BASF, Air Liquide, and Shenergy partner to use biomethane-derived gases for low-carbon MDI production, advancing circular economy and industrial decarbonization.
BASF has entered into a long-term strategic cooperation with two major partners—Shanghai Chemical Industry Park Industrial Gases Co., Ltd. (SCIPIG), a subsidiary of Air Liquide Group, and Shanghai Shenji Energy & Environment Technology Co., Ltd. (Shenji), part of Shenergy Group. This collaboration is designed to advance the production of methylene diphenyl diisocyanate (MDI) with a significantly reduced carbon footprint, marking another important step in establishing a more sustainable MDI value chain.
The agreement outlines a coordinated approach by all three parties to leverage biomethane as a renewable feedstock for industrial gas production. Shenji will apply its advanced bio-circular waste management technologies to convert bio-based waste into high-quality biomethane that complies with national standards. Once produced, this biomethane will be injected into the urban natural gas pipeline system operated by Shanghai Gas. This infrastructure ensures the efficient distribution of biomethane to downstream users within the city’s energy network.
SCIPIG, using its expertise in industrial gas processing, will receive this biomethane and convert it into bio-hydrogen and bio-carbon monoxide (bio-CO). These bio-derived gases will then serve as BASF’s key raw materials for manufacturing various forms of MDI and derivative products. By integrating renewable bio-based gases into its production processes, BASF will deliver MDI variants with a reduced product carbon footprint (rPCF). These include monomeric MDI, which is used across a wide range of applications such as flexible foams, CASE (coatings, adhesives, sealants, elastomers), thermoplastic polyurethane products, shoe soles, and blends with polymeric MDI (pMDI). The initiative showcases how bio-based industrial gases can directly contribute to lower-carbon specialty chemical production.
Dr. Jeffrey Lou, President and Chairman of BASF Greater China, expressed strong enthusiasm for bringing this initiative to life so quickly after the signing of an earlier Memorandum of Understanding on biomethane cooperation. He highlighted that the incorporation of bio-based feedstocks strengthens BASF’s mission to expand its sustainable product offerings and accelerate circular economy practices. He further emphasized that this effort not only supports BASF’s global sustainability roadmap but also plays a crucial role in enabling customers across China to achieve their low-carbon transition goals.
Dinan Huang, Chairman of Shenergy Group, reiterated the company’s commitment to transforming organic waste into valuable renewable energy resources. He described this agreement as a major leap forward in creating a green value chain—from bio-based feedstock to environmentally friendly chemical production. According to Huang, the collaboration will significantly contribute to advancing industrial decarbonization and fostering sustainable urban development.
Air Liquide China’s Chief Executive Officer, Rui Coelho, noted the significance of producing bio-hydrogen and bio-CO locally in Shanghai for the first time using biomass. He confirmed that the production will align with ISCC PLUS standards, following site and product certification. Coelho emphasized that this contract marks the launch of bio-product manufacturing within the Shanghai Chemical Industry Park, enhancing momentum for decarbonization and circular economy goals among the industrial community. Air Liquide China remains committed to developing reliable, competitive, and sustainable solutions that help customers reduce emissions and contribute to a cleaner future.
