BASF prepared the a way for new acetic acid process with their work on the catalytic conversion of CO and H₂. It was discovered around 1913 that methanol, the primary reaction product from synthesis gas, could be carbonylated to acetic acid. This route became economically feasible after 1920 when methanol was available in commercial quantities. Other firms, including British Celanese after 1925, then began working intensively with the carbonylation reaction, which takes place by the following equation:

Corrosion problems, present from the beginning, were only solved at the end of the 1950s with the use of newly developed, highly resistant Mo-Ni alloys (Hastelloye). In 1960, the first small plant was brought on line by BASF. In the industrial process (BASF), methanol - alone or mixed with and a small amount of H₂O - is reacted with CO in the presence of CoI₂ in the liquid phase at 250°C and 680 bar. The cation and anion act independently of one another in the reaction mechanism. It is assumed that cobalt iodide initially reacts to form tetracarbonylhydridocobalt and hydrogen iodide, which is then converted into methyl iodide with methanol:

Tetracarbonylhydridocobalt and methyl iodide react to form the important intermediate CH₃Co(CO)₄ which, after co insertion, hydrolyzes to form acetic acid and regenerate tetracarbonyl-hydridocobalt:

Thus both catalyst components are available for a new reaction sequence. In the industrial process, cobalt and iodine can be almost completely recovered. The selectivities to acetic acid are 90% (based on CH₃OH) and 70% (based on CO). The byproducts (4 kg per 100 kg acetic acid) include a multitude of chemicals. CO₂ is regarded as a coproduct. After a five-column distillation of the crude product, 99.8% acetic acid is obtained.

In 1983, there were two plants using the BASF process: one in West Germany, with a capacity of 50000 tonnes per year, and a Borden plant in the USA (since shut down) with a capacity of 65 000 tonnes per year.

Around the mid 1960s, Monsanto discovered that rhodium combined with iodine was a considerably more active catalyst system for methanol carbonylation than cobalt iodide. As with CoI₂ it is assumed that the active species is a metal carbonyl complex with methyl ligands, in the form of [CH₃-Rh(CO)₂I₃]-. By insertion of CO into the CH₃ - Rh bond, an acetylrhodium complex is formed. This can go on to react, for example, by methanolysis to form acetic acid and regenerate the initial complex:

In 1970, the first industrial plant went on stream in Texas City, with a capacity of 150000 tonnes per year acetic acid.

In the years following, the Monsanto process (now BP) was preferred for new acetic acid plants, so that by 1991 about 55% of the acetic acid capacity worldwide was based on this technology. In Japan, the first plant to use Monsanto technology - a 150000 tonne-per-year unit by Daicel Chemical - started operation in 1980; in Western Europe, the first was a 225000 tonne-per-year unit brought up by Rhone-Poulenc in 1981.

In the industrial process, methanol and CO react continously in the liquid phase at 150-200°C under a slight pressure of up to 30 bar to form acetic acid with selectivities of 99% (based on CH₃OH) and over 90% (based on CO). The main byproducts are CO₂ and H₂ from the water gas shift reaction. In a modern commerical unit, the fully automated process control system includes production and regeneration of the catalyst system, since a low-loss rhodium recycle is very important to the profitability of the process.

A new process concept has been employed by BP in a plant in England since 1989. By using a rhodium-catalyzed carbonylation of methanol/methyl acetate mixtures, yields of acetic acid and acetic anhydride of between 40/60 and 60/40 (which correspond to market demand) can be produced.