very pleased to have Agustin Izquierdo, the CFO of LyondellBasell, with us this morning. I'll let you know, you've got a few slides we'll open up, and then we'll kind of just keep it informal and kick it off. With me also is Dan Lungo, our IG credit analyst. If you don't know Dan, you should. He is a wealth of knowledge, and I think for BofA specifically, I think the fact that we have both credit and equity on a lot of this stuff, offers a lot of value for clients. If you haven't met Dan before, please introduce yourself as well. With that.
Excellent. Thank you very much. Thank you, Matt, Dan, and everybody joining here in the room and on the webcast. Very happy to be here. Yes, as we mentioned, I'll go through a few slides. I want to cover obviously, the recent recalibration of our dividend. We'll also talk a little bit about the financial performance we had in 2025, and then we'll also touch, of course, on the macro and the outlook.
Sure.
As always, there will be forward-looking statements I will be doing, and please look in the LYB website on all the disclaimers that legal is very happy that we have here embedded. As for 2025, here are some of the financial highlights. I think I would also like to start by mentioning, it's not in here, but 2025 was a record low year in terms of reportable incident rate for LyondellBasell. We're very proud of how we run our operations in a safe manner. You can see also here we have a very strong cash conversion, which is one of the highlights we'll talk about in a little bit. This business has produced a lot of cash, even during very difficult times.
We've just been very, very disciplined, controlling the controllables, being very aware and in tune of where we are in the cycle. We've had to take the difficult decisions of delaying some of the growth CapEx, but also continuing to invest, for example, in VEP, which is our high return, low payback projects. We've continued with our MoReTec-1 investments for chemical recycling in Germany. Jumping into cash generation, as I said, our business has generated a tremendous amount of cash. 95% of cash conversion in 2025, which is extremely strong, a very good team effort, and especially on the working capital front.
We over-delivered on this front, and the team has just been fantastic on the fixed cost side, working capital side, and we generated also $2.3 billion of cash from operations. As we go through 2026, you should expect this cash conversion to come down a little bit. Because it's normal that we will have to rebuild some of this working capital as the market comes back, but we will still target the 80% through the cycle cash conversion. Other highlights during 2025, we also issued $1.5 billion of debt to pre-finance the maturities that we will have here at the end of 2026 and 2027. You know, we saw an opening in the credit markets. We took advantage of that.
It de-risks the company as well, because after those maturities in 2027, we don't have any maturities until 2030. We're proactive in doing that. We closed the year with $3.4 billion in cash and ample liquidity, $8.1 billion of liquidity overall. Now, turning into capital allocation, You saw the press release last week where we recalibrated our dividend. We reduced it now to $0.69 per share, so roughly a 50% reduction. This obviously improves the flexibility that we have at LYB. We continue to prioritize our balance sheet. Investment grade continues to be very important, even with the 50% cut, we still offer a very attractive yield to investors.
You know, in our investor base overall, roughly 40% income-focused, and the dividend is an important part of the investment thesis for LYB. One other thing I want to highlight is on the cash improvement plan and going back to controlling the controllables. You know, we had announced a $600 million target for 2025, and we over-delivered. We reached $800 million. For 2026, we have announced $500 million of cash improvement plan, and it's early in the year, but with all the sort of bottoms-up idea and what we have visibility to, I think we're in very good shape to significantly over-deliver on the $500 million, which it just gives further sort of peace of mind and clarity that the cash conversion and generation will continue to be a priority for us.
Let's also talk now a little bit about the outlook and some of the things that give us a bit more hope for the medium term, right? You see here on the left-hand side, we're highlighting the PE inventories. They were four days below the 2025 average, and this is very supportive also for price increases, right? You saw that we got the $0.05 per pound here in January. We also had the winter storm at the end of January, which in a way helps that inventories are not rebuilt. The now late Lunar New Year in China should also help in terms of further draw of material here as we go into late February, early March.
That is all conducive and supportive of pushing our price increases, especially here in the first half of the year. The theme of rationalization continues. You saw the second chart already in our earnings release, but 23 million metric tons, roughly, that have been announced of closures. This is around the world since 2020. Of course, the net is still additions by 2030, particularly in China, but the rate at which Two things. The rationalizations have happened lately, has accelerated quite a bit, and also we see it from our technology business. The number of licenses that we've continued to sell are shrinking rapidly, and that is bad news for technology, but very good news for the supply-demand balance and no more builds, especially coming out of Asia and China.
PMI, earlier in the year, had a good pick up. This is a leading indicator. We were talking about this in prior meetings. Usually when PMI, you know, starts to pick up, you usually have a six or 9-month lag. You start to see it on the margins on the results. We're very encouraged by the strength in PMI. Lastly, here on the last chart, the durable demand continues to be solid. It hasn't really come down. You know, we're at the bottom of the cycle, but that continues to hold on pretty stable. Also, just we're still consuming, you know, the glut that we had after COVID.
As we come down on that normal cycle, just of replenishment of durables and non-durables, starts to happen, this should be more conducive for this, what's now the longest trough, you should start to see some light at the end of the tunnel. In terms of near-term outlook, here, you've seen the slide before as well. The seasonal improvement in demand continues, especially for North America. We just talked about the inventory side for polyethylene, continues to be very supportive of pushing prices here in the first half of the year. Europe, we're seeing also slight improvements in demand. However, now the high crude prices are offsetting because obviously they correct naphtha, so it's sort of evening out there on the margins.
Asia, we still continue to see the pressures on the, from the oversupply, and in terms of some of the end industries, packaging has been very, very steady throughout the period and should improve also as we come out of this cycle. Building and construction, you know, new home sales continues to be good. Of course, we need existing home sales also to start picking up. Muted if rates come down, obviously that will be quite a boost for the industry, and we would benefit from that. Automotive, I would say North America, it's okay, hasn't come down, but we continue to do also quite meaningful improvements, especially in our APS business, which is 60% exposed to automotive, especially on the margin side. Finally, on the Oxyf uels side, we're seeing a more than normal seasonality trends.
Last year was a bit of a disruption where basically the driving season was nonexistent. Now we're seeing that markets and premiums are coming back as oil prices recover, and the industry seems to be acting in a bit more rational way. I think with that, we can jump to Q&A.
Thanks for that.
Mm-hmm.
I think, you know, the dividend cut being probably the most pressing conversation, particularly now with that out of the way, can you talk about cash needs and cash priorities? Dan obviously has some questions as well around, like, debt structure and what this looks like, how you're gonna move forward. Do you wanna kind of go with that, Dan, or?
Yeah, I mean, any other type of things that you're considering to boost cash in the next two years, asset sales, or reducing debt through a potential hybrid issuance, anything else you're looking at? For the audience, then the equity side, when I say hybrids, I mean subordinated notes, not convertibles. Convertibles are equity issuances. They get 100% equity credit. Subordinated notes get 50% equity credit at the agencies.
Let's tackle one by one. We continue to control the controllables, so the cash improvement plan, as I said, we over-delivered in 2025. We will over-deliver in 2026. We have a good visibility. In terms of monetizing assets, you know, since Peter started his tenure, he's been very active in terms of portfolio optimization, shutting down the refinery. We sold ethylene oxide and derivatives. We're about to close the transaction with AEQUITA for the European assets. We just shut down another POSM joint venture we had in the Netherlands. What we have left are, you know, smaller monetization, some joint ventures, so nothing meaningful, you know, probably in the low $3-digit number that we could monetize, and we'll continue to do that and of course, you know, delaying CapEx, etcetera. As for instruments, we always look at them.
They're in the portfolio, they're in our toolkit. For now, we're not exploring any hybrid issuances, but we'll continue to explore them.
Just to follow up, obviously, with the S&P news last week.
Mm-hmm.
Then follow with the cut, the dividend. S&P obviously couldn't front-run anything you were doing. They have the negative watch. What do you see the outcome of that review? You know, hopefully, we get some clarification by tomorrow or next week, but, where do you see your ratings ending up there? Then if you could just kind of touch on the other two agencies and what you're hearing from them.
The dialogue with the rating agencies is very, very robust. Every quarter we're talking to them. I was there in September of last year. We obviously communicated to them right after the board meeting, and they were happy to hear that we took the decision on the dividend. You know, the industry is going through a long, long cycle. They have obviously taken that into consideration. They've been sort of very supportive and rational in terms of understanding that this is a cycle, that it will come out. We are a few, rightfully so, are in credit watch negative, and we are sort of making our case that we should stay Investment Grade. Investment Grade is paramount for our capital allocation and our discipline as to how we run the business.
It's critical to stay investment grade, and we have, you know, tools like the dividend, where we cut. We will do whatever's within our needs and capacities to continue to fight for that investment grade. It is important just to operate in terms of liquidity, flexibility, payment terms, guarantees. You know, it's very important in our industry to keep it. As for Moody's and Fitch, we continue to have also very good dialogue with them. I think we explained that we're controlling all the control levels. We're fairly CapEx light in that sense also. We've pushed all the growth CapEx projects. We've optimized even our maintenance CapEx as much as we can. We explained how after the European transaction closes, our maintenance CapEx comes down to roughly $1.1 billion.
We're truly doing everything we can to strengthen the balance sheet and preserve cash.
I wanted to approach a topic that's kind of became a bit of a hot button issue on all the earnings calls, was just artificial intelligence and deployment, right? Particularly, you have a peer announcing some very aggressive cost-cutting actions, and, you know, admittedly, the details felt a little light. You know, there's clearly a lot going on under the surface there or so we understand. As we look at, like, cycle issues in your cost structure, do you see similar opportunities? How is Lyondell assessing its cost structure for the next five years? As you look at new tools like artificial intelligence, like what's the top-down message and the opportunity set that you're exploring?
Mm-hmm. I mean, in terms of cost structure, we're generally a leaner company than most of our competitors.
Yes.
It's just also the way in which we've brought up much flatter structures and organizations. The portfolio cleanups have helped quite a bit in terms of our cost structure. We've have let go of roughly 1,300 employees. We're at levels of we're 18,000 employees now, this is also the lowest level since 2018. We're very painful measures, but we've been proactive in that sense. There's more to come, right? As we also you'll hear more and more in the coming months of the, what we call the LYB operating model, which is optimize more the end-to-end processes, move more to call it a shared service center organization, that will drive costs further down. In terms of AI, we've been very sort of diligent and methodical in the case uses.
We've done a lot of it in preventive maintenance. We do quite a bit in terms of intelligence and modeling our MTBE, for example. We've deployed it on contract reviews, where we can extract a little bit of more pricing, also on our feedstocks. I think we have small use cases, but I'm, and there, we'll continue to do that, but I'm not there yet in announcing a big bang on-
You're not gonna be a CFO of one organization just yet?
Not yet.
This is maybe a little technical or maybe not, right? Like, you know, the inventory situation for polyethylene in North America was pretty long July.
Mm-hmm.
You know, we'd come out of the tariff situation, the big pause in demand, everybody took rates down. We went back up. Inventory is down. The American Chemistry Council also, like, gutted its inventory estimate for the U.S. When you look at that, like, how important is that for an indication for you on the market? Like, did you, at the time, feel like the market was tighter than what the data was providing, or was the data that you go off of? Like, I can see it going both ways. Some of the revisions to inventory through the course of the year were pretty surprising.
Yes. A little bit of both. We did feel the tightness, and we knew something just because we're obviously operating and we're a meaningful player, something wasn't really quite working with the tightness and the inventory levels that we were looking at. You know, ACC has a very good and defined process. They figure out what was the mismatch with one of the producers declaring inventory that maybe was in their warehouse but already sold. That's what the meaningful revision came, and that sort of validated what we were seeing on the ground and even the operating rates at which most participants were running, which was lower. We saw it on the export numbers. Demand wasn't really slowing down, sort of anything different from the seasonality trends that we see.
It just normally was leading to lower inventory levels than what we would have seen on the statistics. We were sort of validated by the revision and the lower numbers with the ACC figures, and that is also what's now helping drive. Now we have the data to make the case also that the price increase does have legs. You know, CMA pushed it. We agreed with it, $0.05 per pound, and we're all have increases on the table for February.
February, yes.
Mm-hmm.
It's interesting 'cause 4Q, I don't know that I've seen a bigger divergence. I'm sure there's been, but like a bigger divergence between you and your primary peer as it relates to, like, polyolefins profitability and cash flow dynamics.
Mm-hmm.
Four Q was pretty stark because, you know, your EBITDA was down considerably, but your cash conversion on the year was, like, mid-nineties, right?
Mm-hmm.
Conversely, your larger peer took operating rates up, EBITDA up, but cash conversion terribly. You're clearly solving for a different thing. As you look at the market, right, polyethylene prices up in January, polyethylene price is up maybe February. We'll see, fundamentally, the market is in pretty good standing right now. Part of that is because operating rates are low.
Mm-hmm.
How do you hold the line? How do you make the decision that Lyondell will continue to kind of operate at this mid-high 80s range, which you're talking about, when, you know, two of at least the public peers that are in earnings have said they wanna run hot, right? You have CPChem coming to market later this year. What's that decision like internally? If prices go up, do you take your rates up and capture that? Do you kind of sit there and be a little bit more mindful?
Yeah, I think we've been extremely disciplined and very proud of the team on how we've managed our operating rates. Like we've said, during earnings, we'll match to however we see the demand. We'll continue to be very disciplined. If there's obviously opportunity to be taken, we'll run higher, but if not, we're not shy of lowering operating rates. We're maximizing cash, and we're also not afraid of value over volume. We will continue to be very disciplined. Eventually, it's paying off, as you saw, in terms of the cash conversion, profitability, and that's how we'll continue to run in a very disciplined way.
Somebody like CPChem is turning capacity on later this year. I know most of the stuff kind of typically finds its way into the export market when a new facility ramps, but they have channels and sales and presence domestically as well. As they look at putting tonnage into the market physically, because I know, I'm sure they've already been marketing, but physically putting tonnage more, is this something where you take your rates down? If demand doesn't grow enough domestically to absorb what they can ship domestic, do you take rates lower to make room for them, or is this like... Yeah, how do you play that game theory?
No, I think we'll see where they place volumes, right? What they've been very vocal on is all the HDPE volume that will come into the market from that plant is meant to export. These are the basic grades.
Yeah.
As you know, we play mainly in the domestic market. We try to have sort of a bit more sophisticated grades, so of course, it creates a ripple effect on the export market and the export prices. We'll continue to be focused more and more on the domestic side. I think, you know, we'll adjust as needed. If we have to lower rates, we'll do it. If we have to ramp up, we'll do it. Just, you know, time will tell. We'll adapt. We're very quick and nimble. Yeah, Hard to say right now what-
Yeah, no, I appreciate it. I'm just trying to get inside the mind.
Yeah
... you know, I think the general mantra for a lot of the industry is like: This is a low-cost operating base, you should run full out. It's a unique stance that you've taken. Maybe it's not as unique as you think, but versus the public companies that we've had talk, like, it is a point of difference. It, to your point, it is benefiting you on the cash side. Your cash conversion was really strong.
Mm-hmm
in the fourth quarter. I get it as it relates to what you're trying to solve for. You have that closures slide. There's definitely been announcements for sure. A lot of it is ethylene not tied to polyethylene, right? We've seen a lot of ethylene closures into other derivatives. Why do you think it's been slower on the polyethylene side of the equation? Maybe that's not fair, maybe you disagree with my comment, but I'm just looking globally at some of these announcements, and I've been waiting for more polyethylene-specific closures.
Yeah. I think normally what people announce are the ethylene, the, so the cracker or the producer, not so much the PE, but you see some of these clusters, particularly if you think of Europe, right?
Yes.
When somebody shuts down a cracker, there were so many other adjacent downstream products, whether PE or other derivatives, the domino pieces start to fall. Now, for example, in that chemical cluster, you shut down a couple of downstream units, maybe the industrial gases plant cannot run anymore or the wastewater plant cannot run. You'll see more and more of this effect on PE. I think we've seen, from our numbers, there is also a meaningful closure of PE activity, whether intended or unintended, as I say, if somebody shuts down a cracker. I agree with you. What gets announced is the ethylene. We do see, and we see it in the market, significant PE closures.
Okay. All right. If I think about the headwinds to closing, right?
Mm-hmm.
What ultimately are you navigating, right? Because you opted to sell your assets, almost kind of effectively pay a little bit to get rid of them. When we look at the market in Europe and what still feels like a net supply addition, what are we running into as headwinds to close?
You mean our transaction or assets in general?
As, like, an industry. Like, industrial gas contracts are there, environmental remediation, right? Like, what if you're an operator and you're saying, "I could lose $100 million a year," whatever, "or close," we see some decisions to close, but oftentimes these assets are just running at a loss, and maybe there's too much co-integration. If you're talking to us as around, like, what decisions you have to guide and navigate when you're looking at closing, like, what are the primary hurdles that keep these plants running maybe at below ideal profitability?
Yeah. Obviously, we want to run these plants in a profitable way.
Of course.
That's number 1. I would say the shutdown costs are also quite significant, especially in Europe. You know, you have labor contracts, remediation, which are quite high. We do the pros and cons. You're also looking. Right now, the environment seems to be shifting in the right direction, but there are significant costs to decarbonize these assets. You're looking at, you know, significant CapEx investments, and if you don't see really the return or the ability to push prices to return that investment, you just, in the future, you might be losing money now, there's not a clear path in which you can turn these assets profitably in the, you know, next five, 10 years.
We do the pros and cons and took the very painful decision of painful and strategic decision of just cleaning the portfolio in Europe, but always comparing versus the alternative, which would be an important one, is shut down for sure, and those are significant.
As we look at, you know, part of what the anti-involution thesis has been is just kind of closing old capacity. The other conversation that I've heard is just China's desire to cap carbon emissions by 2030. If we think about the own evidence you see through your licensing business, right? Maybe provide a little bit of context for how long that will take if we starting seeing the sales now to resonate. From our pipeline, we still see projects in 2028 and 2029. I'd love to see those projects not come to market. Maybe they haven't started building those projects yet. Is there some reality where you're like, the licenses we've sold would not show that those capacity would come, or that capacity is probably gonna come or not, and we don't have more beyond that because of the licenses?
Like, what path does that provide you?
Yeah, I think the visibility that we have on the licenses would tell us that there's no more capacity coming, definitely, probably after 2029 or 2030. If a license we sell today would be a plan that starts in two or three years, and we've been selling, you know, 15 licenses, 2023, and eight licenses, 2024, you know, a couple, two, three licenses in 2025, with very little visibility of any licenses that we would sell this year. The majority were going into China. That just means they're not building, which is good news for the industry, right?
Right.
They've been rationalizing the smaller producers, especially the non-integrated producers, are under quite a bit of pressure, whether if it's VAT tax or the NAFTA consumption tax. They're putting a lot more strain into those non-integrated operators. You know, we have to remember also in the P world, the cost curve matters quite a bit.
Of course.
The oil to gas ratio advantage will continue to be in North America and the Middle East. Even though they have this new additions and nameplate capacity-wise alone, they would be self-sufficient and exporting, and they still import roughly 30% of their needs. It's a little bit tricky just to go by the additions.
Of course, operating rates are very low accordingly. I hear you. Part of that also remains the Russian, you know.
Correct.
Import perspective. If you try to navigate the crude imports and the low price imports of Russian crude, like when you're looking at the cost curve, how much of a tailwind, maybe if you were to bring that to a polyethylene or polypropylene price per pound, like what kind of tailwind is that providing them, or how much of a headwind is that to the cost curve?
I mean, they're still operating at losses. I'm not sure they even cover their variable costs, but if you're getting Russian oil at $60 minus, you know, that's a cap at maybe $10 discount, and I would still argue we're fairly competitive in North America and the Middle East, otherwise they would have stopped even.
Sure
... imports of material. This oil to gas ratio advantage won't disappear. Actually, if the war ends, that could be very good news for everybody, right? If the Russian oil sort of flows, they lose this discount, then obviously reconstruction would be good business, and of course, wonderful for Europe.
APS.
Mm-hmm.
Right? There were some grand plans for Lyondell as it remained or related to being kind of like a polymer formulator.
Mm-hmm.
APS has gone through its own kind of restructuring work, and we're coming out on the other side of that. What's the longer term strategy for this business? Because it's pretty subscale as it relates to the grand scheme of Lyondell. Is this something that, like, is fine, it has its place? Is it ultimately you're gonna have to make a decision, is it worth holding on to or growing? I know originally there were expectations-
Mm-hmm
of more acquisitions in there. I know that, you know, maybe that's not where you're gonna be right now from a cash perspective. When we look at like what the APS portion of your profile is over time, what is that gonna be?
First say that APS is in the middle of the turnaround, and the team has done a great job, right? The EBITDA that they've generated, impressive cash conversion, probably more than 140% or so of cash conversion. The work since the acquisition that has been done is meaningful. I think half the sites that we inherited from A. Schulman have been shut down, and we continue to shed all those assets that were not profitable. The improvements on margin have been incredible. The, you know, NPS scores, all the right things are falling into place. There are a lot of synergies that we get from our just normal O&P business and the sort of being closer to the customer, our technology.
It also gives us a very good vehicle as we push more into circularity and the close connection to the brand owner. We've won pretty good businesses on the Circulen side for automotive customers, for example. It has a place in its portfolio. It's valuable, but, you know, like talking to Peter, every part of the portfolio gets reevaluated constantly. We'll cross that bridge when we get there, but for now, it's an important part of our equation, and the turnaround is in fact.
Is this a business that you see merits? I mean, like, look. If you think about Westlake, right, they love talking about their PVC compound and pipe business as a very good margin protector up and down, and then conceptually, APS can be a similar basis if you've got a real high-value business proposition that you're formulating. Is this something that will grow over time, organically or inorganically, or is it just?
Yeah, the plan that even was announcing capital markets, say, for them to reach the $500 million of EBITDA continues in place, obviously won't be at the-
Yeah
... 27 mark, which delayed a year, a year and a half, but that's still the goal, to make this business at least a $500 million EBITDA generating business for LYB.
You touched on the circularity side of things. Can you give us a little bit of an update on MoReTec-
Mm-hmm
... the market for it and how it's evolving?
Sure. MoReTec-1 continues its investment, and it should start here in the first half of 2027. It's one of the growth projects that we've kept. This is a chemical recycling facility that we have in Germany at our integrated site in Wesseling, and we continue to see very good demand, especially in Europe. The environment is very supportive for recycled plastics. You've heard probably the news a week and a half ago that the SUPD, so the Single-Use Plastics Directive, was approved in Europe, and that gives us comfort that the environment is there. Regulatory-wise, very supportive of the recycled content, the content of plastic that has to go into the products. This is also giving support to the margins of our MoReTec-1 product. We're very happy with it. It's, you know, relatively small, 50 KT.
It's a combination of a production, but a big pilot plant for us as well. But we're very happy with the commitments that we have from customers and the way it's progressing, so we're happy with our commitments there.
Policy in Europe is moving around a lot. Yeah, I'm sure there's a lot of, you know, internal delight as to that getting reassured. We see a lot of waffling on the carbon tax side of the equation, CBAM, whether it moves forward or not, and this morning, Italy made some comments about the carbon trading system and then putting it on hold. Like, how does that impact your business in the way that you think about Europe as a market opportunity and a cost structure and commercially?
Look, I think there was a number of chemical executives meeting in Antwerp last week with the European Commission. They are all moving in the right direction. They understand the importance of having flexibility in terms of CBAM and ETS. I'm very hopeful that the changes will happen. It will definitely help the European industry, right? Otherwise, you deindustrialize very quickly.
Yeah.
They wouldn't be able to compete with Middle Eastern or product from China. Maybe TBD. I'm hopeful that they move quickly. In terms of our sort of circular product portfolio and the MRT-1, it's we're in a great shape, and it wouldn't really affect what's those changes.
It is interesting watching that develop for years to now only start to see pushback when it goes, and then, yeah-
Yeah.
It's a little late, I think. I wanna open it up to any questions in the audience. We've got 2 up front. Here you go, Roger.
Hi, Roger Schmitz. You're selling your assets, I can't pronounce the name, in Europe, to AEQUITA or whatever it's called. Did you know at the time that they were looking to buy SABIC's European olefin polyolefin? How concerned, by which I mean, you know, you're putting in cash right up ahead. SABIC is not putting in cash. It's just two forever PIK notes, perpetual PIK notes. AEQUITA is putting in $10 million. If they, you know, the SABIC assets are losing a lot of EBITDA. If they, if this entity goes bankrupt, how many years out do they have to go bankrupt before you are no longer? They don't, you know, France doesn't look back to you and SABIC to take care of the closure costs?
Sure. Lots of questions there. By the time we were going through our process, we didn't know that AEQUITA was interested or would be the, obviously, the winning party on the SABIC assets. If anything, we see that as a positive, because now they're a larger player, they have an incentive to make the combination work with the SABIC assets and our assets. They are, you know, a very shrewd operator. They have very good experience in automotive. They wanna be a meaningful player in chemicals.
The way we structure the transaction and how which we will capitalize these assets, we're making sure that these assets will be viable, you know, for the foreseeable future, and that's why we did all the calculations and the numbers to make sure that we were handling an asset that can survive and stand on its own. They're also taking very good and qualified LYB employees, so they should be able to make it work, and then combining it with the SABIC assets, I think they have a very, very good shot at being a meaningful player and very nimble, without any of the requirements of being sort of public company. I'm very hopeful for the new combination of AEQUITA with the SABIC and our assets.
Thank you.
Mm-hmm.
Thank you. I want to ask you brought up the circular portfolio, but I think just on Monday, you cut down your commitment, right? It was $2 million of recyclable and circular polymers, and now it's $800,000 by 2030.
Mm-hmm.
What drove that? What does it mean about MoReTec-2 or any other platforms? I think in the past, you've been talking about getting a decent premium for these polymers. Are you still getting a premium, or how does it compare versus, say, a year ago?
Sure. You're absolutely right, we revised our sustainability commitments earlier in the week, and this is basically to match to the market realities. As you rightfully say, we've delayed MoReTec-2, and with that, just normally the amount of pounds that we would have generated from that asset are coming later. We're adjusting to what will be in the market and being more realistic. In terms of the margins we continue to see out of MoReTec-1, continue to be just as healthy as we saw on the original plan. Brand owners are still very committed. More than half that plant is sort of committed already, and we're very happy with the margins, and the premiums really haven't moved.
The imbalance that we've communicated through previous earnings calls and capital markets day of supply and demand in terms of pyrolysis oil and recycled plastics continues to be, especially in Europe. It's very, very strong, this imbalance, and that helps margins, gives strong support for the margins. We're very happy with that investment.
I ask a quick one-
Mm-hmm.
on your maintenance schedule. Obviously, very low maintenance schedule in 2026. That's why the maintenance CapEx of $800 million, going back up to the $1.2 billion or $1.1 billion, $1.2 billion.
Mm-hmm.
Given the low level of turnarounds this year, should we be concerned in, like, the 2027, 2028, 2029 period, that there could be a year where maintenance CapEx is significantly above that one to two level that you gave us?
No, I think that. Look, we've done a couple of or a lot of portfolio rationalization, that also took out a significant amount of CapEx historically. This one CapEx, maintenance CapEx going forward, has been properly sized with the portfolio that we will have at hand. We're very disciplined and extremely good at managing and optimizing the CapEx. For example, we had an issue with our Lake Charles plant at the end of last year. While we were repairing that piece of equipment, then we took the opportunity to do, you know, other maintenance, and that allows us to then extend a little bit more the turnaround cycle. I wouldn't expect that this, you know, increases.
We're incredibly good at running these assets in a safe and reliable way and very good at doing the right maintenance and scoping it correctly so that we stay within that 1-1 maintenance CapEx range.
All right. I think we can end it there.
Perfect.
Thank you so much.
Thank you very much.
Thanks.