BASF Discovered How to Make a USD 6.63 Billion Chemical from Biodiesel Waste

BASF’s G2PG technology converts glycerin – a biodiesel by-product – into pharmaceutical-grade propylene glycol with 60% lower CO2 emissions than conventional methods. In 2025, over 3,700 EU-approved medicines list this ingredient as an excipient. The market is repricing fast.

Somewhere in Poland, a plant is doing something chemically elegant.

It is taking glycerin – the thick, syrupy by-product that accumulates whenever biodiesel is produced – and converting it into one of the most commercially important chemicals in the global pharmaceutical supply chain.

The plant belongs to ORLEN Poludnie. The technology it runs was developed by BASF. And the product it makes – bio-based propylene glycol – is being absorbed by a pharmaceutical industry that cannot source enough of it to meet regulatory and sustainability commitments simultaneously.

The Global Propylene Glycol Market, valued at USD 4.91 billion in 2025 and projected to reach USD 6.63 billion by 2032 at a CAGR of 4.4%, per Maximize Market Research, is being pulled in two directions at once: upward by pharmaceutical demand, and sideways by a structural pivot from petroleum-based to bio-circular production. BASF sits precisely at the intersection of both forces.

The G2PG Process: Chemistry That Closes the Loop

BASF’s Glycerol to Propylene Glycol technology – commercially branded G2PG – is the leading commercially proven process for converting bio-glycerol into renewable propylene glycol. The process works through catalytic hydrogenation:

• Refined glycerin is hydrogenated in a liquid phase using BASF’s proprietary copper catalyst, across two serial fixed-bed reactors at 175-195 degrees Celsius
• The output is high-purity propylene glycol at a technical grade of more than 99.5% – matching or exceeding petroleum-based equivalents
• Carbon emissions are reduced by at least 60% compared to conventional fossil-based propylene oxide routes
• The feedstock – bio-glycerol – is a biodiesel industry by-product, meaning the process creates value from industrial waste rather than primary petroleum extraction

BASF has commercialised this technology since 2012 and has executed more than four full process design packages for external licensees. ORLEN Poludnie completed its first full year of G2PG operations in 2023, producing renewable propylene glycol at scale from biodiesel by-products generated in Poland’s biofuels sector.

MMR Insight: The G2PG process solves two problems simultaneously – it monetises a biodiesel waste stream that would otherwise require costly disposal, and it produces a high-purity chemical that is increasingly mandated over petroleum-based alternatives in pharmaceutical, food, and cosmetic formulations.

Why Pharmaceutical Demand Is Accelerating

Propylene glycol’s role in pharmaceutical manufacturing is expanding at a rate that is structurally supported by macro forces:

• Over 3,700 medicinal products authorised in the EU list propylene glycol as an excipient – including monoclonal antibodies, mRNA vaccines, and paediatric syrups
• 64% of new active substances approved in the EU in 2023 required propylene glycol as a co-solvent or stabilizer in liquid formulations
• Global pharmaceutical-grade PG production capacity increased 9% in 2024 alone due to facility expansions in North America and Asia Pacific
• The EU pharmaceutical excipients propylene glycol segment is forecast to grow at 8.9% CAGR through 2033, the fastest expanding sub-segment in the entire PG market

Final Take

BASF has built something quietly remarkable: a technology that converts an industrial by-product into a premium pharmaceutical ingredient with a dramatically lower carbon footprint than the material it replaces.

As pharmaceutical brands face both regulatory pressure to use USP-grade excipients and ESG pressure to reduce scope 3 emissions, the company that controls the leading licensed technology for bio-based pharmaceutical propylene glycol production may hold one of the most strategically valuable process assets in specialty chemicals today.