Despite a prolonged sunset for oil and gas, the lack of a fully baked regulatory framework, and some recent weakening in political support for sustainability, OMV pledged to push ahead with its green agenda, regardless.
At the hands of CEO Alfred Stern, the Austrian company is undertaking the biggest transformation in its 68-year history. There’s even a new logo, the loop (see photo) reflecting progress toward circularity.
Under the plan, unveiled today at a capital markets day event in London, the legacy energy business will gradually pivot toward renewables, including geothermal power, solar, wind and EV charging stations.
The next bit sees the PhD Material Science and former DuPont executive return to his roots.
Stern, the former CEO of polymers maker Borealis, which OMV acquired, plans to build a chemicals platform that not only leverages the company’s strength in polyolefins but, maybe, ventures a little further afield into adjacent chemical markets, he told analysts.
“We need to put our foot down now when we believe we can take market positions,” Stern said.
Against the backdrop of general back-pedalling in curtailing oil-and-gas production, OMV’s green commitment raised more than one eyebrow among the analysts attending the event.
The Austrian company is budgeting for EU3.8b in annual organic investment over the 2024-2030 period, with 40-50% of that amount destined for new sustainable projects like SAF and HVO diesel. It’s targeting 1.4mmt of renewable base chemicals, whether that’s bio-based or derived from mechanical or chemical recycling.
Not all chemical companies are happy to proceed without a firm regulatory framework in place. Dow has long held-off making a decision on plans to build an advanced recycling plant in Böhlen, Germany using Mura Technology, citing the lack of a clear regulatory framework. To be fair, the European team at Dow appeared up for it, head-office less inclined to step into the unknown.
OMV is getting some comfort from its first incursions. Companies like Henkel and Unilever want to get ahead of legislation that will dictate how much recycled content their products or packaging will contain.
The same goes for Ryanair, which wants to increase deliveries of SAF, so OMV is ramping up production in Romania using waste cooking-oil. Next year, a 2% mandate for blending-in SAF will come into force. Ryanair wants to get to 12% by 2030.
Neste, Borealis and Covestro this month signed a deal to enable the recycling of discarded tires into plastic for auto parts. Via a chemical recycling process, the tires are broken down into base chemicals for making polycarbonates.
Stern also made the point that it’s a big world out there.
“We shouldn’t think we are alone here in Europe and the only ones driving this. The biggest investments in renewable power are in China. You will see in the Middle East tremendous investments into green hydrogen and renewables. It’s a global competition that’s going on.
“We will see changes moving forward because some of the areas we see more efficient technology and new things coming out. Rather than be a victim, it will be important to use that opportunity and drive the growth forward. But a smart strategy is built in a way to be flexible enough to adjust for potential changes in speed. That could be an acceleration or things take a little bit longer.”
The time now is to claim a space.”