Chemicals conglomerate BASF is to receive a lump sum of €134m ($132.7m) from the German government to build a green hydrogen project in the country, after the European Commission (EC) signed off the grant under its state-aid exemption rules.

The 54MW proton exchange membrane (PEM) electrolyser at BASF’s Ludwigshafen headquarters, scheduled for operation by 2025, will produce 5,000 tonnes of green hydrogen per year as well as 40,000 tonnes of oxygen, predominantly for use in BASF’s chemicals business.

These volumes will account for a very small proportion of BASF’s total hydrogen demand, but the company tells Recharge it hopes to use the electrolyser project as a learning tool as part of a wider decarbonisation push.

“With this plant, we want to gain experience with this technology in combination with industrial chemical production,” a spokesperson for BASF says. “Green hydrogen, along with the use of renewable energy, new low-CO2 production processes, renewable raw materials and closed material cycles, is another building block that can help BASF achieve its long-term climate goals.”

The company currently produces around 250,000 tonnes of hydrogen at its Ludwigshafen site — either from unabated fossil gas or as a by-product from its other chemical processes. In total, BASF consumes around one million tonnes of hydrogen per year across all its global sites, again almost all of it fossil-based “grey” hydrogen, using it to produce ammonia, methanol and polymer-based materials such as plastics.

BASF, which is working on the electrolyser scheme in partnership with Siemens Energy, declined to comment on the total capital expenditure of the project, noting only that the German government grant has made it “possible”.

Siemens Energy will provide the PEM technology for the project, Recharge understands.

"Step up"

Volumes of green hydrogen not used for chemicals production at Ludwigshafen will be delivered elsewhere to promote the use of H2 in transport applications, the EU said, although it is not clear if BASF will be directly involved in this.

Executive vice-president Margrethe Vestager, who is in charge of competition policy and signed off the exemption from EU state aid rules, said that the EC took the decision because it would help Germany replace fossil-based hydrogen in a hard-to-decarbonise sector.

“This €134m measure enables Germany to help BASF step up its renewable hydrogen production capacities, thereby contributing to the greening of the chemical value chain and of the transport sector,” she said.

In addition to green hydrogen, BASF has also been conducting work on methane pyrolysis, so-called “turquoise” hydrogen, a process which uses high-temperature heat in the absence of air to produce hydrogen and solid carbon from methane.

Funded by the German government, BASF and its partners have built and now operate a test project at Ludwigshafen that uses pyrolysis to produce hydrogen from biomethane. The process uses around 80% less electricity than water electrolysis and is “virtually” carbon-dioxide free when powered by renewable energy, BASF claims.

Solid carbon, or “carbon black”, is a commodity that is used in tyre production and as a pigment, among other chemical applications, but critics have questioned whether the market will be big enough to absorb carbon black from widespread turquoise hydrogen production.