11 BASF – A sustainable investment EU Commission Forum 15 October 2010 Wolfgang Weber Head of Energy and Climate Policy BASF SE.

11

BASF – A sustainable investment

EU Commission Forum15 October 2010

Wolfgang WeberHead of Energy and Climate PolicyBASF SE

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BASF – The Chemical Company

Provides key solutions for energy and climate challenges

Sales 2009: €50,693 mill.

EBIT 2009: €3,677 mill.

Employees (end-2009): 104,779

About 1,300 new patents filed

6 Verbund sites and about 380 production sites

BASF – At a glance

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Sustainable Development – Less a Response but a Chance

Contribution to a company‘s successSustainability areas of action

Managing Risk -

Mandatory

Ensure that laws are respected Minimize material risk Reduce reputational risk

Strengthen brand image Optimally leverage resources Generate beneficial business environment

Enhancingbusiness -Essential

Generating

business –

Differentiating

Access new target groups and markets Increase market-differentiation Increase customer retention

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Added Value through Sustainability

Sustainability Expertise for making us & our customers more sustainable

Processes Products Strategies

Waste Managemt

Advice on Emissions

Energy Supply

Chemical Mgt

Handling of hazardous goods

Product Safety

Eco-Efficiency Analysis

SEEbalance

Sustainability Mgt

Sustainability Issue Mgt

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BASF Eco-efficiency analysis

Strategic instrument to identify both costs (TCO) and environmental impact of products, process, systems

Holistiv view of alternatives

Life-cycle view

Ecologic footprint

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Climate change impact on BASF

Risks

Opportunities

Regulatory Changes

Financial burdens (i.e. by CO2 levies, regulation, etc.)

Shrinking markets

Competitive advantagevis-à-vis local peers

Growing markets

GHG-intensive technologies

Inefficient production method

Efficient production processes

Technologies to abate GHG emissions

ClimaticChanges

Adaptable sites and production processes

Technologies to adapt to climate change

Endangered sites(including customer and supplier industries)

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Steam exports

Acrylic acid plant

Sulphuric acid plant

Urea/ carbamide

plant

Power plant

Adipic acid plant

Steam imports

Energy Verbund: Energy generation:

gas-fired combined heat and power plants:

Highly efficient processes:

E.g. continuous improvement of the catalyst system in the acrylic acid plant

Primary energy:1.5 mill. toe

CO2 emissions:3.4 mill. t CO2

Annual savings BASF Group:

1.0 mill. toe

2.2 mill. t CO2 100,000 t CO2e

Energy efficiency is key for GHG reduction

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Energy balance at BASF Ludwigshafen

2008

9 9

Energy efficiency: Highly efficient power plants

using natural gas Energy-efficient processes Logistics optimization

Use of waste flows as raw material for other production processes

Installation of proprietary N2O decomposition catalysts

Important measures

Kyoto

+86%

-27%

-61%

Production volumes

GHG emissions per product volume

Absolute GHG emissions

* Index = 100

1990* 2009

BASF: Reduction of GHG Emissions

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Reduce specific

greenhouse gas emissions

by 25% by 2020 compared with 2002

-25%

Increase

energy efficiency in production

by 25% by 2020 compared with 2002

+25%

BASF global climate and energy goals

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3 : 1Automobiles

Housing

IndustryAgriculture

Emissions for raw materials,production and disposal of all BASF products

Total savings from product use over the life cycle

Additional products

Corporate Carbon Footprint 2008

Savings of CO2 equivalents 2008 Emissions of CO2 equivalents 2008

million t CO2e/a 287

Production of precursors

Direct and indirect emissions from BASF production

DisposalTransport and business trips

90

27

25

248

1413

66

35

25

3

3

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Solutions for future challenges

Construction &Housing

60% of the world population will live in cities by 2030

Which materials are needed to make energy consumption more efficient?

Energy & Climate

8 billion people will live on earth by 2030

How can we ensure food and water supply for everyone?

40% more primary energy will be needed in 2030

How can we contribute to climate protection and energy supply?

Health & NutritionMobility & Communication

2 billion cars will drive on earth by 2030

How can we reduce emissions and fuel consumption ?

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Ultramid®

for light-weight motor parts

Terblend N® and Terluran®

for high-quality plastic components

Neopolen® for absorption of collision energy

Lumogen® Black and Sicopal ® Blackfor heat reduction of dashboards

UV cured coatingshigh environmental compatibility, rapid coating processes

Astacin® leather finishesenvironment-friendly

Catalysts for purification of exhaust fumes and reduction of air pollutants

BASF’s sales 2009* to the automotive industry: €5 billion

Sales of plastics to the automotive industry:approx. €1.4 billion

Growth drivers Share of plastics in medium-sized cars expected to grow from today’s ~15% to over 25%

in 2020 driven by stricter regulatory requirements

Global automotive market expected to grow by 5.0-7.5% p.a. mid-term

Keropur® Fuel additiveshelp reduce fuel consumption

Business case plastics

*by first customer industry in 2009

Innovative system supplier to the automotive industry

Solutions for more efficient carsMegatrend Mobility

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Up to 50% weight reduction

Every 100 kg weight reduction cuts fuel consumption by 0.4 l/100 km and CO2

emissions by 1 kg/100 km

Light-weight plastics Eco-efficient coatings

Savings of primary energy: 15-20% in the production process

Reduction of VOC and CO2 emissions: 15-20% in the production process

Capable of destroying over 90% of hydrocarbons, carbon monoxide and nitrogen oxides produced by gasoline engines

Three-way-catalysts (TWC)

Value for the environment: Value for the environment: Value for the environment:

Solutions for more efficient carsExamples

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BASF’s sales 2009* to the construction industry: €3.8 billion

Sales of insulating foams to the construction industry:

approx. €1 billion in 2009

Growth drivers

Market potential of innovative refurbishing of more than

€400 billion in Germany alone

Market growth for insulating foams expected to outpace construction industry growth

COLO-FAST®

for solar panel frames

Micronal® PCMlatent-heat storage system

Neopor® and Rheocell®

for heat insulation

Styrodur® C for insulation ofwalls and floors

Lumogen®, Paliogen® and Sicopal®

black pigments forcool surfaces

Elastopor® H for insulation ofceilings, roofs and walls

HECK® MultiThermsystems for insulation of walls (inside and outside)

X-SEED® concrete hardener

Business case insulation

*by first customer industry in 2009

Walltite® Sprayfoam for

insulation of walls

Innovative system supplier to the construction industry

Solutions for more efficient housingMegatrend Construction & Housing

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Savings of up to 50% of heating oil equivalents

Savings through product sold in 2008 for old buildings: 208 million t CO2 equivalents

Insulation materials Pigments for solar heat management

Solar heat buildup of dark construction elements cut by 50%

Reduced need for cooling and air conditioning

5% of global CO2 emissions attributable to cement production

Savings through super- plasticizers sold in 2008: 22 million t CO2 equivalents

Concrete admixtures

Value for the environment: Value for the environment:Value for the environment:

Solutions for more efficient housingExamples

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Solutions for future nutrition Megatrend Health & Nutrition

Agricultural production to double in next 20-30 years, food for 8 billion people needed in 2030

Use of grain for fuel growing by ~ 20% per year

Estimated market value in 2025: $50 billion

BASF pipeline value €1.9 billion*

Value for the environment and society:

Improvement of global food supply in terms of quality and quantity

Conservation tillage, reduction of soil erosion

Improvement of land-use efficiency and better use of available water

Business case Plant Biotechnology

*Expected gross trait sales before partner share in 2020

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Global cooperation: Sectoral activities (selection I)

ICCA/IEA cooperation to jointly develop efficiency technology roadmaps

Catalysis, with support from Dechema

Bioenergy/feedstock and buildings

ICCA global chemical industry carbon balance

INTERNATIONAL COUNCIL OF

CHEMICAL ASSOCIATIONS

23.520.38.5

3.3 6.5 5.0

2030 BAU 2030 AbatementGross savings ratio 2.6 : 1 3.1 : 1 4.7 : 1

Own emissions & gross savings (Gt CO2e)

2005

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Global cooperation: Focus energy efficiency (selection II)

Rudea: BASF supports energy efficient buildings project in Ekaterinburg

Model homes in many other locations (EU, U.S., China, Korea, etc.)

E.g. Sustainability customer center in Brazil

Rome“Casa 3 Litri”

Nottingham“Building a SustainableFuture House”

Paris5-Litre House:“Batiment Génération E”

Ludwigshafen3-Liter-Haus

Ludwigshafen1-Liter Haus

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... joint leadership by industrialized and emerging countries. A sole EU pioneer will not deliver.

... strengthening industrial value chains for technology development and deployment.

„It is all about global action, stupid“ Global climate action is about ...

Annual global GHG Emissions

49 Gt CO2e

13,1 %2,8%

8 %

WasteManagement

PowerGeneration

Industry

Heating of Buildings

Agriculture, Forestry & Deforestation

13 %3%

26 %19 %

31 %

Transport

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EU Policy implications

Industrial technologies and activities are at the core of „green“ business/ service modelssupport EU industrial value chains

(e.g. ETS: fair allocation, in particular for new capacities; fair taxes and RES levies, etc.)

do not discriminate between „old“ and „new“ (green) industries

Stable policy framework for investment

Support Research & Development

Macro-economic sound and cost efficient policies for internalization of external effects (e.g. proper balance between energy efficiency and RES)