Supplying a fast-growing global population with food, energy and clean water, making the best use of limited natural resources and protecting our climate are among the greatest challenges of our time. Innovations based on chemistry play a pivotal role in overcoming these. New, resource-efficient solutions and business models are needed to decouple growth from the consumption of finite resources. Together with our customers from almost all sectors, we are working on innovative processes, technologies and products for a sustainable future. This is how we ensure our long-term business success and that of our customers.
Innovation has always been the key to BASF’s success, especially in a challenging market environment. The knowledge and skills of our highly qualified employees are our most valuable resource here and the source of our innovative strength. We had approximately 10,000 employees involved in research and development worldwide in 2020.
Our three global research divisions are run from our key regions – Europe, Asia Pacific and North America: Process Research & Chemical Engineering (Ludwigshafen, Germany); Advanced Materials & Systems Research (Shanghai, China); and Bioscience Research (Research Triangle Park, North Carolina). Together with the development units in our operating divisions, they form the core of our global Know-How Verbund. BASF New Business GmbH and BASF Venture Capital GmbH supplement this network with the task of developing new technologies, attractive markets and new business models for BASF.
In 2020, we generated sales of around €10 billion with products launched on the market in the past five years that stemmed from research and development activities. In the long term, we aim to continue significantly increasing sales and earnings with new and improved products – especially with Accelerator products, which make a substantial sustainability contribution in the value chain.
Our global network of outstanding universities, research institutes and companies forms an important part of our Know-How Verbund. It gives us direct access to external scientific expertise, talented minds from various disciplines as well as new technologies, and helps us to quickly develop targeted, marketable innovations, strengthen our portfolio with creative new projects, and in this way, reach our growth targets.
Our eight Academic Research Alliances bundle partnerships with several research groups in a region or with a specific research focus. They are complemented by cooperations with around 250 universities and research institutes as well as collaborations with a large number of companies.
For more information on our Academic Research Alliances, see BASF Report 2020
Research and development expenses amounted to €2,086 million in 2020 (2019: €2,158 million). The operating divisions accounted for 82% of total research and development expenses in 2020. The remaining 18% related to cross-divisional corporate research focusing on long-term topics of strategic importance to the BASF Group.
Research and development expenses by segment 2020
As part of our corporate strategy, we combined research and development at an organizational level, making it better aligned with the needs of our customers. Our aim is to continue to shorten the time to market and accelerate the company’s organic growth. A strong customer focus, digitalization, creativity, efficiency and collaboration with external partners are among the most important success factors here. In order to bring promising ideas to market as quickly as possible, we regularly assess our research projects using a multistep process and prioritize our focus areas accordingly.
We are fine-tuning our innovation strategies in all of our business areas to ensure a balanced portfolio of incremental and disruptive innovation, as well as of process, product and business models.
We have also identified additional, far-sighted topics that go above and beyond the current focus areas of our divisions. The aim is to use these to leverage new business opportunities within the next few years. In addition, we are working on overarching projects with a high technological, social or regulatory relevance. For instance, one global research and development program, the Carbon Management R&D Program, is focusing on the underlying energy-intensive production processes for basic chemicals. These basic chemicals account for around 70% of the CO2 emissions produced by the European chemical industry.1 The program covers topics such as the development of new catalysts for dry reforming methane with CO2 to produce syngas, and using methane pyrolysis to produce hydrogen from natural gas or biogas.
Our global research and development presence is vital to our success. In Asia in particular, we want to continue advancing our research and development activities with a focus on growth in regional markets. A stronger presence outside Europe creates new opportunities for developing and expanding customer relationships and scientific collaborations as well as for gaining access to talented employees. This strengthens our Research and Development Verbund and makes BASF an even more attractive partner and employer. The Ludwigshafen site in Germany is and will remain the largest in our Research Verbund. This was once again underlined with the investment in a combined laboratory building for cleanroom and elemental analysis. The new building is scheduled to open in 2022 and will enable us to continue to drive forward Analytics 4.0 with innovative digitalization and automation solutions.
The number and quality of our patents also attest to our power of innovation and long-term competitiveness. In 2020, we filed around 950 new patents worldwide. The Patent Asset Index, a method that compares patent portfolios, once again ranked us among the leading companies in the chemical industry in 2020.
1 Sources: JRC (Energy efficiency and GHG emissions: Prospective Scenarios for the Chemical and Petrochemical Industry 2017, Boulamanti A., Moya J.A.); DECHEMA Technology Study (Low carbon energy and feedstock for the European chemical industry, 2017)
BASF’s Styrodur® Hybrid is the next generation of the green insulation boards made from extruded polystyrene for customers in the construction industry. The hybrid version has vertical grooves on one side to bond better with the concrete. The simpler and cleaner processing leads to considerable time and cost savings in construction, for example by eliminating the need for full-surface adhesion. These advantages are in addition to the general benefits offered by Styrodur, such as high compressive strength, low moisture absorption, and excellent thermal insulation properties, which play a significant role in reducing CO2 emissions and cutting heating costs.
BASF’s new additive for the asphalt industry, B2Last®, has been designed for sustainable road construction. It extends pavement life while cutting CO2 emissions along the production chain. B2Last® meets additional health and safety requirements by enabling asphalt to be produced and processed at significantly lower process temperatures. The innovative additive enables faster completion times and reduces emissions, improving the carbon footprint and making roads more durable.
BASF and IntelliSense.io, a leading industrial artificial intelligence (AI) company, have combined their expertise in mineral processing, ore beneficiation chemistry and industrial AI technology. The joint offering is called the BASF Intelligent Mine powered by IntelliSense.io and delivers AI solutions embedded with BASF’s mineral processing and chemical expertise. The solution helps customers to make their mine operations more efficient, sustainable and safe, while offering a real-time decision-making platform. Each mining process, such as grinding, thickening, flotation and pumping, is supported by an Optimization as a Service application that predicts and simulates future performance, generating process-specific recommendations for optimization. This enables customers to realize efficiency gains across the entire value chain.
With Glasurit® 100 Line and R-M® AGILIS, BASF has introduced the most advanced waterborne basecoat technology for refinish coatings, offering outstanding efficiency and environmental advantages. The focus in product development was on sustainability, with the result that volatile organic compound (VOC) levels are consistently below 250g/l. This is the lowest VOC level on the market, making the new product line the eco-friendliest automotive refinish coatings available. The innovative formulation optimizes the processing properties for fast and efficient application, enabling customers to cut process times by up to 35%. Another 20% can be saved from the reduction in material consumption. This allows body shops to reduce their CO2 emissions through faster application and shorter drying cycles. At the same time, they can increase profitability and improve their environmental footprint.
Nutrition & Care
BASF has launched the new fragrance Isobionics® Santalol, an alternative to sandalwood oil. Isobionics® Santalol is produced on a biotechnological basis from renewable raw materials and is 100% free of endangered sandalwood. Our fermentation technology ensures consistent high quality, effective production and yearround availability. Isobionics® Santalol resembles the floral heart of sandalwood oil and is particularly suitable for use in perfumes and exclusive personal care products thanks to its woody odor profile.
By 2030, more than 30 major R&D projects will complement BASF’s connected offer of seeds and seed treatment products, chemical and biological solutions, as well as digital services. This brings the pipeline to an estimated peak sales potential1 of more than €7.5 billion. In 2020, BASF spent €840 million on R&D in Agricultural Solutions, representing around 11% of the segment’s sales.
We leverage the potential of digitalization in agriculture to help farmers grow their business profitably and reduce their environmental footprint. Launched in 2020, the new outcome-based business model xarvio® HEALTHY FIELDS provides a tailored, optimized field and seasonspecific crop protection strategy. By measuring and classifying externally induced plant stress, automatically defining buffer zones and recording biodiversity on and off arable land, it guarantees plant health and enables farmers to achieve agreed yield forecasts. This way, we respond to modern farming challenges, requirements by society and political action plans and contribute to more sustainable farming.
Wheat is one of the most produced crops in the world and demand continues to increase based on the growing world population. Our agricultural innovations for wheat production contribute to food security, which will help to reach the U.N. Sustainable Development Goals (SDGs). Our R&D pipeline comprises solutions that help farmers to achieve better yield – balancing the needs of the environment, society and agriculture.
In 2020, we received the first registration worldwide for the new herbicide active ingredient Tirexor®. It will give wheat growers in Australia more choice for effective weed control to combat resistance and enable climate-smart, no-till farming. Further dossier submissions in other countries across Asia and South and North America are planned.
Our recently launched fungicide Revysol® will also play a crucial role in future resistance management in wheat, helping growers to better protect their crops, manage resistances and increase their yield in a sustainable way.
1 Peak sales describes the highest sales value to be expected in one year.
BASF is the largest chemicals supplier to the transportation industry, with more than 20% of sales to this market in 2020 and leading market positions in OEM coatings, engineering plastics and mobile emissions catalysts. In battery materials, BASF focuses on high-energy cathode active materials (CAM). In this business, chemical innovation is the biggest lever to improve energy density, reliability, and safety and to reduce the cost of batteries for electric vehicles. BASF’s unmatched access to OEMs and their suppliers enables an early understanding of market needs, leading to product development from a well-established position in the two key CAM technologies, NCA (Nickel-Cobalt-Aluminum) and NCM (Nickel-Cobalt-Manganese).
Headquartered in Shanghai, China, BASF’s battery materials business unit currently generates annual sales in the triple-digit million-euro range. Battery materials is a very dynamic market, as OEMs have more than 300 electric vehicle models lined up for introduction in the next three to five years. The lithium-ion battery market is expected to grow at about 25% per year to 2030.1 For 2030, we anticipate annual production of more than 30 million electric vehicles. Depending on the mix of powertrains and technological progress, the market for cathode active materials could be more than 2,500 kilotons, valued at €50 billion to €65 billion. BASF has the required financial strength and is committed to driving the expansion of a global, cost-competitive asset footprint.
BASF has contracted the required base metal raw material supply with Nornickel and is constructing a precursor (PCAM) plant in Harjavalta, Finland, enabling a secure supply of locally sourced nickel and cobalt. The new plant will utilize locally generated renewable energy, including potential use of hydro, wind and biomass sources. Startup is planned for 2022. Additionally, BASF recently announced a collaboration with Eramet in Indonesia to evaluate the potential to build an HPAL (High-Pressure Acid Leaching) refinery in the country as a source for nickel and cobalt intermediates which are critical base metal raw materials for the lithium-ion battery value chain.
In February 2020, BASF announced that Schwarzheide, Germany, would be the location for CAM production in Europe, enabling the supply for around 400,000 electric vehicles per year. The plant in Schwarzheide will use precursors manufactured in the Harjavalta plant. The Schwarzheide production plant will use an industry-leading energy mix with a low CO2 footprint. Startup is also planned for 2022.
To complement its own assets, BASF collaborates with TODA KOGYO. The partners established two BASF majority-owned and controlled companies, BASF TODA Battery Materials LLC in Japan and BASF TODA America LLC in the United States. In May 2021, BASF announced that it will form a BASF majority-owned joint venture with Shanshan, a leading battery materials supplier, to produce cathode active materials and precursors in China. These entities plus the European plants in Harjavalta and Schwarzheide will make BASF the first company with capacities in all major markets, increasing its annual capacity to 160,000 metric tons by 2022 with further expansions underway.
Around the world, BASF experts are working on innovative cathode materials for lithium-ion batteries to meet the growing demand for powerful, reliable and low-cost electric vehicles. The 2025 goal is to double the on-road range of a mid-size electric vehicle from 300 to 600 kilometers on a single battery charge, halve battery size and reduce charging time to 15 minutes.
The growing demand for electromobility is also increasing the need for recycling. As a leading producer of battery materials, BASF has indepth expertise in battery chemistry and process technology. Together with our partners, we are leveraging this expertise to develop a closedloop system for the raw materials used to produce cathode active materials, such as nickel, cobalt, manganese and lithium. The objective is to further increase sustainability in the value chain for batteries by developing an innovative, large-scale process to recycle batteries along the entire value chain – from collecting end-of-life batteries and recovering mineral raw materials to using these in the production of new battery materials.
1 Compounded annual growth rate (CAGR)
Electromobility value chain
BASF is well-positioned in the value chain with strategic partnerships to secure high-purity raw materials