Up to Four Billion Euro Investments Earmarked This Is How BASF Wants to Become Carbon Neutral
By 2050, BASF wants to be climate-neutral. Based on recent progress in the development of CO2-reduced and CO2-free technologies, the company is simultaneously increasing its medium-term reduction target for greenhouse gas emissions by 2030.
Ludwigshafen/Germany — Compared to 2018, BASF aims to reduce the amount of greenhouse gases emitted worldwide by 25 % — despite targeted growth and the construction of a large Verbund site in southern China. Overall, the Group plans to invest up to one billion euros by 2025 and a further two to three billion euros by 2030 to achieve the new climate target.
In 2018, the Group's global emissions were 21.9 million metric tons of CO2 equivalents. In 1990, they were around twice as high. The new 2030 emissions target corresponds to a reduction of around 60 % compared with 1990 and will exceed the European Union's target of minus 55 %. Dr Martin Brudermüller, Chairman of the Executive Board, reaffirmed his company's commitment to the Paris climate agreement. Climate change was the greatest challenge of the 21st century. BASF had to align its processes and product portfolio to this, Brudermüller said.
At the heart of the long-term transition toward net zero CO2 emissions by 2050 is the use of new technologies, which will replace fossil fuels such as natural gas with electricity from renewable sources. Most of these technologies are being pioneered by the group in collaboration with partners and are currently in a pilot stage. Broad scaleup of these technologies will only be fully realizable after 2030. In order to accelerate the avoidance of CO2 emissions prior to that date, the company also continues to systematically implement continuous improvement processes for existing production plants. In addition, BASF plans to progressively switch to renewable sources to meet its electricity needs and intends to invest in wind parks to facilitate this.
One of the most important new technologies that the group is currently developing are electrically heated steam crackers for the production of basic chemicals such as ethylene, propylene and butadiene. These chemicals are building blocks for numerous value chains and are essential for chemical production. Hydrogen is another important feedstock for many chemical production processes. To achieve CO2-free production of hydrogen, BASF is pursuing two processes in parallel: the commercially available water electrolysis and methane pyrolysis, for which the company has developed a new process technology. Another important lever to increase energy efficiency is the use of electrical heat pumps to produce CO2-free steam from waste heat. BASF’s goal is to work with Siemens Energy to gradually ramp up this technology to industrial scale and use it for waste heat recovery at entire sites.
The chemicals company expects that this switch to climate-neutral production processes will lead to a sharp increase in electricity demand at the group’s major sites, including the largest production site in Ludwigshafen, in the coming decade. From around 2035, the group’s electricity demand is expected to be more than three times higher than it is today.
In addition to the planned investments in renewable energies, BASF is pursuing a number of specific flagship projects:
- Together with Sabic and Linde, BASF is working on the realization of a pilot furnace for the world’s first electrically heated steam cracker. Compared to conventional crackers, this would enable nearly CO2-free production of basic chemicals. If the necessary funding is granted, start-up of the pilot plant is slated to begin as early as 2023.
- The company is developing methane pyrolysis technology for the CO2-free production of hydrogen from natural gas. Compared to other processes for emission-free hydrogen production, methane pyrolysis requires only around one-fifth as much electrical energy. A pilot reactor has been constructed in Ludwigshafen and is being started up. Funding for this project was provided by the German Federal Ministry of Education and Research.
- In collaboration with Siemens Energy, BASF is currently investigating possibilities for the construction of a PEM (proton exchange membrane) water electrolysis system with a capacity of 50 MW for CO2-free production of hydrogen from water and electricity at the Ludwigshafen site. This CO2-free hydrogen would be primarily used as a raw material in the Verbund but would also be used to a limited extent to support the launch of the mobility market in the Rhine-Neckar metropolitan region.
- At the Antwerp site, BASF is planning to invest in one of the largest carbon capture and storage (CCS) projects under the North Sea. Together with partners in the Antwerp@C consortium, this creates the opportunity to avoid more than one million metric tons of CO2 emissions per year from the production of basic chemicals. A final investment decision is targeted for 2022.
However, most of the new technologies are not yet competitive under today’s framework conditions. Since it is very capital-intensive to replace existing highly efficient production processes with new plants, BASF is trying to secure funding from European and national programs such as IPCEI (Important Projects of Common European Interest).
“We are convinced that ultimately all players involved will work together to make this once-in-a-century transformation economically successful. This also includes consumers accepting higher prices for CO2-free products throughout the value chain to offset higher operating costs and additional investments. To achieve this, we need new cooperation between industry and policymakers that leads to positive, outcome-oriented regulations and preserves our international competitiveness,” said Brudermüller.