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 protection and the transformation of the chemical industry are very important to us and an important part of our corporate strategy. The reduction of emissions in the chemical industry is closely linked to our customers’ transformation. We want to be the preferred chemical company to enable our customers’ green transformation. However, our key customer industries are facing enormous challenges in reaching their sustainability-related goals. At the same time, the preconditions for business cases at scale do not yet fully exist. Market development, and hence also the speed of green transformation, varies widely between regions and customer industries. Against this backdrop, we are taking a step-by-step approach to the green transformation and focusing our approach even more consequently on development and on the needs of our various customer markets. The focus will continue to be on projects that secure our license to operate. Over time, we stagger our transformation projects based on these priorities.

In recent years, in a first phase, we have already increasingly invested in renewable energy to power our plants. We already today test new technologies and deploy alternative raw materials to 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 second phase, we are focusing even more on Scope 1 reduction measures with specific opportunities for our business as well as prioritizing projects for which we see increasing customer demand and willingness to pay for low- and zero-carbon solutions. In a first step, we focus on using greater amounts of renewable, recycled and low-emission 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, contributing to profitable growth for BASF. As the markets for more sustainable products grow, we want to be in a position to fund the necessary investments in new production technology and also to apply and scale up the new technologies that we are currently developing and, in some cases, already piloting. These technologies also require qualified employees and service providers.

In line with our market-oriented approach and the reduced speed of industrial feedstock transformation, we have adjusted our investments to an expected €1.2 billion from 2026 to 2029. We continue to assume that most of the major capital expenditure for our green transformation will be incurred in the third phase after 2030.

Policies, requirements and principles

General information on our overarching policies can be found in the General Disclosures chapter of the (Consolidated) Sustainability Statement. These include the Responsible Care Management System and, as part of this, our global standards in terms of CO₂ emissions and energy data, energy efficiency, energy concepts and environmental protection. Also listed there are our procurement policy, our procurement requirement, our risk-based sustainability management for procurement, the Supplier Code of Conduct, our principles for the responsible sourcing of renewable raw materials and our requirements for PCFs and eco-efficiency analyses. The specific aspects of these policies are explained in the following section.

We have established comprehensive management and control systems to minimize negative environmental impacts. Our Responsible Care Management System includes not only Group-wide requirements and guidelines for health and safety (for more information, see S1 Own Workforce) 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. 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 supply from renewable sources. We use requirements for systematically collecting and monitoring emission and energy data as the basis for improving our sustainability performance and steering our climate protection targets.

We address climate change adaptation centrally through our approach to assessing climate-related physical risks (see Climate-related physical risks and opportunities). 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 (see S2 Workers in the Value Chain). We have defined relevant standards for this in a global procurement requirement. Our overarching procurement policy also includes ensuring BASF’s secure supply, including raw materials. We expect our suppliers to comply with internationally recognized environmental standards. Our expectations are set out in the globally valid Supplier Code of Conduct (see S2 Workers in the Value Chain), which also includes the deployment of energy-efficient, environmentally friendly technologies. We continuously enhance our policy and requirement as well as our structures and processes in order to adapt to changing conditions. We endeavor to ensure compliance with these guidelines using a multistage control process (see S2 Workers in the Value Chain).

In addition, BASF has drawn up principles for the responsible sourcing of renewable raw materials, plus standards in relation to PCFs and eco-efficiency analyses of products with the aim of reducing our products’ carbon footprints.

Incentive schemes and organizational structures

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

We anchored reducing our Group-wide CO₂ emissions (Scope 1 and 2)⁶ as one of the most important nonfinancial key performance indicators 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. The compensation of the Supervisory Board does not include any variable components and is therefore not linked to the achievement of targets.

The targets in the short-term-incentive (STI) program for senior executives in our operating business units include financial targets with a 75% weighting. Other targets with a total weighting of 25% include occupational and process safety, sustainability and further development of the operating divisions, the first two of which are sustainability-related. The other targets are division-specific, adapted to the respective situation and are considered holistically. The sustainability target in 2025 includes elements that contribute to our green transformation, such as sales of our Sustainable-Future Solutions (for more information, see General Disclosures) or the increase of the share of purchased raw materials with supplier-specific PCFs (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, which will be publicly available online.

Our organizational structures are designed in such a way as to enable 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 & Quality, which reports to a member of the Board of Executive Directors, is responsible for our Responsible Care Management System. The Corporate Sustainability unit, which reports to the Chairman of our Board of Executive Directors, develops the BASF Group’s climate protection targets and tracks emission reduction levers for target achievement. Together with Corporate Sustainability, the Global Procurement unit, which reports to the Chief Financial Officer, is responsible for the purchasing processes and procurement requirements relating to our raw materials-related targets. 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 sourcing of renewable energy.

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 (see also the section Global Targets).⁸ Based on the emission reduction pathways described by the International Energy Agency (IEA) in its Net Zero by 2050 study⁹, our target is compatible with limiting global warming to 1.5°C. The targeted reduction by 25% is below the reference value calculated from the data of the study. Already today, our plants for producing basic chemicals such as ammonia, methanol and high value chemicals¹⁰ have an emissions intensity 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 and have also set ourselves a target for our raw materials-related Scope 3.1 emissions¹¹ (see Global Targets). 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 plan¹² that shows our emissions reduction pathway based on the most important levers. We are focusing on the following emission reduction levers¹³ 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 demand from renewable sources (see Actions).

• Operational excellence: Our operational excellence activities are continually improving the energy and process efficiency of our plants (see Actions).

• Low-emission steam generation: 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).

• Climate-smart technologies: We are developing completely new emission-free and low-emission processes, and are assessing and piloting new technologies for a more sustainable chemistry (see Actions).

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 results in a further reduction potential 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 “Winning Ways” strategy, in which we have adopted a step-by-step approach (see also Strategy and Governance). For the progress made in implementing our transition plan, clustered by the relevant emission reduction levers, see section Actions. We continuously evaluate and prioritize specific actions for emission reduction and target achievement 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 at the time of the publication of the transition plan at the beginning of 2025, but is subject to future updates. We will only consider external offsetting measures for our Scope 1 and Scope 2 emissions¹⁴ 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.¹⁵ 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 start of commissioning in 2025 onward, the latter is already supplied exclusively with electricity from renewable sources and shall serve as a model for more sustainable chemical production.

Few of our products lead directly to CO₂ emissions during their use phase. Nevertheless, we also aim to further reduce these emissions by constantly looking for new, more sustainable solutions (see Our Product Carbon Footprints) and have already achieved significant emission reductions as a result (see the reduction in Scope 3.11 in section 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 €0.6 billion in Scope 1 measures between 2026 and 2029. These are part of BASF's green transformation expenditures of an expected €1.2 billion between 2026 and 2029. In line with our market-oriented approach and the reduced speed of industrial feedstock transformation, we have adjusted our investments. We aim to continue to promote the use of renewable energies with long-term supply agreements.

In 2025, we invested €77 million, which was attributable to gas-related economic activity (see tables in EU Taxonomy chapter). In addition to investments made to achieve our emission reduction target, we have also invested in steam generation at the site in Zhanjiang, China. A small part of steam generation there will come from a boiler fired using natural gas, among other things, alongside the future use of process waste heat steam. In addition, there were no significant taxonomy-aligned investments/capex with respect to the environmental objectives of climate change mitigation and climate change adaptation. The low coverage of BASF’s activities in the EU taxonomy and the reporting criteria currently used, at present provide a picture of BASF’s potential sustainability contribution that is only of limited informative value. The small number of activities that fall under the climate change mitigation environmental objective are presented under EU Taxonomy. Hence, BASF is not pursuing any further plans to align economic activities with the provisions of Delegated Regulation (EU) 2021/2139.

Responsibility in our value chain

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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 associated 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 subject to 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 Resource Use and Circular Economy). In the future, we will increasingly drive forward sourcing of renewable raw materials and deploy a make & buy approach analogous to that with which we source renewable energy. Feeding in greater amounts of renewable, recycled and low-emission raw materials in our existing plants will allow us to leverage the unique advantages of our Verbund and to offer our customers products with lower PCFs.

We use a digital solution that continuously determines the PCFs of our products¹⁶ (see Our 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 for steering 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 and our resilience and scenario analyses). In addition to implementing new regulatory requirements, we are 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.

• 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 protection, makes it possible to develop new processes that are competitive internationally and resolutely drives forward the expansion of renewable energies. Our aim is to contribute to shaping 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 councils such as the Nature Advisory Council, which we established together with external experts (for more information, see General Disclosures). Together with Vulcan Energy, for example, we provided information about the current status and next steps of the geothermal project in Ludwigshafen and the Vorderpfalz region in community townhall events in 2025 (for more information, see Low-emission steam generation). The Civil Society Forum, founded in 2024, also provides space for confidential exchange with representatives of the civil society and trade union spectrum (for more information, see General Disclosures).

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), which has derived 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 impacts 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. BASF achieved a score of A in CDP’s 2025 climate change questionnaire, again attaining Leadership level. Companies at Leadership level are distinguished by factors such as the completeness and transparency of their reporting.

• 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 a low-emission chemistry is closely linked to our customers’ transformation (see also Strategy and Governance).

No significant capital and operating expenses within the meaning of the EU taxonomy were incurred in the business year 2025 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 to our electricity supply. In 2025, electricity from renewable sources as a share of total electricity consumption rose further compared with the previous year to 36% (2024: 26%). 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.

As regards the transformation of our electricity supply, we are pursuing a make & buy approach in the short, medium and long term. On the one hand, BASF is investing in its own renewable power assets. On the other hand, we are focusing on purchasing green electricity on the market through long-term supply agreements with plant operators, green electricity purchase agreements or renewable energy certificates, depending on the region and market regulations.

In 2025, we further advanced the supply of electricity from renewable sources. Our new Verbund site in Zhanjiang in southern China, where we started manufacturing the first products from the Verbund in November 2025, is powered entirely with electricity from renewable sources. A joint venture was established for this purpose with the Mingyang Wind Power Group Limited, which includes the development, construction and operation of an offshore wind farm in Zhanjiang. The wind farm is under construction and has a planned capacity of 500 megawatts. The grid connection project has been successfully completed and the wind farm is scheduled to start operation in 2026.

Since the beginning of the 2025 business year, our Zhanjiang site has already been supplied with 100% electricity from renewable sources through a supply agreement with the State Power Investment Corporation (SPIC). In addition to the existing long-term supply agreements 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. We also made progress at other Asian sites in 2025: Six of our production sites in Shanghai will be supplied with 250 gigawatt hours of electricity from renewable sources via China Huaneng Group in the future. This agreement also includes the first ever cross-business-zone¹⁷ electricity supply agreement for electricity from renewable sources from the Chinese provinces of Guangxi and Yunnan to Shanghai. BASF Taiwan has also taken another step toward energy transition. Our Kuanyin site had already participated in the first green electricity auction held by Taiwan Power Company (Taipower), Taiwan’s largest electricity supplier, in 2023 and had won the bid of a small amount of renewable energy for three years. In 2025, the Changhua site was also successful in a similar auction.

In spring 2025, we signed an agreement with SP Group (Singapore Power) to install solar rooftop panels at two of our production sites in Singapore. In 2023 and 2024, we had already signed long-term power purchase agreements for electricity from renewable sources at our three sites in Jiangsu, China, and for six of our production sites in Korea.

The Hollandse Kust Zuid offshore wind farm, a joint project with Vattenfall and Allianz, has been 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. We use the electricity generated to supply our production sites in Europe, particularly Ludwigshafen, Germany.

In North America, we were able to secure around 150 megawatts of solar generation capacity through virtual power purchase agreements back in 2022. These solar power plants are already operational. Further long-term supply agreements exist with X-ELIO, providing capacity of 48 megawatts of solar power to supply the Freeport, Texas site (Liberty project) and with other developers, providing 33 megawatts of solar power for the Freeport site and 35 megawatts of wind energy for the Freeport and Pasadena sites in Texas. With the Liberty project, which went into operation in 2025, the purchased electricity for our Verbund site in Freeport will come from 100% renewable energy sources. In some regions, we have also acquired renewable energy certificates. In addition, at the end of 2025, BASF concluded an agreement with BP Energy Retail Company for the purchase of renewable energy certificates. The 15-year agreement covers a wind capacity of approximately 47 megawatts.

The carbon footprint of purchased electricity in 2025 was around 0.14 metric tons of CO₂ per MWh (market-based approach) (2024: 0.20 metric tons of CO₂ per MWh). For the 2025 business year, by using electricity from renewable sources, we were able to reduce our greenhouse gas emissions by around 1.5 million metric tons of CO₂ compared to the use of electricity from fossil sources (for more information on the expected emission reductions, see our transition plan).

In order to align the supply of green electricity with the decreased transformation speed, BASF sold its 49% stake in the Nordlicht 1 and 2 offshore wind farms back to Vattenfall in 2025. This transaction is in line with BASF’s disciplined approach to capital allocation, as well as BASF’s market-driven, step-by-step transformation approach as part of the “Winning Ways” strategy. At the same time, BASF continues its collaboration with Vattenfall, securing a long-term supply of electricity from renewable sources for chemical production in Europe – at a time when additional green electricity will be needed.

Operational excellence

Through our operational excellence projects, we aim to operate our plants even more efficiently, to make our processes even more resource-saving and thereby reducing CO₂ emissions. Certified energy management systems according to DIN EN ISO 50001 at all relevant production sites play a particularly important role here.¹⁸ 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 2025, we implemented more than 550 measures to reduce energy and resource consumption and increase our competitiveness, which led to a reduction in emissions of around 240,000 metric tons of CO₂ (for more information on the expected emission reductions, see our transition plan). In Hannibal, Missouri, for example, natural gas consumption has been reduced by optimizing process control at our incinerators, resulting in an annual CO₂ reduction of about 7,000 metric tons. In Camaçari, Brazil, we have achieved a reduction in steam consumption by optimizing the valve seals and pipeline layout in one plant, avoiding around 6,700 metric tons of CO₂ emissions annually. At the Caojing site in China, the consumption of natural gas in one plant was significantly reduced by making full use of surplus hydrogen from a third-party company and developing a timely signal transmission system for hydrogen supply in collaboration with the supplier. Together, these actions reduce CO₂ emissions by around 9,600 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 have already made initial progress toward low-emission steam generation: 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 for emission-free steam generation at its site in Ludwigshafen, Germany. Construction began in 2025. The 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 is primarily to be used for producing formic acid. This offers the potential to use the heat pump to reduce CO₂ emissions related to the production 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 operation in 2027, will save up to 100,000 metric tons of CO₂ per year at the company’s headquarters. The expansion of the substation at the Ludwigshafen site by the transmission system operator Amprion began in 2025 in order to take account of the future increase in electricity demand due to the electrification of chemical production and energy generation processes, such as low-emission steam generation. Initial partial commissioning is planned from 2029 onward, with overall completion scheduled until 2037.

We are also examining the use of geothermal energy at the Ludwigshafen site as part of a partnership with Vulcan Energy. The results of initial 2D seismic evaluations carried out by our partner in the Vorderpfalz region in spring 2025 confirm the region’s geothermal potential. Further measurements, including a 3D seismic evaluation, are planned. Geothermal energy from the Vorderpfalz region could be used by heat pumps to generate emission-free steam. With a potential output of 300 megawatts of thermal energy, around 4 million metric tons of this crucial energy source for the chemical industry could be produced per year. This would avoid roughly 800,000 metric tons of CO₂ emissions. The overarching goal of BASF and Vulcan Energy is to implement the joint geothermal project in the early 2030s.

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 start operation at the end of 2026. Another power-to-heat plant is currently being built at the Guaratinguetá site in Brazil. It is scheduled for startup by the end of 2026. The plant will be powered by electricity from renewable energy sources, so that in the future up to 60% of the steam demand on site can be provided with low emissions.

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. The main focus here is on basic chemicals, which are often still emission-intensive to produce. This is the case with steam crackers, for example, which use high temperatures of 850°C to break down crude petroleum into olefins and aromatics. The high temperatures have until now been achieved by burning natural gas. A heating concept using electricity from renewable sources could reduce process-related emissions by at least 90% in future compared to today’s conventional technologies. Together with our partners SABIC and Linde, we are testing this new process on an industrial scale, as well as the associated direct and indirect heating concepts, in a demonstration plant for electrically heated steam cracker furnaces at our site in Ludwigshafen, Germany.¹⁹ The prototype is completely integrated into one of the two existing steam crackers at the site.

One common but emission-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. In November 2025, we agreed on a collaboration with ExxonMobil to jointly advance methane pyrolysis technology to commercial readiness. In Baytown, Texas, we are planning to construct and operate a joint demonstration plant intended to help validate the technology at scale.

Together with Siemens Energy, we also pressed ahead with the construction of a proton exchange membrane (PEM) water electrolyzer²⁰ with a capacity of 54 megawatts at the Ludwigshafen site in Germany. The plant went into operation in March 2025. Powered by electricity from renewable energy sources, the electrolyzer 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 PCF. 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, as sustainable energy carrier. 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). This technology is expected to be one of the most economically attractive ways to reduce hard to abate emissions in the medium and long term. For this reason we are examining the implementation of CCS plants at various locations worldwide.

Actions along our value chain

As part of our supplier management, we continuously review compliance with our required criteria when selecting suppliers and evaluating 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 evaluation 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 includes 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 since requested the PCFs of our raw materials and support our suppliers in determining these, for example, by sharing our knowledge of valuation and calculation methods with them. After around four years, we have more than 2,200 validated PCFs. This corresponds to a coverage of 40% in relation to the greenhouse gas emissions of our raw materials. We are working to further increase the transparency of the PCFs of our raw materials and thus the quality of the PCFs of our products.

• More information on the Supplier CO₂ Management Program

In addition, we launched the next phase of our Supplier CO₂ Management Program already in 2024, so as to agree PCF reduction pathways with our suppliers. We use dialog forums to exchange information 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 in 2025 in Houston, Texas for the North America region and in Shanghai, China for the Asia Pacific region. The format had already been rolled out in the Europe and South America regions in 2024. We are also enhancing our purchasing processes and establishing PCFs as a relevant criterion for raw materials in the procurement requirements.

Natural gas – in particular low-carbon natural gas – remains a key energy source and raw material for BASF on the path to climate neutrality. In this context, we are focusing on new supply agreements that balance security of supply, flexibility and climate compatibility. In June 2025, BASF and Norwegian energy company Equinor signed a long-term strategic agreement for the annual delivery of up to 23 terawatt hours (around 2 billion cubic meters) of natural gas over a period of ten years. Norwegian natural gas has a carbon footprint less than half the size of the European gas market average, because, among other things, very little methane escapes during its production and processing and predominantly renewable electricity is used. Delivery began on October 1, 2025.

To replace fossil raw materials, we concluded a long-term purchase agreement for certified biomethane with ENGIE in 2024. This is used at our Verbund sites in Antwerp, Belgium, and Ludwigshafen, Germany. Consequently, we are able to reduce the carbon footprint of sales products in sectors such as the automotive, packaging and detergent industries using our mass balance approach. In another project with raw material supplier Graphit Kropfmühl, we agreed on an innovative approach to reducing the carbon footprint of its products. We supply the company with Guarantees of Origin for electricity from renewable sources, reducing the PCF of the graphite produced. We then use the graphite as a raw material to reduce the PCF of our insulation material Neopor^®. Together with AkzoNobel and Arkema, BASF is working to lower the carbon footprint of architectural powder coatings supplied by AkzoNobel’s Interpon brand. To this end, BASF supplies neopentyl glycol (NPG) with a PCF of zero to its partner Arkema, which in turn transforms the bio-attributed raw materials and thus reduces the carbon footprint of super-durable powder coating resins for AkzoNobel.

In Taiwan, BASF has signed a license agreement with Carbon Cap Applications Technology Co. (CCAT) to provide its OASE^® blue gas treatment technology for a carbon capture and storage project at a power plant belonging to the Taiwan Power Company (Taipower) in the Taichung Power Plant Carbon Reduction Technology Park. The project is operated by Taipower and, according to design and planning requirements, is expected to capture 2,000 metric tons of CO₂ annually. BASF and the ANDRITZ Group have signed a license agreement for the use of OASE^® blue in a carbon capture project planned to be implemented in Aarhus, Denmark. The project aims to capture around 435,000 metric tons of CO₂ annually from the flue gases of a waste-to-energy plant for sequestration. The implementation of the project is contingent upon the customer receiving funding from the Danish CCS fund.

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 75% since 2018.²¹ 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 Resource Use and Circular Economy). Both ensure that less and less CO₂ pollutes the atmosphere throughout the life cycle of our products.

Our Product Carbon Footprints

In 2025, we further expanded our product portfolio with a certified reduced carbon footprint, for example in aroma ingredients through the market launch of L-menthol FCC rPCF, in ammonia products, or with our Basotect^® EcoBalanced melamine resin foam for sound absorption applications in the transportation and construction industries. The Intermediates division has switched its amine portfolio at our BASF sites worldwide to 100% renewable electricity. In 2025, this transition took place at the European Verbund sites in Ludwigshafen and Antwerp, Belgium as well as the Verbund site in Geismar, Louisiana. At BASF’s Nanjing site in China, amine production had already switched to renewable electricity in 2023. In addition, we are counting on acrylic monomers produced with electricity from renewable energies that can be used by customers in adhesive products, for example. With biomass-balanced polyethersulfone (PESU), we have been offering our customers a more sustainable alternative in high-performance plastics for industries such as household, automotive, electrics and electronics since the beginning of 2025. We already offer net-zero carbon footprint versions of some of our products, including the polyamide Ultramid^® and the HySorb^® superabsorbent for the hygiene industry, as Ultramid^® ZeroPCF and HySorb^® B 6610 ZeroPCF. 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 lowPCF and zeroPCF 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. Furthermore, we use electricity and steam 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 our 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. 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 impacts 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 CO₂ emissions that arise during the extraction of raw materials or the manufacture of precursors. A digital solution developed by TfS and Siemens for exchanging PCF data between companies was launched in October 2024. We have fully migrated our queries to this solution since mid-2025. Equally, it has been possible to exchange 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

17 “Cross-business zone” here means that electricity from renewable energies generated in other Chinese provinces (e.g. in Guangxi or Yunnan) is used to supply production facilities in Shanghai.

18 Relevant sites are selected based on the amount of primary energy used and local energy prices.

19 The project has been granted €14.8 million from Germany’s Federal Ministry for Economic Affairs and Climate Action (BMWE) under the Decarbonization in Industry funding program. It is also being financed by the European Union via the NextGenerationEU fund.

20 The project is funded by Germany’s Federal Ministry for Economic Affairs and Climate Action (BMWE) and the Federal State of Rhineland-Palatinate.

21 BASF operations without oil and gas business

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 Impacts, risks and opportunities from our business activities). We accept this responsibility and are pursuing ambitious climate protection targets.²²

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 2030.²³ 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 in the period 2018 to 2030 we aim to reduce annual 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 2050.²³ In line with the requirements of the Greenhouse Gas Protocol, we consider future developments in our Scope 1 and Scope 2 emissions in the event of changes to our corporate structure. 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

In 2025, the BASF Group’s emissions from production and energy purchases amounted to 16.1 million metric tons of CO₂ equivalents (2024: 17.0 million metric tons of CO₂ equivalents). We further increased the share of electricity from renewable sources to 36% and, together with measures to increase energy and process efficiency, made a relevant contribution to reducing emissions. Furthermore, the decline in demand year on year led to a reduction in production volumes and thus lower CO₂ emissions. All in all, we have reduced our greenhouse gas emissions in BASF’s operations by 60% since 1990. In the coming year 2026, we expect significant additional emissions from our recently commissioned Verbund site in Zhanjiang, China. These have already been taken into account when setting targets. Our projection of target-relevant Scope 1 and Scope 2 emissions for 2026 can be found in the forecast.

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. In this way, we aim to reduce our specific Scope 3.1 emissions from 1.64 kilograms of CO₂ per kilogram of purchased raw material in the base year 2022 to 1.39 kilograms of CO₂ per kilogram of purchased raw material in the target year 2030. Through our commitment, we aim to keep our target-relevant Scope 3.1 emissions at roughly constant 50 million metric tons of CO₂ equivalents by 2030 while at the same time growing production.

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 Resource Use and Circular Economy).

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)

In 2025, specific Scope 3.1 emissions²⁵ amounted to 1.62 kilograms of CO₂ per kilogram of raw materials purchased (2024: 1.58 kilograms of CO₂ per kilogram of purchased raw material). The increase in specific emissions was mainly attributable to a change in the raw materials portfolio. This was countered by initial purchases from suppliers who offer raw materials 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 BASF Group’s greenhouse gas emissions according to the Greenhouse Gas Protocol.

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 as part of our strategic stakeholder engagement as well as in meetings with investors. In this way, stakeholder expectations are continuously taken into account in the development of strategic approaches, targets and principles of sustainability management.

Carbon credits

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As part of the above stated targets, we aim to reduce 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 aim to neutralize all remaining emissions elsewhere through measures that are characterized by high quality and credibility. These include nature-based measures such as reforestation, but also technical possibilities such as the long-term storage of originally biogenic carbon. We plan to use ratings from carbon credit rating agencies such as BeZero and Sylvera to assess the quality of carbon credits. We also plan to leverage initiatives such as the Integrity Council for the Voluntary Carbon Market (ICVCM), its Core Carbon Principles, and the credits assessed through them. We are developing internal standards for evaluating climate protection projects and considering whether to develop our own projects. We are also investigating the use/development of a project under the European Carbon Removal and Carbon Farming Certification Framework (CRCF). With these conditions in mind, we anticipate using a portfolio of different credits. Our focus is on credits that meet well-established standards such as Verra or Gold Standard, but also on certificates that are created under Article 6 of the Paris Agreement or that rely on the CRCF. BASF did not use any carbon credits in the past business year.

22 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. Our targets include future organic growth and investments that in turn increase the level of emissions to be reduced. A linear correlation between emissions and production volumes was assumed for the purpose of estimating additional emissions. Our targets are based on the scope of consolidation using the financial control method and are audited in the context of the annual report. For information on compatibility with the 1.5°C scenario, see Transition plan for climate change mitigation.

23 Scope 1 and Scope 2 (excluding the sale of energy to third parties). The emissions account for 96% of total Scope 1 and Scope 2 emissions in relation to the base year. The target includes greenhouse gases according to the Greenhouse Gas Protocol, which are converted into CO₂ equivalents (CO₂e). Scope 2 emissions are calculated using the market-based approach in accordance with the Greenhouse Gas Protocol. Based on the aforementioned emission reduction levers, we assume a reduction in Scope 1 emissions of around 14% between 2018 and 2030. We aim to reduce Scope 2 emissions by around 75% in the same period. The target is aligned with limiting global warming to a global average of 1.5°C, and is thus science-based. It has not been externally audited.

24 Scope 3.1, gross emissions from raw materials excluding battery materials, excluding services, technical goods and greenhouse gas emissions from BASF trading business. The emissions account for 52% of total Scope 3 emissions based on the 2025 business year. The target is not science-based and has not been externally audited.

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

Metrics

Energy supply

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Our total energy consumption in 2025 amounted to 74.3 million MWh (2024: 74.8 million MWh).²⁶ 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 electricity and steam in highly efficient and predominately natural gas-based combined heat and power plants and our Verbund system (integrated network) are key to a 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 electricity and steam generation and our continuously optimized energy Verbund, we were able to prevent a total of 5.2 million metric tons of CO₂ emissions²⁷ in 2025 (2024: 6.1 million metric tons of CO₂ emissions) compared with separate, fossil-based electricity 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 report every year already 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 CO₂ emissions both in our own production and, with our partners, along the value chain (see Strategy and Governance). In 2025, our greenhouse gas emissions according to the Greenhouse Gas Protocol including Scope 1 and Scope 2²⁸ emissions amounted to 17.270 million metric tons of CO₂ equivalents (2024: 17.952 million metric tons of CO₂ equivalents)²⁶. Of this amount, 89% were Scope 1 emissions (2024: 87%) and 11% were Scope 2 emissions (2024: 13%). Carbon dioxide was the largest component and accounted for 98% of emissions (2024: 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 2025, we calculated Scope 3 emissions of around 94 million metric tons of CO₂ equivalents (2024: 92 million metric tons of CO₂ equivalents). The share of emissions that were calculated using primary data²⁹ amounted to 25% in 2025.

The largest contribution to emissions along the value chain in 2025 was in category 3.1 (purchased raw materials, technical goods and services) at 53 million metric tons of CO₂ equivalents (2024: 53 million metric tons of CO₂ equivalents)²⁶. For the calculation we use primary data from our suppliers from the Supplier CO₂ Management Program (see Actions along our value chain), industrial averages and values from external databases³⁰. The disposal of our products (Scope 3.12) accounted for the second-largest share at around 27 million metric tons of CO₂ equivalents (2024: 26 million metric tons of CO₂ equivalents)²⁶ (for additional information on the calculation methods for the Scope 3 categories, see table Calculation methodologies for Scope 3 categories).

CO₂ emissions along the BASF value chain in 2025^a

million metric tons of CO₂ equivalents

BASF reports its Scope 2 emissions using the market-based approach in accordance with the Greenhouse Gas Protocol. In 2025, the share of total electricity consumption determined in accordance with the market-based approach was 50.9%. Contractual instruments such as energy attribute certificates (Guarantees of Origin, 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 the General Disclosures chapter of the (Consolidated) Sustainability Statement. We use emission factors from reports from the RWI – Leibniz Institute for Economic Research, the German Environment Agency and the U.S. Department of Energy, as well as supplier-specific emission factors, to calculate Scope 1 emissions resulting from the energetic use of primary energy carriers. 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 scenario-dependent price projections to factor in the costs of CO₂ emissions when assessing investment projects. In addition, these prices can also be used to evaluate research projects and to determine benchmarks. The prices differ for 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 information on the scenarios, see Climate-related transition risks and opportunities), which are also used to analyze transition risks. The fundamental drivers for the scenarios are influential geopolitical actors and their various interests, 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 €365, depending on the year. This is used for all Scope 1 emissions caused by investments (capex) by our companies worldwide, and is included in the cost calculations. Scope 1 and Scope 2 emissions are also taken into account in the context of our target achievement. 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. The CO₂ prices used in the Consolidated Financial Statements differ from the shadow prices described. Instead, external forecasts for CO₂ prices and spot prices are used, as these enable an objective assessment on the reporting date and satisfy IFRS requirements.

26 The comparative figure for 2024 has been restated to reflect updated data.

27 Calculation basis: electricity conversion efficiency of conventional power plants 45%; steam generation efficiency 90%

28 Market-based approach, including sale of energy to third parties

29 According to the Greenhouse Gas Protocol Scope 3 standard, the term primary data refers to data that comes directly from our partners in the value chain as well as primary activity data.

30 The database values are updated on an annual basis. Significant changes in these values are reflected accordingly in our calculations.