Denmark-based investment group A.P. Moller Holding announced the launch of Vioneo, a new venture that will seek to develop and manufacture fossil-free plastic, with the aim of significantly reducing the carbon footprint associated with plastics production.

Despite many efforts to reduce their impact by making recycling more efficient and effective, fossil fuel-based plastics remain a major cause of pollution; experts say that only some 9% of plastic is recycled annually. Because traditional plastic is not biodegradable, much of it remains in the environment in one form or another for a very long time. Additional pressure to reduce plastic waste comes from many nations and local jurisdictions that have adopted regulations requiring consumers and businesses to cut down on the use of single-use plastics in the coming years.

Biodegradable plastics could help with that effort. Vioneo has designed a production method for fossil-free polypropylene (“PP”) and polyethylene (“PE”), both used in a wide variety of packaging. The company will be able to produce the materials at scale, using green methanol as a feedstock, ensuring biodegradability, A.P. Moller said. The production will be powered by renewable electricity, significantly reducing GHG emissions. The end-product will be 100% fossil-free and ISCC (International Sustainability and Carbon)-certified, suitable for applications across all sectors, including medical appliances, home goods, automotive and packaging, according to Vioneo.

Jan Secher, former CEO of Clariant AG and Perstorp Group, who has been appointed Chair of the Board of Directors of Vioneo, said:

“Vioneo represents a strategic shift in plastics production. By adopting advanced proven technologies and green methanol, we are addressing fundamental environmental challenges associated with conventional plastics, while simultaneously offering a significant opportunity for Europe to lead the defossilisation of the €5 trillion global chemicals and materials sector, securing a leading position for Europe in the transition. We are excited about the potential to lead this transformation and contribute to a more sustainable future for the plastics industry.”

The production plant and supply base will require an investment of nearly €1.5bn of equity and debt, A.P. Moller said, adding that the project’s success would be dependent on updated regulatory frameworks and policies supporting a competitive environment for fossil-free plastics, as well as better conditions for the European chemicals industry, such as lower energy costs.

In addition, success will require long-term offtake agreements with customers, and the support of a wide range of stakeholders. Vioneo is in advanced discussions with several major global brands from various industries, including healthcare, automotive, fast moving consumer goods, beauty and home products, A.P. Moller said.

The new company’s first facility will be in Antwerp, Belgium, which has a sizeable chemical industry, as well as a major port and access to renewable energy. The company hopes to take advantage of the region’s expertise in chemical production to develop its products. Alex Hogan, who previously served as Business Director at INEOS Olefins and Polymers, will lead Vioneo as its Chief Executive Officer.

Jan T. Nielsen, Chief Investment Officer of A.P. Moller, said:

“A.P. Moller Holding is committed to driving the transition to low-carbon and fossil-free sources by advancing green methanol production and its applications across various sectors. The launch of Vioneo marks a significant step in this commitment. With Jan Secher and Alex Hogan leading the initiative, I am confident that Vioneo is well-positioned to spearhead the shift towards a more sustainable plastics and chemicals industry. However, success also depends on other key stakeholders being willing to lean in together with us.”