BASF Partners with Shenergy (Group) to Launch China's First ISCC+ Certified Biogas Project

On November 20, 2024, BASF announced that it had signed a memorandum of understanding with Shenergy (Group) and Shanghai Shenji Environmental Technology Co., LTD. (hereinafter referred to as "Shenji"), a subsidiary of Shenneng (Group) Co., LTD. (hereinafter referred to as "Shenji"). The signing of this cooperation symbolizes the joint launch of BASF and Sheneng Group's first ISCC+ certified bio-gas pipeline delivery project in China.

As the development platform of Shenneng Group in the whole natural gas industry chain, Shanghai Gas is also responsible for the operation of Shanghai City Gas. Shen Ji is a key enterprise of Shen Neng Group focusing on the utilization of waste resources.

According to the memorandum of Understanding, Shenji will be committed to developing biogas purification projects for livestock farms and biogas purification projects for waste disposal. At the same time, on the basis of the biogas project certification, Shenji will cooperate with BASF to first test the application scenario of biogas quality balance, provide BASF with biogas that meet the ISCC+ certification standard, and deliver them through the Shanghai Gas pipeline network. BASF will use the biogas as a chemical feedstock.

BASF's main bases in Shanghai include the Shanghai Pudong Science and Technology Innovation Park and the Shanghai Caojing Base. Pudong Science Park is a comprehensive base integrating global, Asia-Pacific and local R&D, production, marketing and functional departments, while Caojing Base has the main production bases of wholly-owned companies and three joint ventures. The main products in these regions include:

(1) Shanghai Pudong Science and Technology Innovation Park Products: New materials such as Ultramid® (polyamide PA), Ultradur® (polybutylene terephthalate PBT), polyurethane composites, Elastollan® thermoplastic polyurethane (TPU), Cellasto® microporous polyurethane elastomers, acrylic dispersions and polymer colorants, cleaners, metal complexing dyes, skins Leather additives, polyvinylpyrrolidone (PVP), 3D printing materials, motor vehicle emission catalysts, etc.

(2) Shanghai Caojing Base products: polytetrahydrofuran, TDI, MDI, polyisocyanate (Basonat®), precious metal salts and solutions, automotive coatings, resins and electrophoretic paints, polyamide polymers, process catalysts, antioxidants, etc.

In addition to the cooperation between BASF and Shenneng Group, China has also made a number of major breakthroughs in the field of bio-based materials recently. For example, in November, Sinopec officially launched the country's first bio-based polyolefin material; China's first ISCC EU certification of biological natural gas and biological methanol; Sinopec's first domestic bio-based benzene product was listed and obtained ISCC certification.

Why is there a relatively concentrated phenomenon in the recent low-carbon development of domestic materials? This is closely related to the clarity of regulations and standards, one of the prerequisites for low-carbon development.

One of the first elements of global low-carbon development is the determination of regulations and standards, taking the hydrogen industry as an example, renewable hydrogen standards have always been one of the important factors affecting the development of the global hydrogen industry. Europe has been struggling with standards for years. Although the development of domestic standards related to low-carbon is relatively lagging, the country's first energy law was formally introduced in November.

Renewable energy refers to energy that can be continuously replenished and regenerated in a relatively short period of time through natural processes, including water energy, wind energy, solar energy, biomass energy, geothermal energy, ocean energy, etc. The Energy Law further states that biomass energy refers to the conversion of natural plants and urban and rural organic wastes into energy through biological, chemical or physical processes. Energy law covers the consumption and processing of energy, so chemical materials also apply to energy law. According to the latest energy law, bio-based materials are officially listed as "green" materials, and bio-natural gas, methanol, etc., can also be officially referred to as green natural gas or green methanol.

The initial establishment of standards is one of the important factors to promote the development of low-carbon materials, and it is expected that the development speed of domestic biobased low-carbon materials will be significantly increased. On the other hand, the low-carbon development of domestic chemical materials has initially appeared the phenomenon of multi-route progress.

The carbon reduction of products can be divided into source carbon reduction and process carbon reduction. Process carbon reduction benefits from the rapid development of domestic wind power photovoltaic and the power grid, many companies have been involved, and even invested in the construction of large-scale wind power plants, such as BASF Zhanjiang 500MW offshore wind power project. In terms of source carbon reduction, because the formulation of low-carbon policy goals will not be achieved overnight, the routes of enterprises are more diversified.

(1) Carbon reduction of by-product raw materials. Taking Wanhua Chemical as an example, Wanhua Chemical has launched a comprehensive utilization project of by-product hydrogen in Penglai, and plans to build a new set of 180,000 tons/year synthetic ammonia project on the site of the second phase of Penglai Industrial Park, in which hydrogen is supplied by the first-phase propane dehydrogenation plant and is by-product hydrogen. Part of the synthetic ammonia will be used as the raw material for MDI synthesis. This route is one of the effective ways of large-scale carbon reduction in the current chemical industry. With reference to Wanhua Chemical Penglai Project, it is expected that the phenomenon of centralized and large-scale chemical projects will further increase.

(2) The depth of carbon reduction of biomass raw materials. Biomass feedstock is a relatively low cost source depth carbon reduction method, which is also one of the reasons for the current project.

(3) electrolytic hydrogen production, CCUS and other deep carbon reduction methods. Taking CNPC Tongzhou Bay 100,000 tons/year POE project as an example, the first phase of the project will produce 1,440 tons/year of hydrogen from electrolytic water, some of which will be used for POE synthetic raw materials.