BASF’s Hydrogen Strategy 2025: From Green Production to Turquoise Innovation

Industry Adoption: BASF’s Pivot from Strategic Planning to Commercial Execution in Hydrogen

Between 2021 and 2024, BASF laid the strategic groundwork for its hydrogen ambitions. This period was defined by foundational planning, securing capital, and forming key alliances. The company initiated its dual-track approach, pursuing both green and blue hydrogen pathways. A cornerstone was the “Hy-Ludwigshafen” project, a plan for a large-scale PEM electrolyzer, which secured a crucial €124.3 million in German state funding in late 2023. Partnerships with energy and technology giants like RWE and Siemens Energy were established to tackle the immense challenges of renewable power supply and electrolyzer technology. Simultaneously, BASF explored blue hydrogen, studying a massive blue ammonia project with Yara in the U.S. and licensing its OASE® carbon capture technology to external projects like bp’s H2Teesside. The strategy was comprehensive but largely prospective, focused on developing enabling technologies and finalizing plans for future production.

The year 2025 marked a clear inflection point, shifting BASF’s strategy from planning to execution and refinement. This transition is highlighted by three pivotal events. First, the 54 MW PEM electrolyzer in Ludwigshafen was officially commissioned in March 2025, moving green hydrogen production from a blueprint to a commercial reality with an 8,000 metric ton annual capacity. Second, BASF immediately monetized this new capability, signing an offtake agreement with OCI in December 2025 to supply certified green ammonia. This demonstrated a rapid path from production to market. Third, and most strategically significant, was the pivot away from blue hydrogen toward turquoise. In August 2025, BASF and Yara scrapped their U.S. blue ammonia project. Just three months later, BASF formalized a major partnership with ExxonMobil to build a demonstration plant for methane pyrolysis in Texas. This move signals a calculated hedge, prioritizing a technology that produces a solid carbon byproduct over one reliant on complex and costly carbon capture and storage (CCS), thereby reshaping its approach to decarbonizing with natural gas.

Table: BASF Hydrogen-Related Investments and Divestments (2022–2026)

Table: BASF’s Strategic Hydrogen Partnerships (2021–2025)

Geography: BASF’s Expanding Global Hydrogen Footprint

Between 2021 and 2024, BASF’s hydrogen activities were geographically centered in Europe, with Germany as the clear nexus. The flagship “Hy-Ludwigshafen” green hydrogen project and foundational partnerships with Siemens Energy and RWE were all anchored to its main Verbund site. This European focus was complemented by a role as a technology supplier to projects in other regions, such as providing OASE® gas treatment for bp’s H2Teesside blue hydrogen project in the UK and HiPACT® technology for a demonstration project in Japan. The U.S. appeared on the radar as a potential site for a large-scale blue ammonia plant with Yara, but this remained in the evaluation phase.

From 2025 onwards, BASF’s geographic strategy has matured into a distinct multi-hub model. While Germany remains a critical production center with the commissioning of the 54 MW electrolyzer, the United States has emerged as a second, equally important hub for technological innovation. The decision to scrap the U.S. blue ammonia project and instead launch a major methane pyrolysis demonstration plant with ExxonMobil in Baytown, Texas, marks a decisive strategic concentration on the U.S. Gulf Coast for developing this potentially disruptive technology. This move leverages the region’s vast natural gas infrastructure and technical expertise. Concurrently, BASF has deepened its presence in Asia, signing new agreements in 2025 with Air Liquide and Mingyang to advance low-carbon hydrogen and its derivatives in China. This global dispersion mitigates regional risks and positions BASF to capitalize on differing policy environments and market opportunities in the world’s three largest economic zones.

Technology Maturity: BASF’s Hydrogen Journey from Pilot to Commercialization

In the 2021–2024 period, BASF’s hydrogen efforts were characterized by technology piloting and commercializing enabling systems. Green hydrogen production was in the large-scale *planning and funding* stage, with the 54 MW Hy-Ludwigshafen project serving as the primary example. Methane pyrolysis was an *internal R&D* and pilot-scale endeavor. The most commercially mature technology was its OASE® gas treatment solution for blue hydrogen, which was being deployed in third-party projects. BASF was effectively building the technological and financial foundation for its future production, with a significant focus on evaluating blue hydrogen as a viable near-term pathway, evidenced by the Yara project study.

The year 2025 represents a significant leap in technological maturity. Green hydrogen has transitioned from planning to *commercial operation*. The commissioning of the 54 MW PEM electrolyzer is a definitive validation point, and its output is already being commercialized through a green ammonia offtake agreement with OCI. This closes the loop from production to revenue. Simultaneously, turquoise hydrogen (methane pyrolysis) has advanced from internal piloting to a *large-scale demonstration* phase through the high-stakes partnership with ExxonMobil. This moves the technology out of the lab and into an industrial setting. The cancellation of the Yara blue ammonia project suggests a de-prioritization of this pathway for BASF’s own production, likely due to economic and logistical challenges associated with CCS. Furthermore, enabling materials like BASF’s Ultrason® polymer are now being commercially adopted in electrolyzer manufacturing by partners like Stargate, proving their value in the broader market.

Table: SWOT Analysis of BASF’s Evolving Hydrogen Strategy

Forward-Looking Insights: What’s Next for BASF’s Hydrogen Strategy

The data from 2025 clearly signals that BASF is executing a pragmatic, two-speed hydrogen strategy. It is operationalizing green hydrogen now at a modest but meaningful scale, while making a major bet on turquoise hydrogen as the more economical, scalable transition pathway for the medium term. This dual-track approach is designed to mitigate risk while pursuing leadership across multiple technology fronts.

Looking ahead, market actors should watch three critical signals. First is the progress of the methane pyrolysis demonstration plant with ExxonMobil in Texas. Data on production costs, hydrogen purity, and the marketability of the solid carbon byproduct will be the ultimate validation of this strategic pivot away from blue hydrogen. Second, the scheduled Q1 2026 startup of the commercial-scale 3D-printed catalyst plant is a key milestone to monitor, as its success is directly linked to improving the efficiency and economics of the pyrolysis process. Finally, with the first 54 MW electrolyzer online, the industry will be watching for announcements of further green hydrogen capacity expansion, especially as EU carbon policies like CBAM and the rising ETS price make the economics of decarbonization increasingly urgent. The offtake agreement with OCI serves as a powerful template, and any future expansion will likely be tied to similar commercial arrangements for certified low-carbon products. BASF is no longer just planning its role in the hydrogen economy; it is actively building it from the molecule up.

Frequently Asked Questions

What was the most significant shift in BASF’s hydrogen strategy in 2025?
The year 2025 marked a major shift from planning to execution. Key events included commissioning their first large-scale green hydrogen plant (a 54 MW PEM electrolyzer in Ludwigshafen), immediately commercializing the output through a green ammonia deal with OCI, and pivoting from evaluating blue hydrogen to actively developing turquoise hydrogen with ExxonMobil.

Why did BASF seem to abandon blue hydrogen in favor of turquoise hydrogen?
BASF made a strategic pivot by cancelling its large-scale blue ammonia project with Yara, which required complex carbon capture and storage (CCS). Instead, it partnered with ExxonMobil to develop a methane pyrolysis (turquoise hydrogen) demonstration plant. The text suggests this move prioritizes a technology that produces a valuable solid carbon byproduct and avoids the costs and complexities associated with CCS.

What are the two main types of low-carbon hydrogen BASF is actively developing?
BASF is pursuing a dual-track strategy focused on two technologies. First is green hydrogen, produced via water electrolysis powered by renewable energy, which is now in commercial operation at their Ludwigshafen site. Second is turquoise hydrogen, created through methane pyrolysis, which has advanced to a large-scale demonstration phase in a partnership with ExxonMobil in Texas.

Besides producing hydrogen, how else is BASF participating in the hydrogen economy?
BASF is establishing itself as a key supplier of materials and technologies. The company is producing components for green hydrogen and fuel cells at its new facility in Budenheim, Germany. It also supplies advanced materials like its Ultrason® polymer to electrolyzer manufacturers and provides purification technology to partners like Plug Power for hydrogen liquefaction plants.

What is the capacity of BASF’s flagship green hydrogen project and how is the hydrogen being used?
The flagship ‘Hy4CHem’ project in Ludwigshafen features a 54 MW PEM electrolyzer with an annual production capacity of 8,000 metric tons of green hydrogen. Shortly after commissioning, BASF signed an offtake agreement to use this hydrogen to produce and supply certified green ammonia to the company OCI, demonstrating a clear path from production to a commercial, low-carbon product.