Energy and climate protection

Strategy

• We are committed to energy efficiency and global climate protection along the value chain

We want to reduce greenhouse gas emissions in our production and along the entire value chain. To this end, we have thoroughly analyzed the greenhouse gas emissions from our production in the past few years and implemented comprehensive reduction measures.

Comparisons with European emissions trading benchmarks show that our greenhouse gas-intensive chemical plants operate at above-average efficiency. To supply our production sites with energy, we rely on highly efficient combined heat and power plants with gas and steam turbines, and on the use of heat released by production processes.

Our success also depends on the long-term security and competitiveness of our energy supplies. Furthermore, we are committed to energy management that helps us analyze and further improve the energy efficiency of our plants. We continuously analyze potential risks to our business operations arising in connection with the topics of energy and climate protection and derive appropriate measures.

We offer our customers solutions that help prevent greenhouse gas emissions and improve energy and resource efficiency. Around half of our total annual research and development spending goes toward developing these products and optimizing our processes.

Our climate protection activities are based on a comprehensive analysis of our emissions. We report on greenhouse gas emissions in accordance with the Greenhouse Gas Protocol Standard, as well as the sector-specific standard for the chemical industry. Since 2004, we have participated in the international non-profit organization CDP’s program for reporting on data relevant to climate protection. BASF again achieved a score of A- in CDP’s rating for 2017, awarding it “Leadership” status. Companies on the “Leadership” level are distinguished by factors such as the completeness and transparency of their reporting. They also pursue comprehensive approaches in managing the opportunities and risks associated with climate change as well as emissions reduction strategies to achieve company-wide goals.

Climate protection is a shared global task. We advocate climate protection by supporting initiatives to this end. In 2017, companies from G20 countries – the Business 20 (B20) – developed recommendations on energy, climate and resource efficiency for state and government leaders. BASF led this B20 task force. BASF supports a consistent implementation of the Paris climate accord as the necessary basis for limiting global warming. We therefore also joined the World Economic Forum’s CEO Climate Leaders initiative in 2017.

Reduction of greenhouse gas emissions per metric ton of sales product in BASF operations excluding Oil & Gas ¹ (%)

¹ The value for the 2012 business year was not adjusted to reflect the currently applied global warming potential factors. For more information on our data collection methods, see below.

Global goals and measures

• Reduction of greenhouse gas emissions per metric ton of sales product
• Introduction of energy management systems in accordance with ISO 50001

We aim to reduce our greenhouse gas emissions per metric ton of sales product by 40% by 2020, compared with baseline 2002. Our emissions rose year-on-year in 2017, mainly due to higher production levels of precursors within the Group and an increase in nitrous oxide emissions. In 2017, we reduced greenhouse gas emissions per metric ton of sales product by 35.5% compared with baseline 2002 (2016: reduction of 37.2%). Since 1990, we have been able to lower our overall greenhouse gas emissions from BASF operations (excluding Oil & Gas) by 48.3% and even reduce specific emissions by 74.7%.

We set ourselves a new energy efficiency goal in 2015 covering both the chemicals and the oil and gas businesses. By 2020, we want to have introduced certified energy management systems (DIN EN ISO 50001) at all relevant production sites.² Taken together, this represents 90% of BASF’s primary energy demand. This is one of the ways in which we intend to identify and carry out improvements in energy efficiency, reducing not only greenhouse gas emissions and saving valuable energy resources, but also increasing the BASF Group’s competitive ability.

The introduction and implementation of the energy management systems is steered by a global working group. All energy efficiency measures are recorded and analyzed in a global database and made available to BASF sites as best practices. Currently, over 100 measures are being pursued to reduce energy consumption and increase competitive ability. Sites and pilot plants across all regions were certified in accordance with ISO 50001 in 2017. These include the Verbund site in Antwerp, Belgium, production plants at the Guaratinguetá site in Brazil and Freeport in Texas, as well as another 10 sites in China, India, Singapore, Ireland, Norway and Switzerland. At the moment, 43 sites are certified worldwide, representing 54.3% of our primary energy demand.

Energy supply of the BASF Group 2017

Certified energy management systems (ISO 50001) introduced at BASF Group sites worldwide, in terms of primary energy demand (%)

Energy supply and efficiency

• Verbund system as important component of our energy efficiency strategy

Gas and steam turbines in our combined heat and power plants enable us to fulfill more than 70% of the electricity demand of the BASF Group. Compared with separate methods of generating steam and electricity, we saved 12.7 million MWh of fossil fuels and prevented 2.6 million metric tons of carbon emissions in 2017. The Verbund system is an important component of our energy efficiency strategy: Waste heat from one plant’s production process is used as energy in other plants. In this way, the Verbund saved us around 19.2 million MWh in 2017, which translates to 3.9 million metric tons less of CO₂ released to the environment. With combined power and steam generation as well as our continuously enhanced Energy Verbund, we were thus able to prevent a total of 6.5 million metric tons of carbon emissions in 2017.

We were able to further optimize the resource and energy consumption of our production in numerous projects around the world in 2017. In Ludwigshafen, for example, we were able to reduce the energy required for cooling by systematically analyzing the cold supply and using a new absorption chiller to make the existing waste heat steam available for cooling. Furthermore, process improvements at many additional sites have led to savings in steam and electricity.

We also rely on locally available energy sources for energy supply at our sites. Especially in the growing Asian market, we and our energy suppliers also utilize coal as an energy source in individual cases since the more climate-friendly natural gas is not available in sufficient quantities at competitive prices.

We are continuously exploring the use of renewable energies. The focus here is on the purchase of electricity. It only makes economic sense to replace highly efficient internal electricity and steam generation using natural gas once renewable energies offer the necessary supply security and are available at competitive prices.

Our research also contributes to increasing the efficiency of technologies for the use of renewable energy sources.

Carbon footprint and climate protection products

• Reporting on greenhouse gas emissions along the entire value chain
• Customers’ use of climate protection products sold in 2017 avoids 570 million metric tons of CO₂ equivalents

BASF has been publishing a comprehensive corporate carbon footprint since as early as 2008. This reports on all emissions along the value chain and shows the volume of emissions prevented through the use of our climate protection products. We plan our climate protection activities along the value chain based on our corporate carbon footprint.

Through various measures to reduce our raw material and energy requirements, the emission of greenhouse gases associated with producing the raw materials was decreased by a total of around 153,000 metric tons in 2017.

 Our climate protection products help us offer solutions to our customers to avoid greenhouse gas emissions over their entire lifecycle as compared with reference products. According to the systematic sustainability analysis we conduct on our portfolio – using the Sustainable Solution Steering^® method – such products are referred to as “Accelerator” solutions as using them contributes positively to climate protection and energy. One example is the ammonium stabilizer DMPP. As the main component of BASF’s Vizura^® fertilizer additive, it helps to increase plant uptake efficiency. This reduces the use of fertilizers or liquid manure and cuts nitrous oxide emissions by 50% on average.

Greenhouse gas emissions along the BASF value chain in 2017 ⁴ (million metric tons of CO₂ equivalents)

⁴ According to Greenhouse Gas Protocol, Scope 1, 2 and 3; categories within Scope 3 are shown in parentheses

An analysis of 23 climate protection product groups revealed that customers’ use of products sold in 2017 helps to avoid 570 million metric tons of CO₂ equivalents. Every product makes an individual contribution in the value chain of customer solutions. Value chains are assessed in terms of BASF’s economic share of the respective customer solution. On average, 6% of the emissions avoided were attributable to BASF in 2017. The calculation of avoided greenhouse gas emissions took into account the chemical industry standards of the International Council of Chemical Associations (ICCA) and the World Business Council for Sustainable Development (WBCSD).

Prevention of greenhouse gas emissions through the use of BASF products (million metric tons of CO₂ equivalents)