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Chemical giant BASF buys into offshore wind for net-zero production

28 June 2021 Cristina Brooks

German chemical company BASF is aiming to use electricity from a Dutch offshore wind farm for hydrogen production and a greening of operations at its Antwerp facility in Belgium.

BASF signed a €300 million ($357 million) contract with Swedish diversified power company Vattenfall for the purchase of 49.5% of the 1.4-GW Hollandse Kust Zuid (HKZ) offshore wind farm in Dutch waters, the output of which will be use to supply its European chemical production facilities, according to a 24 June statement.

The facility's co-owner, Vattenfall, is also retaining an interest to supply wind power to its Dutch customers, having won a 2018 bid to supply power and assist the energy transition in the Netherlands. The Dutch government has pledged to reduce national GHG emissions by 49% by 2030 compared with 1990 levels.

Construction of the HKZ wind farm, which will not rely on subsidies for operation, is expected to begin in July ahead of the launch of commercial operations in 2023.

Hydrogen production in chemical sector

BASF in March announced intentions to reduce its GHG emissions by 25% by 2030 and achieve net-zero emissions by 2050.

BASF is looking into CO2-free methods to produce green hydrogen, which typically uses a large amount of renewable energy, it said in the statement. Chemical refiners today tend to rely on grey hydrogen, which is not CO2-emissions free; it is produced with fossil fuels like green hydrogen's low-carbon feedstock rival, blue hydrogen.

The chemical company is also looking to use renewable energy to heat up feedstock in its steam crackers, which break down hydrocarbons into olefins that can be used to make plastic, or aromatics which can be used to make solvents.

Renewable electricity that replaces fossil fuel-based electricity is an important lever in bringing down emissions, the company said. "With this investment we are securing significant volumes of electricity from renewable sources for BASF, which is a key element of our transformation towards climate neutrality," said Martin Brudermüller, chairman of the board of executive directors of BASF SE.

BASF's Antwerp Verbund site in Belgium, the largest chemical production site in the country, will use HKZ's renewable power "to a significant extent."

Antwerp Verbund is BASF's second-largest production site after Ludwigshafen in Germany. BASF and power generator RWE announced in May their intention to develop an offshore wind farm in the North Sea that would supply renewable electricity to that site.

BASF also runs a hydrogen pilot in Ludwigshafen, Hy4Chem. Alongside Vattenfall's hydrogen projects in Hamburg and Neustad, that pilot is set to benefit from €8 billion ($9.73 billion) in German state funding for hydrogen research to secure the country's leadership in the sector.

Offshore wind for climate neutral power

For its part, Vattenfall's former CEO Magnus Hall in 2017 said the company would be climate neutral by 2050.

In the shorter term, Vattenfall has also committed to reduce its absolute Scope 3 GHG emissions by 20% by 2030, which would include the electricity products it sells to customers. "Vattenfall and BASF share a common objective of phasing out GHG emissions from our operations," Anna Borg, Vattenfall's current CEO, said in the statement.

Elsewhere in Europe, Vattenfall is active in the electric vehicle charging market and plans on supplying EV charging and hydrogen filling stations in the UK to meet the demand created by a planned national ban on diesel vehicle sales.

Last week, Vattenfall said it would supply electricity to enable green hydrogen's use in future fossil fuel-free steel production in Sweden, where it has also partnered with steel producers on building a renewable hydrogen storage cavern.

--Includes original reporting by Ian Young, Executive Editor of Chemical Week.

Posted 28 June 2021 by Cristina Brooks, Senior Journalist, Climate & Sustainability, IHS Markit

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