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Neste, Covestro and SK geo centric reveal value chain collaboration

Neste, Covestro and SK geo centric reveal value chain collaboration
Benzene shipment leaving the Port of Ulsan in South Korea (photo courtesy SK geo centric).

Finland-headed oil refiner and renewable products producer Neste Oyj, Germany-headed polymer major Covestro, and South Korean petrochemical company SK geo centric have announced joint cooperation to enable the production of a major polyurethane raw material based on renewable raw materials via mass balance.

The cooperation will see Neste provide SK geo centric with renewable “Neste RE”, an International Sustainability and Carbon Certification (ISCC) certified feedstock for polymers and chemicals made from 100 percent renewable raw materials such as waste and residue oil and fats.

With renewable solutions available, we are now entering the phase of scaling up their usage in the chemical industry. This will be crucial in replacing the vast amounts of fossil resources the industry is currently depending on, said Mercedes Alonso, EVP, Renewable Polymers and Chemicals at Neste.

SK geo centric will process this feedstock into benzene at the company’s facilities in South Korea and supply it to Covestro for use as raw material for methylene diphenyl diisocyanate (MDI) at its site in Shanghai, China.

I am much pleased that through this collaboration we continue to ramp up the market for such sustainable alternative materials, said Sucheta Govil, Chief Commercial Officer of Covestro.

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 cold chain helping to save carbon dioxide (CO2) emissions and reduce energy consumption during its product life.

This enables us to supply our customers in Asia-Pacific with more sustainable MDI based on mass-balanced raw materials. Using such materials is attractive because it will also help them achieve their climate goals. Another core benefit of this line of products is that it is a technical drop-in solution that our customers can use immediately without a major changeover in their plants, Sucheta Govil said.

Develop future collaboration

The cooperation marks the start of possible future collaborations between the three companies, aiming at replacing fossil feedstocks with more sustainable ones in the production of polymers and chemicals in the APAC region and beyond.

To make this ramp-up a success, we’ll need to establish collaborations along the value chain – and this one between three sustainability-minded partners is a prime example of how the industry can do just that, said Mercedes Alonso

Replacing the common crude oil-based fossil feedstock with Neste RE provides a significant reduction in greenhouse gas (GHG) emissions, thereby improving the carbon footprint of the polyurethane raw materials produced by Covestro and downstream industries.

Under the strategy of ‘Green for Better Life’, SK geo centric announced its target to become ‘Net-Zero’ before 2050. To fulfill its responsibility, the company will drive its business transformation by expanding its high-quality renewable products portfolio.

SK geo centric will respond to increasing global demands in the market by leveraging the strong synergies between collaboration partners.

We are delighted to ship and export our first renewable Benzene produced with 100 percent renewable Neste RE feedstock. SK geo centric will actively work with Covestro and Neste as we mark the first collaboration of this kind in the Asia-Pacific region. We remain committed to expanding this cooperation, said Woohyuk-Choi, Vice President of SK geo centric’s Aromatic Business Unit.

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