fuels than traditional gas-oil-based bunkers.
1) According to GLEC calculation methodology. For PO, maritime emissions come directly from shipping lines. // 2) Pipeline is only applicable for BC, Air is only applicable for PO. A CO2 tracker has been implemented in BC, making the reporting more accurate. // 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.
In total, around 31% of Borealis’ European polyolefins shipments are transported by intermodal transport, with the result that road transport generates the large majority of Borealis’ emissions from logistics activities.
The Group is trialing LNG, hydrogen and electric trucks to replace trucks using diesel, thereby reducing emissions from road transport.
Polyolefins
Base Chemicals
