R&D Webcast: Circular Economy at BASF

R&D Webcast on December 10, 2020

Circular Economy at BASF

Dr. Martin Brudermüller

Chairman of the Board of Executive Directors and Chief Technology Officer of BASF SE

Cautionary note regarding forward-looking statements

This presentation contains forward-looking statements. These statements are based on current estimates and projections of the Board of Executive Directors and currently available information. Forward-looking statements are not guarantees of the future developments and results outlined therein. These are dependent on a number of factors; they involve various risks and uncertainties; and they are based on assumptions that may not prove to be accurate. Such risk factors include those discussed in Opportunities and Risks on pages 139 to 147 of the BASF Report 2019. BASF does not assume any obligation to update the forward-looking statements contained in this presentation above and beyond the legal requirements.

2 December 10, 2020 | R&D Webcast

The European Green Deal

"The Green Deal is Europe's 'Man on the Moon' Moment"

Selected Green Deal objectives

CO2 First climate-neutral continent by 2050

Lead the way to a circular economy Move to a zero-pollution environment Accelerate to a sustainable food system

3 December 10, 2020 | R&D Webcast

BASF's Circular Economy Program: Targets

• 250,000 metric tons of circular feedstock by 2025
• Double circular sales to €17 billion by 2030
• Prioritize related capex, M&A, R&D

4 December 10, 2020 | R&D Webcast

BASF's Circular Economy Program: Today's focus

New

Feedstocks

New

Material Cycles

New

Business Models

5 December 10, 2020 | R&D Webcast

Today's recycling landscape for plastic waste

Fate of 30 million metric tons of plastic waste generated in EU28+2 in 2018

Unmanaged / Leaks

3%

				Mechanical
Landfill	24.5%	31.1%	recycling

	EU28+2:
Energy	30 million	Chemical
metric tons
recovery	recycling
		0.1%
	41.0%

20%

30%

Globally:	<0.1%
250 million
metric tons	20%
30%

Only one third of all plastic waste is kept in the materials cycle in EU28+2.

6	December 10, 2020 | R&D Webcast Source: Conversio, Circular Economy of Plastics 2018 EU28+2, September 2019; Conversio, Global Plastics Flow 2018, February 2020

The plastics value chain

Semi-

Naphtha

Basic

Monomers,

finished

Plastic

chemicals

additives, etc.

goods

goods

Refinery

Steam cracker

Chemical

Plastics

Manufactured

Plastic

production

production

goods

waste

Recovery Incineration

Disposal

Landfill

7 December 10, 2020 | R&D Webcast

New chemical recycling technology to increase the overall amount of plastic waste recycled

Chemical recycling

• Waste to chemicals
• Can handle mixed plastic waste
• Products are "virgin-grade"

Semi-

Naphtha

Basic

Monomers,

finished

Plastic

chemicals

additives, etc.

goods

goods

Refinery	Steam cracker	Chemical	Plastics	Manufactured	Plastic
		production	production	goods	waste

ChemCyclingTM is complementary to mechanical recycling.

8 December 10, 2020 | R&D Webcast

The scale-up challenge: BASF collaborates with partners to supply its Verbund with pyrolysis oil

 World's largest plastic pyrolysis plant1 of Quantafuel in Skive, Denmark is operating with first-generation catalysts

− Unique integrated process of pyrolysis of mixed plastic waste and purification into a secondary raw material

− Catalytic purification happens at ambient pressure

− Flexibility in scale enables optimization of the supply chain setup

 Further cooperation partners with focus on pyrolysis of end-of-life tires:

− Pyrum Innovations, Germany

− New Energy, Hungary

9	December 10, 2020 | R&D Webcast 1 Capacity of 16,000 metric tons per year

The purification challenge: Together with Quantafuel, BASF develops purification catalysts for their technology

Pyrolysis feed

Purification catalysts

Purified pyrolysis oil

NH2 ClCl

CH3

>99.9% carbon, hydrogen

Contaminant stream

	O	H	S	H
H3C	CH3
		HCl		N
		O		H	H
					H

• Waste plastic feedstock contains a variety of chemical structures and a significant amount of heteroatoms, e.g., chlorine, nitrogen and oxygen.
• These are undesirable in pyrolysis oil as they cause corrosion, create safety risks or poison process catalysts.

10 December 10, 2020 | R&D Webcast

Chemical recycling broadens BASF's feedstock base and leverages the Verbund concept

Flexible feedstocks

Verbund concept

Mass Balance concept

+

+

BASF

BASF can allocate new feedstocks to the most attractive applications combining its unique Verbund and Mass Balance concepts.

11 December 10, 2020 | R&D Webcast

Next steps in BASF's chemical recycling partnerships

2020

Establishing partnerships

• Start up of Quantafuel's plant in Skive, Denmark. Test second- generation approaches
• Investment into tire pyrolysis specialist Pyrum, Germany
• Agreement for a feasibility study with New Energy, Hungary

2021

Further development of processes

• Test second-generation approaches in pilot scale with Quantafuel
• Start of construction of two additional production lines in Pyrum's existing site in Dillingen
• Trials with mixed plastic waste in New Energy's plant in Dunaharaszti

2022

Capacity building

• Start construction of second-generation plant with Quantafuel
• Build-upof additional capacities with Pyrum and further partners

ChemCyclingTM is a key contributor to BASF's commitment to use 250,000 metric tons of recycled feedstock annually by 2025.

12 December 10, 2020 | R&D Webcast

Bio-based products across the portfolio further broaden BASF's feedstock base

Chemicals		Materials		Industrial		Surface		Nutrition		Agricultural
		Solutions		Technologies		& Care		Solutions

Bio PolyTHF® ecovio®		Sovermol® 830 Color Brite		Rambuvital®		Inscalis®
		packaging								insecticide

13 December 10, 2020 | R&D Webcast

BASF's Circular Economy Program: New Material Cycles

New

Feedstocks

New

Material Cycles

New

Business Models

14 December 10, 2020 | R&D Webcast

Established mechanical recycling loop for plastics

Mechanical recycling

• Polymer to polymer
• Clean single-stream waste needed
• Products are not "virgin-grade"

Semi-

Naphtha

Basic

Monomers,

finished

Plastic

chemicals

additives, etc.

goods

goods

Refinery

Steam cracker

Chemical

Plastics

Manufactured

Plastic

production

production

goods

waste

15 December 10, 2020 | R&D Webcast

Mechanical recycling - a fast-growing market enabled by innovative additives

Mechanically recycled plastics globally
million metric tons	97

		Stabilizers
	Process	+10% p.a.
50	Compatibilizers
residues
	losses and

30

Other additives

2018	2018	2030
Collected	Mechanically
for recycling	recycled plastics

BASF is expanding its broad plastic additives portfolio with offerings specific to the mechanical recycling of common types of plastic.

16 December 10, 2020 | R&D Webcast Sources: Mc Kinsey, No time to waste: What plastics recycling could offer, September 2018; Conversio, Global Plastics Flow 2018, February 2020

Innovative stabilizers enable mechanical recycling

Example: Recycled PET bottles - color shift

Discoloration

yellowing index

	6.3
3.4		3.7
Fresh bottle	…without	…with
flakes	restabilization	restabilization

Challenge:

• Discoloration of recycled PET bottles

Solution:

• Yellowing and greying is inhibited by adequate additization during recycling
• Reuse in applications of equal or higher value are made possible

17 December 10, 2020 | R&D Webcast Source: BASF internal analysis at Polymer Additves Lab in Kaisten, Switzerland

Innovative compatibilizers enable higher recycling rates

Example: Polymer mixtures - inhomogeneities

Without compatibilizer

With compatibilizer

Challenge:

• Mixtures of chemically different polymers show inferior performance profiles for reuse due to de-mixing

Solution:

• Innovative block copolymers can connect different polymer phases
• Compatibilization avoids defects and ruptures in recycled plastics

18 December 10, 2020 | R&D Webcast Source: K. Ragaert et al, Waste Management 2017, 35.

Footprint of key battery materials

1 kg nickel class 1 with >99% purity

7.9 kg

CO2

	106 kg
3.6 kg
oil	blue water

1 kg lithiumhydroxide-monohydrate

7.4 kg

CO2

271kg
2.6 kg
blue water	oil

The considerable footprint of virgin nickel and lithium can be reduced with recycling loops.

		Note:	"CO2" means CO2-equivalents, "oil" means energy demand in oil-equivalents
19	December 10, 2020 | R&D Webcast	Sources: H2O: Minirvo Ltd, Lithium Hydroxide Monohydrate Life Cycle Assessment Study, 2020, ex Salar del Hombre Muerto
	Nickel: Nickel Institute, Life Cycle Analysis 2017 for class 1 Nickel (100%), ex Nickel sulfate

The new value chain for electric vehicles - recycling closes the loop

Creating a circular economy for battery materials

Metal mining			Cathode
		active
and refining
		material

Metal extraction

"black mass"

Collection and shredding of used battery packs

We aim to recycle used batteries as well as waste streams from all process steps and to create a "zero-waste" value chain.

Battery cell

Lithium-ion battery

Electric vehicle

20 December 10, 2020 | R&D Webcast

Processing "black mass" - comparison of main technologies

Pyrometallurgy

Hydrometallurgy

• High recovery rates for nickel, cobalt and copper
• Graphite and solvents burned, providing much of the process energy
• Mature technology

• High energy intensity (around 1,500°C) and CO2 footprint
• Loss of lithium in slag - recovery from slag is expensive

• High recovery rates for cobalt, nickel and copper
• Lithium is recycled
• Option for manganese and graphite recycling
• Moderate temperature range

• High investment required
• Inflexible process
• High amounts of by-products, waste

Both technologies have potential for improvement with regard to lithium yield, by-products or investment cost.

21 December 10, 2020 | R&D Webcast

1 kt Li in form of LiOH*H2O

New BASF process scheme avoids waste

Step 1: Removal of lithium from "black mass"

"black mass"

30 kt

Smart	Selective Li-leaching
lithium release	and purification

Benefits of LiOH first:

 avoids sodium sulfate by-product

 allows direct access to lithium hydroxide  cuts investment cost in the value chain

Step 2: Extraction of Ni, Co

H2SO4	H2SO4
H2O2	CaO

Leaching Purification

Carbon	CuSO4,	Zn(OH)2
(removal via	Al(OH)3	CuSO4
filtration)	Fe(OH)3

NaOH solvent

Ni, Co solvent extraction

10 kt NCM in form of Ni, Co, (Mn) sulfate

The new BASF process reduces CO2 footprint and is flexible.

22 December 10, 2020 | R&D Webcast

Next steps in closing the loop in battery materials

2020

• Pilot trials
• Flowsheet development

2021

• Start of pilot plant construction
• Process fine tuning

2022

 Start up pilot plant

 First battery-grade LiOH from pilot plant

Förderkennzeichen

16BZF101A/B

This activity has received funding from the European Institute of Innovation

and Technology (EIT), a body of the European Union, under the Horizon 2020, the EU Framework Programme for Research and Innovation

BASF innovations will enable a new circular value chain in Europe.

23 December 10, 2020 | R&D Webcast

BASF's Circular Economy Program

New

Feedstocks

New

Material Cycles

New

Business Models

24 December 10, 2020 | R&D Webcast

Product Carbon Footprints create transparency for customers

Digital application to calculate greenhouse gas emissions of 45,000 sales products

20,000

raw materials	700
Scope 3
10 TWh/a	production plants
Scope 1

energy

Scope 2

0101000			1011101			Product Carbon
1011101
0101010			0101010			Footprints of
1010111			1010101
0101010			1011110	CO
1010101			1010010		~45,000
001010		10100
0110100			1010010	2
1011101010		1010100
	0101010
1000010101

sales products

Cradle-to-gate Product Carbon Footprints for BASF's portfolio available by end of 2021 based on process emissions, energy demand and upstream emissions.

25 December 10, 2020 | R&D Webcast

Profitable growth with transformation - based on resource efficiency of the Verbund and the Mass Balance concept

CO2 emissions - illustrative example per 1 kg product

CO2 reduction

We are creating a toolbox to offer differentiated carbon footprints for our sales products.

26 December 10, 2020 | R&D Webcast

Circular Economy and Carbon Management Programs

- BASF's way to drive sustainability

Carbon

Management

Program

Low-CO2

Bio-based

Ccycled

Circular

Economy

Program

We are providing drop-in products with new sustainability characteristics for customers in all industries.

27 December 10, 2020 | R&D Webcast