Raw materials

Strategy

The Verbund system is an important cornerstone of our resource efficiency strategy: The by-products of one plant often serve as feedstock elsewhere, thus helping us to use raw materials more efficiently. In 2015, BASF purchased a total of around 30,000 different raw materials from more than 6,000 suppliers. Some of our most important raw materials are naphtha, natural gas, methanol, ammonia and benzene. We apply the “mass balance approach” in our Verbund system for the use of renewable raw materials. Furthermore, we are involved in the responsible cultivation and utilization of renewables in numerous projects along the value chain.

Renewable resources

• Bio-based PolyTHF^® 1000 offered for testing purposes for the first time
• New voluntary commitment and goals for procuring palm oil products

In 2015, around 5.8% of the raw materials we purchased worldwide were from renewable resources. To make the use of these materials more competitive, we work on product innovations based on renewable raw materials as well as on enhancing production processes in reaction technology and preparation.

We also further promoted our “mass balance” method on the market in 2015. This approach uses renewable raw materials from certified sustainable production from the very beginning of the value chain in the existing Production Verbund in order to save fossil resources. The proportion of renewable raw materials is allocated to customer-selected products according to their formulations. The quality of the final product remains unchanged. This method is currently being applied for numerous BASF products – for example, for superabsorbents, dispersions, plastics such as polyamides and polyurethanes, and for intermediates available on the market as “drop-in products.” These can be used in place of previously employed products in the production process without having to change the process itself.

Since 2013, we have provided our customers with 1,4-butanediol (BDO) on a commercial scale using sugars as a renewable feedstock based on a licensing agreement with the U.S. company Genomatica Inc. BDO and its derivatives are used, for example, to manufacture plastics for the automotive and textile industries. We use BDO produced with the Genomatica license to make bio-based polytetrahydrofuran 1000 (PolyTHF^® 1000), which we offered to customers for testing purposes for the first time in 2015. PolyTHF^® 1000 primarily serves as a chemical component in thermoplastic polyurethane (TPU), an ingredient used to manufacture skis and roller skates, shoe soles, dashboard films in the automotive industry, and many other products.

In 2015, we completed our joint project with Cargill and the German governmental agency for international cooperation on the sustainable production of coconut oil in the Philippines. Small farmers now produce the world’s first Rainforest Alliance-certified dried coconut meat (copra), from which the oil is extracted.

Palm oil, palm kernel oil, and their derivatives are some of our most important renewable raw materials. We want to ensure that the raw materials we use stem from sustainable, certified sources and actively support the Roundtable on Sustainable Palm Oil (RSPO). In 2015, we revised and expanded our voluntary commitment to the sustainable procurement of palm oil products. This is to contain guidelines for procuring palm oil and palm kernel oil, as well as their primary derivative products. The guidelines involve requirements for protecting and preserving forests and peatland, along with the involvement of local residents in decision-making processes. In order to further increase the availability of sustainable, RSPO-certified palm oil and palm kernel oil, we will involve more and more small farmers by supporting suitable projects. Our goal is to exclusively obtain palm oil and palm kernel oil that has been certified by the RSPO insofar as this is available on the market. The voluntary commitment has been expanded to include the most important intermediate products based on palm oil and palm kernel oil up through 2025; these include fractions and primary oleochemical derivatives as well as edible oil esters.

Mineral raw materials

We procure a number of mineral raw materials, like precious metals, that we use to produce process and mobile emissions catalysts. In suspected cases, we investigate the origins of minerals – as defined in the Dodd Frank Act – to see if they come from conflict mines. We reserve the right to conduct an external audit and, if necessary, terminate our business relationship. The suppliers addressed have confirmed to us that they do not source minerals matching this definition from the Democratic Republic of Congo or its neighboring countries.

Preserving ecosystems

• Our production sites reviewed for proximity to internationally protected areas
• BASF partnership supports preservation of biodiversity

Biodiversity forms the foundation of ecosystem services. Internationally protected areas play a critical role in maintaining biodiversity around the world. This is why, in 2015, we once again investigated our production sites to discover which are located near internationally protected areas: 2% of production sites (excluding Oil & Gas) are adjacent to a Ramsar Site and 2% to a Category I, II or III protected area of the International Union for Conservation of Nature (IUCN). None of our production sites are adjacent to a UNESCO protected area. Our 2015 analyses revealed no impact of our activities on biodiversity in these areas. In 2016, we will review the evaluation methods we have used up to now in order to even better identify any relevant impacts in the future.

Furthermore, we promote projects that contribute to the preservation of biodiversity. These include, for example, the “Farm Network” – a partnership brought to life by BASF in 2002 between independent farms, environmental protection organizations, universities and agricultural technology suppliers. The partners concentrate on strengthening biodiversity as well as responsible use of water and soil in commercial agriculture. By developing practical and locally adaptable measures for modern farms, the Farm Network has already helped numerous farmers increase the biodiversity of birds and insects in their fields and save water and soil resources. The first Farm Network conference took place in 2015, where BASF invited experts from six European countries to share their experiences with new agricultural practices and strengthen their network.