In Focus: Climate Neutrality BASF Report 2021 Management’s Report – In Focus: Climate Neutrality 27 In focus: Our Journey to Climate Neutrality Climate change is the greatest challenge of the 21st century. Swift and resolute action is needed to ensure that the targets agreed in the Paris Climate Agreement can be achieved. We stand by this responsibility. In many areas, products and innovations based on chemistry are the key to a climate- neutral future. At the same time, we are working intensively to significantly reduce the carbon footprint of our production and thus of our products. Our target: net zero emissions by 2050. We have set ourselves an One thing is clear: The transformation will require significantly more ambitious milestone on this path. By 2030, we want to reduce the energy from renewable sources. Initial estimates suggest that at the greenhouse gas emissions from our production sites and our energy Ludwigshafen site in Germany alone, we would need to roughly purchases by 25% compared with 2018 – while growing production triple or quadruple our current electricity use (2021: 6.0 TWh) to volumes. This corresponds to a decrease of around 60% compared fully implement new, low-carbon electricity-based production pro- with 1990. We are intensely pursuing our climate protection targets cesses. To meet this demand, we are investing in our own power with investments of up to €4 billion by 2030. Our focus here is on assets, especially for wind power, and are increasingly buying green five strategic levers: We are increasingly meeting our energy electricity on the market (make & buy approach). needs from renewable sources (gray-to-green lever). We are increasingly relying on energy recovery to produce steam (power- Also critical to success are prices for renewable energy. Substi- to-steam lever). We are working to further improve the energy and tuting fossil fuels is only economically feasible at production costs of process efficiency of our plants (continuous opex lever). We are 4 to 5 cents/kWh. Consequently, there is an urgent need to expand increasingly replacing fossil resources with bio-based raw materials supply and reduce the levies and fees on electricity prices. In addi- (bio-based feedstocks lever). And together with partners, we are tion, globally comparable carbon pricing – or at least at G20 level – is pioneering nearly carbon-free production processes, especially for needed to ensure that climate-friendly processes are competitive emission- intensive basic chemicals (new technologies lever). internationally. For more information on energy and climate protection, see page 126 onward We want to play an active and responsible role in shaping the For more information on raw materials, see page 112 onward transition toward a climate-neutral society. This calls for new ways of thinking and working together. And it needs a political and regu- Our global climate protection targets latory environment that promotes innovation in climate protection, makes it possible to develop new, climate-smart processes that are –25% Net zero competitive internationally and, above all, resolutely drives forward Renewable energy is a central building block on BASF’s journey to the expansion of renewable energies – including through the appro- Reduction in our greenhouse gas Greenhouse gas emissions by climate neutrality. To enable us to meet our growing demand in the priate land use designations, rapid planning and approval proce- emissions by 2030 compared 2050 (Scope 1 and 2) future, we are gradually switching our supply agreements to green dures and the swift expansion of grid infrastructure. with 2018 (Scope 1 and 2) power and investing in our own plants. Find out more about how we are driving forward the transformation of our energy supply in the online report at report.basf.com.