Germany-based polymer producer Covestro and US-based circular chemicals manufacturer Encina have reached an agreement on a long-term supply of circular raw materials derived from end-of-life plastics.

Encina will supply Covestro with benzene and toluene pending the completion of Encina's production facility, anticipated to come online at the end of 2027.

Benzene and toluene are important raw materials in Covestro's manufacturing processes for methylene diphenyl diisocyanate (MDI) and toluene diisocyanate (TDI) respectively. MDI and TDI are critical raw materials used to produce rigid and flexible polyurethane foams.

Benzene can also be used for the synthesis of phenol and acetone – raw materials for making polycarbonate plastics which are used in applications for packaging in the electronics, IT and other industries.

The agreement marks the first major procurement agreement involving chemically recycled, circular-based raw materials for Covestro and helps reduce its scope 3 emissions.

Covestro chief technology officer Thorsten Dreier commented: "The ability to source raw materials from used plastics for the manufacture of our products makes a decisive contribution to realising our vision of a circular economy.

Encina CEO David Roesser added: “This agreement represents the beginning of what we hope to be a long-standing partnership between our companies as we work to create a truly circular economy and realise a future in which nothing is wasted.”

The beginning of 2024 has already seen progress in the circular plastics landscape, with the Circular Packaging Association and Rebound partnering to standardise plastic recyclates.