BASF Report 2021 Management’s Report – Raw Materials 113 Good to know Renewable resources In addition to fossil resources, we employ renewable raw materials, mainly based on vegetable oils, fats, grains, sugar and wood. In 2021, we purchased around 1.3 million metric tons of renewable raw materials. For instance, we use renewable resources to produce ingredients for the detergent and cleaner industry, or to source natu- ral active ingredients for the cosmetics industry. We also use renew- able feedstocks such as biomethane and bio-naphtha in our Verbund as an alternative to fossil resources. The mass balance approach allows us to allocate the amount of renewable resources used to a wide variety of end products (see box at left). Examples ® ® include the Acronal Eco and Joncryl MB biomass balance binders ® for solvent-free paints and coatings, the HySorb Biomass Balanced ® superabsorbent, various biomass balance versions from the Trilon , ® ® Sokalan and Protectol product lines for the detergent and cleaner ® industry, and the biomass balance versions of our Styropor , Neopor® and Styrodur® insulation materials. The mass balance approach As for fossil raw materials, we also consider how renewable resources impact sustainability topics along the value chain. Many BASF value chains start in syngas plants or steam crackers, Mass balance products are identical in quality to conventionally Alongside positive effects like saving greenhouse gas emissions, where fossil resources, mostly natural gas and naphtha, are con- produced products but have a better sustainability balance due to these can also have negative effects on areas such as biodiversity, verted into hydrogen and carbon monoxide or important basic the use of bio-based or recycled raw materials. This method has land use or working conditions, depending on the raw material. This chemicals such as ethylene and propylene. These are used to already been applied to over 700 BASF products (2020: ~200 prod- is why we carefully weigh the advantages and disadvantages of create thousands of products in the BASF Verbund. Alongside fossil ucts), for example, engineering plastics such as polyamide, super- using renewable resources, for example using Eco-Efficiency Ana- resources, bio-based and recycled raw materials such as biometh- absorbents, dispersions and intermediates. We share our expertise lyses. We also take recognized certification standards such as the ane, bio-naphtha or pyrolysis oil can be used as feedstocks in our in numerous stakeholder platforms, such as the European Commis- Roundtable on Sustainable Palm Oil into account in our decisions. plants. Due to the simultaneous processing of fossil, bio-based and sion’s Circular Plastics Alliance, to harmonize and standardize recycled feedstocks, the raw materials cannot be directly assigned different allocation methods and certification schemes for mass We want to minimize raw material-specific risks and increase sus- to resulting derivatives. The share of bio-based or recycled raw balance products. tainability in our supply chains with measures, projects and targeted materials can however be allocated to derivatives using the mass For more information, see basf.com/massbalance involvement in initiatives. Our activities here concentrate on value balance approach, which is audited by a third party, and certifica- chains that are relevant quantitatively or that do not yet have certifi- 2 tion (such as the REDcert standard for the chemical industry). It is cation standards. We are also working on product innovations and similar in principle to green power, which has been established for on enhancing our production processes to improve the profitability many years: Energy from renewable sources is fed into the grid and and competitiveness of renewable resources. For example, we are then charged to individual customers. developing innovative processes such as biocatalysis and fermen- tation for the production of vitamins and enzymes; and we are