The world's largest chemicals group, BASF, has postponed indefinitely its decision about making an investment totalling around €1.5bn in a coal gasification plant, after confusion over CO2 certificates led to uncertainty over future trading of emissions.
The plant had been conceived for a service life of approximately 30 years, which means that there would most certainly have to be guaranteed investment security. However, the federal government and the EU Commission have for some time already been in dispute over the future trading of emissions with certificates.
“We don’t know what we'll have to buy in the way of carbon dioxide certificates from 2012 onwards,” were the decisive words of Deputy Managing Board Chairman Eggert
Voscherau, as he cited this for the permanent delay in the project.
In BASF's case, coal gasification would partly replace oil-based raw material supply. Basic materials for chemicals production are derived from both raw materials and depending on how the price of oil continues to develop in the future, coal could become a cheaper raw material basis. In any case, BASF would be more independent of oil that, in contrast to coal, is produced in politically unstable regions.
Voscherau left open the question as to whether the plant could still be built in Ludwigshafen in a few years’ time, when there is clarity regarding the certificates. “We will have to wait and see whether it could be somewhere else.”
“In Germany, there’s a question mark over the entire industrial infrastructure at present,” Voscherau added, comparing the coal gasification project with the difficulties faced by energy supply companies who are currently also postponing investments running into billions, because of the unclear future regarding the certificates.
A similar situation reportedly applies to investments in industries such as steel, cement and aluminium.