Circular Economy

See how the circular economy can become a winning formula for any business 

The circular economy can now become company strategy

The circular economy can now become company strategy Image: Getty Images/iStockphoto

Alfred Stern
Chief Executive Officer, OMV AG
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Circular Economy

This article is part of: World Economic Forum Annual Meeting
  • Climate change demands new solutions. For businesses, this means undertaking a huge transformation.
  • Sustainability is key to becoming a net zero company.
  • Systematic change cannot happen in isolation: we must move towards a decarbonized society with all our stakeholders.

The world is changing - and so is business itself. Leaders globally are waking up to the realization that global warming requires urgent action - and everyone’s contributions. This requires a new interpretation of how we partner and how we plan.

For OMV, these forces have also triggered a shift in how we build our company’s future. Our company was founded in 1956 and for many decades we were well known as an oil, gas and petrochemical company. Like many companies, we must build on an existing legacy and pivot to a more sustainable business model, becoming net zero in all three scopes by 2050 at the latest.

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In our case, this means we must reduce the use of resources, such as fossil fuels, by replacing them with alternatives. At the same time, we need a quicker way to drive forward the circular economy.

These aspirations, though, are just the first step to become a leading provider of sustainable fuels, chemicals and materials. Execution will require a deep understanding of practical implications and a willingness to identify and adapt to a changing landscape of new business opportunities.

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Our planning and analysis can be a help to any business looking to make this transition. Here are three business cases that drive home how new thinking and commitments can lead not just to implementing sustainable solutions, but a chance for climate progress at scale.

1. Focus on sustainable mobility

OMV produces bio-based fuels that have nearly identical properties to fossil fuels. For example, we have been producing sustainable aviation fuel from used cooking oil since 2022. We see a lot of interest in the industry for this fascinating technology. First, off-take agreements have been signed with major airlines. While still being in an early stage, we expect the business to grow. By 2030, our goal is to produce approximately 1.5 million tons of sustainable fuels and feedstocks annually.


2. Think circular

Renewables and energy efficiency can only tackle 55% of the greenhouse gas emissions needed to meet the Paris Agreement. Thankfully, experts have found that rethinking how we manage resources - and embracing circularity – can help tackle the remaining half.

To this end, OMV is building circular economy solutions that convert waste into valuable feedstock. Together with a partner, we are constructing the largest sorting facility for plastic waste in Europe. Operations are expected to start in 2026 in Walldürn, Germany. This enables the processing of used plastics that would otherwise end up in landfills or incineration plants. This feedstock can be converted into chemical feedstock with our patented chemical recycling technology: ReOil. This approach aids in resource conservation and leads to a substantial reduction in CO2 emissions.


3. Drive solutions for sustainable energy

“Re-invent essentials for sustainable living.” This simple phrase defines our purpose but also stresses the importance for any innovator of crafting solutions that empower more individuals to experience well-being on a daily basis with the smallest carbon footprint possible.

To this end, OMV has committed to climate-neutral geothermal heat. Recently, we established a joint venture to make geothermal district heating a reality for up to 200.000 households in Vienna in a few years. As a global operating company, OMV draws upon extensive knowledge in the fields of geology and geophysics, as well as drilling and production technology, based on decades of exploration and production experience. It makes no difference whether we search for, find and use crude oil, natural gas or – as in the case of geothermal energy – hot reservoir water. Our initial capacity in the Vienna project will be 20 megawatts, with a continuous increase in performance, reaching up to 200 megawatts by 2030.

I believe that these examples show how we have made sustainability the starting point and the core element of our strategy. This is also reflected in our investment allocation: approximately 40% of our global investment budget until 2030 will go into sustainable projects.

At the same time, I am transparent when speaking about a fact that is not popular with everybody: the energy transition will not happen overnight. In our case, we estimate that the market demand for natural gas will remain over the next 20 years.

As a consequence, we need to responsibly balance short and medium-term goals. We will fulfil our responsibility to deliver a secure energy supply – nationally and internationally. Our approach is the gradual replacement of fossil-based energy sources through low-carbon solutions. The successful businesses of today enable us to diversify and scale up low-carbon businesses of the future.

My final lesson learned is that transformative change requires collaboration. To shift towards a decarbonized society, we must engage all stakeholders: investors, customers, employees, politicians, media and the public. Effective communication is crucial, anchored in a winning business model. Society must grasp and embrace the benefits. In these challenging times, I dedicate even more effort to dialogues with stakeholders.

I like to share optimism about the future. Despite global climate challenges, there lies significant opportunity. I believe that a company's success hinges on integrating sustainability for innovation and growth.

OMV is committed to this trajectory and I have full confidence that the business community recognizes sustainability as the transformative force for good that it truly is.

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The views expressed in this article are those of the author alone and not the World Economic Forum.

Related topics:
Circular EconomyNature and BiodiversityForum Institutional
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