If you have an ACS member number, please enter it here so we can link this account to your membership. (optional)

ACS values your privacy. By submitting your information, you are gaining access to C&EN and subscribing to our weekly newsletter. We use the information you provide to make your reading experience better, and we will never sell your data to third party members.


Greenhouse Gases

BASF to deepen carbon emission cuts

German major tears up its 2019 target and commits $3.5 billion to its new low-carbon transition

by Alex Scott
April 1, 2021 | A version of this story appeared in Volume 99, Issue 12

A photo of BASF's main production complex in Ludwigshafen, Germany.
Credit: BASF
BASF new target of zero CO2 emissions by 2050 will require big changes at its complex in Ludwigshafen, Germany.

BASF has pledged to reduce its carbon dioxide emissions 25% by 2030 compared with 2018 and to cut them to zero by 2050. The German firm, the world’s largest chemical company, anticipates that its policy will cost it up to $1.2 billion by 2025 and as much as $3.5 billion more by 2030.

BASF’s greenhouse gas emissions in 2020 totaled 21.6 million metric tons (t). Because the firm anticipates a huge increase in production resulting from a chemical complex it is building in southern China, achieving its new 2030 goal will require it to halve emissions from its current operations.

BASF anticipates it will make substantial greenhouse gas emissions cuts by steadily replacing its use of fossil fuel as an energy source with electricity from renewable sources. The company says it will invest in wind farms to achieve this. BASF is also pursuing CO2-free production of hydrogen via water electrolysis and methane pyrolysis. And it’s installing electrical heat pumps to produce CO2-free steam from waste heat.

“Climate change is the greatest challenge of the 21st century,” BASF Chairman Martin Brudermüller says in a statement. Transforming chemical production will require large quantities of cheap renewable electricity, he adds. “At the moment that is not the case in Germany.”

Climate change is the greatest challenge of the 21st century.
Martin Brudermüller, chairman, BASF

Brudermüller’s new goals mark a significant shift in strategy. In 2019 BASF announced a then-new carbon emission strategy with the goal being only to stop increasing CO2 emissions through 2030. Around the same time, many other major chemical companies—including Dow, DuPont, and PetroChina—were setting more ambitious carbon reduction goals.

While BASF points to the significant costs associated with ratcheting down its greenhouse gas emissions, outside observers note that, without such investments, the firm faces costs resulting from a recent surge in the price of carbon emission permits under Europe’s Emissions Trading Scheme (ETS). In Europe, where BASF has about 40% of its sales, the cost of buying a permit that allows a company to emit 1 t of CO2 to the atmosphere has doubled in the past year or so to more than €40 ($47), and some analysts see it doubling again in the year ahead.

“It is now at €43. This is the highest price ever since the inception of the ETS in 2005,” says Sam Van den plas, policy director for Carbon Market Watch, a nonprofit organization encouraging a transition to a zero-carbon society. The price hike will encourage emitters to look more closely at their activities, he says. “Finally, after a decade and a half, the ETS is doing what it is meant to do.”

The German investment bank Berenberg estimates that, assuming BASF has not saved up emissions allowances, an ETS carbon price of €110 per metric ton would at current emissions cost BASF the equivalent of just under 3% of its expected 2021 pre-tax profit. BASF’s 2020 pre-tax profit was $9 billion.

Large European chemical firms currently receive most of their CO2 allowances for free. But this summer the European Commission will publish a set of proposals that could lead to a significant cut in free allowances as Europe attempts to meet its obligations under the Paris climate agreement, Van den plas says.


This article has been sent to the following recipient:

Chemistry matters. Join us to get the news you need.