E5 Resource Use and Circular Economy

Strategy and Governance

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We are pursuing a holistic strategy to establish a circular economy and, at the same time, to reduce the environmental footprint of our business activities. Our strategy covers the entire value chain. General information on our overarching policies can be found in the General Disclosures chapter of the (Consolidated) Sustainability Statement. These include our procurement requirement and, as part of it, our risk-based sustainability management, our principles for the responsible sourcing of renewable raw materials, the BASF Palm Sourcing Policy, the Supplier Code of Conduct and our Responsible Care Management System. The specific aspects of these policies are explained in the following section.

We want to offer our customers innovative products and solutions to support their green transformation. Our business units are therefore in close contact with our customers in order to better understand their sustainability needs and offer tailored BASF solutions. The insights from this dialog are also incorporated in our research projects and in innovation processes.

Sourcing of fossil or renewable raw materials

Alongside economic, environmental and social criteria, we also consider aspects such as product safety and supply security when selecting suppliers and raw materials. Our Procurement organization has set out guidelines for our upstream value chain in a global, risk-based management system. We have defined the standards for this in a global procurement requirement (see S2 Workers in the Value Chain). The requirement includes a risk analysis of our suppliers, which also examines their sustainability performance. The aim here, among other things, is to counter the negative impacts on the environment caused by the sourcing of both fossil and renewable raw materials (see E4 Biodiversity and Ecosystems). We expect our suppliers to comply with internationally recognized environmental standards. Our expectations are laid down in our Supplier Code of Conduct (see S2 Workers in the Value Chain), which is integrated into our purchasing conditions. The Code of Conduct includes, among other things, the protection of human rights, compliance with valid environmental regulations and the efficient use of resources.

The global procurement requirement is supplemented by our principles for the responsible sourcing of renewable raw materials (see E4 Biodiversity and Ecosystems) as well as specific internal guidelines, for example on sourcing palm-based raw materials (see E4 Biodiversity and Ecosystems) or certain mineral raw materials.

Use of fossil raw materials

Reducing the use of fossil raw materials is not part of our requirements. We are focusing on actions and on our circularity target to increasingly replace fossil raw materials with renewable or recycled raw materials. We pursue BASF’s Verbund concept² (see General Disclosures) to ensure the efficient use of raw materials.

Waste in the value chain

We rely on our procurement requirement and our Supplier Code of Conduct to address waste management in our upstream value chain. The responsible management of resources and waste in our own production as well as of the negative impacts resulting from this are core elements of our Responsible Care Management System. Specifically, we intend to use it continuously to improve our processes in the areas of safety, environmental protection and resource use. Our global standards and guidelines relating to waste are defined in the Group-wide Corporate Requirement Environmental Protection (see General Disclosures). This includes compliance with the waste management hierarchy: prevention, reuse, recycling, energy recovery, incineration, disposal. The sites and Group companies are responsible for implementing this requirement. The Corporate Environmental Protection, Health, Safety & Quality unit in the Corporate Center conducts regular audits to monitor compliance with legal and internal requirements.

2 The Verbund concept is not a BASF policy or requirement and therefore also not a policy as defined by the European Sustainability Reporting Standards (ESRS).

Actions

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We aim to transition to a more circular economy to reduce emissions along the value chain. Our focus is on increasing the use of circular raw materials (both renewable and recycled), designing new material cycles and establishing new business models.

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We help to close and extend loops by developing and implementing circular solutions for the materials that we source, continuing to optimize our operations and offering resource-efficient products and services, in order to support our customers’ circular processes. We are also developing product-specific recycling technologies and are involved in cross-industry networks and initiatives to avoid plastic waste and strengthen the circular economy.

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As part of our strategic direction toward a circular economy, BASF teams have developed new approaches in over 50 initiatives since 2019. These relate to the main action areas of making greater use of circular raw materials, designing new material cycles and establishing new business models. The respective BASF business units will drive forward the implementation of these initiatives in the long term.

We rely primarily on the following actions:

• Responsible sourcing of renewable raw materials

• Use of the mass balance approach

• Partnerships to drive forward chemical recycling

• The steering of our product portfolio toward more sustainability through TripleS (see General Disclosures).

Responsible sourcing of renewable raw materials

In line with our procurement requirement, our responsible sourcing of renewable raw materials takes the protection of biodiversity and ecosystems into account (see E4 Biodiversity and Ecosystems). The aim here, among other things, is to counter the negative impacts on the environment caused by the sourcing of both fossil and renewable raw materials.

We are constantly working to switch to more sustainable raw material alternatives and to reduce the resources consumed in the manufacturing of our products, for example through more efficient processes and innovative technologies. In joint initiatives with suppliers and other partners, we develop and test long-term approaches for a more sustainable supply of raw materials, for example based on palm oil and palm kernel oil (see E4 Biodiversity and Ecosystems).

Use of the mass balance approach

In addition, we continue to apply the mass balance approach in our production in the long term: Many BASF value chains start in syngas plants or steam crackers. This is where fossil feedstocks, mostly naphtha and natural gas, are converted into hydrogen and carbon monoxide or split into important basic chemicals such as ethylene and propylene. These are then processed further in the BASF Verbund to create thousands of products. In addition to fossil feedstocks, we feed alternative feedstocks from renewable and chemically recycled sources, such as bionaphtha, biomethane and pyrolysis oil, into the Verbund long term at our production sites in Asia Pacific, Europe and North America. These alternatives are used in place of fossil feedstocks for our mass balance products. As fossil, renewable and recycled raw materials are processed simultaneously, the feedstocks cannot be directly physically attributed to resulting derivatives. However, through monitoring by independent third parties such as TÜV Nord on the basis of recognized certification systems such as REDcert² or the International Sustainability and Carbon Certification (ISCC) PLUS, it can be verified that an adequate amount of alternative feedstocks has been used for the amount of mass balance sales product. This ensures that fossil raw materials are saved with every sale of these certified products. We aim to use the mass balance approach to help our customers to achieve their sustainability targets. This can help BASF to purchase fewer fossil raw materials and reach its sustainability targets.

• More information on the mass balance approach

Mass balance products are identical in quality to conventionally manufactured products, but due to the alternative feedstocks used they contribute to more sustainability, for example, through fewer CO₂ emissions or lower demand for fossil raw materials. In 2025, we expanded our mass balance portfolio in many areas, for example to include Ccycled^® food packaging and biomass balanced products for customers in the automotive, electronics, cleaning and textile industries.

Partnerships to drive forward chemical recycling

One focal point of our activities in the area of circular raw materials is the chemical recycling of plastics. Chemical recycling has impacts on the entire value chain – from the sourcing of raw materials and the use of recycled raw materials in the manufacture of products to the downstream value chain, in which waste can be used as a raw material. We use this complementary technology to mechanical recycling to help reduce the amount of plastic waste that is disposed of in landfills or thermally recovered in the long term. Chemical recycling breaks down plastics into their building blocks or converts them into basic chemicals. Different methods are used for this, such as depolymerization, gasification or pyrolysis. As part of ChemCycling^®, we feed pyrolysis oil into the BASF Verbund at our production sites in Asia Pacific, Europe and North America as a substitute for fossil feedstocks and manufacture Ccycled^® products by applying the mass balance approach. Within the scope of a pilot project with cooperation partners, BASF successfully demonstrated in 2025 that complex vehicle waste such as automotive shredder residues (ASR) can be used as a material. Syngas and its derivatives were produced from ASR and biomass through gasification. In the production of feedstocks for new automotive steering wheels, BASF used the recycled raw material based on the mass balance principle, which made it possible to replace fossil raw materials. The project demonstrates that loops within the automotive industry can be closed.

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We are also pursuing the goal of closing product loops. One example of this is loopamid^®. BASF developed this innovative solution to support the circular economy in the fashion industry and recycle polyamide 6 (PA6) textile waste. The technology behind loopamid^® tolerates fabric blends such as PA6 and elastane, enabling textile-to-textile-recycling of industrial textile waste and used clothing from the downstream value chain. The fibers and materials can be recycled over multiple cycles. At the same time, the material’s characteristics are identical to those of conventional polyamide. BASF commissioned the world’s first commercial loopamid^® plant at its Caojing site in Shanghai, China, in March 2025.

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Steering our product portfolio

A significant tool for the long-term global steering of the product portfolio based on the sustainability performance of our products is our TripleS method (Sustainable Solution Steering). This steering method also allows us to enhance our portfolio with respect to the aspects of the circular economy and resource use. By doing so, we aim to contribute positively to reducing the sourcing of fossil raw materials by supporting the use of recycled raw materials and closed-loop product cycles. The latter could further reduce waste along the entire value chain.

Waste management

We are committed to minimizing material consumption along our value chain. We expect our suppliers to comply with internationally recognized environmental standards. We support our suppliers in developing and implementing measures for improvement, for example in waste management. BASF’s global network of experts shares information, experiences and best practices on an ongoing basis. Continuous monitoring, documentation and control of waste streams as well as the implementation of improvement measures are an integral part of our environmental management.

Through targeted waste management, which is set out in the Group-wide Corporate Requirement Environmental Protection, we aim to reuse materials by recycling them, for example, and to keep waste disposal volumes as low as possible. In this continuous process, we systematically track our material flows and follow a clear hierarchy: We aim to avoid waste as far as possible, for example, by continuously optimizing our processes or developing new production methods. This is where our Verbund structure with its networked plants and value chains comes in (see General Disclosures). If waste cannot be used within the Verbund structures, we assess whether it can be recycled or thermally recovered. We have established processes for the safe, proper and environmentally responsible disposal of materials that we cannot recover or where recovery is not legally permitted. At the Ludwigshafen site, we introduced a new digital system for commissioning waste disposal at the beginning of 2025. It simplifies correct classification of the waste generated at the site and the commissioning of disposal. If we use external waste disposal companies, we conduct audits to verify that waste is disposed of properly. In this way, we also contribute to preventive soil protection and keep today’s waste from becoming tomorrow’s contamination.

Global Targets

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We have set ourselves the target of ensuring that more than 50% of BASF’s sales relevant to TripleS are attributable to Sustainable-Future Solutions by 2030 (see General Disclosures). With these products, as well as through future products developed by research and development with circular design principles in mind, we are making a positive contribution to sustainability. We are aiming to reduce the negative impacts of the sourcing and use of fossil raw materials, for example, by using more recycled raw materials in such products and deploying circular solutions to make more efficient use of raw materials. This can also reduce the waste produced along the value chain. With this target, we aim to increase the proportion of our more sustainable products. This methodology and the associated target are based on clearly defined criteria in the respective ESG topic areas that are comprehensible in the methodology manual. There is currently no general quantitative scientific framework for business-related, more sustainable steering of the product portfolio that companies could use as a basis for setting targets. For more information on the methodology behind this target, see the General Disclosures chapter of our (Consolidated) Sustainability Statement.

In addition, we aim to generate sales of €10 billion from Loop Solutions by 2030. This target was adopted by the BASF Board of Executive Directors in 2024 on the basis of the TripleS method to strengthen the circular economy. We define Loop Solutions as products that are categorized as Pioneers or Contributors in line with TripleS and that hence make a positive contribution to the circular economy. The total sum of absolute sales for these products are grouped together as Loop Solutions. These are products that are based wholly or partly on renewable or recycled raw materials, support recycling processes, increase durability of materials or prolong their lifetime. For example, multilayer packaging produced with our water-based Epotal^® adhesives can be easily separated into its individual recyclable materials during recycling, allowing them to be reused. Our aim with this target is to reduce waste along the value chain and to make a positive contribution to the more efficient use of raw materials. Regional legislation on the circular economy and the requirements set out therein, which we expect that our customers will have to meet, were also taken into account when setting the target. As part of the annual review of the TripleS target, the products that contribute to the circular economy target are also analyzed. By doing so, we also measure and evaluate our development toward achieving our Loop Solutions target. Despite a challenging market environment, we see continuous progress in achieving our target (2025: €5.8 billion, 2024: €5.7 billion).

In this way, BASF is pursuing a holistic strategy to support a circular economy and at the same time achieve our sustainability targets. To meet our two product-specific targets, we will enhance the sustainability of our raw material base in the direction of a more circular economy.

There are no plans to introduce a dedicated waste management target. Our focus is on the efficient use of raw materials in our plants. We are continuously increasing this efficiency thanks to our focused actions (see Waste management) and hence are also reducing the volumes of waste generated during production.

Metrics

Resource inflows

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Petrochemical feedstocks derived from gas and crude oil such as naphtha and benzene are among BASF’s most important raw materials by volume. We use liquid gas and natural gas as fuels to generate electricity and steam, and as raw materials to produce key basic chemicals such as ammonia or acetylene. Naphtha is mainly fed into our steam crackers, where it is split into products such as olefins and aromatics. Olefins such as ethylene, propylene and butene are important feedstocks for numerous value chains at BASF. We use aromatics such as benzene or toluene to manufacture engineering plastics, among other products. Further details about water as a resource can be found in chapter E3 Water. Investments in property, plant and equipment such as the construction of new facilities or the expansion of capacities at existing production plants are of crucial importance to us as a chemical company. Information on these investments can be found in the chapter Material Investments and Portfolio Measures of the Management’s Report. Thanks to a high degree of forward and backward integration, we can produce feedstocks for our value chains efficiently within the BASF Verbund while conserving resources. We continuously evaluate whether fossil and petrochemical raw materials can be replaced with renewable or recyclate-based alternatives.

Our renewable raw materials are mainly based on vegetable oils, fats, grains, sugar and ethanol. We use these to produce ingredients for the detergent and cleaner industry or natural active ingredients for the cosmetics industry, for example. We also use renewable feedstocks such as biomethane and bionaphtha as an alternative to fossil feedstocks in our Verbund (see Use of the mass balance approach).

We document the volumes of raw materials that we source by determining and adding together their weights. Solids are weighed directly, while for liquids and gases, the volumes are measured and the weights then calculated using their density.

Overall, we purchased 30.1 million metric tons of raw materials in 2025, which we generally also use in the same year (2024: 30.4 million metric tons). Of this, renewable raw materials accounted for 1.1 million metric tons and were mainly based on vegetable oils, fats, grains and sugar (2024: 1.2 million metric tons).

Of the renewable raw materials purchased in 2025, 21% were certified (2024: 24%), among other things by the Roundtable on Sustainable Palm Oil (RSPO), REDcert-EU or ISCC PLUS. Certification standards are not available for all renewable raw materials. As part of our commitment to more sustainability, we are focusing on those areas where these are currently still missing.

We sourced 7.2 metric kilotons of recycled raw materials in 2025 (2024: 11.3 metric kilotons). This corresponds to 0.02% of our raw materials (2024: 0.04%). The figure includes pyrolysis oil, which is obtained using chemical recycling (see Partnerships to drive forward chemical recycling).

The independent BASF Environmental Catalyst and Metal Solutions (ECMS) division offers customers circular solutions and comprehensive services in the fields of catalysis and precious metal trading and recycling. These are used in mobile emissions catalysts as well as in chemical catalysts. ECMS has many years of experience and a high degree of specialization in the recycling of precious metals such as platinum, palladium and rhodium. We primarily use the precious metals recovered in this way as feedstocks to manufacture new products for the automotive, specialty chemical, semiconductor and green hydrogen industries.

Another focus is on the recycling of mineral raw materials. For example, our Battery Materials division is advancing innovative technologies and solutions for recovering metals such as lithium, nickel, cobalt and manganese from end-of-life lithium-ion batteries or production scrap. With the growing market for electric vehicles, the demand for recycling of lithium-ion batteries will increase. As a leading producer of battery materials with global production capacities, BASF has in-depth expertise in battery chemistry and process technology. We are utilizing these competencies to develop battery recycling as an additional growth market in cooperation with partners along the value chain. For example, in June 2025, we started operation of a battery recycling plant for the production of Black Mass at the Schwarzheide site.

Resource outflows

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The production and processing of chemicals is our core business. Our extensive product portfolio ranges from chemicals and materials to industrial solutions, surface technologies, nutrition and care through to agricultural solutions (see General Disclosures). Our products are frequently used to manufacture durable, high-performance solutions such as electric motors for vehicles or insulation materials for the construction industry. We are making increasing use of alternative raw materials and processes in the manufacture of our products, to close material loops and reduce waste (see Actions). This includes in particular our Ccycled^® products (see Partnerships to drive forward chemical recycling). We are helping to strengthen the circular economy and increase resource use by offering our customers products that support the recycling process, increase the durability of materials and prolong their useful life. With the TripleS method, we create transparency with regard to the sustainability contribution of our product portfolio. The extent to which BASF products can be recycled depends crucially on the products into which they are further processed by our customers. In pilot projects, we were able to demonstrate the principle of recyclability, for example of our high-performance plastics.

BASF generated 2.18 million metric tons of waste in 2025 (2024: 2.18 million metric tons). As is normally the case in the chemical industry, this includes metals, plastic waste as well as reaction and distillation residues, among other things. In coherence with the concept of the circular economy, we are continuously examining recycling or thermal recovery options for all waste. In 2025, we were able to find new uses for 1.32 million metric tons of our waste (2024: 1.09 million metric tons). A further 0.86 million metric tons of our waste were disposed of (2024: 1.09 million metric tons). 1.65 million metric tons (2024: 1.70 million metric tons) of our waste could not be recycled. This corresponds to 75.7% (2024: 77.8%) of the total waste generated. We continuously identify and evaluate safe and environmentally sound disposal routes for non-recyclable waste. The hazardous waste disposed of in landfill is mainly contaminated construction waste that cannot be recycled due to legal requirements. BASF classifies waste before its disposal in line with the applicable legislation. The volume is determined by weighing or flow measurement at the disposal company. The data determined by weighing serves as the basis for the applicable treatment or disposal costs. A general description of our measurement methods and of the process used to capture environmental data, including waste volumes, plus general information on estimating or rounding specific sustainability parameters can be found in the General Disclosures chapter of our (Consolidated) Sustainability Statement.