Opportunitiesin Chemical Manufacturing

Aspen Global Change Institute : Technologies andPolicies to Decarbonize the Industry SectorOpportunities in Chemical Manufacturing12. November 2018Dr. Brigitta Huckestein, BASF SE

BASF – We create chemistryn Our chemistry is used in almost all industriesn We combine economic success, socialresponsibility and environmental protectionn Sales 2017: 64,457 millionn EBIT 2017: 8,522 millionn Employees (as of December 31, 2017):115,490n 6 Verbund sites and 347 other production sites2BASF Ludwigshafen

Chemical products contain carbon„Decarbonization“ is not a usefull term304.12.18Petrochemical Value Chain

Reduction of greenhouse gas emissions with increasedproductionDevelopment since 1990Index 1990 100%, BASF Group excl. oil and gas business250 104% volume of sales product2001501001005001990 1996 2002 2008 2014 48.3% absolute greenhouse gas emissions 74.7% specific greenhouse gas emissions4

Elements of Energy Management at BASFEnergy VerbundEnergy ProductionEnergy EfficiencyLinkage of energy flowsbetween production plantsHigh efficient combined heatand power plants (CHP) withcombined cycle gas turbines(CCGT)Process optimization e.g. newcatalysts in the acrylic acid plant,heat integration, .Power PlantSteam exportSulfuric acidplantSteam importAcrylic acid plantUrea / carbmidePlantAdipic acidplantAnnual savings*Primary energy 18 mill. MWhCO2 emissions 3.9 mill. t CO2* BASF Group 2017Platzhalter für BildAnnual savings*Primary energy 13 mill. MWhCO2 emissions 2.6 mill. t CO2Several hundred measuresper year

DECHEMA Technology Study: Low carbon energy andfeedstock for the European chemical industryn Scope: European chemical industryMethanol, ethylene/propylene, benzene/toluene/xylene, ammonia/urea, chlorine 50% of energy consumption and GHG-emissions of European Chemical Industryn Technology measuresEnergy efficiency, biomass and waste, H2 CO2-based processes, H2 only from waterelectrolysisn Four Scenario calculations based on selected percentages of technology implementationn No carbon leakagen Additional impact of CO2-based methanol and ethanol as fuel component

Energy ContentCCU: Using CO2 as feedstockHHH len HOO C OHCO2HH2OOxygene richChemicalsFormaldehydeEthanolAcrylic acidFormic acid

DECHEMA Technology Study: Results of scenariocalculations (w/o fuels production)BAU: business-as-usual

DECHEMA Technology Study: Energy Demand

Emissions in the Chemical Value Chain 20 Basic ChemicalsToproduce20.000 Chemicalsin the value chain80 %GHGEmissions20 %GHG Emissions1004.12.18R&Dfocus on bigemitters needed

Methane pyrolysis – a new source of H2Project outlook and financing aspectsReference/demonstrationunit on commercial scalePilot Unit 20-40 million investmentStart-up ³2020,R&D-Projectfunded by the GermanMinistry of Educationand ResearchRisks 11breakthrough process developmentcarbon utilization in metallurgyindustrial scale reference requiredCAPEX and OPEX support needed 100 million investmentStart-up ³2024,

More Hydrogen from the same amount of renewableEnergy by Methane PyrolysisH2 by Water ElectrolysisH2 by Methane PyrolysisH2(g) 0,5 O2(g)C(s) 2H2(g)kJCH4(g) Hor 37 mol H2kJ Hor 286 mol H2H2O(l)87% less energyBut: fossile feedstockAlternative: Bio-Methane if available

Our contribution to fulfill the Paris agreement –Avoidance with highest contributionCO2CO2EnergyEfficiencyHigh efforts totackle remainingopportunities13SustainableBiomass asfeedstockWaste asfeedstockBASF BiomassBalance anddedicated Biobased productsUse waste in areasonable waywhile limitingeffects on climateAvoidance by new productiontechnologiesCCUFocus on productswith high oxygencontent and thusless energy needsUse of limited resources like biomass andrenewable energy based on best value to societylimit availability for chemistryResearch and Developmentof low CO2 processes forchemicals with highestemissions

Learningsn Large-scale CO2-reductions can only be achievedthrough a significant electrification of industrialprocesses, leading to a huge increase of low-carbonelectricity demand.n Radically lowering the price of renewable electricity,including Government driven surcharges and levies,presents an indispensable prerequisite for a successfulindustrial transformation.n R&D funding programs contribute to accelerate thedevelopment of new technologies.n To turn these R&D activities into actual investments, weneed a global (at least G20) CO2 price to allow for abusiness case. The economic constraints around zerocarbon transformation needs to be acknowledged.

Process optimization e.g. new catalysts in the acrylic acid plant, heat integration, . Steam export Acrylic acid plant Sulfuric acid plant Urea / carbmide Plant Power Plant Adipic acid plant Steam import Annual savings* Primary energy 18 mill. MWh CO2emissions3.9 mill. t CO2 Annual savings* Primary energy 13 mill. MWh CO2emissions 2.6 mill. t CO2