In the loop: Bringing back returns to downstream leaders
The concept of a circular economy – a system built around the constant re-use and recycling of existing resources and materials – can be applied to any sector. But for the downstream industry, its significance goes one step further.
Refiners and petrochemicals operators are looking to revamp their business model towards more environmentally, and economically, sustainable production.
As the industry redefines a new ‘business-as-usual’ amid global economic uncertainty and growing demand for renewables, this is the perfect moment for operators to make a swerve to a circular economy, to optimise their impact on society, and their business growth.
Waste is a dirty word, except when it’s not
Fossil fuel output accounts for 10% of current global carbon emissions. And with the level of carbon dioxide in the atmosphere at its highest point in 800,000 years, there is strong scope for operators to loop these emissions into their circular economy.
A global US$1.6 billion carbon capture technology market is expected to soar to US$ 3.5 billion within the next five years, by trapping waste CO2, and depositing it where it cannot re-enter the atmosphere. Now a relatively new concept takes this one step further. Carbon Capture and Utilisation (CCU) also pulls CO2 from the atmosphere, but it then re-introduces it into the production process in place of hydrocarbons, essentially recycling it. While debate still surrounds the effectiveness of these new, energy-intensive technologies, the CCU is a valuable transition step away from the sector’s reliance on fossil fuels, and a sign of the potential of technology to shape a more circular energy economy.
Waste recycling technologies are also becoming increasingly advanced and are providing refiners with sustainable feedstock whilst reducing their reliance on fossil fuels.
Recovering energy from waste is both circular and a means of meeting the energy needs of a growing population.
A fully sustainable supply chain
Recycling the by-product of your production process extends past greenhouse gases. Increasingly refiners and petrochemicals operators are looking for new solutions to recover and recycle spent chemicals and catalysts, weaving them into the circular economy loop.
Heat and steam can also be captured to generate new power. Last July in the UAE, Esra Al Hosani, a technology specialist at ADNOC Offshore used her Cambridge research on the subject to investigate how to practically apply the circular economy to ADNOC’s business.
“The oil and gas industry is particularly interesting with regards to energy and water, because it is possibly the only industry that not only uses water, but produces it in mass quantities, and calls it waste. Water can never be ‘waste’”, she explains. As part of her model, waste gas is used to power facilities that treat this water, that can then be shipped – on tankers already transporting oil – to places in need.
Packaging the circular economy
Even the end-product can be re-introduced into the cycle. For over a decade, petrochemicals operators have been committing research and investment towards how plastics – a traditionally long-life, non-biodegradable product, can become part of this sustainable cycle.
One pioneer making moves in this field is BASF. As of 2025, the multinational chemical company has ambitions to process 250,000 metric tons of recycled and waste-based raw materials annually, through a combination of renewable feedstocks, new business models and new material cycles. Their ChemCycling project uses chemically recycled plastic waste to manufacture high-performance products on an industrial scale.
Leading UAE petrochemical company Borouge has also made large strides in its circular economy ambitions in recent years. Borouge has a dedicated Circular Economy Solutions business unit and its team at its Packaging Centre of Excellence in Abu Dhabi works to create innovative new packaging solutions that help drive circularity. These include advanced products which help converters to incorporate recyclates in end applications or switch to mono-material packaging which are designed to promote effective post-consumer recycling. Borouge has also recently introduced to its customers a new range of circular, premium polyolefins produced with renewable feedstock derived entirely from waste and residue streams called Bornewables™ from Borealis.
Changing consumer behaviour
But recycling can be a double-edged sword. It involves the transportation and sorting of used products, a process which in itself consumes energy, resources and contributes towards pollution.
In order for recycling to be truly beneficial, a crucial – and often overlooked – is shifting consumer behaviour. Sustainable consumption and awareness of recycling can be a barrier to achieving a truly circular economy. Singapore, for example, has identified public education as a key pillar of their national ‘Zero Waste Plan’.
Operators can play their part in setting standards at the source. Responsible consumer behaviour can be integrated across the production and distribution network, and ingrained as an important marketing and branding message.
Going full circle
As well as reputational value, promoting a truly circular economy can also increase overall production, and ultimately better business results. But a loop is continuous, and needs long-term commitment from all parties to create a self-sustaining, sustainable, cycle. Downstream business leaders need to take the lead in encouraging changes in consumer behaviour, and in changing their own attitudes and approach towards new products, processes and business models. This can be challenging, but those who take the leap will be the first to reap the benefits.
In the next era, the bravest thing we can do is work together. The result: a more sustainable, well-rounded, (business) environment.