Case study: Catalysis & electrochemistry for decarbonization — a leading company's implementation and lessons learned

Why It Matters

Industrial chemistry accounts for approximately 20 percent of global greenhouse gas emissions, with the production of ammonia, methanol, ethylene, and steel representing the largest individual sources of process emissions (IEA, 2025). Conventional catalytic processes in these industries rely on fossil fuel feedstocks and high-temperature, high-pressure reaction conditions that have remained largely unchanged for a century. The Haber-Bosch process for ammonia synthesis, operating at 400 to 500 degrees Celsius and 150 to 300 atmospheres, alone consumes roughly 1.2 percent of global primary energy and generates approximately 1.8 percent of global CO2 emissions (Royal Society, 2024). Decarbonizing these foundational chemical processes requires either replacing fossil inputs with green electricity and hydrogen or developing entirely new catalytic and electrochemical pathways that operate at lower temperatures and pressures using renewable energy.

The market opportunity is substantial. BloombergNEF (2025) estimates that the global market for green chemicals and electrochemical processes will reach $85 billion annually by 2035, driven by carbon pricing mechanisms (the EU Emissions Trading System reached EUR 65 per tonne in 2025), corporate Scope 3 reduction commitments from downstream buyers, and regulatory mandates including the EU Carbon Border Adjustment Mechanism (CBAM). For industrial companies, the decision to invest in electrochemical decarbonization is no longer purely a sustainability initiative but an operational and competitive imperative. Companies that delay risk stranded assets, carbon border tariffs on exports, and loss of market share to competitors offering lower-carbon products.

BASF, the world's largest chemical company by revenue, provides a particularly instructive case study. The company has committed EUR 4 billion to climate-related investments through 2030 and has made electrochemistry a central pillar of its decarbonization strategy. BASF's implementation reveals both the transformative potential and the sobering practical challenges of retrofitting century-old industrial infrastructure with next-generation catalytic and electrochemical technologies.

Key Concepts

Electrocatalysis. Electrocatalysis uses electricity to drive chemical reactions at electrode surfaces, replacing thermal energy from fossil fuel combustion. The key advantage is that electricity can be sourced from renewables, eliminating direct process emissions. Industrial electrocatalytic applications include water electrolysis for green hydrogen production, CO2 electroreduction to produce fuels and chemicals, and electrochemical synthesis of ammonia, chlorine, and organic intermediates. Catalyst design determines energy efficiency: the best platinum group metal catalysts for water electrolysis achieve over 80 percent energy efficiency, while emerging non-precious metal alternatives reach 65 to 75 percent at substantially lower cost (Nature Catalysis, 2024).

Steam cracker electrification. Steam crackers are the backbone of the petrochemical industry, thermally decomposing hydrocarbon feedstocks into ethylene, propylene, and other olefins at temperatures exceeding 850 degrees Celsius. Conventional crackers burn natural gas or naphtha to generate this heat, producing 1.0 to 1.5 tonnes of CO2 per tonne of ethylene. Electrified steam crackers replace combustion-based heating with resistance heating or induction heating powered by renewable electricity, potentially eliminating up to 90 percent of direct emissions. BASF, SABIC, and Linde are jointly developing the first commercial-scale electrically heated steam cracker (eFurnace) at BASF's Ludwigshafen site (BASF, 2025).

Proton exchange membrane (PEM) electrolysis. PEM electrolyzers use a solid polymer electrolyte to split water into hydrogen and oxygen. They offer advantages over traditional alkaline electrolysis, including higher current densities (1 to 3 A/cm2 versus 0.2 to 0.5 A/cm2), faster response to variable renewable power, and more compact footprints. PEM systems currently cost $1,200 to $1,800 per kilowatt, compared to $500 to $800 for alkaline systems, but costs are declining 15 to 20 percent annually as manufacturing scales (IRENA, 2025).

Catalyst poisoning and degradation. Industrial catalysts lose activity over time through mechanisms including poisoning (irreversible binding of contaminant molecules to active sites), sintering (agglomeration of metal nanoparticles at high temperatures), and coking (deposition of carbonaceous residues). Catalyst lifetime directly affects process economics: replacing industrial catalysts costs $500,000 to $5 million per reactor, and unplanned shutdowns for catalyst replacement can cost $1 million or more per day in lost production. Novel electrochemical processes must demonstrate catalyst durability exceeding 50,000 operating hours to compete with established thermocatalytic routes.

Power-to-chemicals. Power-to-chemicals encompasses processes that convert renewable electricity into chemical products, either directly through electrochemistry or indirectly through green hydrogen as an intermediate. The concept extends the "power-to-X" framework and includes power-to-methanol, power-to-ammonia, and power-to-syngas pathways. Economic viability depends critically on electricity prices: most power-to-chemical processes become competitive with fossil-based routes when renewable electricity costs fall below EUR 30 to 50 per megawatt-hour (Fraunhofer ISI, 2025).

What's Working and What Isn't

What is working. BASF's most successful electrochemistry deployment has been its green hydrogen program, centred on a 54-megawatt PEM electrolyzer installed at the Ludwigshafen Verbund site in partnership with Siemens Energy. Commissioned in late 2024, the system produces approximately 9,000 tonnes of green hydrogen annually, displacing steam methane reforming capacity that previously generated 90,000 tonnes of CO2 per year (BASF, 2025). The hydrogen feeds directly into existing ammonia and methanol synthesis loops, requiring minimal downstream process modification. BASF reported that the electrolyzer achieved 97 percent availability in its first year of operation, exceeding the 90 percent target, and that green hydrogen production costs of EUR 4.50 to 5.50 per kilogram were competitive with grey hydrogen plus EU ETS carbon costs.

Catalyst innovation for CO2 utilization is also generating tangible results. BASF's catalysis research division developed a novel copper-zinc-aluminium catalyst for CO2 hydrogenation to methanol that achieves 85 percent selectivity at 220 degrees Celsius and 50 bar, significantly milder conditions than conventional methanol synthesis (250 to 300 degrees Celsius, 50 to 100 bar). Pilot-scale testing at the company's Schwarzheide site demonstrated 4,500 hours of stable operation with less than 5 percent activity decline (BASF, 2025). If commercialized, this catalyst could enable distributed, small-scale methanol production from captured CO2 and green hydrogen at chemical parks and refineries.

Cross-industry collaboration has accelerated technology maturation. The eFurnace consortium (BASF, SABIC, Linde) completed construction of a demonstration-scale electrically heated steam cracker furnace at Ludwigshafen in 2025. Initial test runs achieved cracking temperatures above 850 degrees Celsius using resistance heating elements powered by renewable electricity, with ethylene yields comparable to conventional furnaces. The consortium reported a 90 percent reduction in direct CO2 emissions from the cracking process (BASF, 2025).

What is not working. Scale-up economics remain the dominant challenge. BASF's 54-megawatt electrolyzer produces only 9,000 tonnes of hydrogen annually, while the Ludwigshafen site alone consumes approximately 200,000 tonnes of hydrogen per year. Scaling to full site requirements would demand over 1.2 gigawatts of electrolyzer capacity, requiring capital investment exceeding EUR 2 billion and renewable electricity supply equivalent to approximately 1.5 percent of Germany's total generation capacity. The mismatch between pilot-scale success and industrial-scale requirements illustrates why electrochemical decarbonization is a decade-long transition rather than a near-term solution.

Grid infrastructure limitations constrain deployment. BASF's Ludwigshafen site has a peak electrical load of approximately 3.5 gigawatts when including planned electrification projects. The local transmission grid cannot deliver this capacity without substantial upgrades that depend on German federal grid expansion plans running years behind schedule. BASF has publicly stated that grid constraints, not technology readiness, represent the binding constraint on its electrification timeline (BASF, 2025).

Electrochemical ammonia synthesis at scale remains elusive. Despite significant academic progress on nitrogen electroreduction catalysts, no system has demonstrated ammonia production rates exceeding 10 micromol per second per square centimetre at Faradaic efficiencies above 50 percent, far below the thresholds needed for industrial relevance (Nature Catalysis, 2024). BASF concluded that direct electrochemical ammonia synthesis is unlikely to reach commercial readiness before 2035, opting instead for the indirect pathway of green hydrogen fed into conventional Haber-Bosch reactors.

Key Players

Established Leaders

• BASF operates the world's largest integrated chemical complex at Ludwigshafen and has committed EUR 4 billion to electrification and process decarbonization through 2030.
• Thyssenkrupp Uhde is a leading electrolyzer manufacturer and process engineering firm, providing large-scale alkaline water electrolysis systems for green hydrogen and chlor-alkali applications.
• Siemens Energy supplies PEM electrolyzers and integrated power-to-X systems, with a manufacturing capacity target of 3 gigawatts annually by 2027.
• Johnson Matthey develops advanced catalysts for hydrogen production, fuel cells, and chemical synthesis, with particular expertise in precious metal and base metal catalyst formulations.

Emerging Startups

• Twelve (formerly Opus 12) developed a CO2 electrolyzer that converts captured carbon dioxide into syngas, carbon monoxide, and other chemical intermediates using proprietary membrane-electrode assemblies.
• Verdagy (formerly Nemaska Lithium spinoff) produces next-generation alkaline electrolyzers with advanced diaphragm technology, targeting green hydrogen costs below $2 per kilogram.
• Sublime Systems is developing an electrochemical process to produce cement clinker substitute at ambient temperature, eliminating the 1,450 degree Celsius kiln firing that drives cement industry emissions.
• Electra uses electrochemical refining to produce low-carbon iron from low-grade ores at ambient temperature and pressure, bypassing the blast furnace entirely.

Key Investors and Funders

• Breakthrough Energy Ventures has invested in multiple electrochemistry startups including Twelve, Sublime Systems, and Electra, deploying over $400 million in climate-related materials and chemistry ventures.
• BASF Venture Capital invests directly in early-stage catalysis and electrochemistry companies through its corporate venture arm, with a portfolio including over 30 active investments.
• European Commission Horizon Europe and Clean Hydrogen Joint Undertaking provide substantial grant funding for pre-commercial electrochemical process development, with EUR 1 billion allocated to hydrogen and electrochemistry research during 2021 to 2027.

Examples

BASF's Ludwigshafen electrolyzer and eFurnace program. BASF's flagship electrification project at Ludwigshafen illustrates both the promise and complexity of industrial-scale electrochemical decarbonization. The 54-megawatt PEM electrolyzer, commissioned in partnership with Siemens Energy, cost approximately EUR 75 million and delivers 9,000 tonnes of green hydrogen annually. BASF integrated the electrolyzer output directly into its existing hydrogen pipeline network, allowing seamless blending with grey hydrogen from steam methane reformers. The project benefited from EUR 15 million in German federal subsidies under the IPCEI Hydrogen program and a long-term renewable power purchase agreement with RWE at approximately EUR 45 per megawatt-hour. In parallel, the eFurnace demonstration at Ludwigshafen validated electrical heating of steam cracker furnaces at temperatures above 850 degrees Celsius, with BASF reporting that the technology could be retrofit to existing furnace infrastructure at 30 to 40 percent of the cost of building entirely new units.

Thyssenkrupp Uhde's 200-megawatt alkaline electrolyzer for green ammonia in Saudi Arabia. Thyssenkrupp Uhde is supplying a 200-megawatt alkaline water electrolysis plant for the NEOM Green Hydrogen Project in Saudi Arabia, one of the world's largest green hydrogen facilities. The electrolyzer will produce approximately 35,000 tonnes of green hydrogen annually, feeding into a modified Haber-Bosch plant to produce 1.2 million tonnes of green ammonia per year for export. Thyssenkrupp's contribution involves scaling its proven 20-megawatt cell stack design into a modular 200-megawatt configuration, with engineering challenges including managing thermal gradients across large electrode stacks, ensuring uniform electrolyte distribution, and maintaining cell voltage uniformity across 1,000+ individual cells. The project, expected to reach full operation by 2027, will serve as a reference plant for gigawatt-scale electrolyzer deployments globally (Thyssenkrupp, 2025).

Twelve's CO2 electrolyzer commercial partnerships. Twelve, based in Berkeley, California, developed a CO2 electrolyzer that converts waste carbon dioxide into carbon monoxide and syngas using proprietary catalysts and membrane-electrode assemblies. The company achieved a key milestone in 2024 when it signed a multi-year offtake agreement with Mercedes-Benz to supply CO2-derived chemicals for automotive plastics production. Twelve's electrolyzer operates at ambient pressure and moderate temperatures (50 to 80 degrees Celsius), achieving CO2 conversion efficiencies above 90 percent and Faradaic efficiencies exceeding 85 percent for carbon monoxide production. The company raised $645 million in combined equity and debt financing through 2025, including a $400 million Series C round, and broke ground on its first commercial-scale facility in Moses Lake, Washington, with an annual production capacity of 50,000 tonnes of CO2-derived products. The scaling challenge centres on reducing cell stack costs from approximately $3,000 per square metre to below $500 per square metre through manufacturing automation and membrane material innovation (Twelve, 2025).

Johnson Matthey's HyCOgen technology for sustainable aviation fuel. Johnson Matthey developed HyCOgen, a reverse water-gas shift catalyst system that converts green hydrogen and captured CO2 into synthesis gas optimized for Fischer-Tropsch conversion to sustainable aviation fuel (SAF). The technology operates at 700 to 900 degrees Celsius with catalyst lifetimes exceeding 25,000 hours in pilot testing. In partnership with bp and the UK's Humber Industrial Cluster, Johnson Matthey commenced construction of a demonstration facility capable of producing 3,000 barrels per day of SAF by 2027. The catalyst system achieves CO2 conversion rates above 65 percent per pass with selectivity to CO exceeding 95 percent, comparable to the best academic results but demonstrated at industrially relevant gas hourly space velocities (Johnson Matthey, 2025).

Action Checklist

• Conduct a comprehensive audit of current process emissions, identifying the highest-emitting unit operations where electrification or catalytic substitution would deliver the largest abatement per unit of capital invested.
• Evaluate grid connection capacity and renewable electricity availability at each production site, as power infrastructure constraints frequently determine the pace of electrification.
• Engage electrolyzer manufacturers early and secure long-term equipment supply agreements, as lead times for large-scale electrolyzers currently extend 18 to 30 months.
• Negotiate renewable power purchase agreements (PPAs) with terms of 10 to 15 years to lock in electricity costs below EUR 50 per megawatt-hour, the threshold for most electrochemical process economics.
• Establish catalyst testing and validation programs with minimum durability requirements of 50,000 operating hours for any novel catalytic system before committing to commercial-scale deployment.
• Map eligibility for public funding programs including IPCEI Hydrogen, Clean Hydrogen Joint Undertaking grants, and national decarbonization incentives, and factor subsidies into project economics.
• Develop phased electrification roadmaps that prioritize processes where green hydrogen or electrified heat can substitute into existing infrastructure with minimal modification.
• Build internal electrochemistry expertise through hiring, partnerships with research institutions, and participation in pre-competitive consortia to maintain technology optionality.

FAQ

What is the cost difference between electrochemical and conventional chemical processes? Green hydrogen produced via PEM electrolysis currently costs EUR 4 to 6 per kilogram, compared to EUR 1.50 to 2.50 for grey hydrogen from steam methane reforming. However, when EU ETS carbon costs of EUR 60 to 70 per tonne are included, the gap narrows to EUR 1 to 2 per kilogram. At projected 2030 renewable electricity prices of EUR 25 to 35 per megawatt-hour, green hydrogen is expected to reach cost parity with unabated grey hydrogen in most European markets (IRENA, 2025).

How long does it take to retrofit an existing chemical plant with electrochemical processes? Typical timelines for major electrification projects range from 3 to 7 years from feasibility study to full commercial operation. The BASF Ludwigshafen electrolyzer took approximately 3 years from investment decision to commissioning. Larger, more complex projects like the eFurnace demonstration required 4 years. The NEOM green ammonia project spans approximately 5 years from announcement to projected full operation.

What are the biggest technical risks in scaling electrochemical processes? The three primary technical risks are catalyst degradation at industrial scale (performance validated in laboratory cells does not always translate to multi-square-metre cell stacks), membrane durability under continuous industrial operation (current PEM membranes require replacement every 60,000 to 80,000 hours), and system integration complexity when connecting electrochemical units to existing chemical process infrastructure designed for continuous, steady-state operation.

Which chemical processes are most amenable to electrochemical decarbonization? Chlor-alkali production is already fully electrochemical. Green hydrogen production via water electrolysis is commercially mature. Methanol synthesis from CO2 and green hydrogen is at demonstration scale. Steam cracker electrification is at pilot scale. Direct electrochemical ammonia synthesis and electrochemical ethylene production remain at laboratory scale with commercialization timelines of 2035 or later.

How do carbon border adjustment mechanisms affect the business case? The EU CBAM, which begins full implementation in 2026, imposes carbon costs on imports of steel, aluminium, cement, fertilizers, and hydrogen based on their embedded emissions. For European producers, CBAM provides competitive protection against imports from regions without equivalent carbon pricing. For importers, CBAM creates a direct financial incentive to source lower-carbon products, strengthening the business case for electrochemical processes. BASF estimates that CBAM could add EUR 50 to 100 per tonne to the cost of imported ammonia and methanol from unabated fossil-based producers by 2028 (BASF, 2025).

Sources

• IEA. (2025). Energy Technology Perspectives 2025: Industrial Decarbonization Pathways. International Energy Agency.
• Royal Society. (2024). Ammonia: Zero-Carbon Fertiliser, Fuel, and Energy Store. Royal Society Policy Briefing.
• BloombergNEF. (2025). Green Chemicals Outlook: Market Sizing and Investment Trends to 2035. Bloomberg LP.
• BASF. (2025). Climate Protection: Electrification and Hydrogen Strategy Progress Report. BASF SE.
• Nature Catalysis. (2024). Progress and Challenges in Electrochemical Nitrogen Reduction. Nature Publishing Group.
• IRENA. (2025). Green Hydrogen Cost Reduction: Scaling Up Electrolysers to Meet the 1.5 C Climate Goal. International Renewable Energy Agency.
• Fraunhofer ISI. (2025). Power-to-Chemicals: Techno-Economic Assessment of Electrochemical Routes. Fraunhofer Institute for Systems and Innovation Research.
• Thyssenkrupp. (2025). NEOM Green Hydrogen Project: Engineering and Supply Update. Thyssenkrupp Uhde GmbH.
• Twelve. (2025). CO2 Electrolyzer Technology: Commercial Deployment and Performance Data. Twelve Inc.
• Johnson Matthey. (2025). HyCOgen Reverse Water-Gas Shift Technology: Pilot Results and Scale-Up Plans. Johnson Matthey plc.