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Statement of the Supervisory Board

Changes to the Shareholder Structure and Supervisory Board

As of November 2022, the Abu Dhabi National Oil Company (ADNOC) acquired the 25% share in the Borealis Group previously held by Mubadala. The Supervisory Board welcomes this development, which will further strengthen the strong bond between Borealis and ADNOC, and help intensify global expansion efforts. We anticipate constructive and fruitful co-operation with ADNOC and the OMV Group to assure the present and future success of Borealis as a leading international provider of innovative and circular polyolefins-based solutions.

As of February 2022, Saeed Al Mazrouei was appointed as the new Vice Chairman of the Supervisory Board; Alvin Teh joined the Supervisory Board, succeeding Musabbeh Al Kaabi. Subsequent to the shareholder change from Mubadala to ADNOC in November 2022, Khaled Salmeen superseded Saeed Al Mazrouei as Vice Chairman of the Supervisory Board. Khaled Al Zaabi joined the Supervisory Board, replacing Alvin Teh.


The Total Recordable Injury Rate (TRIR) per million working hours of 2.9 reported in 2022 falls short of the 2.3 TRIR recorded in 2021. While a TRIR of 2.9 remains world-class for the industry, further improvements must be made to reach the “Goal Zero” objective of no accidents or incidents whatsoever. The Supervisory Board trusts that the “B-safe” programme currently being rolled out across the Group will obtain the desired results.

Financial Results

In 2022, demand for Borealis polyolefins – particularly in the energy, healthcare and mobility sectors – remained solid, yet volumes were lower due to the global recession caused by the war in Ukraine, rising inflation and the lingering effects of the pandemic, including lockdowns in China. Borealis Polyolefins sales volumes were approximately 10% lower than in 2021, at 3.54 million tonnes, due to lower demand in the consumer products segment. In the first half year, polyolefin margins gradually dropped from the historic highs of 2021, with the descent accelerating around the third quarter. Low operating rates in the final quarter led polyolefin margins to recover slightly by year’s end, yet remained lower than at the start of 2022. While the Polyolefins operating profit declined from EUR 1,186 million in 2021 to EUR 526 million in 2022, the strong showing in the first half of the year produced an overall solid result.

The olefin industry margin declined at the beginning of the year to a low in March, rose in response to healthy demand in the turnaround season, and peaked in summer. In the second half of the year, the global recession lowered demand, thus narrowing the margin.

Borealis Base Chemicals delivered an operating profit of EUR 243 million, down from the EUR 309 million reported in 2021. Despite an increase in indicator margins, the financial result was negatively impacted by the Stenungsund cracker turnaround, less favourable sourcing costs due to the war in Ukraine, and lower demand, particularly in the second half of 2022.

Borealis Fertilizers sales reached 3.21 million tonnes in 2022 versus the 3.91 million sold in 2021. The decline is the result of lower demand due to high gas prices, and competitively priced urea imports to Europe. Melamine sales also decreased, from 143 thousand tonnes in 2021 to 84 thousand tonnes in 2022, due in large part to the combined effects of Chinese imports and the global economic downturn as of the third quarter.

Operating profit was supported by a strong contribution from the Borealis nitrogen business unit, and especially from Fertilizers, in which prices remained healthy despite soaring natural gas prices. Melamine faced sluggish demand and collapsing prices, particularly in the second half of the year.

The reduction in the operating result was nearly completely offset by an increase in the Borealis joint venture contributions, from EUR 595 million in 2021 to EUR 1,001 million in 2022. Borouge business performance was impacted by softer demand and lower sales prices. The Baystar™ result suffered from the full depreciation charge after the start-up of the cracker and its slow ramping up due to operational challenges. However, the positive one-off effects of the successful Borouge IPO, which contributed EUR 604 million to the result, and the re-measurement gain of EUR 266 million from the disposal group related to the ongoing divestment of the nitrogen business unit, helped compensate for the lower business result. The net profit of EUR 2,111 million is the highest ever achieved by Borealis.

Supervisory Board

Acquisitions and Divestments

Borealis recently acquired a majority shareholding position in Renasci N.V., having gradually increased its share from 10% in 2021, to around 27% in November 2022, and subsequently to 50.01% as of January 2023. Belgiumbased Renasci is a provider of innovative recycling solutions and a key strategic partner in the area of chemical recycling.

The divestment process of the Borealis nitrogen business is nearing completion. A binding offer received from EuroChem in February was rejected shortly thereafter, following assessment of the consequences due to the war in Ukraine and accompanying sanctions in place. In June, Borealis received a binding offer from leading European player AGROFERT that assessed the business on an enterprise value basis at EUR 810 million. Pending regulatory approval, closing is expected for the first quarter of 2023.

In June, Borealis increased its shareholding in Rosier S.A. from 77.47% to 98.09% after converting EUR 55 million into equity of Rosier S.A. In September, Borealis and the YILDRIM Group’s YILFERT Holding signed an agreement for the acquisition of Borealis’ shares at a valuation of EUR 35 million. Borealis completed the divestment process on 2 January 2023 by divesting all formerly owned shares in Rosier S.A.

Borouge Initial Public Offering (IPO)

Borouge, the strategic joint venture founded by Borealis and ADNOC in 1998, became the largest-ever IPO in Abu Dhabi after being listed on the Abu Dhabi Securities Exchange (ADX) in June 2022, drawing USD 83 billion in orders and raising over USD 2.0 billion in gross proceeds. The Supervisory Board congratulates Borouge on this landmark IPO, which underscores ADNOC’s role as a growth enabler in the UAE, and solidifies Abu Dhabi’s position as a favoured destination for global investors. Borouge is poised to play an even greater role in driving growth for the Borealis Group in the Middle East and Asia.

Corporate Strategy and Purpose

Following a year of transformation under the new ownership structure in 2021, Borealis launched in 2022 the Borealis Strategy 2030, a strategic evolution centred on sustainability. It is supported by two main pillars, geographic expansion and company transformation, and sets new and more ambitious targets for decarbonization and the production capacity of circular products, such as recycled and renewable-based polymers as well as renewable hydrocarbons, including the ISCC Plus-certified Borvida™ portfolio of circular base chemicals launched in 2022. The customer-centric approach to speeding the transformation to a circular economy of plastics is expressed in the strategy’s purpose, “Re-inventing Essentials for Sustainable Living”.

Global Growth Projects

Despite geopolitical strife and a challenging macro-economic environment, Borealis has made good progress on its largest global growth projects in 2022. Two joint ventures, Borouge and Baystar, are crucial to fulfilling its strategic aim of doubling polyolefins production capacity in MEA, Asia and North America by 2030. Ground was broken in February 2022 for Borouge 4. This new, USD 6.2 billion facility located at the Borouge complex in Ruwais (UAE) will help ensure the reliable supply of differentiated polyolefins to customers in the MEA and Asia, and will also supply feedstock to the adjacent TA’ZIZ Industrial Chemicals Zone. The fifth polypropylene (PP) unit, PP5, was also started up in February. It increases total Borouge PP capacity by over 25%, to 2.4 million tonnes per year. The new PP5 leverages the proprietary Borstar® technology to deliver greater quantities of polymer-based material solutions for the infrastructure, energy, agriculture, healthcare, mobility and advanced packaging markets.

The Baystar joint venture with TotalEnergies brings Borstar to North America for the first time, and is currently the largest Borealis growth project on this continent. The new ethane-based steam cracker with an annual production capacity of one million tonnes of ethylene was successfully started up in July 2022, and currently supplies feedstock to Baystar’s existing polyethylene (PE) units. It will also supply ethylene to the new, 625,000 metric-tonne-per- year Borstar® PE unit after completion and ramping up.

While progress was made in the first half of 2022 at the new world-scale propane dehydrogenation plant (PDH) in Kallo (Belgium), construction was halted after misconduct on the part of the site’s contractor, IREM, was uncovered. Borealis suspended, then terminated all contracts with IREM and its subcontractors due to non-compliance with fundamental contractual principles. On-site work resumed in October after a re-tendering process. Start-up of the new PDH plant is expected in the second half of 2024. Borealis has zero tolerance for non-compliance in all aspects of its operations and has since implemented extensive controls and monitoring measures to ensure full future compliance.

Plastics Circularity

Borealis is at the forefront in driving the industry transformation to circularity. In addition to boosting its current annual production capacity of circular products to 1.8 million tonnes by 2030, Borealis aims to ensure that by 2025, 100% of its consumer products will be recyclable, reusable, and/or made using materials from renewable sources. The Company’s dedication to circularity is best embodied in its EverMinds™ platform, which unites value chain partners and other stakeholders in innovation and collaboration. A large number of polymer-based applications designed for eco-efficiency were launched in 2022: grades from the Bornewables™ portfolio of premium circular polyolefins were used in value-chain collaboration to develop rigid food packaging, plastic bottles, PE-X and PP-RCT pipes, and even a baby pacifier. Other novel applications include PE monomaterial pouch solutions and flexible packaging formats incorporating ever-higher levels of post-consumer recyclate.

Borealis is picking up the pace in mechanical recycling. Planning is underway for the construction of an advanced recycling plant on a commercial scale in Schwechat (Austria) to supplement its three existing polyolefin recycling operations in Europe. With an annual production capacity of over 60 kilotonnes, the plant will be based on the proprietary Borcycle™ M technology. Providing larger volumes of high-quality recyclate to the market is essential to closing the loop on plastics circularity.

The transformational Borcycle™ C technology uses chemical recycling to turn plastic waste streams into virgin-level grade materials suitable for demanding applications, such as in healthcare and food packaging. At present, the pyrolysis oil used in the chemical recycling process is sourced from Renasci N.V. A feasibility study for the erection of a new chemical recycling unit at Borealis’ production facilities in Stenungsund (Sweden) is currently underway. These activities augment ongoing co-operation with OMV and its patented ReOil® technology.

Value Creation through Innovation

The groundbreaking Borstar® Nextension Technology, a step change for performance-based polyolefins, was launched in 2022. This universal solution combines Borstar technology and single-site Borstar Nextension catalysts (manufactured at a new Borealis plant in Porvoo, Finland) to improve the properties of PP, and to enable production of an abundant range of tailored polyolefins. The Nextension Technology encourages design for recycling because it delivers monomaterial solutions that can replace conventional multi-layer applications.

The Borealis Group employs around 500 scientists and researchers working primarily at the Innovation Headquarters in Linz (Austria) and the two innovation centres in Stenungsund and Porvoo. Value creation through innovation is best evidenced by the growing number of Borealis Group patents. Borealis maintains its leadership among Austrian companies when it comes to patent filings, with 128 new priority patents filed at the European Patent Office in 2022.

Energy and Climate: Driving Decarbonisation

Two key goals guide decarbonization efforts: reducing Scope 1 and Scope 2 emissions from 5.1 million tonnes per year (from a 2019 baseline)1) to 2 million tonnes by 2030; and ensuring that by 2030, 100% of the electricity used in the Polyolefins and Hydrocarbons businesses is of renewable origin. Three new, long-term power purchase agreements (PPA) were signed in 2022 to supply wind energy to help power Borealis’ production operations in Finland, Sweden and Belgium; and the first-ever hydropower PPA to augment the electricity supply for Schwechat operations. Two new photovoltaic arrays have also been erected to power portions of the Group’s operations in Linz and Schwechat. In September, Borealis announced that it had initiated a joint industrial-scale project with energy company VERBUND to use green hydrogen to produce fertilizers, melamine and technical nitrogen products.

1) Emission reduction targets calculated on the basis of a 2023 divestment of the Borealis nitrogen business comprising fertilizers, melamine and technical nitrogen products.

Economic Development and Outlook for 2023

Safety must remain the top priority for the Borealis Group. The Supervisory Board renews its call for heightened vigilance with respect to health and safety on the job. We have full confidence that measures such as the “B-safe” programme will produce even better safety results, and in particular a lower number of total recordable injuries (TRI).

The Supervisory Board congratulates the Borealis Executive Board, its senior management and all Borealis Group personnel for their efforts in achieving a record net profit under challenging market conditions. However, due to a confluence of geopolitical, economic, and market forces, we expect the general business environment to become more, rather than less, challenging over the next several years. We are confident that the strong foundation of Borealis – its people, safety and innovation mindsets, and customer-centric orientation – will continue to support sustainable business growth, particularly in the circular sphere. By staying true to its commitment to re-inventing essentials for sustainable living, Borealis will continue to provide innovative chemical and plastics solutions which add value to society and our everyday lives.

Vienna, 28 February 2023
Supervisory Board

Combined Annual Report 2022 (PDF)

English and German Version available

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This online report contains only highlights and excerpts from Borealis’ Combined Annual Report 2022. Only the entire report is legally binding and it must be read in full to gain a comprehensive understanding of Borealis’ performance and activities in 2022. A copy of the Combined Annual Report 2022 can be downloaded here.