1. The German chemical industry has been forced to reduce production due to high energy costs, impacting polymer prices. How does BASF expect the situation to develop in 2025?
BASF expects demand to move sideways at the global level, building up on the current trend in the second half of 2024. While the leading economic indicators for our European customer industries remain weak and suggest further declines in demand for durable consumer goods and the automotive industry, they point to a slight increase in demand in Asia and North America. However, we see an encouraging demand for sustainable polymer solutions.
2. What level of demand is BASF seeing for mass balanced materials?
I firmly believe that long-term targets for recycled and renewable content can only be achieved through mass balancing. This approach is essential; otherwise, the transition to more sustainable materials would become too expensive.
Encouragingly, BASF is seeing an increasing demand for mass balanced solutions, mainly coming from customers who are interested in testing their markets. Statistics from organisations like ISCC, an independent multi-stakeholder initiative and leading certification system, clearly indicates that there is a growing demand for mass balanced products.
However, some challenges remain that prevent broader acceptance. One significant hurdle is the regulatory uncertainty surrounding the inclusion of mass balanced materials in quotas for recycled or renewable feedstock.
Additionally, many customers need further education regarding the concept of mass balancing. Interestingly, while it is broadly accepted in the cocoa sector, there is still a significant gap in understanding and acceptance in the chemical industry.
In conclusion, to make the transition to sustainable materials truly happen, mass balancing must play a pivotal role, as it provides the necessary framework to overcome current obstacles and facilitate a more sustainable future.
3. BASF Performance Materials wants to be carbon neutral by 2050. What role will emission trading systems and carbon pricing have on that goal and how will it influence decisions of where to produce materials?
By implementing the Carbon Border Adjustment Mechanism (CBAM), the European Union aims at preventing the shift of production to regions with lower environmental standards, ensuring fair competition and reducing global carbon emissions. We believe that these governmental interventions are essential to internalise externalities and drive the transition towards sustainability.
For BASF Performance Materials, the impact of a CBAM on our carbon neutrality target is expected to be positive. This is due to our company's strategy of customer proximity, which involves local production to serve local customers. By producing materials close to their intended markets, the financial burden caused by CO2-related regulations like CBAM would be minimised, hence reducing the overall emissions.
4. Which materials or technologies do you think show most promise in the path to plastics circularity?
BASF sees all recycling routes – mechanical, chemical and organic - as essential in the path to plastics circularity. However, choosing the most sustainable recycling option for waste streams containing plastics requires consideration of life-cycle factors and local waste infrastructure.
For conventional types of plastics, mechanical recycling is preferred if it is ecologically beneficial, technologically possible, and economically feasible. Chemical recycling comes as a complementary solution. Organic recycling is preferred when use of a plastic helps to divert organic wastes from landfill/incineration, or the application is responsible for plastic contamination in the organic waste stream.
5. If you had to pick one sustainability trend that will drop off the agenda by 2030, what would it be?
One sustainability trend that is likely to drop off the agenda by 2030 is the switch to renewable energy. This trend will diminish because by that time, it will have become the new normal and mainstream practice. The competitive nature of renewable energy, driven by the growing capacities and advancements in technology, will make it one of the cheapest and most effective ways to reduce emissions. As renewable energy becomes more accessible and affordable, it will no longer be seen as a separate sustainability trend but rather as an integral part of the energy landscape.