INTERVIEW: BASF aims to electrify China Verbund cracker project for lower CO2 emissions – CEO

NEW YORK (ICIS)–BASF plans to make greater use of electricity from renewable energy at its new Verbund cracker project in Guangdong province, China for a dramatically lower carbon footprint, its CEO said.

“You can imagine that if you build a new integrated Verbund site, then you also… apply the latest technologies. One learning we have as an industry is that we are very steam-based. So there is also in a steam cracker, steam-driven aggregates. And we will replace them with electric models and devices,” said Martin Brudermuller, CEO of BASF, at a fireside chat during the ICIS Power Players Awards virtual event.

“That means the steam demand from this cracker will be different, so it will be more electric. And with this we can also apply green energy – renewable energy. Also, in a lot of other ways, we will close the loop, using more off-gases as raw materials. And this way we will actually manage to have a very low carbon footprint,” he added.

Brudermuller is the winner of the 2021 ICIS CEO of the Year Award, having been selected by his peers among the ICIS Top 40 Power Players.

BASF kicked off its China Verbund cracker project in November 2019, and will invest up to $10bn at the site in Zhanjiang, making it the company’s largest investment. This project would 100% BASF owned and operated and include a 1m tonne/year cracker along with downstream plants for consumer-oriented products.

Photo credit: BASF

The site will be built in phases, with the first plants producing engineering plastics and thermoplastic polyurethane scheduled to start up by 2022 and powered by 100% renewable energy. The entire project is planned to be complete by 2030. And become BASF’s third largest site behind Ludwisghafen, Germany and Antwerp, Belgium.

After Phases 1 and 2 of construction, the project is expected to generate somewhere around 1.8m tonnes/year of CO2, about 25% of the emissions of a coal-based China competitor project today, according to the company.

“So we are also leading with this new Verbund site in terms of CO2 footprint. It will be fully digitalised and we will apply all that is new in the chemical industry,” he added.

Separately, in March, BASF joined forces with SABIC and Linde to develop the world’s first electrically heated steam cracker furnace which would use electricity to heat furnaces rather than natural gas.

If the electricity comes from renewables such as wind and solar, the new technology could slash CO2 emissions by as much as 90%, according to the companies.

BASF is also working with Siemens to increase energy efficiency through the use of electrical heat pumps to produce CO2-free steam from waste heat.

BASF already has a major cracker site in Nanjing, China – a 50-50 joint venture with Sinopec called BASF-YPC which celebrated its 20th anniversary in December 2020. Total investment at the site has been around $5.5bn.

In August, the companies announced plans to further expand capacities of propionic acid, propionic aldehyde, ethyleneamines, ethanolamines and purified ethylene oxide (EO), and build a new tert-butyl acrylate (TBA) plant – all for start-up in 2023.

“BASF has had a long presence in China – for more than 135 years. We have a history in China and… have also positioned ourselves as a very credible partner. I approached the Chinese government by asking whether… foreign companies could have 100% ownership of operations like a cracker,” said Brudermuller.

“We run a 50-50 JV with Sinopec in Nanjing, and now we have the opportunity as one of the very few [companies] to also run such a large Verbund site under our own control. That is both a huge opportunity on one side, but it is also a responsibility and obligation,” he added.

Bringing state-of-the-art technologies to operate a large production site to meet the growing needs of consumers with significantly lower carbon emissions should benefit China as it seeks to manage growth and reduce pollution.

“And that means we establish a very modern, totally digitalised site in China… and with this we also contribute to Chinese society. And on the other hand, we can also benefit from the large growth in the Chinese market. And I think it is this balance that also encouraged the Chinese government to give us this opportunity, said Brudermuller.

On 27 September, BASF will host an investor update on its new Verbund cracker site in Zhanjiang, China and battery materials strategy.

Click here to view the replay of the ICIS Power Players Awards

Interview article by Joseph Chang