With China entering a new era of green and innovation-led growth, Covestro AG, a German company that produces a variety of polyurethane and polycarbonate-based raw materials, will put a new polyurethane dispersion plant into operation in its Shanghai integrated site in 2024 to meet the country's soaring demand for water-based industrial products to further cut carbon emissions, said a senior executive.

PUD material is a polyurethane polymer resin dispersed in water, rather than a solvent. The materials can be used in more environmentally compatible coatings and adhesives for a wide range of applications, including automotives, construction, furniture, textiles, footwear and packaging.

Representing a combined investment of a double-digit million euro amount, the new plant will reinforce Covestro's market presence in China, especially in the areas of developing waterborne solutions, said Thorsten Dreier, who will become Covestro's chief technology officer and board member on July 1.

Headquartered in Leverkusen, Germany, Covestro has invested 3.7 billion euros ($4 billion) into the development of its integrated site in Shanghai since 2001. With 11 plants, the site has become the group's largest manufacturing base in the world.

"The situation in the Chinese market and also on a global basis for coatings and adhesives is that we see a development toward more bio-based and sustainable solutions," said Dreier, who is currently the head of Covestro's coatings and adhesives business entity.

The executive said the company will continue to tap into the trend of customers turning to sustainable waterborne systems with quality properties to replace solvent-based products.

As demand for flexible and durable materials in China and the Asia-Pacific region is growing fast, the German company is building another factory to produce polyurethane elastomers in its Shanghai site to supply customers from industries ranging from offshore wind to solar energy as well as material handling. The facility is expected to be operational later this year.

As China upholds its target of achieving carbon neutrality by 2060, Dreier said that Covestro has been aligning such targets with its own strategies and incorporating them into daily practice.

The company has signed several power purchase agreements for renewable energy with CGN New Energy Holdings Co Ltd, a unit of State-owned China General Nuclear Power Group, since late last year.

Under the agreements, effective January, Covestro's integrated site in Shanghai will receive around 300-gigawatt hours of green power annually from the Chinese company's wind and solar farms in the town of Lenghu in Northwest China's Qinghai province.

"This will account for 30 percent of the Shanghai site's power needs and reduce Covestro's carbon dioxide emissions by around 126,000 metric tons annually," he said, adding the group aims to become climate neutral by 2035 and is systematically converting its production worldwide to renewable energies to achieve this goal.

Dreier said that despite multiple challenges, China remains an attractive market, a well-developed industrial cluster and an increasingly efficient innovation hub for multinational corporations.

"Together with our R&D facilities in China, our localized operational mode has been practical to contact and support customers quickly," he noted.

China's opening-up measures will continue to push global companies from the high-end manufacturing sector to further transform traditional industries with smart manufacturing technology, said Sun Fuquan, vice-president of the Beijing-based Chinese Academy of Science and Technology for Development.

Electronics, green energy, chemicals, automobiles and other manufacturing fields will be key fields for foreign investors to develop in China in the coming years, as the country presses ahead with its pursuit of high-quality growth, said Sun.