BASF wants to achieve net zero emissions by 2050. That is why we develop emission-free technologies at industrial scale, which will replace fossil fuels such as natural gas with electricity from renewable sources. Electricity demand at sites will therefore increase sharply in the coming decade. From around 2035, it is expected to be more than three times the current electricity demand.
A precondition for the transformation of chemical production is the reliable availability of large quantities of electrical energy from renewable sources at competitive prices. That is why BASF acts and pursues a make and buy strategy: We invest in own energy production plants to meet our energy demand and we purchase renewable energy through long-term supply agreements. A key purchasing criterion is "additionality", because we want to drive the expansion of renewable energy facilities. Regulatory framework conditions are also essential for making this transformation economically feasible.
BASF Renewable Energy GmbH is responsible for the supply the BASF Group in Europe with electricity from renewable energies.
Purchasing renewable energy
BASF purchases green power on the market through long-term supply agreements or renewable energy certificates, depending on the region and market regulations. Electricity is primarily sourced from new renewable energy facilities.
Power purchase agreement with Ørsted
BASF and Ørsted have concluded a power purchase agreement, under which BASF will offtake the output of 186 megawatts from Ørsted’s planned Borkum Riffgrund 3 Offshore Wind Farm in the German North Sea.
The offshore wind farm will go into full commercial operation in 2025. The corporate power purchase agreement for offshore wind will run for 25 years. It will help cover the increased electricity needs of low-emission technologies for BASF and is a step towards BASF’s ambition of becoming carbon neutral by 2050.
Power purchase agreement with ENGIE
BASF signed a 25-year Power Purchase Agreement (PPA) with ENGIE, effective as of January 1, 2022. The agreement includes the provision of up to 20.7 terawatt hours of renewable electricity by ENGIE.
The energy from ENGIE’s renewable project portfolio in Europe will supply multiple European BASF sites. The electricity will initially come from various Spanish onshore wind farms. In the future, ENGIE will have the option to either deliver power from existing Spanish assets or from future onshore and offshore wind farms.
In September 2023, BASF signed a 25-year PPA with SPIC to purchase 1,000 GWh of renewable energy per year for the Zhanjiang site.
This partnership is a significant milestone for BASF in securing 100% green power supply for the Zhanjiang Verbund site by 2025.
In 2022, BASF and X-ELIO signed a 12-year contract to supply 48 MW of solar power for the Verbund site in Freeport, Texas.
With this agreement in place, 100% of the site’s expected purchased power will be supplied from renewable energy.
BASF is committed to renewable energy solutions to power its sites across the United States and has entered into virtual power purchase agreements (VPPAs) for wind and solar power totaling 250 MW. They are designed to offset the carbon-intensive grid-supplied electricity being used at more than 20 of BASF’s manufacturing sites in several states across the country, from Texas to Michigan.
Investing in own renewable power assets
The current production of electrical energy from renewable sources cannot meet the expected future energy demand of BASF. For that reason, we invest in own renewable energy facilities like offshore windparks.
Offshore wind farm Hollandse Kust Zuid
In 2023, BASF, Vattenfall, and Allianz jointly inaugurated a 1.5 GW wind farm in the North Sea. Hollandse Kust Zuid (HKZ) is one of the largest offshore wind farms in the world.
HKZ plays an important role in BASF's transition towards Net Zero. Around half of the electricity will be used to reduce the carbon footprint of our products at BASF sites in Europe and to power innovative, low-emission technologies. The subsidy-free offshore wind farm is expected to become fully operational in 2024.
In 2022, BASF and enviaM inaugurated a solar power plant in Schwarzheide. With a total installed capacity of 24 megawatts peak (MWp) and an expected electricity production of 25 gigawatt hours (GWh) per year, the plant is the first major solar power plant worldwide that BASF realized with a partner.
On an annual average, the solar park will be able to cover about 10 percent of the current electricity demand of the BASF production site in Schwarzheide.