Impact of Regulations on the Chemical Industry1

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1 Impact of Regulations on the Chemical Industry1 James Bero Senior Vice President Environment, Health & Safety, BASF Corporation April 2013

2 The Chemical Company We Create Chemistry for a Sustainable Future Our products are used in almost all industries We combine economic success, social responsibility and environmental protection Sales 2012: 72,129 million (~$94B) Employees (as of December 31, 2012): 110,782 In 2012, BASF filed for around 1,170 new patents worldwide 2

3 Business Segments as of January 1, 2013 Chemicals Performance Products Functional Materials & Materials & Solutions Solutions Agricultural Solutions Oil & Gas Petrochemicals Monomers Intermediates Dispersions & Pigments Care Chemicals Nutrition & Health Paper Chemicals Catalysts Construction Chemicals Coatings Performance Materials Crop Protection Oil & Gas Performance Chemicals 3

4 Worldwide Sites Antwerp Florham Park Ludwigshafen Freeport Geismar Nanjing Hong Kong Kuantan Singapore Regional centers Selected production sites São Paulo Verbund sites Most important research sites 380 Production Sites 6 Verbund Sites 4

5 Overview of Our Goals Environment (by 2020) Energy and climate protection Greenhouse gases -40% (specific) Energy efficiency +35% Reduce (specific) -10% greenhouse gas emissions of transported gas Water Drinking water -50% for production Sustainable water 100% management in water stress areas Emissions to air Air pollutants -70% Emissions to water Organic substances -80% Nitrogen -80% Heavy metals -60% Health (each year) Health protection Health Performance Index comprises five criteria; Goal: score >0.9 (max. 1.0) Recognized occupational diseases Medical emergency planning First aid Preventive medicine Health promotion Safety and security (by 2020) Occupational Safety Work-related -80% accidents Transportation safety Transportation -70% accidents Product safety Risk assessment for more than 99% of our products 5

6 Overview of Our Goals Environment (by 2020) Energy and climate protection Greenhouse gases -40% (specific) Energy efficiency +35% Reduce (specific) -10% greenhouse gas emissions of transported gas Water Drinking water -50% for production Sustainable water 100% management in water stress areas Emissions to air Air pollutants -70% Emissions to water Organic substances -80% Nitrogen -80% Heavy metals -60% Health (each year) Health protection Health Performance Index comprises five criteria; Goal: score >0.9 (max. 1.0) Recognized occupational diseases Medical emergency planning First aid Preventive medicine Health promotion Safety and security (by 2020) Occupational Safety Work-related -80% accidents Transportation safety Transportation -70% accidents Product safety Risk assessment for more than 99% of our products 6

7 Energy and climate protection Greenhouse gas emissions per metric ton of sales product by 2020 (baseline 2002) -40% Status 2012: % Energy efficiency in production processes by 2020 (baseline 2002) +35% Status 2012: % 7

8 Energy and climate protection Reduce CO 2 emissions from natural gas transport business by 2020, compared with 2010 (specific) -10% Status 2012: % Halt flaring of associated gas released during oil production by Wintershall by % Achieved! CO 2 8

9 Reduction of emissions to water* Organic substances by 2020 (baseline 2002) -80% Status 2012: % Nitrogen by 2020 (baseline 2002) Heavy metals by 2020 (baseline 2002) Status -80% 2012: % -60% Status 2012: % 9* Excluding oil and gas production

10 Reduction of emissions to air* Air pollutants by 2020 (baseline 2002) -70% Status 2012: % * 10Excluding oil and gas production

11 NOx Reduction Non-hazardous process incinerator combusting solid waste Driven by Commercial Industrial Solid Waste Incinerator (CISWI) rule published February 7, 2013 NOx reduction options: 1. Selective Non-Catalytic Reduction (SNCR) NH3 injection 2. Selective Catalytic Reduction (SCR) BASF catalyst Key success factor is SNCR nozzle design 11

12 MON Compliance Miscellaneous Organics NESHAP (MON) drove site to control atmospheric releases from methanol tanks Tanks now tied-in to common vent header and routed to thermal devices with of > 95% DRE To avoid costly control of site WWTP, all steam-jet vacuum pump replaced with dual mechanical seal pumps Solvent losses from vacuum pumps were discharged to WW sumps Now solvent losses routed to condensers and then thermal oxidizer 12

13 Ethylene Cracker Plant redesigned to allow startups and shutdowns with less flaring Additional furnaces boost steam production to reduce flaring Furnaces equipped with o Modern low NOx burners o Additional flue recycle gas capacity o Selective Catalytic Reduction Newest furnace subject to Greenhouse Gas (GHG) Major Source permitting BACT (Best Available Control Technology) based on energy efficiency Efficient heat recovery and well-tuned combustion controls result in less fuel usage and less GHG emission 13

14 Gas-Fired Boilers Coal-fired boilers will be replaced with natural gas-fired boilers New Boiler MACT requires controls for coal-fired units to reduce emissions of particulate matter (metals), acid gases (HCl and SO2), and mercury Gas-fired boilers will not require any HAP emission controls; NOx emissions controlled by SCR 14

15 Future Challenges Continued growth in ozone nonattainment areas Availability of offsets Lowering NAAQS Greenhouse Gas (GHG) emission controls Major threshold reduction Environmental Justice Enhanced outreach? 15

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