Ladies and gentlemen, I'd like to welcome you to our ordinary AGM of BASF SE 2022. As Chairman of the Supervisory Board, I open this AGM, and I will chair it according to Section 18, number 1 of the Articles of Association. I'd like to welcome you, dear shareholders, shareholder representatives, and representatives of the press who are connected live via internet and following us in video and audio. Of course, we would like to have welcomed you face-to-face this year after two years of pandemic again, but unfortunately this was not possible due to the pandemic. Of course, we think of the people in Ukraine who are fighting in this war, and many of them are dying. This war will change our life. It will affect industry and economy directly and indirectly. It will also affect the chemical industry and BASF. Mr.
Brudermüller will refer to this, and many of the questions we received are dealing with this topic. Well, as I said, of course, I would have liked to welcome you face to face again this year in order to make possible that we are in direct exchange about the development of the company again. Due to the pandemic, unfortunately, we were forced to have this AGM exclusively virtually. Although Deutsche Telekom, as a big DAX company, has a physical AGM again this year, we and the Board of Executive Directors thought when we had to decide about how we will organize this AGM, that with an expected 7,000 participants on-site and a development of the pandemic that we could not forecast, the only responsible decision would be to have a virtual AGM. I hope this will change next year.
The Board of Executive Directors thus decided to hold this AGM this year again as a virtual AGM without physical presence of shareholders and their proxies. This way, we use the opportunities of the COVID-19 Act, which was extended to AGMs up until 2022. Together with me, Franz Fehrenbach and Sinischa Horvat as Deputy Chairman of the Supervisory Board are present. All the members of the Board of Executive Directors are present. Other members of the Supervisory Board have the opportunity to follow the AGM via internet, and they are connected via a separate conference call. In this room, we have present Dr. Georg Franzmann, Head of Corporate Legal, BASF SE, and Notary Public Dr. Matthias Meyer, who will draft the minutes of today's AGM and the proxies of the company.
The holding of this virtual AGM means that your rights as shareholders differ from the rights at a physical AGM. Voting right can be and could be exercised by all shareholders via a written postal vote, electronic postal vote, or by authorizing the proxies appointed by the company or intermediaries, shareholder associations, and voting right consultants. Registered shareholders have the opportunity to submit written contributions via the online service up until one day prior to the AGM. These contributions were made available to all shareholders via the online service and are available up until the end of today's AGM. In addition to this, all registered shareholders had the opportunity to submit questions up until one day prior to the AGM electronically via the online service. Dr. Brudermüller will have his presentation, and afterwards, we will deal with these questions.
Shareholders who exercised their voting right had the opportunity to object to resolutions of the AGM during the AGM. The presentation of the CEO was made available to shareholders at the beginning of the week via the online service. This report, which only excluded the extensive introduction and the forecast for 2022, made it possible for shareholders to consider the content when casting their vote. This brings me to the formal issues of today's AGM. The convening of this year's ordinary AGM was published in the Federal Gazette of 18 March 2022, and I find that the convention took place in due form and time. This year again, we will have an attendance list indicating who attends the AGM. All the proxies will be part of the attendance list as well.
Depending on the granted or revoked proxies and instructions to the proxies of the company, this attendance list may change. At the moment, the attendance is as follows. 43% of the capital stock of the company are represented at the AGM. This number includes the proxy votes and the votes that we received via postal vote. The proxies of the company represent 379,178,646 votes, which is an attendance of 41.28% of the capital stock. In addition to this, we have votes that we received via postal vote amounting to 15,763,607 no par value shares. The attendance information is available to all registered shareholders via the online service. As I said, the updated attendance will be announced prior to the voting procedure.
Prior to starting dealing with the agenda, we, as every year, remember all those employees and pensioners who died since the AGM 2021. Ladies and gentlemen, this brings me to the organization and the process of this AGM. After my introduction and the presentation by the CEO, we will answer the questions that you submitted in due form and time. Afterwards, we will vote on the resolutions announced in the agenda and the approval of the resolutions. Before this, I will give you more information on the voting process of today's virtual AGM. Votes at today's virtual AGM may be cast by all registered shareholders via the online service by way of electronic postal vote, or by authorizing the proxies of the company still during the AGM up until the end of the voting process. The end of the voting process will be announced by myself as chairman.
Up until the end of the voting procedure, you may change your authorization given to the proxies or your own votes via the online service. I will remind you of casting your vote, but I would like to ask you to do this in due time. Information on voting rights are also to be found in the invitation to today's AGM. The proxies will vote by releasing the votes you placed with them according to your instructions on the individual items of the agenda. The votes we receive by postal vote and electronic postal vote will also be considered. Notary Public, Dr. Matthias Meyer, is present in this room, and he will monitor the voting process, and he will also take care of the certification of the voting. The technical equipment was checked by Dr. Matthias Meyer prior to the AGM.
Before I pass the floor to Martin Brudermüller for the presentation, I would like to talk about changes in the Supervisory Board. As you read in the invitation to the AGM, the Supervisory Board members elected by the AGM on March 3, 2019, Anke Schäferkordt and Franz Fehrenbach announced that they will resign from the Supervisory Board by the end of the AGM 2022. Anke Schäferkordt has been a member of the Supervisory Board since 2010. Since 2020, she has also been a member of the audit committee. With her experience in strategic and operational management and her explicit expertise in the areas of HR, societal issues, communication and media, she contributed to the active work of the Supervisory Board.
Franz Fehrenbach was elected as a member of the Supervisory Board in 2008, and since 2019, he has been Deputy Chairman of the Supervisory Board. Since then, he's also been a member of the Personnel and Strategy Committees. Between 2008 and 2020, he was a member of the Audit Committee. Franz Fehrenbach contributed to the work of the Supervisory Board with his extensive experience in managing international corporations with his financial and technological expertise and his understanding of strategic challenges of our times. I would like to thank Anke Schäferkordt and Franz Fehrenbach very warmly for their constructive cooperation, which over the many years made sure that their independent and critical view was always neutral and very beneficial for BASF and Mr. Fehrenbach, I would like to thank you personally for the excellent cooperation among ourselves. If this were a proper AGM, Mr.
Fehrenbach, you would hear a lot of applause and just imagine you hear this. I'm sure that shareholders at home will applaud to you. Agenda item seven, here the Supervisory Board suggests the election of Alessandra Genco and Professor Dr. Stefan Asenkerschbaumer as new representatives of the shareholders in the Supervisory Board. Both will introduce themselves via a video message. In addition to this, there will be changes also on part of the employee representatives in the Supervisory Board. Denise Schellemans, Waldemar Helber, and Roland Strasser resigned prematurely. Ms. Schellemans has been a member of the Supervisory Board since 2008, Mr. Helber since 2016, both will retire. They worked in the Supervisory Board with a lot of expertise and always had a critical view. Mr.
Strasser has been a member since 2018, and he will resign in order to make sure that the statutory women's quota on part of the employee representatives is complied with. I would like to thank all three of them for a good constructive cooperation in this body. Thank you very much for this excellent cooperation. Their successors will be Natalie Mühlenfeld as representative of IG BCE, André Matta as representative of the German employees, and Peter Zaman as representative of the Belgian employees. By way of defined processes, these elections already took place, and they don't need to be voted on here at the AGM. Ladies and gentlemen, this brings me to the agenda.
Financial statement of BASF SE and the approved consolidated financial statement of BASF Group for 2021 and the management reports for BASF SE and BASF Group for 2021, including the explanatory reports required by sections 289a, 315a of the German Commercial Code with the report of the supervisory board and the proposal on appropriation of profit was made available and published according to statutory requirements. The financial statement of BASF SE and the consolidated financial statement of the group and the management reports of both were audited by the auditors and received an unqualified auditor's opinion. The financial statement of BASF SE and the consolidated financial statement were approved by the supervisory board. BASF SE's financial statement, in line with Section 9 SE Regulation and in conjunction with Section 172 Stock Corporation Act, was approved.
Five supervisory board meetings took place in fiscal year 2021, discussing important matters of management and the situation and goals of different areas of the company, and different topics will be dealt with by Martin Brudermüller in today's report. Also, outside of the supervisory board meetings, the CEO and I myself, the two of us, had detailed discussions on a regular basis regarding the development of the business and important businesses. Regarding the other activities of the supervisory board, I'd like to turn your attention to the detailed written report, which you'll find on pages 177 to 183 in the BASF annual report. The corporate governance report is to be found on Pages 162 to 170. The remuneration report can be found under basf.com/vergütungsbericht.
An overview on the remuneration of the Board of Executive Directors is to be found on Page 183 of the annual report of 2021. With this, I pass the floor to Dr. Martin Brudermüller, the CEO.
Dear shareholders, dear BASF employees, ladies and gentlemen. Once again, we meet in very difficult times. There are some signs that the coronavirus pandemic will no longer have such an impact on our lives, but this does not yet mean a return to normality. Now we are faced with something worse than we ever imagined. There is war in Europe. The suffering of the people in Ukraine is unbearable. It is so incredibly distressing for us all, and it poses many critical questions and major challenges for us. This is also true for BASF. Despite all this, I want to wish you a warm welcome to the annual shareholders meeting of BASF. I'm talking to you today from my headquarters in Ludwigshafen, unfortunately, virtually again. We are all shaken by the war in Ukraine. The longer the war goes on, the more the humanitarian situation in Ukraine deteriorates.
We are devastated by the images and news that reach us daily. I would like to clearly state our position once more. We condemn the Russian government's war of aggression against Ukraine. It is absolutely unjustifiable. It violates international law and our values. We stand for freedom, democracy, and respect for human rights. We are worried about the people of Ukraine, including our 220 BASF colleagues and their families. Their strength, their determination, and their bravery are remarkable. We want to help them. Our employees have donated more than EUR 2.1 million. BASF is matching this amount. In addition, BASF has already provided EUR 1 million in immediate aid. We are also donating materials to help uphold Ukraine's energy supply. We have assembled crisis teams who are working tirelessly to support our employees. Safety is the top priority.
We are not questioning our engagement in Ukraine. Many of our BASF employees are helping refugees, especially our local BASF teams in countries neighboring Ukraine. They are offering a place to stay or assisting with onward travel. I want to express sincere thanks to the entire BASF team for stepping up to help in such a big way. I clearly stated our position and our values. These guide our actions during this time. Yet, like everyone, we must make difficult decisions, which some may view critically. We base our conduct on compliance with the sanctions established by policymakers and the legal regulations. Since March third, we have not entered into any new business dealings in Russia or Belarus.
In light of the current developments in the war and in international law, including the fifth EU sanctions package, we decided this week to also wind down our remaining business activities in the two countries by the beginning of July 2022. Russia and Belarus account for approximately 1% of BASF sales, so they play a minimal role in BASF's business. We have 684 employees in the two countries. We will support them until the end of the year. We are making one exception. We will continue our business to support food production, but only after each individual case has been assessed. Let me state clearly, our aim is not to earn money. The reasoning behind this is that Ukraine and Russia are the bread baskets of the world. They are important grain exporters. This war could lead to famine, which would particularly affect Africa.
We want to do our part to prevent this. Ladies and gentlemen, indirectly, too, the war in Ukraine has a major impact on BASF. It is challenging to lead a global company like BASF with balance and foresight during these times, while also further developing the company. This is what you expect from your BASF and your Board of Executive Directors. At the moment, it is a balancing act. On the one hand, it is about taking a stance and unconditional support for the sanctions. On the other hand, it is about our global responsibility for more than 110,000 employees and our contribution to sustaining the German and European economies. We need to recalibrate this balance every day. We do this conscientiously and with a sense of responsibility. Germany is currently very dependent on Russian natural gas.
Russia supplies around 50% of the natural gas consumed in Germany. Russian gas shipments therefore underpin the competitiveness of our industry, also for BASF in Ludwigshafen. This is the reality. BASF does not procure gas or oil directly from Russia. We buy from Western European suppliers, but their portfolios also include natural gas from Russia, and this ratio is therefore similar at the BASF site in Ludwigshafen. To put it plainly, there is no short-term solution to replace natural gas from Russia. The political and economic priority must be to eliminate this dependency as quickly as possible. We will use all options available to reduce our dependence on Russian gas at the Ludwigshafen site as swiftly as possible. This cannot be done at the push of a button. If the natural gas supply from Russia were suddenly to stop, it would cause irreversible economic damage.
In an extreme case, we would have to stop production in Ludwigshafen. Policy makers have decision-making primacy. We share the German government's view. It has spoken out against a natural gas embargo. We believe this is the right approach. Finally, let me say a few words about Wintershall Dea. We continue to hold a majority stake in the company. Wintershall Dea is not subject to sanctions. The company's board of executive directors has clearly stated that it will not pursue any additional gas or oil development projects in Russia. BASF sticks by its decision. With the merger of Wintershall and Dea, we decided to withdraw from the oil and gas business. We want to list the company on the stock exchange. Wintershall Dea has interests in production facilities in Russia. This makes an IPO difficult at this time.
Ladies and gentlemen, the war in Ukraine is very much on our minds. Nevertheless, it is my duty to tell you today about our achievements last year, where we stand, and what we plan for the future. I am confident that we will also overcome the current situation because we stick together as a team. Our solidarity is strongest in difficult times. We have seen this in previous crises. Let me start with our financial figures. 2021 was a very good year for BASF. We achieved the goals we had set for ourselves, despite the pandemic, rising energy and raw material prices, and material shortages. The key figures for the year 2021 are our sales amounted to EUR 78.6 billion, up 33% versus the previous year. This was mainly attributable to higher prices and volumes in all segments.
We achieved EBIT before special items of EUR 7.8 billion, representing an increase of 118% compared with 2020. Our free cash flow increased by EUR 1.4 billion last year to reach EUR 3.7 billion. We earned a premium on our cost of capital again. In four of our six segments, we increased EBIT before special items. Unfortunately, we did not achieve this in Nutrition & Care and Agricultural Solutions. We were particularly successful in the Chemicals & Materials segments. With volumes growth of 10.6% in 2021, BASF Group grew 4.5 percentage points above global chemical production. This means our growth was stronger than it has been for a long time. In terms of volume development in the regions, growth was strongest in Asia, excluding Greater China at 14.4%.
In North America, sales volumes grew by 10.6%, and in Europe by 10.1%. In Greater China, we increased volumes by 8.7% compared with a very strong prior year. We continued to actively develop our portfolio in 2021. In June, we closed the sale of our global pigments business to the chemical company DIC. In August, we acquired a 51% stake in Shanshan, a supplier of lithium ion battery materials in China. With BASF Shanshan Battery Materials, we have taken another important step to become a global producer of battery materials. In November, we sold our 49% stake in the company Solenis to Platinum Equity.
The current situation in Europe makes it especially clear how important a balanced regional structure is for risk management at a company like BASF. Ladies and gentlemen, we maintain our clear strategic direction, our strength and customer focus, and our cost discipline. We are succeeding in this thanks to the good collaboration and solidarity within our global team. I, therefore, want to express my heartfelt gratitude to all BASF employees. Thanks to their drive and determination, we turned in a strong performance. We took advantage of our market opportunities and capitalized on our strengths. You did an incredible job once again in 2021. On behalf of the entire Board of Executive Directors, I want to say thank you very much. What does this result mean for your dividend, dear shareholders?
The board of executive directors and the supervisory board propose a dividend of EUR 3.40 per share for the 2021 business year. Compared to the previous year, this represents an increase by EUR 0.10. It equates to a total payment of EUR 3.1 billion. This is more than covered by our strong free cash flow of EUR 3.7 billion generated in 2021. Unfortunately, our share price definitely did not reflect the good business development last year. Therefore, we decided at the beginning of the year to buy back up to EUR 3 billion in BASF shares by the end of 2023. We started this program on January 11, 2022. Until the end of February, the BASF share was outperforming the market. Following Russia's attack on Ukraine, share prices dropped significantly.
Recently, the stock markets have been rattled, in particular by the specter of embargoes or halted deliveries of oil and gas from Russia. The BASF share was especially affected by this. Thus, there is significant uncertainty in the market. Nevertheless, we had a very good start to the year 2022. Sales rose by 19% to EUR 23.1 billion in the first quarter of 2022. EBIT before special items of EUR 2.8 billion was 21% higher than the level of the prior-year quarter. All segments, with the exception of Surface Technologies, contributed to this. Net income came in at EUR 1.2 billion. It was significantly below the level of the prior-year quarter. This was due to impairments of around EUR 1.1 billion on assets of Wintershall Dea.
Now, what do we expect for the current business year as a whole? There is the possibility that the very high energy and raw material prices, especially in Europe, will act as a drag on the growth of the global economy, industry, and chemical production. It is also unclear how the pandemic situation in China and thus its economy will develop. Yet we are still experiencing strong demand in our markets. It is, however, impossible right now to provide a reliable forecast of future developments. Therefore, we are currently sticking to our outlook for the 2022 business year. We anticipate sales of between EUR 74 billion and EUR 77 billion, EBIT before special items of between EUR 6.6 billion and EUR 7.2 billion, and a ROCE of between 11.4% and 12.6%.
Dear shareholders, in these turbulent times you will certainly have more questions than usual about our future, operational in the short term as well as strategic in the long term. How are we dealing with the high energy costs, and how are we preparing for a possible supply shortage of natural gas in Europe? What progress are we making on reducing our carbon emissions? How are we helping our customers become climate neutral, and how do we want to grow profitably in the future? The answers to these questions ultimately converge at the topic of climate protection, and this is a global topic for us. We need to become independent of fossil energies. We must do everything we can to accelerate the expansion of renewable energies, and we must adapt our plans so we need less gas. Despite the current events, we are resolutely following our path towards climate neutrality.
Not only that, we are speeding up this transformation. You already know our ambitious targets. They continue to apply. By 2030, we want to reduce our carbon emissions by 25% compared to 2018, and we aim to achieve net zero emissions by 2050. You might think of these as dry numbers, but what measures, activities, and concepts are behind them? Most importantly, how do we strengthen our competitiveness while doing all this? I would like to give you some answers, and I will focus on six points. First, we are following new energy supply paths. We want to supply our sites worldwide with green electricity. In Europe, the war has created additional pressure on fossil fuels. In the short term, the priority is substituting Russian natural gas, for example, with liquefied natural gas or LNG.
This will not be possible from one day to the next. Technically, we could just barely be able to continue operations at our Verbund site in Ludwigshafen with half the volume of gas. Doing so would mean idling numerous plants. We are therefore working intensively to reduce our dependence on gas. However, BASF cannot entirely forgo natural gas because we also use it as a raw material for our products. For energy production, on the other hand, we want to completely move away from oil and gas. This can be done with electricity from renewable sources. We need enormous quantities of green electricity to reach our climate targets, especially since we want to continue growing at the same time. We expect that our global electricity needs will more than double or even triple by 2040.
In China, we plan to supply our third-largest Verbund site in Zhanjiang with 100% green electricity by 2025. This is even faster than we previously planned, and we are therefore playing a pioneering role in the manufacturing industry in China. In June 2021, we signed a purchase agreement for renewable electricity with China Resources Power. In March 2022, we signed a framework agreement with State Power Investment Corporation. We are also securing access to green electricity in the United States. We have entered into long-term supply agreements for wind and solar energy for our sites in Freeport and Pasadena, Texas. The expansion of renewable energies thus needs to proceed faster. At BASF, we are not waiting around. We are setting the pace. To this end, we have established a dedicated legal entity, an own team to procure renewable energy for our sites in Europe.
Solar, wind, or bioenergy, there are various possibilities. We have taken a one-quarter stake in an offshore wind farm from Vattenfall and secured half of its electricity production for BASF. Vattenfall is building the wind farm in the North Sea off the coast of the Netherlands. This will be the world's largest offshore wind farm to date, and it is being built without government subsidies. It is slated to connect to the grid in 2023. You know why we get excited about strong winds over the North Sea. Those turbines will also be turning for BASF, primarily for our Verbund site in Antwerp. We have other plans as well, such as supply contracts with energy companies such as ENGIE and Ørsted to secure green electricity in the long term. This is part of the make and buy strategy.
Already today, we produce most of our electricity and steam ourselves. Currently, we are using natural gas. In the future, we want to do this with renewable energy. This is competitive if the setup is right. It will become more attractive in the future because CO2 costs will continue to rise. As you can see, we are systematically transforming our energy supply with electricity from renewable sources. Second, we are developing new low-emission technologies. With investments and innovations, we can reduce our emissions at our sites, namely the emissions from our production and from the generation of electricity and steam. We are directly responsible for these emissions. They are reflected in our corporate goals. I will give you two examples of what we are working on. We are developing new technologies to switch over our huge steam cracker furnaces from fossil to electric heating.
We are in the middle of this project and everything is on schedule. Why is it important for us? Because most of the CO2 is emitted at the beginning of our value chains. For example, where naphtha is split into basic chemicals using steam at temperatures of around 850 degrees. This process gives us a toolbox of molecules which we use to produce our sales products. We are already planning to start up the first electrically heated steam cracker next year. We are doing this together with our partners, SABIC and Linde. Another technology we are working with is heat pumps. Perhaps you are currently thinking about how to make your home heating more climate-friendly. Then this technology is likely to play a role. The principle is simple to explain.
At low temperatures, the pump absorbs heat from the environment and uses electricity to generate energy at a higher temperature level. We can use this energy for chemical reactions. A lot of waste heat is generated in our chemical plants, and most of it is not utilized right now. In the future, we will use it to produce steam for our production. To do so, we want to employ high-temperature heat pumps. We are working on a great pilot project with Siemens Energy. The heat pump should start operations in 2024. In a first step, it can reduce CO2 emissions by 160,000 metric tons. We will be using waste heat from our acetylene plant in Ludwigshafen. To give you an idea of the scale, the heat pump is approximately as large as a soccer field.
Steam is the most important source of energy in the chemical industry. Until now, half of it has come from our gas and steam power plants, which emit CO2. When we start generating steam with heat pumps, we will avoid these emissions. We are a trailblazer. This will be the first industrial heat pump of its kind worldwide. It will not remain the only one. We will roll out this technology as quickly as possible at other sites, too. Third, we are changing our raw material base with the circular economy. We have yet another lever to reduce our carbon emissions. We are replacing fossil feedstock with recycled and waste-based raw materials. From 2025, we want to process 250,000 metric tons of these materials in our production annually.
To this end, we are working with partners to analyze waste streams and raw material sources to develop innovative processes. One example of this is chemical recycling. In this process, pyrolysis oil can be produced as a new feedstock from plastic waste and scrap tires. We also use our biomass balance approach. Bio-naphtha and biogas are obtained from organic waste and serve as starting material in our production. Many products, such as insulation materials or hygiene products, can be produced in this way. In total, we are working on 35 promising circular economy projects. These are innovations for new sources of feedstock, material loops, and new business models. By the year 2030, we want to double our sales generated with solutions for the circular economy to EUR 17 billion.
Fourth, we offer our customers products with a reduced carbon footprint, and we take advantage of our opportunities for profitable growth. Ladies and gentlemen, our carbon reduction targets are ambitious. We are well on track to reaching them. The crucial question is, how do we stay competitive while doing so, and how do we leverage new opportunities for growth? Transformation and competitiveness must go hand in hand. This means CO₂-free must have its price. More and more of our customers want to have products with a reduced carbon footprint. Let me give you one example. Henkel wants to replace fossil feedstock with renewable raw materials in its products, with us as a partner. We are doing that over the next four years with the biomass balance approach. This will cover the entire spectrum of detergents and cleaners. As well as personal care products.
Some of these brands you surely know, Persil, Pril, Fa, and Schauma. Achieving this requires transparency about product-related emissions. We provide this transparency by having developed a digital solution to calculate the carbon footprint of our 45,000 sales products worldwide. This cradle-to-gate figure covers emissions from the purchased raw materials and the energy used in production all the way up until the product leaves our factory gates. With Henkel, we are replacing about 110,000 metric tons of fossil-based inputs per year with renewable raw materials. As a result, the end products will have a significantly reduced carbon footprint. Overall, we are avoiding around 200,000 metric tons of carbon emissions in the production of products for Henkel.
We are convinced carbon-free products are the future, and this is why we want to be one of the first suppliers to have many such products in our portfolio. This differentiates us, it increases our competitiveness, and enables us to grow faster than the market in all regions. We expect that demand will soon outstrip supply, and the price of these products will more than compensate for the higher production costs. You, as a consumer, will ultimately have the choice between a less expensive but more carbon-intensive product or a slightly more expensive product with a reduced footprint. As you can see, we are making progress in developing markets for carbon-free products, and this is also necessary so our investments pay off. Because we are investing significantly for more climate protection, EUR 4 billion by 2030, and after 2030, it will likely be more than EUR 10 billion.
Dear shareholders, without profitable growth, there will be no successful transformation. We are therefore continuing to focus our portfolio and our business activities on organic growth. This can only be accomplished with China. China is the largest and fastest-growing chemical market in the world. As you know, we are building our third-largest Verbund site in Zhanjiang in southern China. We want to accelerate our profitable growth in China. This site will be the foundation for that. We are utilizing the newest and most innovative technologies and production processes there. From the very beginning, we have planned this site to be a leader in terms of sustainability, with lower carbon emissions compared to conventional chemical production sites. Construction work in Zhanjiang is on schedule despite the pandemic. Expanding our battery materials activities is our second growth focus area.
We are one of the few global producers. With our production sites in Europe, the United States, and Asia, we are present in all key markets and close to our customers. Our cathode active materials support the dynamic market transition from combustion engines to e-mobility. At the same time, with their low carbon footprint, they enable the journey to a climate neutral future. This is how we at BASF combine climate protection with growth. That brings me to my fifth point. We need a new spirit of cooperation between policymakers, industry, and society. Europe wants to achieve climate neutrality by 2050, as you know, North America and many of BASF's other important markets. However, the EU has adopted the most ambitious transformation strategy of any region. Other regions take a critical view of many of the planned changes. Implementing the European Commission's Green Deal is an incredible feat.
Chemical companies in Europe are confronted with a quadruple challenge, becoming green and digital while advancing the circular economy and dealing with the new European chemicals law. Everything at the same time, no priorities. This is a bit of a steamroller situation, and it jeopardizes our competitiveness. Since February 2024, the European chemical industry has been facing an additional challenge, high energy prices, and these will not just be temporary. It will be a long-lasting structural change not faced by the United States and China. In this new reality, it will thus be even more difficult to achieve the transformation to climate neutrality. It will be the hardest test to our industrial competitiveness, especially for the energy-intensive chemical industry. It will hamper the industry's financial power precisely at the time when increased investment and innovation are needed to realize the Green Deal.
This certainly doesn't mean that we are questioning our targets. To combat climate change, it is up to us to find solutions, but it is a herculean task that we will only accomplish together. Politics, industry, and society must work as one. One example is the new chemical legislation coming out of Brussels. Independent experts estimate that around 12,000 chemical products are likely affected. This is 45% of all substances. Many of them will be banned, and we will not be able to replace all of them by innovations. Outside of Europe, there is no such approach. This makes it increasingly difficult for the chemical industry in Europe to remain competitive. Just so you understand, we support the aim of further improving the protection of people and the environment. Even in Europe, with the world's highest levels, we can still get better.
Here too, we need a sense of reality and balance in Europe. A glimpse at other regions shows what a hot topic this is. The chemical industry plays a crucial role for the Green Deal because without our innovations, it will not succeed. If we are not on the right path to climate neutrality at the beginning of nearly all the value chains, then nobody in the downstream businesses will succeed either. That's why we urgently need a political framework in Europe that strengthens rather than weakens competitiveness, a framework that rewards entrepreneurial boldness. It is clear that not all technologies will succeed in the end, but we have to try new things now. This means we need to be open to technologies, and there must be unbureaucratic public funding for audacious new projects.
We at BASF have the entrepreneurial drive to achieve the energy transition, and we have the technologies. Moreover, there are positive signals from policymakers in Berlin. The German government has now recognized that we need to massively speed up the expansion of renewable energies at competitive prices. The transformation will not be possible with expensive energy. I repeat my message to politicians. We must think about climate and energy policy with the end result in mind. All measures must revolve around the question, how can we achieve the climate goals and at the same time preserve the global competitiveness of industry? That's how to put theory into practice and make this transformation an economic success. Finally, six, we are a strong team at BASF with passion and courage. Ladies and gentlemen, at BASF, we are working on entirely new processes and technologies for a climate neutral future.
We are more than 110,000 employees worldwide, from Germany and Ukraine, from the United States and China, and many other countries. The BASF team is highly motivated, gives its best, is creative, has entrepreneurial spirit, and is proud that sustainability is firmly embedded in our corporate purpose. We create chemistry for a sustainable future. We stand behind this. This drives us. This is our common bond. I am passionate about this too. As a CEO, as a father and a citizen, I would like to make a contribution to a bright future and a healthy planet. As a scientist, I am pushing to ensure we will supply the innovations for this. At BASF, we are making every effort to achieve this. This is how we create value for you, our shareholders. This brings me to the end of my speech.
We are navigating BASF through these difficult times with balance and foresight. We make carefully weighed decisions to remain competitive and further develop BASF. We have the right strategy for this, as I showed you today. We are following new energy supply paths. We are developing new low emission technologies. We are changing our raw material base with the circular economy. We are offering our customers products with a reduced carbon footprint. We are utilizing our opportunities to grow profitably, and we are a strong team at BASF with passion and courage. Once again, this team demonstrates we stand together in times of crisis. This solidarity gives us strength, determination, and optimism for the tasks that lie ahead of us. With our innovative strength and our entrepreneurial spirit, we create chemistry for a sustainable future. We are pioneers driving the transformation.
Every industry needs a driving force that puts things in motion, and that force is your BASF. We would be pleased to continue to have you firmly at our side. Thank you.