Friday - June 17, 2016

Inauguration of CO2-based polyol production plant

Address by Patrick Thomas

Chairman of the Board of Management

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Thank you, wonderful CO2 trio!

Ladies and gentlemen, we have now been tuned up, in the truest sense of the word, for the subject at hand and today’s event, to which I would like to extend my warmest welcome. It’s good to have you here!

Theater. We all know it’s an illusion. In this case, however, the illusion is very close to the truth. What the actors are showing us in their performance is a dream that has come true. A dream that chemists have had for many years. A dream that basically affects us all.

Year after year, we all look on as billions of tons of carbon dioxide are released into the atmosphere – from factories, homes and automobiles. No one can doubt that there are consequences on the environment.

CO2, the unpopular greenhouse gas and that’s how it is generally perceived. In fact, however, that is only half the story. Just as in a play, when the suspected villain frequently turns out to be the hero, carbon dioxide has two faces. In fact, it is at the same time a useful substance.

For example, carbon dioxide is what makes plants grow. We know that from biology class: CO2 plus sunlight produces hydrocarbons, the building blocks and energy source of flowers, shrubs and trees. CO2 also gives the sparkle to mineral water. It powers fire extinguishers and is used as a coolant.

And not only that: CO2 is also the stuff of the dreams for many people in my line of business, the plastics industries. In 1969, a scientist from Japan succeeded in bringing this dream to life for the first time – by using the elementary carbon in CO2 to produce plastics.

The big advantage is that: It allows us to conserve fossil fuels such as crude oil and natural gas, which are the conventional sources from which industry obtains the carbon it needs. It also opens vast opportunities for the expansion of the resource base and the conservation of resources.

Today, more than four decades later, this vision is becoming reality. Thanks to a new process that we at Covestro have developed with partners. And we are now implementing this process in the production plant that has just been officially inaugurated. Here we will use CO2 to produce an important component of foams that are used in mattresses and upholstered furniture. Soon we will be able to sleep on CO2.

But before we press the start button, I would like to welcome two very special honored guests: Thomas Rachel, State Secretary at the Federal Ministry of Education and Research in Berlin, and Professor Ernst Schmachtenberg, Rector of RWTH Aachen University. Welcome!

You are the very personifications of science and politics. And it is precisely the collaboration between science, politics and industry that we have to thank for the realization of the dream of CO2 as an alternative raw material.

The integration of this molecule into plastics is by no means a trivial accomplishment. It also took a great deal of persistence, passion and painstaking detail to turn this scientific spark into a fire. And it took the right economic framework.

Mr. Rachel, your organization created that for us. The Federal Ministry of Education and Research was quick to recognize the potential of using carbon dioxide as a raw material in the chemical and plastics industries. You provided an extensive program of subsidies and generously supported our project in the research phase.

I would like to take this opportunity to express my sincere thanks. And I am very pleased that the use of CO2 will continue to play a role in the continued growth of Germany as a home for high-tech industries. We look forward to hearing more about it from you.

Professor Schmachtenberg, you deserve our thanks for fruitful collaboration on the scientific level. RWTH and Covestro jointly operate the CAT Catalytic Center, a research institute in Aachen that attracts scientists from all over the world. The Center’s experts and our own researchers achieved the scientific breakthrough that first made the efficient use of CO2 in plastics production possible.

Let me briefly describe the challenge. Everyone knows that carbon dioxide is the end product of combustion. In other words, it only contains little energy. And so it is difficult to get it to react with other substances. You need to give it a little push first.

To get the chemical reaction going, you need a catalyst. But not just any catalyst. You need one that is specially designed for precisely this function. Scientists worldwide have been searching for this catalyst for generations.

Our experts, with colleagues from the CAT Catalytic Center in Aachen, were also on the hunt. And now, finally, their efforts have paid off: We have found the right catalyst. Chemists call the result a “dream reaction” – an unusual and fantastic reaction. That's where we got the name for our project: Dream Production.

What exactly do we do with the catalyst? We use it to produce an innovative form of polyol. Polyols are the precursor products I spoke about before. The CO2 is broken down and chemically bonded to other substances.

We use polyols to produce polyurethane foam, a versatile material we encounter everywhere in our daily lives. As insulation in houses and refrigerators, for example, or in automobile seats. And also in mattresses and upholstered furniture, for which the special CO2-based polyols have been created. They contain approximately 20 percent carbon dioxide – as much as possible in this case – and that allows us to conserve that much crude oil.

We intend to produce up to 5,000 metric tons of the new material in our new plant here in Dormagen. We have invested approximately 15 million euros in the process. And I can tell you this much: There is tremendous interest in this innovative product.

Ladies and gentlemen, the fact that we have come so far today is not only the result of groundbreaking research and support from the Federal Ministry of Education and Research. Also industrial partners such as the energy group RWE made a major contribution. As our partner in the research and development phase, RWE also supplied us with CO2 from a nearby, coal-fired power plant.

I would not like to conceal the efforts of Covestro either. The use of carbon dioxide as an innovative raw material also represents the successful efforts of a large team from many different disciplines.

Under the leadership of Dr. Karsten Malsch, engineers, applications developers, marketing experts and numerous others worked hand in hand. I am delighted to welcome so many of you here today. You have done a fantastic job, and I would like to extend my sincere thanks to each and every one of you.

Innovations like this are what define Covestro. Officially, our company is still very young. As you know, we gained independence and launched our IPO only last fall. But in fact the company has been around for decades, coming up with remarkable innovations time and time again.

Besides new manufacturing processes such as our CO2 process, our breakthroughs have also included new products. An extremely effective and super-lightweight polyurethane insulation, for example. This material is even used in the Solar Impulse, the solar-powered aircraft that is flying around the world without a single drop of fuel. Without this insulation, the pilot could not survive in the tiny cockpit.

As with Solar Impulse, innovation and sustainability go hand in hand at Covestro. And that is also the foundation of our purpose: “To make the world a brighter place.”

Ladies and gentlemen, the “dream team” of innovation and sustainability has also achieved success in the use of CO2 and created the new technology we will be marketing under the name “cardyon.”

The process is not just more environmentally compatible than conventional production technologies. Most importantly – and let me emphasize this again – it helps us conserve the scarce resource petroleum and expands our resource base.

We also want to expand our product portfolio. Our researchers are working on using CO2 to produce additional plastics besides flexible foam. They are also tinkering with other processes to increase the proportion of carbon dioxide they use.

As you can see, ladies and gentlemen, Dream Production is becoming a reality. But this beautiful CO2 dream is far from over.

And with that, let me turn the stage over to State Secretary Rachel.

Forward-looking statements
This press release may contain forward-looking statements based on current assumptions and forecasts made by Covestro AG. Various known and unknown risks, uncertainties and other factors could lead to material differences between the actual future results, financial situation, development or performance of the company and the estimates given here. These factors include those discussed in Covestro’s public reports which are available on the Covestro website at Covestro assumes no liability whatsoever to update these forward-looking statements or to conform them to future events or developments.