Our unique Verbund concept is one of BASF’s greatest strengths. The driving principle of the Verbund concept is to add value through the efficient use of resources. At our Verbund sites, production plants, energy and material flows, logistics, and site infrastructure are all integrated.
BASF currently operates six Verbund sites worldwide: two in Europe, two in North America and two in Asia. Our Verbund site in Ludwigshafen, Germany, is the world’s largest chemical complex owned by a single company that was developed as an integrated network. We are building a seventh Verbund site in Zhanjiang, in the Chinese province of Guangdong.
The Verbund system creates efficient value chains that extend from basic chemicals all the way to consumer products. In this system, chemical processes make use of energy more efficiently, achieve higher product yields and conserve resources. By-products of one process are used as starting materials for another process. We thus save on raw materials and energy, minimize emissions, cut logistics costs and realize synergies. BASF operates an additional 241 production sites worldwide, but the six Verbund sites produce more than 50% of our volumes. This is a testament to the importance and strength of the Verbund concept within BASF.
The Verbund creates opportunities to reduce emissions, waste and resource consumption. Around half of the Verbund advantages stem from wastewater, steam and electricity savings compared to BASF’s non-Verbund sites as well as compared to publicly available data on industry cost averages. The remaining 50% of the savings are achieved in logistics and material handling due to our chemical integration (using pipelines instead of filling and transporting via truck/railway/ship). These benefits make the Verbund sites our most efficient sites.
Value chains in integrated Verbund structures can be steered efficiently to conserve resources and reduce CO2 emissions.
More than 70% of BASF Group’s electricity demand is met by gas and steam turbines in our highly efficient combined heat and power plants. Compared with separate methods of generating steam and electricity, we saved 12.0 million MWh of fossil fuels in 2020 and avoided 2.4 million metric tons of carbon emissions. In 2020, internally generated power in the BASF Group had a carbon footprint of around 0.24 metric tons of CO2 per MWh of electricity, as compared to 0.41 metric tons of CO2 per MWh for purchased electricity calculated using a market-based approach. Our carbon intensity was below the national grid factor at most BASF Group locations. As part of our carbon management, we aim to reduce the carbon footprint of purchased electricity.
The Verbund system is an important component of our energy efficiency strategy: Waste heat from one plant’s production process is used as energy in other plants. In this way, the Verbund saved us around 18.7 million MWh in 2020, which translates to 3.8 million metric tons less CO2 released into the environment. With combined power and steam generation as well as our optimized Energy Verbund, we were thus able to avoid a total of 6.2 million metric tons of carbon emissions in 2020.
The Verbund goes beyond production. It has several additional dimensions that all contribute across the businesses to strengthen our portfolio and to create value. By managing our value chains, we ensure the competitive and flexible supply of key raw materials and products to all segments.
We have strong technological competence in production processes but also in research, product development and our customers’ applications. This know-how is available to all segments through our technology platforms.
Digitalization is an integral part of our business and we harvest the benefits from the vast amount of data generated across BASF. Using and connecting this data intelligently, we can increase the efficiency of our processes and provide many new opportunities to create additional value for our customers.
By combining the specific expertise of each business, we want to be the preferred supplier for our customers in the different markets.
Examples from our Technology Verbund
Expertise in catalysis
Developing and using chemical catalysts that vastly speed up chemical reactions has been a core competence of BASF since the realization of the first large-scale synthesis of ammonia in 1913. Today, catalysis is employed in almost every value chain at BASF. Catalysts are required to make more than 90% of our products in an efficient and sustainable way.
BASF is the global leader in catalyst production for chemical, automotive and refinery applications. The know-how to develop, manufacture and employ catalysts for all these different applications is bundled in one research platform, creating significant synergies across the company. For example, the same principles applied in mobile emissions catalysts to destroy toxic compounds, such as nitrous oxides, can be used in the cleanup of industrial off-gases from upstream plants.
In the future, due to an increasing focus on carbon emissions and waste recycling, even more robust catalysts will be needed to handle the impurities found in, for instance, bio-based raw materials and plastic waste. With our broad experience across many chemical value chains, BASF’s catalyst R&D is well equipped to tackle these challenges.
White biotechnology and fermentation technologies
Future growth in many of our markets will be driven by trends like growing consumer awareness and the resulting demand for sustainable product solutions, natural and organic ingredients and their traceability. Innovation will be the key driver here, which is why we are working on approaches beyond the existing purely chemical solutions with research and development in white biotechnology and fermentation technologies. Our enzymes unit, founded in 2018, centrally steers the research, technology and production of the enzyme businesses at BASF. In addition, this business unit markets enzymes directly.
Despite its complexity, the Production Verbund can respond flexibly to fluctuating demand and changing markets. The Verbund Simulator is a proprietary digital tool that helps us optimize the Verbund. Within the Verbund, each business unit must create value for BASF. Therefore, we apply an internal market-based transfer pricing system that avoids cross-subsidization and provides transparency as we actively manage and optimize our value chains.