Forest-Child Borregaard Has Turned the Tables on Dow

It’s 1980, and the global chemicals and plastics boom is in full swing. New linear low-density polyethylene films hit the plastic-bag scene and petrochemical and polymer plants spring up like weeds, at the expense of the environment. There are disasters, but nothing threatens the flaring stacks.

In Böhlen, near Leipzig, the chemical park is being reborn. Starved of investment and western equipment during years of Soviet control had left it a creaking tangle of rusty pipes and reactors, fuelled by a power plant burning lignite from nearby Saxony seams. Dow took over Böhlen in the mid-1990s and the site took centre stage as eastern Germany rediscovered its industrial heartbeat after reunification.

Today, there’s a shiny cracker and plants producing aromatics, butadiene, styrene, resins and aniline.

Some bits of the Soviet-era have passed the test of time: odd fragments of metalwork from that era still stand amongst the chemical plants, colourfully decorated by local painters and those artistically-inclined members of Dow’s maintenance teams.

The 1980s surge in chemical capacity that restored Böhlen’s fortunes was at the same time killing Borregaard in the forested lands of Norway 1,000 kilometres north. This ancient forestry, pulp and paper group had turned its hand to wood-based chemicals as a side hustle to use up byproducts. But oil was cheap, and the Norwegian group couldn’t compete with the Gulf Coast or Riyadh. Back then, few consumers cared about whether a chemical came from nearby forests or a well. Borregaard survived by switching from commodity products to specialty additives and ingredients used in coatings, pharma and nutrition.

The contrast between Dow and Borregaard was stark back in the 1980s. But so is the change in wind direction today.

Demands for more sustainability are sweeping through the chemical industry. The old Norwegian underdog now sees its glass half full, according to Borregaard CEO Per Sørlie. The company’s raw materials come from 100% sustainable, non-GM trees and are converted into lignin-based ingredients, bioethanol and biopolymers. And customer doors are swinging open, he said.

“It’s our time now,” Sørlie said in an interview with chemicalESG.

Although there are still parts of the portfolio to address from a sustainability point of view, on balance, Sørlie says he sees more opportunities now than in the last three decades combined.

The food flavouring chemical Vanillin, a substitute for the Madagascan vanilla pod, highlights changing market dynamics. Back in the 1970s, there were 8 producers of wood-based vanillin. Along came the benzene-derived synthetic version and all the players but Borregaard were wiped out. Borregaard survived because it was the only one that had found a way to use the considerable waste streams for biomaterials. Basically, it didn’t have to worry about turning a profit from vanillin.

Now it’s petrochemical-based vanillin that’s on the back foot as brands like Hershey have adopted “plant-derived” vanillin flavouring that sits between the pod and the artificial variety. The new category seeks to reflect that the vanillin originates from a natural source but is industrially processed. And Borregaard’s offering fits nicely into the category.

“There was always this saying, you can make anything out of lignin, except money,” he added.

It’s not a phrase you hear so much these days.

Of the two companies, Borregaard’s path to net zero now appears the easier, the more readable on the map. It’s Dow’s turn to be pushed to the edges of its comfort zone as it seeks to lower emissions and de-fossilize its feedstock.

Dow updated Böhlen once, and is setting about the task again. This time, it’s against a very different back drop.

If all goes according to plan, Böhlen will have a 120 kiloton plant advanced plastic recycling plant by 2025. A plot of turf has already been allocated on one side of the park where overhead pipelines take feedstock from the cracker to polymer plants in Schkopau 30 kilometres away and to Stade, another Dow park to the northwest.

The recycling project is a collaboration between Dow, engineering group KBR, and Mura Technology, which invented a process to return difficult-to-recycle waste plastic destined for incineration back into its original molecule. All this without the high-energy furnaces used in pyrolysis chemical recycling methods, according to Oliver Borek, Mura’s chief commercial officer.

The material is melted, shredded and hit by “supercritical” high-pressure water. Coming out the other end is naphtha or another liquid hydrocarbon, depending on requirements. This will be fed back into Dow’s Böhlen cracker that produces ethylene, propylene and other derivatives, in what’s been coined a circular economy for plastics. It’s a step up on all fronts from mechanical recycling, where a plastic bottle is melted and used again for the same purpose.

Dow had looked into advanced recycling internally but in the end opted to go with Mura. At this nascent stage of chemical recycling, it felt a start up could better handle the trial and error nature of the early years.

“There’s a lot of capital in this space. It’s focused on trying to get things going,” Borek said. Only a handful of the startups developing chemical recycling technology will make it to the proof of concept and commercialisation stages, where Mura has reached, he added.

Left: The three stages of advanced plastic recycling.

More than half of Mura’s plot at Böhlen will be taken up by materials preparation. Local recyclers hand over roughly-sorted plastics to Mura’s pro-sifters using magnets, shredders and optics to remove troublesome substances like chlorine, Borek said.

Dow started talking in earnest about the circular economy at the K trade fair in 2019, a year after CEO Jim Fitterling arrived. Since getting together with Mura in 2021, there have been several announcements on the key milestones so far, reflecting what is a journey into the unknown for a company built on the asset light approach to global mass production of plastics and highly profitable polymers used in coatings, adhesives, resins and many other applications.

A ship like this doesn’t turn easily. But the time for talking about net zero is over.

Dow hasn’t said how much the Mura plant will cost, but the final tab could well approach the $500 million mark. There are lingering questions, like: Will there be enough quality plastic waste available to roll this concept out? Will the European Commission officially qualify and recognise chemical recycling processes in the sustainable targets they set? And how will advanced recycled plastic be sold in the global market place, given it will be thrown into the mix and blended with the standard stuff?

That the US company is pressing on with the project without having all the answers and regulatory framework in place is very un-Dow like and reflects a cultural shift within the group.

“We had to make a choice. Either sit and wait until the legislation is there and have full certainty, or we go ahead,” Dow Advanced Recycling Director for EMEA and APAC, Marc van den Biggelaar, said in an interview. “The new Dow and the new thinking is kind of like we’re driving a speed boat while Dow has been the big oil tanker. Not everyone is on the speed boat yet.”

Importantly, CEO Fitterling most definitely is, according to van den Biggelaar. Dow is talking about rolling out Mura recycling plants globally and expanding capacity to 600 kilotons. The investment numbers could get very big.

First comes Böhlen, and Dow plans to make a final decision by the end of 2023.

As Borregaard’s Sørlie puts it: “You have to start doing something. Companies have to deliver on their ESG targets and the clock is ticking.”

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