On March 20, Covestro announced that it has successfully completed the modernization of the TDI (toluene diisocyanate) plant in Dormagen and officially put the plant into operation.

Image source: Covestro

It is reported that the core of this modernization upgrade is the installation of a new reactor weighing 150 tons and nearly 20 meters high, which recycles the energy generated during the reaction process for steam production, achieving energy recycling. After this upgrade, energy consumption is reduced by 80% compared to traditional processes, and 22,000 tons of carbon dioxide emissions can be reduced annually.

The factory is the largest TDI production plant operated by Covestro in Europe, with an annual capacity of 300,000 tons, using gas phase technology developed by Covestro. In the summer of 2023, Covestro launched a renovation, investing millions of dollars. The successful renovation not only strengthened the plant's market position in the face of high energy costs but also significantly improved the competitiveness of TDI production in Europe, and provided customers with TDI products that have a lower carbon footprint. TDI is a key chemical raw material component for various polyurethane-based materials.

Image source: Covestro

In addition, Covestro has set a target to reduce the CO2 emissions per ton of product from energy use by 20% compared to 2020 levels by 2030.

In addition, in the global wave of green transformation in the TDI industry, our country has also made new progress in achieving low-carbon and green development of TDI: in August 2024, the Shaanxi Coal Technology Center successfully developed the world's first pilot plant for non-phosgene TDI green synthesis technology.

It is worth mentioning that for the decarbonization of the isocyanate series, global enterprises are achieving this through process innovation, raw material substitution, and breakthroughs in carbon cycling. For example, in June 2024, Lehua New Material announced its domestically developed non-phosgene XDI production technology, which has been validated by customers; in February 2025, a team from the Institute of Process Engineering, Chinese Academy of Sciences, in collaboration with Shaanxi Coal, completed the industrial trial of urea-based non-phosgene MDI technology, breaking international monopolies;

In addition, as a key raw material for bio-based polyurethane, the market size of bio-based MDI will gradually expand in the context of dual carbon, along with the expansion of the bio-based polyurethane industry. Companies such as BASF, Covestro, Huafon Chemical, and Lanxess have laid out plans for bio-based MDI. For example, polyurethane cold storage sandwich panels produced using BASF's biomass balanced MDI have been put into commercial operation in 2024; Huafon Chemical and Covestro use alternative raw materials containing plant waste to produce bio-based MDI. Regarding bio-based MDI.

In addition, Tosoh of Japan uses CO2 recovery technology to utilize the captured CO2 for the production of isocyanate products (MDI, HDI, etc.), promoting the low-carbonization of the polyurethane industry chain.

The global TDI production capacity distribution is as follows. Due to the impact of energy costs and environmental policies, overseas TDI production capacity continues to shrink. Among them, Petroquímica Río Tercero, the only TDI manufacturer in Argentina and the entire Latin America, due to its limited company scale, increased competition, and low profits, shut down its 28,000-ton/year TDI plant located in Córdoba in October 2024.

BASF has already closed its TDI and precursor facilities at the Ludwigshafen site at the beginning of 2023; Tosoh Japan also ceased its TDI production in Nanyo, Japan (about 25,000 tons/year) in 2023.

And with a complete industrial chain, our country has become the main supplier of TDI globally, accounting for nearly 40% of the world's TDI production capacity. Companies such as Wanhua Chemical, Covestro, and BASF dominate the market, with the current production capacities as follows:

Domestic existing TDI production capacity and technology (as of June 2024)

Among them, the first and second phases of Wanhua Fujian TDI are planned to be expanded to 360,000 tons/year, and Hualu Hengsheng also plans to build a new capacity of 300,000 tons/year in Jingzhou.

However, the current and planned production capacities in the country are still mainly based on the phosgene method, and the large-scale application of low-carbon technology will be the key for the future.

From the market perspective, since the beginning of the year, the domestic TDI market has remained stable, with a slight increase in prices in mid-January. Prices began to decline at the beginning of February. As of March 17th, the mainstream quotations in East China and South China regions were in the range of 11,900-12,500 yuan/ton, with downstream demand showing a lackluster performance. However, the TDI market in 2024 has been experiencing low demand, with most TDI production enterprises reporting net losses. The July TDI settlement price for BASF Shanghai in 2024 was 13,400 yuan/ton, and its August listing price was 18,000 yuan/ton. Compared to last year, TDI prices this year are relatively lower.

source: TianTian Chemical Network

As the global production capacity landscape is being restructured, while ensuring supply, our country needs to accelerate technological upgrades to address the dual challenges of international competition and low-carbon transition. From the previous context, our country is accelerating the industrialization process of non-phosgene technology.

The upgrade of Covestro's European plant not only sets a benchmark for energy efficiency in the industry but also marks the transition of TDI production from a traditional high-energy-consuming model to a greener and more efficient one, injecting new momentum into the sustainable development of the polyurethane industry.