The global 1,4-Butanediol (BDO) market is undergoing a historic structural shift. In early 2026, the European Union unveiled preliminary anti-dumping duties on BDO imported from China, imposing provisional tariffs ranging from 105.6% to 113.7%—effectively closing the EU market to Chinese BDO suppliers. Against this backdrop, chemical giant BASF has begun increasing BDO production at its Ludwigshafen site in Germany, aiming to fill the European supply gap. This move comes shortly after BASF completed its full exit from BDO production in China, raising widespread industry attention.
EU Anti-Dumping Duties Deal Heavy Blow to China’s BDO Exports
The EU’s anti-dumping investigation against BDO was launched in June 2025, covering China, Saudi Arabia, and the United States. On January 8, 2026, the preliminary ruling was disclosed, setting extremely high tariffs for Chinese producers—far exceeding those for Saudi Arabia (52.4%) and covering both bio-based and fossil-based BDO products. The provisional duties officially took effect on February 6, 2026, with a final ruling expected on August 5, 2026.
For China’s BDO industry, this policy represents a severe shock:
• Europe accounts for 21.4% of China’s total BDO exports, a key overseas market.
• Tariffs above 100% make exports to Europe economically unviable, virtually shutting down this channel.
Compounding the pressure, China’s Ministry of Finance and State Taxation Administration announced that starting April 1, 2026, BDO will be removed from the export tax rebate list. Previously enjoying a 13% rebate, exporters will face an immediate cost increase of about 13 yuan per 100 yuan of product value.
This double pressure—EU anti-dumping duties + canceled export tax rebates—has pushed China’s BDO industry into a tight corner. The domestic sector already suffers from serious overcapacity: total capacity exceeds 5 million tons, while domestic demand is only around 3 million tons. Most producers operate below cost and face sustained losses. With exports blocked, more supply will be forced back into the domestic market, intensifying competition, accelerating industry consolidation, and likely forcing smaller, high-cost producers to halt operations.
BASF Exits China, Expands in Europe
While Chinese BDO enterprises face mounting pressure, BASF’s strategic pivot has drawn intense focus.
In February 2024, BASF announced plans to sell its BDO-related assets at Xinjiang Meike Chemical. The full equity transfer was completed in April 2025, marking BASF’s complete withdrawal from BDO production in China.
Now, barely a year later, BASF is ramping up BDO output at its integrated Ludwigshafen, Germany, site to fill the supply vacuum left by the exit of Chinese and other targeted suppliers.
BASF’s decision reflects clear strategic logic:
• Strengthen localized European supply to enhance supply chain resilience.
• Leverage its fully integrated acetylene-based Vebon production system for cost and efficiency advantages.
• Reduce logistics costs and lower product carbon footprints.
• Support stable output of high-value derivatives including THF, PolyTHF, and NMP, which serve critical downstream industries such as polymers, elastomers, solvents, automotive, and pharmaceuticals.
BASF also emphasized that it is expanding its sustainable product portfolio, including biomass balance (BMB) BDO, aligning with Europe’s low-carbon and green development goals.
Global BDO Market Enters a New Era of Regionalization
The EU’s high anti-dumping tariffs and BASF’s capacity expansion signal that the global BDO market is moving toward regionalization and supply chain localization.
In the short term:
• Chinese BDO exporters lose meaningful access to Europe.
• BASF captures significant market share in its home region.
• Domestic competition in China intensifies as export volumes return home.
In the long term:
• China’s BDO industry will be forced to accelerate transformation: reducing overcapacity, upgrading technology, optimizing cost structures, and expanding domestic demand.
• Global supply chains will become more regionally self-sufficient.
• Leading integrated producers with local advantages, represented by BASF, will strengthen their dominant positions.
Conclusion
BASF’s counter-trend BDO expansion is not a random operational adjustment, but a precisely timed strategic move amid global trade restructuring and industrial regionalization. For China’s BDO sector, the dual shock of EU anti-dumping duties and canceled export tax rebates marks the start of a painful but necessary industry reshuffle.
In the new landscape, success will depend less on pure volume expansion and more on technological innovation, cost competitiveness, green production, and diversified market development.
