With the deal, which Martin Jung, president of the German group’s Performance Materials division, said reflected strong support from Chinese authorities as well as the joint efforts of BASF and its local energy partner, the chemical giant will be able to operate its first plants at Zhanjiang – producing engineering plastics and thermoplastic polyurethanes – completely on renewable electricity.

Plans for the new Chinese complex were announced in July 2018, and infrastructure work began in November 2019. Zhanjiang will be BASF’s largest investment at around $10 billion and its first wholly owned production site in the People’s Republic. Ultimately, it will be its third largest worldwide, behind Ludwigshafen and Antwerp, Belgium. Investment there is due to be completed by 2030.

Since signing the agreement, BASF said it has been working closely with the Chinese utility to promote the new energy purchasing mechanism and provide growth momentum for the market. The Zhanjiang site will continue to improve the share of renewable energy in its future phases and will be a role model for sustainable production, said Klaus Welsch, president, Mega Projects Asia. This, he said, fits with BASF’s goal of climate neutrality by 2050 and will also contribute to China’s carbon reduction ambition.

Both in his capacity as CEO of BASF and president of the European Chemical Industry Council, CEFIC, Martin Brudermüller has urged the EU to improve conditions for companies investing in renewable energy. Europe risks falling behind the US and China in efforts to decarbonize unless it legislates for a radical expansion of renewables, he said in a recent interview with UK business newspaper Financial Times.

Both countries, Brudermüller asserted, are taking a more pragmatic approach to enabling their industries to cut emissions. Alluding to the Zhanjiang deal, he said the Chinese government in only a few weeks had revised legislation blocking a local partnership from providing renewable energy to BASF’s newest complex. Europe, he argued, is acting more slowly. Most of its renewable energy plans have been drawn up by national governments, rather than centrally through the EU, which is making energy integration more difficult.

Author: Dede Williams, Freelance Journalist