E1 Climate Change¹

Strategy and Governance

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Climate change is the greatest challenge of the 21st century. Swift and resolute action is needed to achieve the targets agreed in the Paris Agreement. We stand by this responsibility. Climate change mitigation and the transformation of the chemical industry are very important to us and an important part of our corporate strategy (for more information, see Our Strategy).

BASF is taking a step-by-step approach to the green transformation and is combining climate change mitigation with its customers’ and its own success. Our ambition is to be the preferred chemical company to enable our customers’ green transformation. In recent years, we have increasingly invested in renewable energy to power our plants, tested new technologies and deployed alternative raw materials so as to drive forward our transformation and launch more sustainable products with a reduced or a net-zero carbon footprint on the market. This also allows our customers to benefit from our emission reduction measures.

In the future, we will focus even more on the specific opportunities for our business and will prioritize projects for which we see growing customer demand and willingness to pay. The focus will continue to be on projects that secure our license to operate. We will stagger our transformation projects over time in keeping with these priorities. In a first step, we are planning to use greater amounts of bio-based and recycled feedstocks in our existing plants. In doing so, we will make the most of the unique advantages offered by our Verbund. We are expecting demand for more sustainable products to outpace supply in the medium term, leading to profitable growth for BASF. As the markets for more sustainable products grow, we will be in a position to scale up and apply the new technologies that we are currently developing and, in some cases, already piloting. This step-by-step approach to transformation is reflected in our investments: Expenditure associated with the transformation is expected to average €600 million per year between 2025 and 2028. We expect that the majority of major capital expenditures for our green transformation will arise in the period after 2030.

We have established comprehensive management and control systems to minimize negative environmental impacts and protect the environment. Our Responsible Care Management System includes not only Group-wide requirements and guidelines for health and safety (for more information, see E2 Process, product and transportation safety and S1 Occupational safety and health) but also the areas of environmental protection and energy. Our global environmental protection standards serve to assess environmental impacts such as those resulting from CO₂ emissions. In addition, we implement the technical, operational and administrative measures needed to control and minimize these impacts, and ensure that we comply with national and local environmental legislation. Our global energy standards are specifically aimed at reaching our Scope 1 and Scope 2 climate protection targets (see Global Targets). In them, we undertake to continuously improve the energy efficiency of our operating procedures by implementing energy management systems, and to drive forward resource-saving and economic production at our sites. Moreover, we have defined general guidelines for optimizing existing energy supply structures and developing new energy supply concepts. These also involve evaluating low-emission and emission-free alternatives such as electricity and steam from renewable sources. We use requirements for systematically collecting and monitoring emissions and energy data as the basis for improving our sustainability performance and managing our climate protection targets.

The Corporate Environmental Protection, Health, Safety and Quality unit in the Corporate Center defines Group-wide management and control systems and monitors compliance with internal requirements and legal regulations, while the sites and Group companies implement these requirements locally. We regularly audit our performance and progress, and hence the effectiveness of our requirements. Our global network enables information and insights to be shared across the BASF Group on a regular basis. Our requirements and guidelines are continuously updated. To this end, we also exchange information with authorities, associations and international organizations. For example, BASF is actively involved in the global Responsible Care^® initiative established by the International Council of Chemical Associations (ICCA).

We address climate change adaptation centrally through our approach to assessing physical climate risks (see Climate-related physical and transition risks). Based on this, our sites resolve and implement local measures such as adapting logistics to low water as well as flood protection measures. The risks associated with adapting to climate change depend heavily on the geographical location of our sites, site-specific conditions and the underlying regulations in the respective countries, and in some cases differ considerably. An overarching policy therefore does not exist.

We have also established guidelines and requirements for managing our emissions along the value chain, and thus our Scope 3.1 target and the Scope 3.1 emissions for our net-zero target by 2050. Our procurement organization has established a global risk-based management system for our upstream supply chain. We have defined the standards for this in a global procurement requirement. We continuously enhance this requirement and our structures and processes in order to adapt to changing conditions. Our suppliers are required to comply with internationally recognized environmental standards. Our expectations of our suppliers are laid down in the global Supplier Code of Conduct (see S2 Strategy and Governance), which is part of our purchasing conditions. The code is based, among other things, on the Ten Principles of the United Nations Global Compact initiative and the Responsible Care^® initiative, and includes the deployment of energy-efficient, environmentally friendly technologies. We endeavor to ensure compliance with these requirements using a multistage control process. In addition, BASF has drawn up principles for the responsible procurement of renewable raw materials, plus standards in relation to Product Carbon Footprints and eco-efficiency analyses with the aim of reducing our products’ carbon footprints.

For further explanations of our overarching policies in respect of scope of application, accountability, impacts in the value chain, global applicability, accessibility to stakeholders and engagement thereof, see General Disclosures in our Sustainability Statement.

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We have laid the foundations for our successful transformation by establishing internal incentive schemes and we are setting up our organization accordingly.

We anchored reducing our Group-wide CO₂ emissions (Scope 1 and Scope 2)⁶ as the most important nonfinancial key performance indicator in the BASF Group’s steering and compensation systems back in 2020, giving it even more weight. This is one of three equally weighted (33.3%)⁷ strategic targets for the long-term incentive (LTI) of the Board of Executive Directors and senior executives. Supervisory Board remuneration does not include any variable components and so is not linked to target achievement.

We used a short-term incentive (STI) program to introduce targets for the senior executives in our operating business units in the reporting year, with the goal being to drive forward the market-driven transformation as part of our new strategic direction. In addition to the financial targets, this defines three further targets: occupational and process safety, sustainability and development of the operating divisions. The first two targets mentioned are sustainability-related. All three objectives are equally weighted in the STI calculation and together account for 25% of the total STI formula. This means that 16.7% of the entire STI formula is sustainability-related. The sustainability target includes elements that contribute to our green transformation, such as sales of our Sustainable-Future Solutions (for more information, see the General Disclosures, Sustainable steering of our product portfolio) or that increase the share of purchased raw materials with supplier-specific Product Carbon Footprints (for more information, see Actions along our value chain).

• For additional information on integrating sustainability-related achievements into our incentive systems, see the Compensation Report

Our organizational structures are designed in such a way as to permit a market-driven transformation to a more sustainable product portfolio, plus the achievement of our climate protection targets. The Corporate Center unit Corporate Environmental Protection, Health, Safety and Quality, which reports to a member of the Board of Executive Directors, is responsible for our Responsible Care Management System. The Corporate Strategy & Sustainability unit, which reports to the Chairman of our Board of Executive Directors, develops the BASF Group’s climate protection targets and tracks the emission reduction levers aiming at achieving them. The Global Procurement unit, which reports to the Chief Financial Officer, is responsible together with Corporate Strategy & Sustainability for the purchasing processes and procurement requirement relating to our raw materials-related targets. As part of our new corporate strategy, the BASF Renewable Carbon unit within Global Procurement is continuing to drive the sourcing of renewable raw materials and biomass for BASF’s operating divisions. This is the counterpart to BASF Renewable Energy GmbH, the subsidiary that coordinates the procurement of renewable energy.

The Net Zero Accelerator unit, which had focused on emissions reduction projects since 2022, was dissolved as of January 1, 2025, in line with the new corporate strategy. The activities were integrated into existing divisions and service units, ensuring that BASF’s green transformation is aligned even more closely with market trends and that the business can better react to new customer requirements.

Transition plan for climate change mitigation

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We are pursuing ambitious climate protection targets. We want to reduce greenhouse gas emissions from our production processes (Scope 1) and our energy purchases (Scope 2) by 25% by 2030 compared to the base year of 2018, and are aiming to achieve net-zero greenhouse gas emissions by 2050.⁶ Our target focuses on emissions caused by our production and includes around 96% of our Scope 1 emissions and 99% of our Scope 2 emissions (see Global Targets).⁸ It is compatible with limiting global warming to 1.5°C based on the emission reduction pathways described by the International Energy Agency (IEA) in its study entitled “Net Zero by 2050.”⁹ Already today, the emissions intensity of our plants for producing basic chemicals such as ammonia, methanol and high value chemicals is below the values defined by the IEA for 2030.

• Additional information on the analysis of our Scope 1 and Scope 2 target and on compatibility with the goals of the Paris Agreement

Above and beyond our own production, we take responsibility for emissions along our value chain. This is why we set ourselves a target for our raw materials-related Scope 3.1 emissions in 2023 that includes around 92% of our Scope 3.1 emissions.¹⁰ Raw materials-related emissions from battery materials are initially excluded from the target (see Global Targets, Scope 3.1). By 2030, we want to reduce these Scope 3.1 emissions in relation to the purchasing volume specifically by 15% compared to the 2022 base year (see Global Targets, Scope 3.1). However, the IEA study does not provide a basis for deriving an emissions reduction pathway for these emissions.

To achieve our climate protection targets, we have developed a transition plan¹¹ that shows our emissions reduction path based on the most important levers. We are focusing on the following emission reduction levers¹² to reduce our greenhouse gas emissions from our own production and energy purchases (Scope 1 and 2):

• Renewable energy: We are increasingly meeting our electricity needs from renewable sources (see Actions, Renewable energy).
• Operational excellence: Our operational excellence activities are continually improving the energy and process efficiency of our plants (see Actions, Operational excellence).
• Low-emission steam generation: In the future, we will increasingly rely on electrification for steam generation and hence also tap previously unused waste heat potential (see Actions, Low-emission steam generation).
• Climate-smart technologies: We are developing completely new emission-free and low-emission processes, and are assessing and piloting new technologies for more sustainable chemistry (see Actions, Climate-smart technologies).

Transition plan for climate change mitigation

Million metric tons of CO₂ equivalents

Roughly half of BASF’s Scope 1 and Scope 2 emissions are attributable to energy produced to operate our plants. Scope 2 emissions can be reduced by up to 3.2 million metric tons of CO₂ by 2030 using the “renewable energy” lever. Additional emission reductions of up to 0.6 million metric tons of CO₂ (Scope 1) are possible in the period up to 2030 using the “low-emission steam generation” lever. In the long term, new steam generation technologies such as heat pumps and e-boilers not only enable emission reduction but will also enable decoupling of highly efficient steam and power generation in combined heat and power plants. The electricity generated from this today can then also be provided using renewable energy. The other half of our Scope 1 and Scope 2 emissions arise in our production processes. One way of reducing these emissions is the continuous improvement of our plants (operational excellence). We see a reduction potential of up to 0.6 million metric tons of CO₂ (primarily Scope 1), which we aim to achieve by 2030. Furthermore, we are working to develop and implement climate-smart technologies so as to facilitate lower-emission production. This will result in further potential reductions of up to 1.1 million metric tons of CO₂ (Scope 1) by 2030. Our emission reduction levers enable the reduction of growth-related CO₂ emissions that will be added by 2030, which are associated with organic growth and the investment in our new Verbund site in southern China. All reduction measures implemented are to be regarded as long-term. We will counteract growth-driven emission increases between 2030 and 2050 primarily using the “climate-smart technologies” and ”low-emission steam generation” levers.

The transition plan reflects the market-driven transformation approach set out in our new strategy, which was published in the reporting year and in which we have adopted a step-by-step approach (see also Strategy and governance). In the first phase, we already succeeded in securing access to larger volumes of electricity from renewable energy and tested new, climate-smart technologies. Now, in the second phase, we are focusing on customer needs, on Scope 1 reduction actions offering specific opportunities for our business, and on securing our license to operate. At the same time, we are assessing new business models and new technologies. Major investments in scaling up climate-smart technologies will largely be made in the third phase after 2030.

For the progress made in implementing our transition plan, clustered by the relevant emission reduction levers, see Actions. We evaluate and prioritize specific actions for emission reduction and target achievement on an ongoing basis from an economic and technological perspective. We also continuously analyze our portfolio. Consequently, the representation in the graphic depicts the current status of our planning, but will be updated going forward. We will only consider external offsetting measures for our Scope 1 and Scope 2 emissions¹³ as a temporary measure in the medium term if our activities were not to make the desired contribution to reducing emissions.

As an energy- and emissions-intensive sector, the chemical industry today has a significant amount of potential locked-in greenhouse gas emissions.¹⁴ This also applies to BASF and was taken into account when assessing our emission reduction levers. Since significant financial resources will be needed to transform our plants, locked-in emissions from assets jeopardize the achievement of our targets in principle. Potential locked-in emissions are factored into our investment decisions, such as the plans for our new Verbund site in southern China. From 2025 onward, the latter will be supplied exclusively with electricity from renewable sources and will serve as a model for sustainable chemical production.

Few of our products lead directly to CO₂ emissions during their use phase. Nevertheless, we also aim to reduce these emissions even further by constantly looking for new, more sustainable solutions (see Product Carbon Footprints) and have already achieved significant emission reductions as a result (see the reduction in Scope 3.11 in Actions along our value chain).

The transition plan is embedded in our financial planning and was approved by the Board of Executive Directors and the Supervisory Board. It is based on investments of around €300 million in Scope 1 measures and €250 million in renewable energies between 2025 and 2028. These are part of BASF’s green transformation expenditure of €600 million each year on average.

In 2024, we invested €59 million (taxonomy-aligned capital expenditures/capex) in constructing a water electrolysis plant for producing hydrogen at our Ludwigshafen site in Germany (see EU Taxonomy, table on capital expenditures/capex).

Furthermore, we invested €149 million, which are attributable to gas-related economic activity (see EU Taxonomy, table on capital expenditures/capex). In addition to investments made to achieve our emission reduction target, we are also investing in steam generation at our Verbund site in Zhanjiang, China, which is under construction. Part of steam production there will come from a natural gas fired boiler, alongside to the future use of process waste heat steam.

BASF has not reported any taxonomy-eligible activities under the climate change adaptation objective. This is firstly to avoid double counting with economic activities that have already been included under the climate change mitigation objective. Secondly, in accordance with the notice issued by the European Commission, a prerequisite for taxonomy eligibility under the adaptation objective is the submission of an investment plan for implementing adaptation solutions; such a plan within the meaning of the Taxonomy Regulation has not been submitted to BASF. In addition, BASF does not have any other targets or plans with which it could adapt its economic activities to the criteria set out in Delegated Regulation (EU) 2021/2139. For information on activities under the climate change mitigation environmental objective, see EU Taxonomy.

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We are focusing on procurement-specific actions to reduce our raw materials-related emissions (Scope 3.1) and are working closely together with our suppliers (see Actions along our value chain). In recent years, we have been able to considerably increase the data availability and thereby the transparency of our raw materials-related emissions, and aim to steer these more precisely via our resulting Scope 3.1 target.

What is more, we are taking responsibility for our other emissions along the value chain (see Actions along our value chain). Reducing Scope 3 emissions – which account for the majority of our total emissions – presents us with particular challenges, as these are only partly within our own direct sphere of influence and are influenced by a large number of external factors.

We are also increasingly focusing on circularity in the form of renewable and recycled raw materials and raw materials based on the use of CO₂ in order to move from linear value creation to closed-loop material cycles (see E5 Strategy and Governance). In future, we will drive forward sourcing of renewable raw materials and deploy a make and buy approach similar to that with which we source renewable energy. Feeding in greater amounts of bio-based and recycled raw materials in our existing plants will allow us to leverage the unique strengths of our Verbund and to offer our customers products with lower Product Carbon Footprints (PCFs).

We use a digital solution that continuously determines the PCFs for more than 40,000 sales products¹⁵ (see Product Carbon Footprints) to increase transparency about our product-specific greenhouse gas emissions and focus CO₂ reduction measures on those areas where they bring the greatest added value. These PCFs include all greenhouse gas emissions – from raw materials extraction to the finished product leaving the factory gates (“cradle-to-gate”). This lets our customers benefit from lower CO₂ emissions in the value chain. In addition, we offer our customers solutions that help prevent greenhouse gas emissions and improve energy and resource efficiency.

Moreover, our TripleS method, which steers the sustainability performance of our product portfolio, is a material element in the process of enhancing transformation topics relating to climate change, energy, resource efficiency and the circular economy (for more information, see General Disclosures, Sustainable steering of our product portfolio). In addition to implementing new regulatory requirements, we are actively driving forward the adaptation and development of new production processes with the aim of reducing the environmental footprint of our products. Criteria for reducing CO₂ emissions are a key part of the evaluation process. Products with sustainability concerns are identified and, in the case of severe challenges, action plans are developed to optimize them or replace them with alternative solutions.

• More information on TripleS

All parts of society must work together to effectively protect the climate. The basis is a political and regulatory environment that promotes innovation in climate change mitigation, makes it possible to develop new processes that are competitive internationally and resolutely drives forward the expansion of renewable energies. Our aim is to work together to shape the transformation toward climate neutrality in a socially just manner (just transition). We include the viewpoints of our external stakeholders in our decisions and actions using dialog forums and advisory bodies such as the Nature Advisory Council, which we established together with external experts (for more information, see S3 Contribution to the positive development of communities) and the Sustainability Lab stakeholder engagement format (for more information, see General Disclosures, Interests and Views of Our Stakeholders).

In addition, we support various national and international initiatives and are involved in partnerships. For example, we engaged in close dialog with the Science Based Targets initiative (SBTi) to derive science-based climate protection targets for the chemical sector.

• More information on climate protection

We are committed to reporting transparently on our climate protection targets and progress, as well as on the impact of climate change on BASF. In this context, we support the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). We have also participated in the program established by the international nonprofit organization CDP for reporting on data relevant to climate protection since 2004. The final CDP assessment on climate protection for 2024 was not yet available up to the editorial deadline for the BASF Report 2024.

• More information on the CDP climate change questionnaire

Actions

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We consistently align our actions with our climate protection targets, based on a comprehensive analysis of our emissions. The transformation of our company toward low-emission chemistry is closely linked to our customers’ transformation. Our key customer industries are facing enormous challenges in reaching their sustainability-related goals. We supply the chemical products supporting them in this. At the same time, the preconditions for business cases at scale do not yet fully exist. The market readiness, and hence also the speed of green transformation, varies widely between regions and customer industries. Against this background, we are focusing our transformation approach even more single-mindedly on development and on the needs of our various customer markets, which will allow us to concentrate even more strongly on our specific business opportunities. We will prioritize projects for which we see growing customer demand and willingness to pay for low-emission and emission-free solutions. As the markets for sustainable products grow, we will be in a position to finance necessary investments in new production technologies. Equally, we will need qualified staff and service providers to develop, implement and maintain these technologies.

In 2024, we invested €59 million (taxonomy-aligned investments/capex) in constructing a water electrolysis plant for producing hydrogen at our Ludwigshafen site in Germany (see EU Taxonomy, table on capital expenditures/capex). In addition, no significant capital and operating expenses within the meaning of the EU taxonomy were incurred in the business year 2024 for the actions described.

Renewable energy

Roughly half of our Scope 1 and Scope 2 emissions are attributable to our plants’ energy demand. A core component is therefore converting our energy supply from fossil to renewable sources; this applies especially with regard to our electricity supply. In 2024, electricity from renewable sources as a share of total electricity consumption rose further compared with the previous year to 26% (2023: 20%). Our electricity consumption will increase significantly in future due to the planned gradual electrification of our steam generation and the switch from natural gas-based to electricity-based, low-emission production processes. Nevertheless, we aim to source more than 60% of our power needs from renewable sources by 2030.

As regards the transformation of our power supply, we are pursuing a make and buy approach in the short, medium and long term. Firstly, BASF is investing in its own renewable power assets. Secondly, we are focusing on purchasing green power on the market through long-term supply agreements with plant operators, green power purchase agreements or renewable energy certificates, depending on the region and market regulations. Profitability and additionally are key purchasing criteria. The electricity purchased here is primarily sourced from new renewable energy facilities.

In 2024, we successfully advanced our plan for sourcing power from renewable sources. The Hollandse Kust Zuid offshore wind farm, a joint project with Vattenfall and Allianz, was commissioned successively and has been fully operational since the summer of 2024. With 139 turbines and a capacity of 1.5 gigawatts, it is one of the largest subsidy-free offshore wind farms in the world. As part of a further project, we have contractually agreed with Vattenfall to purchase 49% of the shares in the Nordlicht 1 and 2 offshore wind farms. Construction is due to start in 2026, subject to the final investment decision, expected in 2025. The wind farms, which have a total capacity of 1.6 gigawatts, are being built without government subsidies and should be fully operational in 2028. We plan to use just under half of the electricity generated by these two wind farms to supply our production sites in Europe, and particularly Ludwigshafen, Germany. In order to be able to fully supply our Verbund site in Zhanjiang in southern China, which is currently under construction, with electricity from renewable sources in the future, we have entered into a joint venture with Mingyang for an offshore wind farm in southern China, which includes development, construction and operation. The planned wind farm in Zhanjiang in the Chinese province of Guangdong will have a capacity of 500 megawatts and is scheduled to go into operation at the end of 2025, subject to approval.

From the beginning of 2025, our new site in Zhanjiang will be supplied with 100% electricity from renewable sources as a result of a supply agreement with the State Power Investment Corporation (SPIC). In addition to the long-term supply agreement with the SPIC, we have entered into a supply agreement with China Energy Engineering Group Guangdong Electric Power Design Institute (GEDI) to source electricity from renewable sources over a period of 25 years. In 2023 and 2024, we also signed further long-term supply agreements for green power at other sites in Asia, such as our three sites in Jiangsu, China, and six production sites in South Korea. In North America, we were able to secure around 150 megawatts¹⁶ of solar generation capacity through virtual power purchase agreements back in 2022. These solar power plants are already operational. Further long-term supply contracts exist with X-ELIO, providing capacity of 48 megawatts of solar power to supply the Freeport, Texas, site and with other developers, providing 33 megawatts of solar power for the Freeport site and more than 35 megawatts of wind energy for the Freeport and Pasadena sites in Texas. In some regions, we have also acquired green power certificates. The aim is to gradually replace these temporary measures with our own power assets or long-term supply agreements.

The carbon footprint of purchased electricity in 2024 was around 0.20 metric tons of CO₂ per MWh (market-based approach). For the 2024 business year, we were able to reduce our greenhouse gas emissions by around 1 million metric tons of CO₂ by using electricity from renewable sources (for more information on the expected emission reductions, see our Transition plan for climate change mitigation).

In 2024, we started operation of a stationary long-term sodium sulfur-based battery storage system (NAS^®) at our Schwarzheide site in Germany, driving forward integration of renewable energy. The system supports the provision of power to individual plants from the site’s own solar park. BASF Stationary Energy Storage GmbH markets the NAS batteries, which were developed by NGK INSULATORS Ltd.

Operational excellence

Through our operational excellence projects, we aim to make our plants and processes even more efficient and resource saving, thereby preventing CO₂ emissions. Certified energy management systems according to DIN EN ISO 50001 at all relevant production sites play a particularly important role here.¹⁷ These help us to continuously identify and implement potential for improvement in energy efficiency. This not only reduces greenhouse gas emissions and saves valuable energy resources but also increases our competitiveness.

In 2024, we implemented more than 450 measures to reduce energy and resource consumption and increase our competitiveness, which led to a reduction in emissions of around 200,000 metric tons of CO₂ (for more information on the expected emission reductions, see our Transition plan for climate change mitigation). For example, optimizing process technology and energy usage at several plants at our Antwerp, Belgium, site has enabled us to prevent more than 45,000 metric tons of CO₂ emissions per year. This includes measures to reduce natural gas, hydrogen and steam consumption as well as more effective catalytic reduction of nitrous oxide. Enhanced heat integration with additional heat exchangers at a plant at our site in Yeosu, South Korea, led to a reduction of 9,000 metric tons CO₂ per year. Our site in Camaçari, Brazil, reduced its natural gas consumption of the waste heat boiler and safety flares by optimizing controls, cutting CO₂ emissions by more than 5,000 metric tons per year.

Low-emission steam generation

Alongside electricity, steam generation is an important component of our energy supply. In the medium to long term, new technologies should make a significant contribution to reducing CO₂, for example by recovering energy from waste heat in our production and infrastructure facilities. In this context, we are examining various concepts such as using electric heat pumps and e-boilers as well as electrifying steam drives. We made initial progress toward low-emission steam generation in the reporting year: In 2024, BASF received funding approval from the German Federal Ministry for Economic Affairs and Climate Action for constructing the world’s largest industrial heat pump, permitting emission-free steam generation at its site in Ludwigshafen, Germany. The planned heat pump will have a capacity of up to 500,000 metric tons of steam per year. The waste heat, which is used as a thermal energy source, is generated during the cooling and cleaning of process gases in one of the two steam crackers at the site. Emission-free steam is generated using electricity from renewable sources and will primarily be used for producing formic acid. This offers the potential to use the heat pump to reduce greenhouse gas emissions produced by up to 98%. A smaller proportion of the emission-free steam is supplied to other BASF production plants via the steam network at the site. In total, the heat pump, which is scheduled to start operations in 2027, will reduce up to 100,000 metric tons of CO₂ per year at the company’s headquarters.

In addition, we are examining the use of geothermal energy at our site in Ludwigshafen, Germany, as part of a strategic partnership with Vulcan Energy. Our partner has been performing initial seismic measurements in the Upper Rhine Graben since early 2025. Assuming a successful outcome to exploration in the Upper Rhine Graben, heat pumps could harness the geothermal energy to generate emission-free steam. With a potential output of 300 megawatts of thermal energy, around 4 million metric tons of this crucial energy carrier for the chemical industry could be produced per year. This would prevent roughly 800,000 metric tons of CO₂ emissions.

We are also focusing on low-emission steam generation at our site in Schwarzheide, Germany. The goal there is to construct and operate a power-to-heat plant together with transmission systems operator 50Hertz. The plant will convert electricity from renewable sources into process heat. The planned plant consists of a 25-megawatt electrode boiler and is scheduled to commence operations at the end of 2026.

Climate-smart technologies

To further abate CO₂ emissions, we are also developing completely new technologies for emission-free and low-emission production and are planning to scale them as far as possible from 2030 onward. These technologies will need large volumes of electricity from renewable sources in order to realize their full potential. The main focus here is on basic chemicals, which are often still emissions-intensive to produce. This is the case with steam crackers, for example, which use large amounts of energy to break down crude petroleum into olefins and aromatics – both important groups of substances for numerous chemical value chains. The cracking reaction requires high temperatures of around 850°C, which until now have been achieved by burning natural gas. Heating concepts using electricity from renewable sources could reduce process-related emissions by at least 90% in future compared to today’s conventional technologies. In 2024, together with our partners SABIC and Linde, we commissioned a demonstration plant for electrically heated steam cracker furnaces at our site in Ludwigshafen, Germany.¹⁸ This is where we are testing this new process, and associated direct and indirect heating concepts, on an industrial scale. The prototype is completely integrated into one of the two existing steam crackers at the site.

Another important basic material in the chemical industry is hydrogen, which we have so far mainly used as a raw material. One common but emissions-intensive way of obtaining hydrogen is steam reforming. We are testing an alternative process – methane pyrolysis – in Ludwigshafen, Germany. This process is virtually emission-free if renewable energy is used and requires considerably less electricity compared with other methods such as water electrolysis. We successfully tested a new reactor concept at the test plant, which was commissioned in 2021, and demonstrated stable operations. This has overcome the first important technical hurdle for further scaling. We also continued construction of a PEM¹⁹ (proton exchange membrane) water electrolyser with a capacity of 54 megawatts at the Ludwigshafen site in Germany with Siemens Energy. The plant went into operation in March 2025. Powered by electricity from renewable energy sources, the electrolyser produces up to 8,000 metric tons of emission-free hydrogen and thus reduces greenhouse gas emissions at the site by up to 72,000 metric tons per year. BASF will primarily use the hydrogen produced as a raw material for the manufacture of products with a reduced Product Carbon Footprint. We also agreed a partnership with Envision Energy, a leading provider of sustainable technologies, at the beginning of 2024. The objective is to drive forward the conversion of green hydrogen and CO₂ into e-methanol, a more sustainable energy source. BASF is contributing its catalyst technologies expertise. In addition, we are expecting new hydrogen applications to emerge in the future, such as its use as an independent or a basic material for sustainable energy carriers, and that demand for hydrogen is likely to increase as a result. Access to large quantities of low-emission or emission-free hydrogen at competitive costs is therefore becoming increasingly important for BASF.

Another focus area of our technological development is carbon capture and storage (CCS). Together with partners, we are examining an industrial CCS project at the Antwerp site in Belgium (Kairos@C) as the first phase of the Antwerp@C project, which could enable BASF to prevent the release of emissions from production of up to 1 million metric tons of CO₂ into the atmosphere every year.

Actions along our value chain

As part of our supplier management, we continuously review compliance with our required criteria when selecting suppliers and assessing new and existing supplier relationships. We urge our suppliers to reduce CO₂ emissions. We arrange for third parties to evaluate suppliers with a high sustainability risk using either on-site audits or sustainability assessments by rating agency EcoVadis. Supplier assessment is mainly performed as part of the chemical industry’s Together for Sustainability initiative. Depending on business requirements, we perform our own Responsible Care audits at selected contract manufacturers if material risks have been identified with respect to environmental protection. This also covers the topic of CO₂ emissions.

We launched the Supplier CO₂ Management Program in 2021 to achieve transparency with respect to our raw materials-related emissions. The goal is to obtain a more accurate data base and to better manage and reduce emissions in the supply chain. In a first step, we have requested the Product Carbon Footprints (PCFs) of our raw materials since then and support our suppliers in determining these, for example, by sharing our knowledge of assessment and calculation methods with them. Since the start of the program, we have asked more than 1,900 suppliers, accounting for around 80% of our raw materials-related greenhouse gas emissions. After around three years, we have validated PCFs for more than 1,700 of our raw materials. This corresponds to a coverage of almost 30% in relation to the greenhouse gas emissions of our raw materials. We are working to further enhance the transparency of the PCFs for our raw materials.

In addition, we launched the next phase of our Supplier CO₂ Management Program in 2024, so as to agree PCF reduction pathways with our suppliers. We use dialog forums to exchange with suppliers about opportunities, challenges and BASF’s specific expectations regarding PCF reductions. One example are the BASF Supplier Days that were held on the topic of Scope 3.1 emissions for the first time in 2024 in Ludwigshafen, Germany (Europe Region) and São Paulo, Brazil (South America Region). The format is to be rolled out to regions Asia Pacific and North America as well in 2025. We are also enhancing our purchasing processes and establishing PCFs as a relevant criterion for raw materials in the procurement requirement.

To replace fossil raw materials, we signed a long-term purchase contract for certified biomethane with ENGIE in 2024. This will be used at our Verbund sites in Antwerp, Belgium, and Ludwigshafen, Germany. Consequently, we will be able to reduce the carbon footprint of sales products in sectors such as the automotive, packaging and detergent industries using our mass balance approach (see E5 Sourcing and use of raw materials, Mass balance approach). In another project, we have agreed an innovative approach to reducing the carbon footprint of the products from Graphit Kropfmühl, a subsidiary of AMG Critical Materials N.V. We supply the company with Guarantees of Origins for electricity from renewable sources, reducing the PCF of the graphite produced. We then use the graphite as a raw material for a reduced-PCF variant of our insulation material Neopor^®.

In addition to reducing our raw materials-related emissions (Scope 3.1), we are taking targeted measures to reduce Scope 3 emissions along the entire value chain. To reduce the emissions from transporting our products (Scope 3.9), the Monomers division has developed a shipment emissions dashboard that enables us to share standardized, reliable data on shipment-related emissions with our customers and identify the most sustainable means of transportation. Moreover, we rely on product adaptations to reduce emissions from the use of sold products (Scope 3.11): For example, climate-damaging blowing agents for foaming polyurethane foams can now be largely dispensed within the downstream value chain. Thanks to these and other measures, we have been able to reduce our emissions from the use of sold products (Scope 3.11) by around 73% since 2018.²⁰ We also want to reduce emissions resulting from the disposal of our products (Scope 3.12). This can be done, for example, through the increased use of renewable raw materials or circular solutions (see E5 Strategy and Governance). Both ensure that less and less CO₂ pollutes the atmosphere throughout the life cycle of our products.

Product Carbon Footprints

In 2024, we further expanded our portfolio of products with a certified reduced carbon footprint. These include ammonia and urea products and the intermediate butanediol, which our customers process in the manufacture of textile fibers, solvents and engineering plastics. Since the end of 2024, we are offering our customers bio-based and biomass balance-based ethyl acrylate – a more sustainable alternative for use in manufacturing adhesives and coatings, among other things. We already offer net-zero carbon footprint versions of some of our products; these include the polyamide Ultramid^® and AdBlue^®, an exhaust gas reducing agent for diesel engines, which we offer as Ultramid^® ZeroPCF and AdBlue^® ZeroPCF by BASF. These lower PCFs are primarily made possible by the substitution of fossil raw materials. For example, we use partially or fully renewable, waste-based or recycled raw materials to produce low PCF and zero PCF products. These include castor oil, biomethane or pyrolysis oil from plastic waste. These alternative resources often have a lower carbon footprint compared with fossil raw materials. The alternative resources are allocated to the end product using the mass balance approach (see E5 Sourcing and use of raw materials, Mass balance approach). Furthermore, we use electricity from renewable sources to reduce our PCFs.

The digital methodology we have developed to calculate PCFs meets general life cycle analysis standards such as ISO 14040, ISO 14044 and ISO 14067, as well as the Greenhouse Gas Protocol Product Standard. A certification from TÜV Rheinland confirms that our calculation method and reporting fully comply with the requirements of Together for Sustainability (TfS). We make our automated PCF calculation approach available to interested industry players through partnerships. At the same time, we are involved in various initiatives to drive transparency, harmonization and standardization across the industry. This also takes place as part of TfS, where we have been involved in the creation and revision of a uniform guideline for calculating the carbon footprint of products in the chemical industry. This enables the climate impact of products to be directly compared and evaluated based on a standardized approach. Harmonizing the approaches used to calculate PCFs allows us to better steer greenhouse gas emissions that arise during the extraction of raw materials or the manufacture of precursors. A digital solution developed by TfS and Siemens for sharing PCF data between companies was launched in October 2024. We have been migrating our queries to this solution since the end of 2024. Equally, it has been possible to share data within the Catena-X network, in which we work together with partners in the automotive value chain, since 2024.

• More information on Product Carbon Footprints

Global Targets

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As an energy-intensive company that generates and consumes energy in the form of electricity and steam and that processes fossil raw materials, we are responsible for greenhouse gas emissions that negatively impact the climate (see also Results of the Double Materiality Assessment for E1). We accept this responsibility and are pursuing ambitious climate protection targets.²¹

Scope 1 and 2

Based on the 2018 base year, we want to achieve a 25% reduction in greenhouse gas emissions from our production processes (Scope 1) and our energy purchases (Scope 2) by 2030.²² Our target focuses on emissions caused by our production and includes 96% of our gross Scope 1 emissions and 99% of our gross Scope 2 emissions. This means that we aim to reduce greenhouse gas emissions from 21.9 million metric tons to 16.4 million metric tons – despite our growth plans and the construction of a new Verbund site in southern China. This corresponds to a decrease of around 60% compared with 1990. Our long-term target is to achieve net-zero greenhouse gas emissions by 2050.²² We consider future developments in our Scope 1 and Scope 2 emissions in line with the requirements of the Greenhouse Gas Protocol. When recalculating the emissions from the base year, we have set ourselves a limit of 5% cumulative deviations from the base year.

Greenhouse gas emissions of the BASF Group (Scope 1 and 2)^a

Million metric tons of CO₂ equivalents

a Scope 1 and Scope 2 (excluding the sale of energy to third parties). The target includes greenhouse gases according to the Greenhouse Gas Protocol, which are converted into CO₂ equivalents (CO₂e).

b The figure for 2023 has been adjusted to reflect updated data.

In 2024, the BASF Group’s emissions from production and energy purchases²² amounted to 17.0 million metric tons of CO₂ equivalents (2023: 17.0 million metric tons of CO₂ equivalents²³). The slight rise in demand year on year lifted production volumes and thus resulted in higher CO₂ emissions. At the same time, we increased the share of electricity from renewable sources compared with the previous year to 26% and, together with measures to increase energy and process efficiency, made a relevant contribution to reducing emissions. All in all, we have reduced our greenhouse gas emissions in BASF’s operations by 58% since 1990.

Scope 3.1

We set ourselves an ambitious Scope 3.1 target²⁴ for our specific raw materials-related emissions in 2023. This includes around 92% of our Scope 3.1 emissions based on the base year. By 2030, we want to reduce these in relation to the purchasing volume specifically by 15% from the 2022 base year. Consequently, we are planning to reduce our specific Scope 3.1 emissions from 1.64 kilograms of CO₂ per kilogram of raw materials purchased in the base year 2022 to 1.39 kilograms in the target year 2030.²⁴ Through our commitment, we aim to keep our target-relevant Scope 3.1 emissions roughly constant at 50 million metric tons of CO₂ equivalents by 2030 despite growing production. We have recalculated our base value for our Scope 3.1 target in line with the Greenhouse Gas Protocol Scope 3 Standard, due to a change in secondary data and to the ongoing improvement in primary data availability under our Supplier CO₂ Management Program (see Actions along our value chain). This preserves comparability between the base year and current business years.

Raw materials-related emissions from battery materials are initially excluded from the target. Battery materials make a significant contribution to reducing CO₂ emissions and thus facilitate the transformation of the transportation sector. Required raw materials such as lithium, nickel and cobalt will not be able to be replaced by more sustainable alternatives in the foreseeable future. Accordingly, associated emissions cannot be reduced significantly in the short term. As soon as recyclable solutions come into play with the increase in available end-of-life batteries, we will include these raw materials in our target definition (for more information on our battery recycling activities, see E5 Recycling of mineral raw materials).

In the long term, we are striving to reduce Scope 3.1 emissions to an unavoidable minimum by 2050, thereby expanding our long-term net-zero target to include these greenhouse gas emissions.

Greenhouse gas emissions of the BASF Group (Scope 3.1)

a Scope 3.1, raw materials excluding battery materials, excluding services, technical goods and greenhouse gas emissions from BASF trading business

b We adjusted the baseline in line with the TfS Guideline in the reporting year due to the availability of further primary data.

c The value for 2023 was adjusted due to increased data availability.

In 2024, specific Scope 3.1 emissions²⁴ amounted to 1.58 kilograms of CO₂ per kilogram of raw materials purchased (2023: 1.67 kilograms²⁵). The reduction in specific emissions is mainly attributable to a change in the raw materials portfolio. In addition, first raw materials were purchased from suppliers who offer these with a lower PCF.

We monitor progress toward our targets annually as part of our strategic controlling activities.

For an overview of our greenhouse gas emissions – broken down by operational control and financial control – see table BASF Group’s greenhouse gas emissions according to the Greenhouse Gas Protocol. Our projection of target-relevant Scope 1 and Scope 2 emissions for 2025 can be found in the CO₂ emissions forecast for the BASF Group.

Target setting was preceded by an analysis of expected business developments, external requirements relating to emission reduction targets and internal implementation opportunities, including the use of pilot plants to develop technical solutions. In addition, cost estimates were developed for planned actions. A Supplier CO₂ Management Program was established and support was provided for the development of standards such as TfS before the Scope 3.1 target was introduced. This approach was designed to ensure that the targets were not only ambitious but also implementable. We discuss the sustainability topics that are material for BASF at regular meetings with external stakeholders forming part of our strategic stakeholder engagement activities, and in discussions with investors. In this way, stakeholder expectations are continuously taken into account in the development of strategic sustainability management approaches, targets and principles.

Carbon credits

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As part of the above stated targets, we have committed to reducing our Scope 1, 2 and 3.1 emissions to net zero by 2050. Despite all our efforts, we expect there to be a residual share of emissions in 2050 that cannot be abated using technical or economic approaches. We are aiming to offset all remaining emissions by 2050 inclusive through high-quality, high-credibility nature-based and technical measures, such as the sequestration of CO₂ into the soil through farming (carbon farming). We are planning to use ratings such as BeZero and Sylvera, and initiatives such as the Integrity Council for the Voluntary Carbon Market (ICVCM), its Core Carbon Principles and carbon credits assessed using them. At the same time, we are developing internal standards for evaluating projects and considering whether to develop our own projects. We are also evaluating using/developing a project under the European Carbon Removal and Carbon Farming Certification Framework (CRCF). In view of this situation, we will likely use a portfolio of different credits, and will rely on well-known standards such as Verra and Gold Standard, but also credits under Article 6 of the Paris Agreement and the CRCF. BASF did not use any carbon credits in the past business year.

Metrics

Energy supply

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Our total energy consumption²⁶ amounted to 75.6 million MWh in 2024. Total energy consumption includes fuel demand for our own energy generation and production plants, plus power and steam imports for our own use.

The generation of our own steam and power in highly efficient and predominately natural gas-based combined heat and power plants and our Verbund system, are key to CO₂-optimized energy supply at our sites. In the latter, waste heat generated during one plant’s production process is used as energy in other plants. Thanks to combined heat and power generation and our continuously optimized Energy Verbund, we were able to prevent a total of 6.1 million metric tons of CO₂ emissions²⁷ in 2024 compared with separate, fossil-based power and steam generation without the use of the Verbund system.

Corporate carbon footprint

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BASF has published a comprehensive corporate carbon footprint every year since 2008. This reports on all emissions along the value chain – from raw materials extraction to production and disposal. We are continually working to reduce greenhouse gas emissions both in our own production and, together with our partners, along the value chain (see Strategy and governance).

In 2024, our greenhouse gas emissions according to the Greenhouse Gas Protocol including Scope 1 and Scope 2 emissions²⁸ amounted to 17.948 million metric tons of CO₂ equivalents (2023: 17.902 million metric tons of CO₂ equivalents²⁹). Of this amount, 87% were Scope 1 emissions (2023: 87%) and 13% were Scope 2 emissions (2023: 13%). Carbon dioxide was by far the largest component and accounted for 98% of emissions (2023: 98%).

Scope 3 emissions arising upstream and downstream of our operations in the value chain are calculated in accordance with the Corporate Value Chain (Scope 3) Accounting and Reporting Standard published by the Greenhouse Gas Protocol and the WBCSD Guidance for Accounting and Reporting Corporate GHG Emissions in the Chemical Sector Value Chain (WBCSD Chemicals). For 2024, we calculated Scope 3 emissions of around 92 million metric tons of CO₂ equivalents.³⁰ There was an increase in total emissions along the BASF value chain in 2024 due to the slight year-on-year increase in production volumes. The share of emissions that were calculated using primary data³¹ amounted to 21% in the business year.

CO₂ emissions along the BASF value chain in 2024^a

Million metric tons of CO₂ equivalents

a According to the Greenhouse Gas Protocol Standard; Scope 1, 2 and 3; reported categories within Scope 3 are shown in parentheses. Scope 3 emissions in category 10 (“Processing of sold products”) are not reported according to the standard for the chemical sector. Only direct use phase emissions are reported in the customer category (Scope 3.11). Excluding greenhouse gas emissions from BASF trading business.

The largest contribution to emissions along the value chain in 2024 was in category 3.1 (purchased raw materials and technical goods and services) at 52 million metric tons of CO₂ equivalents.³⁰ To calculate these upstream greenhouse gas emissions, we use both primary data from our suppliers from the Supplier CO₂ Management Program (see Actions along our value chain) and industrial averages and values from external databases.³² Apart from raw materials-related emissions, the disposal of our products (Scope 3.12) accounts for the second-largest share of our Scope 3 emissions at around 24 million metric tons of CO₂ equivalents.

• Additional information on our emissions reporting
• More information on the Supplier CO₂ Management Program

BASF reports its Scope 2 emissions using the market-based approach in accordance with the Greenhouse Gas Protocol. In 2024, the share of total electricity consumption determined in accordance with the market-based approach was 45.9%. Contractual instruments such as energy attribute certificates (Guarantee of Origins, I-RECs), also in the form of power purchase agreements, local contracts to source renewable energy and supplier-specific electricity labels are used for this purpose.

Information on methodologies, significant assumptions, factors and calculation tools that are used to calculate direct greenhouse gas emissions can be found among other places in General Disclosures in the Sustainability Statement. We use supplier data where possible to calculate our market-based Scope 2 emissions. Where such data is not available, we rely on country-specific residual mix and grid-average emission factors respectively. In this case we use information from the International Energy Agency and the United States Environmental Protection Agency, among other sources. When calculating our Scope 3 emissions, we prefer to use primary data in particular for category 3.1. In the case of secondary data, we rely on leading life cycle analysis databases.

The following table explains the calculation approaches used for the individual Scope 3 categories.

Internal carbon pricing

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We use shadow prices in the form of price projections to factor in the costs of CO₂ emissions when assessing investment projects. These shadow prices differ by region (Europe, Asia and North America) and represent the expected developments in these economic areas in the decades up to 2050. In view of the different ways in which the global economy could potentially develop, BASF currently uses three different scenarios (for more on the scenarios see Climate-related physical and transition risks), which are also used to analyze transition risks. The scenarios and the prices derived from them were developed together with an external cooperation partner. The fundamental drivers for the scenarios are different societal preferences and, building on these, climate and economic policy objectives. The result is a price per metric ton of CO₂ equivalents of up to €340, depending on the year. This is used for all Scope 1 and Scope 2 emissions caused by investments (capex) by our companies worldwide, and is included in the cost calculations. As a result, the emissions caused or reduced are directly included in the decision-making process. This favors investments in low-emission measures and measures that contribute to reducing emissions.

Since the investments will be made in the future, they are not included in the reported emissions for the business year. Consequently, the Scope 1, Scope 2 and Scope 3 emissions for the current year covered by shadow prices amount to 0 metric tons of CO₂ equivalents in each case. In the Consolidated Financial Statements, the shadow prices were only used for the valuation of the climate protection agreement that BASF concluded with the Federal Republic of Germany to fund a heat pump at the Ludwigshafen site.