BASF invests up to €4 billion to slash CO2 emissions by half within ten years

29 Mar 2021 --- BASF plans to invest up to €4 billion (US$4.7 billion) by 2030 to cut CO2 emissions in half in its current business by the end of this decade.

The investment in low-emission and CO2-free technologies comes in response to the urgency of climate change, which BASF calls “the greatest challenge of the 21st century.”

“The pilot plants for most of the new technologies will be located in Ludwigshafen. For the scaling up after 2030 it will be a question of the conditions and the framework,” a spokesperson at BASF tells NutritionInsight.

“We are convinced that ultimately all players involved will work together to make this once-in-a-century transformation economically successful,” says Dr. Martin Brudermüller, chairman of the board of executive directors of BASF SE.  

“This also includes consumers accepting higher prices for CO2-free products throughout the value chain to offset higher operating costs and additional investments.” 

Under BASF’s new climate goals, it will reduce its greenhouse gas emissions by 25 percent compared with 2018. This takes into account growth and the construction of a large Verbund site in South China.

BASF calls on “regulation that enables change” to make sustainable investments more cost-effective.Moving away from fossil fuel
BASF will progressively switch to renewable sources to meet its electricity needs and intends to invest in wind parks to facilitate this.

Photovoltaics is another renewable option the company is looking into, notes the spokesperson. 

BASF 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. 

“A precondition for the transformation of chemical production is the reliable availability of large quantities of renewable electricity at competitive prices. At the moment, that is not the case in Germany,” adds Brudermüller.

Call for regulation
Regulatory framework conditions are also essential for making this transformation economically feasible, Brudermüller flags.

“Most of the new technologies cannot be implemented today because they will not be profitable under the regulatory conditions today. We need a regulation that enables change,” adds the spokesperson.   

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 need new cooperation between industry and policymakers that leads to positive, outcome-oriented regulations and preserves our international competitiveness,” said Brudermüller.

The company will first focus investment on the low-emission production of chemicals, such as ethylene, propylene and butadiene.Raising the bar 
In 2018, BASF Group’s worldwide emissions amounted to 21.9 million metric tons of CO2 equivalents. 

In 1990, this figure was roughly twice as high. The new 2030 emissions goal represents a reduction of approximately 60 percent compared to 1990 levels, which exceeds the European Union’s target of minus 55 percent. 

The move is part of its long-term path to achieving net-zero CO2 emissions by 2050.

“We must adapt our processes and our product portfolio. We need to accelerate this transformation now. We must first concentrate on the initial steps of this journey, not the final ones,” stresses Brudermüller.

“That is why BASF will increase its use of renewable energies. And we will accelerate the development and deployment of new CO2-free processes for the production of chemicals,” he explains.

It begins with chemicals
New technologies are at the heart of the transition toward carbon neutrality by 2050, which will replace fossil fuels such as natural gas with electricity from renewable sources. 

BASF is currently developing electrically heated steam crackers for the production of basic chemicals such as ethylene, propylene and butadiene, the building blocks for numerous value chains.  

BASF is also pursuing two processes in parallel to achieve CO2-free production of hydrogen: commercially available water electrolysis and methane pyrolysis, for which BASF has developed a new process technology. 

Investing for the future
Most of these technologies are being pioneered by BASF 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, BASF also continues to systematically implement improvement processes for existing plants. 

“With transparency and offerings to systematically and incrementally reduce the carbon footprint of BASF products throughout the entire value chain, we help our customers in all industries to reduce the carbon footprint of their own products,” says Brudermüller. 

For example, there will be options based on CO2-footprint for customers, notes the spokesperson.   

More tech ahead 
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 an industrial scale and use it for waste heat recovery at entire sites.

In other investments this month, BASF invested in Bota Bio, based in China, which is developing a biotechnology platform to produce high-value products sustainably and economically.

By Missy Green