The goal is: Climate neutrality by 2045
The progress at Boehringer Ingelheim is so remarkable that even Robert Habeck, Germany's Federal Minister of Economics, paid the company a visit this summer. The pharmaceutical company has commissioned its biomass cogeneration plant, and it’s making a big difference. Around 50,000 tonnes of greenhouse gas (CO2) will be saved each year. In the future, the company will be able to meet almost all of its energy needs at the site from renewable sources. For the minister, this demonstrates how global climate targets can be met and energy imports reduced.
Germany and its chemical and pharmaceutical industries must achieve climate neutrality by 2045. This means they must reduce greenhouse gas emissions to zero, offset the emissions, or capture the CO2 and store it underground to prevent its release back into the atmosphere. This is the requirement of the German government's Climate Protection Act.
Companies have already made great strides in this direction – not only large corporations such as Boehringer Ingelheim but also small and medium-sized enterprises. The industry’s CO2 emissions have fallen significantly: from more than 65 million tonnes in 1990 to 38.9 million tonnes in 2020, even though production volumes increased by 61 percent over the same period. These figures come from the German Chemical Industry Association (VCI).
Using pine oil instead of crude oil
In principle, there are several ways to reduce CO2 emissions in the chemical industry. Two of the most important methods are switching energy sources – i.e., using renewable sources such as solar, wind, or biomass instead of fossil fuels like coal, gas, or oil – and using different raw materials in production. In addition to recycling and the use of CO2, there is potential in green alternatives such as plants or bioplastics.
For example, plastics specialist Profine, based in Pirmasens, Germany, has made an important innovation. A key component of its window profiles is ethylene, which is traditionally derived from fossil fuels. However, the company has succeeded in switching to ethylene made from the renewable raw material pine oil. This allows for more sustainable construction and renovation.
The family-owned company Renolit also offers sustainable plastic products, which contain a high proportion of recycled material, are 100 percent recyclable, or are partially made from renewable raw materials. One example is composite panels for automotive interiors, which contain at least 50 percent renewable natural fibers.
Meanwhile, Lohmann, based in Neuwied, Germany, produces adhesives that are 50 percent bio-based. Processes have been redesigned to use significantly less energy. Lohmann is at a crucial turning point, explains Katharina Candia Avendaño, Global Sustainability Manager, on the company's website. The industry is facing crises that require key decisions for its future viability and sustainable development. “In this context, Lohmann has made significant investments in more sustainable innovations.” The company is contributing to the circular economy and expanding its internal expertise.
Green energy: Is the supply too insecure?
However, the industry cannot achieve climate neutrality alone. Even if companies do all they can to change their processes, it will not be enough.
They depend on external factors such as public infrastructure and the availability and cost of low-carbon energy. “Not all the conditions are currently in place for a successful green transformation,” says Matthias Belitz, Divisional Director for Sustainability, Energy, and Climate Protection at the VCI.
A good example is the demand for electricity. It will increase massively for companies if they aim to run processes without fossil fuels. But so far, there is not enough green electricity. According to the German Association of Energy and Water Industries (BDEW), in the first half of 2024, just under 58 percent of Germany's electricity needs were covered by renewable energies. And the construction of power lines to transport wind energy from the north to companies in the south is progressing slowly. Hydrogen, the great hope of the energy revolution, faces similar hurdles.
In any case, a system based largely on wind and solar power has weaknesses. “During the middle of the day, renewable energies are available in sufficient quantities, especially from solar systems,” says VCI expert Belitz. The situation is different at night and when there is little wind. Coal- and gas-fired power stations, on the other hand, provide a constant supply of energy.
“The shutdown of coal-fired power plants makes generation more volatile,” explains Belitz. The German government has created a reserve for this: It plans to add 12.5 gigawatts of capacity – mainly through new construction but also by modernizing existing plants. However, the VCI does not consider this sufficient. The planned capacities are too low, and it would take too long for the power plants that could run on hydrogen in the future to come on stream.
Costs are also a problem. Companies in Germany already pay much more for energy than their counterparts in China or the US. Taxes and, above all, grid fees drive up prices.
This puts German companies under increasing pressure. Foreign competitors with lower production costs can sell products more cheaply in Germany and Europe than domestic companies. At the same time, it is becoming harder for German companies to remain competitive in other markets – a major problem for the export-oriented chemical and pharmaceutical industries. Cost-cutting programs and the first plant closures are among the consequences.
So, what does it take for the industry to successfully complete the transition by 2045? The costs of anything that hinders the climate-neutral transformation of businesses urgently need to come down, says Belitz. This includes gas prices, electricity prices, and grid-expansion-related system costs such as network charges. And these costs must remain low long-term, providing companies with planning security.
Additionally, the planned backup power plants must be constructed quickly, and a comprehensive strategy for electricity storage must be developed. The transformation of the industry can proceed at full speed – provided there are competitive costs and security of supply.
Waste heat as an energy source
Chemical company BASF can begin preparatory construction work on the world's most efficient industrial heat pump at its Ludwigshafen site. The German Federal Ministry for Economic Affairs and Climate Action is supporting the project with funding of up to 310 million euros. The facility is expected to go into operation in 2027 and significantly reduce CO2 emissions. As the first of its kind, the plant will be used for steam generation, explained BASF CEO Markus Kamieth.
The plan is to utilize waste heat from one of the site's steam crackers as an energy source. With the help of electricity from renewable sources, CO2-free steam will be produced.
Read this article in German.
