Covestro to use renewable energy from Chinese producer CGN for Shanghai plant

Covestro to use renewable energy from Chinese producer CGN for Shanghai plant

German materials firm Covestro says it is taking another major step forward on its path to climate neutrality. The company has signed several multi-year power purchase agreements (PPA) with CGN New Energy, including one that will cover around 30% of the electricity needs of its production site in Shanghai.

“Covestro aims to become climate-neutral by 2035 and is systematically converting its production worldwide to renewable energies to achieve this goal,” says CE Markus Steilemann. “On the way to achieving this, we have reached a new milestone with this agreement. At the same time, we are contributing to the further expansion of the entire market for renewable energies with our investments and our commitment.”

Under the PPA, the Covestro Integrated Site Shanghai will purchase approximately 300 gigawatt hours of green power annually from CGN’s wind and solar farms in the town of Lenghu in northwest China’s Qinghai province. The agreement will reduce Covestro’s carbon emissions in China by around 126,000 tonnes/year of CO2. This is equivalent to the emissions of around 60,000 gasoline-powered cars/year. The PPA is scheduled to take effect in January 2023.

“We are delighted to support leading chemical companies like Covestro in converting their production sites to renewable electricity. We look forward to our further cooperation with Covestro, and together we will also contribute to China’s dual carbon targets and sustainable development,” says Qi Fang, Deputy General Manager of CGN New Energy.

The Shanghai site is already partly supplied by renewable energy. For example, in 2022 alone, it is expected to use more than 300 gigawatt hours of solar power generated in northwest China.

“This new contract is a milestone in the Shanghai site’s journey to net-zero emissions. We have increased energy efficiency and significantly reduced emissions over the years, and the use of green power and alternative raw materials will be a key focus as we strive for carbon-neutral production in the next decade,” says Holly Lei, President of Covestro China.

Covestro to use renewable energy from Chinese producer CGN for Shanghai plantMeanwhile, Covestro’s Guangzhou and Foshan sites in south China will be powered with 100% renewable electricity. Starting next year, both sites will be using power generated from CGN’s offshore wind farms in Guangdong province.

The latest PPAs in China follow purchase agreements Covestro had already signed with energy suppliers in Europe.

Under one agreement, utility Ørsted will supply offshore wind energy starting in 2025, which is expected to meet 10 percent of the electricity needs of Covestro’s sites in Germany.

Under another, Engie, Belgium’s largest renewable energy producer, will provide onshore wind energy to meet 45% of the electricity demand of Covestro’s Antwerp production site in Belgium.

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