Covestro aligns with sustainable development in China

With a strong presence in China, materials manufacturer Covestro has aligned its strategic priorities with the country's sustainability ambitions, particularly around carbon reduction and circular economy initiatives.

The Germany-based company has actively collaborated with Chinese industries, academia and policymakers to drive impactful, localized solutions that advance sustainable development. This approach has positioned Covestro as a committed partner in China's journey toward a greener future and a role model of Sino-German collaboration.

As China continues to pursue ambitious environmental goals, Covestro has strategically leveraged events such as the China International Import Expo to demonstrate its commitment to those efforts. Since joining the CIIE in 2021 and participating for three consecutive years, Covestro has used the platform to showcase its contributions to the circular economy, foster partnerships, and elevate brand recognition.

"The CIIE has created valuable spillover effects, connecting us with key industries such as construction, which is crucial for China's dual carbon goals," said Holly Lei, senior vice-president of Covestro Group and president of Covestro China.

Lei cited partnerships with Shanghai-based property developers such as Pudong Development Group and Lujiazui Group, which aim to drive low-carbon solutions for green buildings, including polyurethane composite wall insulation and energy-efficient doors and windows. Such advancements are essential as China strives to achieve its dual carbon goals.

Headquartered in Leverkusen, Germany, Covestro is among the world's top polymer producers, supplying high-quality materials to key sectors including mobility, construction and electronics. The company's polymers also serve industries such as sports, leisure, cosmetics and healthcare. Covestro's goal is to become fully circular, with plans to achieve climate neutrality for Scope 1 and Scope 2 emissions by 2035, and Scope 3 emissions by 2050.

Chancellor's visit

Covestro's commitment to net-zero emissions took center stage at the company's CIIE exhibit, impressing prominent visitors such as Pit Heltmann, then consul general of Germany in Shanghai. The German consulate general later played a key role in facilitating German Chancellor Olaf Scholz's visit to Covestro's Asia-Pacific Innovation Center in Shanghai during his state visit in April.

The Scholz-led delegation explored Covestro's extensive research and development work in China, which is focused on dynamic sectors such as electric vehicles, wind energy, photovoltaics, consumer electronics and construction. As those sectors increasingly embrace circular economy practices, the Covestro innovation hub has become a pivotal force in supporting China's green transformation and driving progress toward a fully circular global economy.

The company's alignment with China's dual carbon goals is evident in specific initiatives like its dedicated mechanical recycling compounding line for polycarbonates in Shanghai. The line, located at Covestro Integrated Site Shanghai — the company's largest production site — produces more than 25,000 metric tons of premium polycarbonates and blends with recycled materials annually. It is meeting the growing demand for post-consumer-recycled plastics in sectors including electrical and electronic products, automobiles and consumer goods.

In addition, Covestro is collaborating with German federal enterprise GIZ and automotive value chain partners — including Nio, Volkswagen China, Chinese recycler GEM, and certification agency TÜV Rheinland — on pioneering car-to-car closed-loop plastics recycling. The initiative aims to create an efficient and sustainable automotive recycling system, advancing the industry's green transformation.

Sustained presence

With cumulative investments exceeding 4 billion euros ($4.31 billion), Covestro has consistently strengthened its presence in China. The company's Shanghai site, its largest worldwide, houses 12 advanced plants that cover all core Covestro products, with renewable energy covering more than 40 percent of the site's power needs. And its Shanghai regional headquarters, expanded in 2020, serves as global headquarters for engineering plastics and Asia-Pacific headquarters for other business units and corporate functions, underscoring China's strategic role in Covestro's overall growth.

In Guangdong province, Covestro is constructing its largest thermoplastic polyurethanes production site in the coastal city of Zhuhai to cater to industries such as sports footwear, IT devices and automotive applications. The first phase of the site is expected to reach mechanical completion next year. Additionally, in September, Covestro announced plans to establish a new TPU APAC application development center in nearby Guangzhou, marking the company's second TPU-related investment in China in a short span and positioning it even closer to customers.

Collaborative advances

Lei affirmed China's importance in Covestro's growth strategy, saying the company plans to direct three-fourths of its Asia-Pacific investment to China over the next three years. Its localization strategy is deeply rooted in understanding China's market needs, and collaborations with local companies and research institutions enhance the company's adaptability and innovation capabilities. For example, its long-term partnerships with Tongji University include an Innovation Academy focused on industrializing new innovations and talent development, as well as a Sustainability Chair dedicated to advancing circular economy solutions and green materials to support China's green transformation.

Since its establishment in 2007, the Covestro-Tongji Sustainability Chair has conducted research on topics such as the circular economy, climate change and zero-waste cities, including recent projects on plastics waste recycling in Shanghai, contributing to both the value chain and society.

This year, Covestro also signed a cooperation agreement with Maysta, China's leading polyurethane additive supplier, and the Institute of Chemical Industry of Forest Products, Chinese Academy of Forestry, to jointly advance bio-based polyurethane solutions.

Further supporting the transformation of China's automotive industry, Covestro also recently signed a memorandum of understanding with Li Auto, a leading electric vehicle maker. The partnership focuses on developing cutting-edge material solutions for future-oriented applications while enhancing circularity and reducing carbon emissions. Key areas of collaboration include advanced materials for lighting, smart systems and thermal management solutions.

"Li Auto is dedicated to implementing the 'Smart + Electric' strategy with innovative materials and designs, aiming to offer users a safer, more comfortable, convenient and refined travel experience," said Liao Mengjun, vice-president of R&D operations at Li Auto. "Our partnership with Covestro will expedite our exploration in advanced materials, supporting the ongoing enhancement of user product demands."

Covestro's journey in China reflects a long-term commitment to sustainability, innovation and collaboration — aligning with the nation's development goals while setting a model for other global companies operating in the country.