BASF has entered into a multi-year cooperation agreement with Air Liquide’s subsidiary SCIPIG and Shenergy Group’s subsidiary Shenji to accelerate the development of a low-carbon MDI value chain in China. The partnership focuses on using biomethane, bio-hydrogen, and bio-CO to produce MDI and its derivatives with a significantly reduced product carbon footprint, reinforcing industry momentum toward sustainable polyurethane materials.

The agreement outlines a fully bio-based route for industrial gas production. Shenji will convert bio-circular waste into biomethane compliant with national standards and supply it to the Shanghai Gas grid. SCIPIG will then transform this biomethane into bio-hydrogen and bio-CO, marking the first local production of these bio-based industrial gases in Shanghai. BASF will utilize these renewable feedstocks to manufacture reduced-carbon MDI (rPCF MDI), including monomeric MDI used across flexible foams, CASE applications, TPU, shoe soles, and polyurethane systems.

Dr. Jeffrey Lou, President and Chairman of BASF Greater China, emphasized that adopting bio-based feedstock is a key step in expanding BASF’s sustainable product portfolio and supporting customers’ transition to low-carbon chemicals. The collaboration builds upon last year’s biomethane partnership and strengthens BASF’s role in advancing circular economy solutions in China.

Shenergy Group’s Chairman, Dinan Huang, highlighted the company’s commitment to turning bio-waste into renewable energy and enabling a full “bio-based feedstock – green chemicals” supply chain. He noted that the cooperation represents a major milestone for regional green development and sustainable urban transformation.

Air Liquide China CEO Rui Coelho added that the successful local production of bio-hydrogen and bio-CO—fully aligned with ISCC PLUS sustainability standards—will help industrial players in Shanghai Chemical Industry Park reduce emissions and reach their decarbonization goals. The project also underscores Air Liquide’s long-term strategy to deliver reliable, competitive, and low-carbon gas solutions to China’s chemical industry.

By combining renewable energy, industrial gas expertise, and advanced chemical production, BASF, Air Liquide, and Shenergy are laying the foundation for a sustainable MDI supply chain that supports both industry innovation and the broader transition to low-carbon manufacturing.