Covestro, SK geo centric and Neste cooperate to create value chain for renewable attributed MDI in APAC

Covestro, South Korean petrochemical company SK geocentric and Neste are cooperating to enable the production of a major polyurethaneraw material based on renewable raw materials via mass balance. The cooperationwill see Neste provide SK geo centric with renewable Neste RETM, anISCC certified feedstock for polymers and chemicals made from 100 percentrenewable raw materials such as waste and residue oil and fats.

SK geo centric will process this feedstock intobenzene at the company’s facilities in South Korea and supply it to Covestro touse as raw material for methylene diphenyl diisocyanate (MDI) at its site in Shanghai,China. MDI is a key raw material for the manufacture of rigid polyurethane foam,which is a well-proven insulating material for buildings and used in the coldchain helping to save CO₂ emissions and reduce energy consumptionduring its product life.

The cooperation marks the start of possible futurecollaborations between the three companies, aiming at replacing fossilfeedstocks by more sustainable ones in the production of polymers and chemicalsin the APAC region and beyond.

"With renewable solutions available, we arenow entering the phase of scaling up their usage in the chemical industry," says Mercedes Alonso, Executive VicePresident Renewable Polymers and Chemicals at Neste. "This will be crucial in replacing the vastamounts of fossil resources the industry is currently depending on. To makethis ramp-up a success, we’ll need to establish collaborations along the valuechain – and this one between three sustainability-minded partners is a primeexample of how the industry can do just that.

"Replacing the common crude oil-based fossil feedstockwith Neste RE provides a significant reduction in greenhouse gas (GHG)emissions, thereby improving the carbon footprint of the polyurethane rawmaterials produced by Covestro and of downstream industries. Neste RE isproduced with renewable raw materials such as waste and residue oils and fats.

"I am much pleasedthat through this collaboration we continue to ramp up the market forsustainable alternative materials. This enables us to supply our customers in Asia-Pacific withmore sustainable MDI based on mass-balanced raw materials," says SuchetaGovil, Chief Commercial Officer of Covestro. "Using such materials isattractive because it will also help them achieve their climate goals. Anothercore benefit of this line of products is that it is a technical drop-insolution that our customers can use immediately without a major changeover intheir plants."

"We are delighted to ship and exportour first renewable Benzene produced with 100 percent renewable Neste REfeedstock," says Woohyuk-Choi, Vice President of SK geo centric’s AromaticBusiness Unit. "SK geo centric will actively work with Covestro and Nesteas we mark the first collaboration of this kind in the Asia-Pacific region. Weremain committed to expanding this cooperation.

"Under the strategy of "Green forBetter Life", SK geo centric announced its ambitious target to become "Net-Zero"before 2050. To fulfill its responsibility, the company will drive its businesstransformation by expanding its high-quality renewable products portfolio. SKgeo centric will respond to increasing global demands in the market byleveraging the strong synergies between collaboration partners.

About Neste:

Neste (NESTE, Nasdaq Helsinki) createssolutions for combating climate change and accelerating a shift to a circulareconomy. We refine waste, residues and innovative raw materials into renewablefuels and sustainable feedstock for plastics and other materials. We are theworld’s leading producer of sustainable aviation fuel and renewable diesel anddeveloping chemical recycling to combat the plastic waste challenge. We aim athelping customers to reduce their greenhouse gas emissions with our renewableand circular solutions by at least 20 million tons annually by 2030. Ourambition is to make the Porvoo oil refinery in Finland the most sustainablerefinery in Europe by 2030. We are introducing renewable and recycled rawmaterials such as liquefied waste plastic as refinery raw materials. We havecommitted to reaching carbon-neutral production by 2035, and we will reduce thecarbon emission intensity of sold products by 50 percent by 2040. We also haveset high standards for biodiversity, human rights and supply chain. We haveconsistently been included in the Dow Jones Sustainability Indices and theGlobal 100 list of the world’s most sustainable companies. In 2021, Neste'srevenue stood at EUR 15.1 billion. Read more: neste.com

About SK geo centric:

In 1972, SK geo centric laid the foundationfor the development of petrochemical industry by operating the first naphtha-crackingfacility in Korea. SK geo centric provides various automotive & packagingproducts and solutions that customers and markets require. Furthermore SK geocentric is growing into a technology-based global chemical company throughcontinuous R&D efforts and global expansion. SK geo centric will achieveits vision, "Green for Better Life", by establishing a plastics basedcircular economy by collaborating with various partners and stakeholders. SKgeo centric will expand its portfolio of eco-friendly products and willcontinuously recycle beyond the amount of plastics produced in order to realizeand leverage the sustainability efforts that will benefit our planet.

About Covestro:

Covestro is one of the world’s leading manufacturers of high-quality polymer materials and their components. With its innovative products, processes and methods, the company helps enhance sustainability and the quality of life in many areas. Covestro supplies customers around the world in key industries such as mobility, building and living, as well as the electrical and electronics sector. In addition, polymers from Covestro are used in sectors such as sports and leisure, cosmetics and health, as well as in the chemical industry itself.

The company is committed to becoming fully circular and aims to become climate neutral by 2035 (scope 1 and 2). Covestro generated sales of around EUR 15.9 billion in fiscal 2021. At the end of 2021, the company had 50 production sites worldwide and employed approximately 17,900 people (calculated as full-time equivalents).

Forward-looking statements
This news release may contain forward-looking statements based on current assumptions and forecasts made by Covestro AG. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company and the estimates given here. These factors include those discussed in Covestro’s public reports which are available at www.covestro.com. The company assumes no liability whatsoever to update these forward-looking statements or to conform them to future events or developments.