In the face of rapid growth from Chinese competitors and anticipated mega-mergers in the Middle East, BASF CEO Markus Kamieth is bracing for the loss of the group's global market leadership. The Ludwigshafen-based chemical giant is set to lose its top spot in terms of revenue for the foreseeable future, but 'size per se is not a goal for us,' Kamieth told the International Club of Frankfurt Business Journalists (ICFW) on Monday evening. 'We may no longer be the largest company in the world, as others will overtake us in sheer scale. But we will remain one of the most value-driven companies in our industry.'

The chemical industry is currently undergoing a profound structural transformation. The environment is 'more difficult than it has been for at least 25 years,' according to Kamieth. The balance of power on the global market is shifting rapidly: depending on the accounting method, Chinese groups such as Sinopec or PetroChina are already larger in terms of turnover. In fact, the Ludwigshafen group is already locked in a neck-and-neck race with Sinopec, largely dictated by currency fluctuations: with revenues of 59.7 billion euros (approximately 68.9 billion dollars) in 2025, BASF was only marginally ahead of the Chinese rival's chemicals division, which reached 464 billion yuan (about 68.5 billion dollars). Furthermore, Kamieth expects new chemical giants to emerge in the Middle East through consolidations.

This strengthening international competition is contrasted by weakness in the home market. Due to the challenging framework conditions in Europe, many domestic customers of the chemical industry have lost their export competitiveness, the manager explained. At the same time, China has become significantly more autonomous. The People's Republic is expected to account for three-quarters of global growth in the chemical market over the next five to six years. 'We simply do not want to forgo that market,' Kamieth said, defending BASF's heavy commitment in the Far East. BASF recently opened its new Verbund site in Zhanjiang, southern China - at around nine billion euros, the largest single investment in the company's history.

For the second half of the year, Kamieth remains cautious in view of inflationary pressures and potential supply chain disruptions. Nevertheless, he expressed confidence in the home market: 'Europe will not only need a chemical industry, it will also have a strong chemical industry.' The BASF chief identifies the costs of the green transformation as the greatest hurdle for the location. 'The green transformation is technically possible. But making it economically viable is incredibly challenging.' The main problem, he noted, is the lack of willingness among customers to pay. 'Consumers in Germany, in Europe, and nowhere else in the world buy green products voluntarily.' No one is prepared to pay a premium at the supermarket checkout for a carbon-neutral shampoo.

Policymakers must abandon the idea of jumping directly into a green world without intermediate steps, he argued. European regulation erroneously assumes that the transition from a fossil-fuel-based to a climate-neutral economy can succeed in a single step. 'The leap is too far,' Kamieth warned. Instead, a pragmatic approach and feasible intermediate stages are needed to avoid overstretching the industry.

In this context, the manager again voiced sharp criticism of the European Emissions Trading System (ETS). The system in its current design encourages companies like BASF to shut down production in Europe and import products instead. One should not assume that a rising carbon price automatically leads to high-risk investments in green technologies. If Europe pushes ahead with carbon pricing ahead of global competition, it destroys economic power, value creation, and jobs. As an example, Kamieth cited ammonia production: while a 100-euro carbon levy is due per ton in Europe, this does not apply in the rest of the world. 'Whether we will continue to produce ammonia in Europe for much longer under the ETS system as it is designed today, I would not venture to say.'

Kamieth warned against endangering domestic industry through overambitious climate targets and pointed to the issue of proportionality. BASF's total global CO2 emissions correspond to those of a single coal-fired power plant. One must ask whether it makes sense to jeopardize well-paid industrial jobs for further marginal savings. In the past, the industry may have mistakenly given policymakers the impression that the transformation could be managed effortlessly on its own. Now, however, reality is setting in. 'We want feasible climate protection,' the CEO concluded.

(Report by Patricia Weiss, edited by Ralf Banser. For inquiries, please contact our editorial team at berlin.newsroom@thomsonreuters.com (for politics and economics) or frankfurt.newsroom@thomsonreuters.com (for companies and markets).)