Covestro, Neste and SK geo centric to collaborate on production of PU raw material based on renewable sources; SK geo centric will source Neste's ISCC certified feedstock to produce benzene, which it will supply to Covestro as feedstock for MDI production

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June 21, 2022 (press release) –

Covestro, South Korean petrochemical company SK geo centric and Neste are cooperating 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 RETM, an ISCC certified feedstock for polymers and chemicals made from 100 percent renewable raw materials such as waste and residue oil and fats.

SK geo centric will process this feedstock into benzene at the company’s facilities in South Korea and supply it to Covestro to use 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 cold chain helping to save CO2 emissions and reduce energy consumption during its product life.

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

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

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 of downstream industries. Neste RE is produced with renewable raw materials such as waste and residue oils and fats.

"I am much pleased that through this collaboration we continue to ramp up the market for sustainable alternative materials. This enables us to supply our customers in Asia-Pacific with more sustainable MDI based on mass-balanced raw materials," says Sucheta Govil, Chief Commercial Officer of Covestro. "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."

"We are delighted to ship and export our first renewable Benzene produced with 100 percent renewable Neste RE feedstock," says Woohyuk-Choi, Vice President of SK geo centric’s Aromatic Business Unit. "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."

Under the strategy of "Green for Better Life", SK geo centric announced its ambitious 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.

About Neste:

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

About SK geo centric:

In 1972, SK geo centric laid the foundation for the development of petrochemical industry by operating the first naphtha-cracking facility in Korea. SK geo centric provides various automotive & packaging products and solutions that customers and markets require. Furthermore SK geo centric is growing into a technology-based global chemical company through continuous R&D efforts and global expansion. SK geo centric will achieve its vision, "Green for Better Life", by establishing a plastics based circular economy by collaborating with various partners and stakeholders. SK geo centric will expand its portfolio of eco-friendly products and will continuously recycle beyond the amount of plastics produced in order to realize and 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 also 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 is striving to become climate neutral by 2035 (scope 1 and 2). Covestro generated sales of 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.

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