[Presentation]
[Presentation]
[Presentation]
Good morning, welcome to the annual shareholders' meeting of BASF SE in the year 2020. In my capacity as the chairman of the Supervisory Board, I welcome you, representatives of the press, and everybody else who follow this AGM live on the Internet. In my capacity as the chairman of the Supervisory Board, I take the chair according to Section 18, Clause one of the statutes. I would have loved to welcome you to Mannheim personally, you know that unfortunately, it's not possible. We can't have a full attendance assembly. Nobody could have imagined that possible last year. We hope that it's going to be finally possible again next year to meet in Rosengarten, Mannheim.
In the calling for the AGM, you could learn that the Board of Executive Directors, with the approval of the Supervisory Board, decided to conduct this AGM as a virtual assembly without physical attendance of the shareholders and their proxies. Again, we use the possibility which the legislator last year with the COVID-19 Act created, and they took some minor amendments and expanded this law. The virtual AGM enables us to protect the health of our employees, the service providers here, and at the same time to comply with the official rules and have the meeting in due form and time. I hope this is also in your interest. At the same time, we ensure also that the dividend decision, and that's very important, can be taken in due time. Due to the existing social restrictions, we have limited the people here in the assembly room clearly.
Of the Supervisory Board, apart from myself, that's my two vice-chairmen, Franz Fehrenbach and Mr. Horvat. All the members of the Board of Executive Directors are present. The further members of the Supervisory Board can follow the AGM via the Internet, and if need be, they can communicate with myself and the members of the Board of Executive Directors and Supervisory Board. We have also Mr. Wolfgang Haas, who is the General Counsel of the BASF SE, and the notary, Dr. Matthias Maier, who will write the minutes for today's shareholder meeting. We also have the company proxies present. Of course, you can't see that, a whole number of service providers and Helping Hands that make sure that everything is going to be perfect technically. The conduction of this virtual shareholder meetings makes some necessary restrictions for you unavoidable.
I personally have to say that I really regret it because I believe that the shareholder meeting is an important, maybe even the most important meeting and event for our shareholders. It's a good tradition that we meet at Rosengarten in Mannheim in person with you and always have a very vivid dialogue. This dialogue is very important for the Board of Executive Directors and the Supervisory Board because we not only want to hear your questions, but we also want to feel the sentiment and the atmosphere. Of course, this is much easier when we're all assembled together in one room. In so far, the hope, and I think this hope is quite well-founded, is that we can meet again with a full present attendance in the Rosengarten.
That you can take your shareholders' rights at the AGM, the company has made available a wide selection of possibilities in the framework of what is legally admissible. All shareholders can and could exercise their voting rights by written absentee votes, by way of electronic absentee voting, and also by granting power of attorney to the company proxies or to the intermediaries and stakeholder associations and proxy advisors. In addition, all the registered shareholders could submit questions via the online service to the AGM, and this was also used until 23 hours 45. The questions will be answered after the management report of Martin Brudermüller. Shareholders that exercise their voting right can, during the AGM, use the online service to place objections against resolutions. This year, you could also, until one day before the assembly, submit questions in writing via the online service.
These questions were made available to all shareholders in the online service, until the conclusion of today's AGM can be reviewed there. On top of that, the management report was made available to the shareholders' assembly already one week before the AGM on the online service. This presentation could already be read before. You, of course, were still lacking the figures for the first quarter that were made available this morning. You could also consider this presentation in your questions submitted. These possibilities to exercise shareholders' rights correspond to the provisions of the legislators for the conduction of AGMs according to the COVID-19 Act. Due to our calling, they are broadly explained. This is all the specialties of this virtual shareholder meeting. I'll now come to the formalities of today's AGM.
The calling for this year's shareholders meetings was announced in the Federal Gazette on the 18th of March 2021. I therefore state that this AGM was called in due form. This year, too, there's a list of participants in the form of an attendance information. In the list of participants, the company proxies will be included. Depending on the powers of attorney or instruction issues to the company proxies, the attendance will still change until the point of time of the voting. At the moment, on the basis of the powers of attorney and proxy instructions granted so far, the number of attendance is 49.5% of the statutory share capital are represented. This number includes the votes issued to the proxies, as well as those received via absentee voting. The company proxies represent a total of 438,781,436. This is a present of 47.77% of the share capital.
On top of that, there are absentee votes of 16,353,855 individual shares. The attendance information can be reviewed by all registered shareholders on the online service. I will announce the updated attendance again before we take the vote. Now, before going through the items on today's agenda, let us now, like every year, commemorate all employees and retirees that have died since the last AGM in 2020. Thank you. Ladies and gentlemen, now let me talk about the organization and the procedure of today's AGM. After my introducing words and the presentation of the chairman of the Board of Executive Directors, we will answer the questions submitted in due time and form. Afterwards, we will then take the votes on the resolutions announced in the agenda and the proclamation of the resolutions made.
Before, however, I would like to ask Wolfgang Haas to give you another few instructions on today's voting during the virtual AGM. Mr. Haas is our general counsel.
Ladies and gentlemen, the casting of votes for today's virtual AGM is possible for all registered shareholders via the online service, either by electronic absentee voting or by issuing power of attorney to the company proxies, also during this AGM and until the end of the voting. The end of the vote will be announced by the chairman of the assembly. Until the end of that vote, your votes and instructions to the proxies can still be changed via the online service. Kurt Bock will remind you in due time to take your vote, but I would like to ask you as of now to cast your votes punctually and in time.
Information on casting the vote can also be found in the calling and invitation for today's AGM. The proxies will vote by activating your lodged votes on the individual items on the agenda according to your instructions. The written absentee votes and the electronic absentee voting that were handed in in due form and time will also be considered. Notary Dr. Matthias Meyer is also present here in the assembly room. He will execute the notarial recording according to the German Stock Corporation Act, and he will monitor the cast of votes and the counting of the votes. The technical preconditions for that were verified before this AGM in this room.
Yes. Well, thank you very much for these instructions and explanations. Maybe one word on Wolfgang Haas personally, it's his 10th AGM today that he attends as General Counsel of BASF, and at the end of this month, he will retire, which is well-deserved, and it's quite adequate when I will ask or thank him for these 10 years of very good cooperation. Dear Wolfgang, you led us through the legal difficulties of the AGMs with a safe and sure hand. Thank you very much for this good cooperation and all the best for the future. Thank you. That brings me to another important personal change, and that's for the Board of Executive Directors. It is already well-known, but I will explain it. On the 31st of this year, Wayne Smith will resign from the Supervisory Board.
He's been with BASF for 16 years, and he is now responsible for chemicals, petrochemicals and intermediate, the segments and materials with monomers and performance materials, as well as the region North America, where he also has his office. His business had difficult times last year. This year in the first quarter, and Mr. Brudermüller will talk about that as well, has boomed so that with his resignation, he could present excellent figures. Wayne, as I said, has been with BASF since 2004. After a short time, only two years, he was made head of the new business operating division catalyst. That was an acquisition of Engelhard, and for many years, he successfully led and developed the business in North America and Brussels and Ludwigshafen, and also here in the Board of Executive Directors. We all in the Supervisory Board have loved working together with him.
He put cornerstones and milestones, particularly in North America. Wayne Smith, we wish you all the best for the future. Thank you very much for your cooperation, and I am very pleased to meet you again in the future in person. We have another personal change following this up because then we also needed a successor. In this case, it is a female successor in the Board of Executive Directors, who is Melanie Maas-Brunner. Dr. Maas-Brunner has been with BASF since 1997, and she leads nutrition and health. In her new role, she holds the position of Chief Technology Officer, which she assumed from Martin Brudermüller. This comprises the responsibility for the three research areas of BASF, as well as the BASF New Business.
June 2021, Melanie Maas-Brunner will also take the responsibility for European Site and Verbund Management, Global Engineering Services, and Corporate Environment and Protection, Health and Safety, as well as the Industrial Relations Manager, which she will assume from Michael Heinz. Michael Heinz, on June 1, will assume the tasks of Wayne T. Smith in North America, and he will keep his responsibility for the region South America. Here, this is all I wanted to say on the formalities of today's assembly. Ladies and gentlemen, let me now talk about the agenda.
The financial statement and the consolidated potential statement of BASF Group for 2020, as well as the management reports of BASF SE and BASF Group for 2020, including the explanatory reports according to Sections 289a, 315a Commercial Code, and the Supervisory Board's report and the proposal for the appropriation of distributable profits were published together with other documents according to the legal provisions in the internet, and could and can still be reviewed there. The financial statement of BASF SE and the consolidated financial statement of BASF Group, as well as the management report of BASF SE and BASF Group, were audited by the elected auditors and granted the unqualified auditor's opinion. The financial statement of BASF SE and consolidated financial statement of BASF Group were approved by the Supervisory Board.
The financial statement of BASF SE was thereby made final according to Section 9 in conjunction with Section 172 German Stock Corporation Act. In 2020, the Supervisory Board has been informed during seven meetings in the business year 2020 about the management and the situation and targets of selected work areas. Several other subjects will be dealt with in the presentation of Martin Brudermüller. Outside of the Supervisory Board meetings, the chairman of the Board of Executive Directors and Dr. Jürgen Hambrecht , as well as myself after his resignation, have exchanged views and discussion in detail in the current development of the business situation in essential parts of the business and projects. For the further activity of the Supervisory Board, I refer you to the detailed written report, which you can find in the BASF Report 2020 on the pages 203 to 209.
The corporate governance report can be reviewed in the BASF report as well on the pages 168 to 176. What is particularly important for you maybe, you can also find the compensation report and the allowances and flows of income for 2020 for all the members of the Board of Executive Directors on the pages 183 to 202. Now on the Management Report. At the beginning, you see a film in which the employees of BASF talk about their work in the times of the pandemic. Directly afterwards, you will listen to the Management Report given by Mr. Brudermüller.
Working in times of a pandemic. Employee voices worldwide.
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We had high turnover in our engineering group. On top of that, my wife was a medical doctor and was pulled into the ICU, the intensive care unit, at one of the hospitals that was the epicenter of COVID. BASF gave a donation of PPE and equipment. I was able to deliver that to my wife and her team. I'm very grateful for that support, and I'm glad things are getting better now.
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Due to Corona, the order pattern of our customers was turned upside down overnight. One big advantage in that was the network of our global production plants, an excellent crisis management, and a great team that turned around every single stone to make sure we do not let down our customers in these difficult times. Henkel awarded us this year with the Best Supply Performance Award, which is a great acknowledgement of our work.
Typically, we support the introduction of our products to our customer lines with our experts on site. Due to COVID-19, however, this was and is not always possible. The moment we realized that we are facing a problem with respect to product launches, we immediately shipped out so-called augmented or mixed reality headsets to our customers, so our technical experts made sure to guarantee a flawless production setup and the most important, without any time delay.
India is currently in the second wave of the Covid pandemic. Challenging times here. We have a lot of BASF employees who are impacted. This is definitely challenging, but at the same time, I'm also privileged that I'm able to help our friends, family, and colleagues to tide over this calamity. I hope we have better times to come.
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I think it helped people to get the work done without some of the regular supervision that people were used to. I would say that it took their level of responsibility, discipline, and leadership onto a different level.
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COVID-19 is something unexpected. We had to work beyond our regular hours. This has left us with a strong, united, resilient team, which is ready for bigger and better challenges. Instead of saying me, it's we.
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BASF. We create chemistry.
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Dear shareholders, ladies and gentlemen. I wish you warm welcome to our virtual annual shareholders meeting. A year ago, I said I hoped that we would be able to meet again at Rosengarten Congress Center in 2021 for an AGM like the ones we've had before. Unfortunately, this is not yet possible. Nevertheless, like last year, we will provide you with comprehensive information about BASF, just in a digital format. We've just heard from our employees. In the film, they talked about last year and how they experienced 2020 at BASF. I agree with them. We worked hard for our customers. We were able to keep up deliveries. Again and again, we creatively looked for solutions, and our BASF team demonstrated solidarity. With our Helping Hands initiative, we made our contribution to society. There have also been some incredible accomplishments in science.
Vaccines against the coronavirus were developed in record time. They are the crucial instrument for getting the pandemic under control. Production, distribution, and the vaccination campaigns cannot come fast enough. Pragmatism and rolling up our sleeves are now more necessary than ever. At our Ludwigshafen site, we've set up our own vaccination center. First, we vaccinate our employees of priority group two, and we started on April 14th to do so. Our organization is running smoothly, and we hope to be able to vaccinate our entire workforce soon. This depends on the availability of vaccines, and of course, we must follow the rules on priority groups. This is established by the government of the state of Rhineland-Palatinate. Our facility helps ease the strain on regional and community vaccination centers, and once again, we are doing our part. Science and technological progress are helping us in this crisis.
As a society, we should learn something from this.
We can become much more innovative. With courage and good ideas, the challenges of our times can be overcome. I'll come back to this topic later. Here is what I'd like to talk about today. First, a look at our figures. What kind of year did BASF Group have in 2020? How did we perform in the first quarter of 2021? Next, how are we implementing our strategy? How are we actively advancing sustainability? One topic is particularly important to me, reducing CO2 emissions. There is a lot of global momentum here, and the pace is quickening. We at BASF want to take a leadership role in our industry with innovation and new technologies. Finally, our outlook. What do we expect this year for BASF? Our path is clearly focused on profitable and sustainable growth. The pandemic caused the global economy to crash.
The restrictions have been very challenging for almost all sectors. Borders were closed. Supply chains collapsed. In the first six months, production declined around the world, with one exception. The Chinese economy already started rebounding in the second quarter. In other regions, recovery set in later. Beginning in fall, production in the chemical industry started increasing continuously. The pandemic left its mark on our 2020 financial results. We recorded sales of EUR 59.1 billion.
This nearly matched the level of the previous year. Our operating earnings, income from operations before special items, were EUR 3.6 billion, which represented a decline of 23%. Our free cash flow amounted to EUR 2.3 billion. In 2019, it was EUR 3.7 billion. These figures reflect a challenging year, which was shaped by uncertainties. Nobody could have predicted this. In EBIT, we had special items of EUR -3.8 million compared with minus EUR 442 million last year.
The increase is primarily attributable to impairments, which we had to recognize, especially in the chemicals and materials segments, as well as in surface technologies. Earnings per share amounted to EUR -1.15 compared with EUR 9.17 in 2019. This significant decline can be explained by the impairments I just mentioned, as well as the book gain last year from the deconsolidation of the Wintershall businesses. In nearly all segments, we reported lower operating earnings.
The sole exception was the industrial solutions segment, where EBIT before special items reached the level of the previous year. By contrast, the chemicals and materials segments made significantly lower contributions to the results of the BASF Group. One main reason for this was a significant decline in orders from the automotive industry. Our most important customer industry was affected by lower demand, production stoppages, and supply chain disruptions, primarily in the first half of the year.
Overall, we benefited from our broad portfolio. Fluctuations in individual business areas could be partially offset by other units. Our business development in the fourth quarter was very pleasing. We were able to increase our sales volumes in all regions and nearly all segments. On the whole, we had a strong final quarter. These tailwinds carried over into the first quarter. We had a strong start to 2021. We increased sales by EUR 2.6 billion compared with the first quarter of 2020 to EUR 19.4 billion. This was mainly attributable to higher prices and higher volumes. Compared with the prior year quarter, EBIT before special items increased by 42% to reach EUR 2.3 billion. This was primarily the result of considerably increased earnings contributions from the materials and chemical segments. Earnings in the surfa ce technology segment also rose considerably, thanks to the recovery in automotive production.
In the first quarter, all regions contributed to the significant increase in the earnings of the BASF Group. Dear shareholders, for many of you, the dividend is a key criterion in choosing your investments, especially in a time of low interest rates. There is a demand for reliable securities as long-term financial investments. The BASF share is such an investment. For many years, it has been one of the most popular shares among private investors, which pleases us. Despite the pandemic, we generated a solid cash flow in 2020, and BASF once again proved its resilience. A reliable dividend payment is a priority for the BASF Board of Executive Directors, even in difficult times. We are confidently looking to the future.
We therefore propose to the AGM a dividend of EUR 3.3 per share for the 2020 business year, the same as in the previous year, for a high dividend yield of 5.1%. We want the BASF dividend to remain attractive for you in the future as well. We want to make this possible with a high cash flow based on operational strength. This is the core of our dividend policy. I've been working for BASF for 33 years. During this time, we faced some challenges, including the financial crisis of 2008 and 2009. Last year, however, overshadowed everything, and yet our company has successfully navigated through the pandemic. I attribute this to our strong solidarity. This is something we can all be proud of. I want to express my heartfelt thanks to all of our employees.
They've done a terrific job, and this is the reason why we are paying a bonus for the 2020 business year. Based on our results and the agreed rules, this was not required. We want this bonus to be an expression of our gratitude and of our appreciation. I hope that you, as our shareholders, also find this appropriate. Despite many challenges, we want to remain operationally strong and grow profitably. What are we doing to achieve this? First, we remain fully committed to more customer focus. This is the key element of our strategy. During the pandemic, many of our customers faced challenges like never before, but they could rely on us because we were able to deliver our products to them, and they appreciated our efforts. In this way, we were able to strengthen relationships with many of our customers.
This will help us to grow faster than the market in future. Second, we want to continuously improve. Our aims include lower costs, improved processes, and greater competitiveness. This is what it's about. Our excellence program delivered an EBITDA contribution of EUR 1.4 billion last year. The associated costs amounted to EUR 200 million. From the end of 2021, we want to achieve an annual EBITDA contribution of EUR 2 billion. The associated one-off costs will be between EUR 50 million and EUR 150 million this year. The realignment of our Global Business Services unit will also contribute to increasing efficiency. Annual costs will decline by EUR 200 million as of 2023. Worldwide, we are streamlining internal services and responsibilities, and we are shifting activities to our existing service centers in Berlin, Kuala Lumpur in Malaysia, and Montevideo in Uruguay.
The new structure will lead to a reduction of 2,000 positions globally, including 600 in Ludwigshafen by the end of 2022. We are focusing our investments on growth areas. Our main focus areas are the expansion of our business in China and the battery materials. We made a lot of progress here in 2020 despite the pandemic. I'd like to talk about our business in China, specifically the construction of our new Verbund site in Zhanjiang. The city is located in Guangdong Province in southern China, in the middle of the country's industrial heartland. We started construction here on May 30th. The first plants will produce engineering plastic and thermoplastic polyurethane. This will enable us to serve the growing demand from our local customers, who come primarily from the automotive and electronic sectors.
A broad BASF Verbund site will be built in different stages, and it will be 100% owned and operated by BASF with offerings for many of our customer industries. You may be wondering, why is BASF so active in China? There is a simple answer to this question. The country drives the global market for chemicals. Today, it accounts for more than 40%. By 2030, China's market share will grow to more than 50%. By then, almost 70% of global chemical growth will come from China. We want to participate in this growth. This is why we are investing in Zhanjiang. We are planning to invest $10 billion in this project by 2030. Zhanjiang will be our third-largest site after Ludwigshafen and Antwerp. Our second focus area is battery materials. We are investing in e-mobility. Demand for lithium-ion batteries is growing continuously.
The trend is clearly heading in one direction. More and more automotive firms are transitioning to electric vehicles. The market is growing. We see good opportunities for BASF here. Our cathode materials are crucial for the performance of batteries. Not only that. Other key aspects are affordability, safety, and sustainability. All this is only possible with innovative materials. We've been operating production plants for battery materials in the U.S. since 2012 and in Japan since 2015. Now, we are expanding our activities to Europe. We'll produce precursors in Harjavalta, Finland. We will then use these to produce the finished cathode materials in Schwarzheide, Germany. Construction of our plants is proceeding according to schedule. We want to be finished next year. One thing is for sure, we will then have a strong position in Europe. Automotive production is important for the European economy.
The European Commission is supporting these investments. Establishing a value chain for batteries has been recognized as an important project of common European interest, because such an important technology should also come from Europe. I think we can all agree on that. This brings me to fourth, our portfolio. We are focusing our portfolio on profitable growth. We accomplished quite a lot in this area last year. In January 2020, we acquired Solvay's polyamide business. The involved businesses have been successfully integrated. They are part of our performance materials and monomers divisions. We completed the sale of our construction chemicals activities. Since the end of September, the business has been owned by a subsidiary of Lone Star. The sale of our pigments business to DIC requires some more time. We anticipate being able to close this deal in the second quarter. Finally, Wintershall Dea.
The integration has been successfully completed. The new structure offers the expected advantages. The planned IPO depends on market conditions. Dear shareholders, now I come to a very important topic for us and for me personally, climate protection. The corona virus pandemic has drawn many things off course but fortunately not the efforts to combat climate change. Around the world, this challenge is a priority for policymakers and society. Europe has taken on a very ambitious leadership role. The European Commission has presented its European Green Deal.
One of the several objectives is reducing CO2 emissions in the EU to zero by 2050. This would make Europe the first climate-neutral continent, which is an ambitious goal. The once in a century project will affect all of us. It is about much more than protecting the climate. It's about the circular economy, biodiversity, and agriculture, and it's also about digitalization and sustainable finance.
For the chemical industry and our customer industries, it will also mean a tightening of rules governing the approval of products on the European market. The Green Deal is like a master plan for a more sustainable life. How will we produce and consume in the future in Europe? How will we live? There will be many changes. To do this while maintaining our competitiveness, we need intelligent and supportive solutions, and we need joint responses from policymakers, business, and society. The European Commission also tells us the goals of the Green Deal cannot be achieved without the chemical industry. I can only agree here. Chemistry is part of the solution, because we offer innovations for a more sustainable life. Just think about the battery materials I mentioned earlier and modern catalysts, or materials to insulate buildings, or high-performance materials for wind turbines. Our products contribute to greater sustainability.
We are not just part of the solution with our products. Chemical production is very energy intensive and is associated with significant CO2 emissions. Our contribution to a successful European Green Deal must also include an additional meaningful reduction in CO2 emissions. This poses an enormous technical challenge for our industry. The good news is that BASF has a plan for this, and we've been working on the implementation for quite some time. One month ago, we presented our ambitious CO2 goals to the public. By 2050, we want to make BASF climate neutral. Even more importantly, what can be achieved already by 2030? By 2030, we want to reduce our CO2 emissions by 25% compared with 2018 levels. At the same time, we expect considerable production growth during this period. This means that by 2030, we will reduce our global CO2 emissions by 60% compared with 1990 levels.
We will thus exceed the EU target and will comply with the Paris Climate Agreement. BASF will therefore be a front runner in the chemical industry. We need to pick up the pace. Climate change requires decisive action from all of us. Our good news is we've made great technological progress. We can reduce our emissions faster than we previously expected. That's why we've committed to these two new targets. We already know that they will be very challenging for us. After all, we've already reduced our CO2 emissions by half since 1990 while doubling our production. During this time, we've done a lot to improve energy efficiency. We've continuously refined our plants and processes. This potential is now exhausted, and we are reaching the technical limits. That's why we need completely new technologies and processes. We are working on these, and we've bundled our activities in our carbon management.
It's also a fact that chemistry requires energy, vast amounts of energy. Right now, this mainly comes from fossil fuels. A climate neutral chemical industry will only be possible with a sufficient supply of renewable energies, or more precisely, sufficient electricity from renewable sources. We are talking here about the electrification of the chemical industry. Our electricity demand will increase dramatically. Consider as well all the other energy-intensive industries and e-mobility. It becomes clear, a massive expansion of renewable energies across Europe is required. Offshore wind farms play a key role here. They can supply the electricity volumes for industry and at attractive prices. Germany must become competitive in terms of the prices for renewable energies. Currently, we are not. Electricity tax, renewable energy levies, grid fees, and other charges are driving costs unnecessarily high. Our international competitors have an advantage here.
We need electricity prices to be less than €0.05 per kilowatt hour. This is equal to the cost of production. We need an electricity market without public subsidies, but also without charges. With an electricity price of less than EUR 0.05, we'll be able to do both, pay for the transformation of our industry and remain competitive on the global stage. What else is important? We need to finally see some progress in grid expansion in Germany and in Europe. Our expectation is policymakers quickly forge ahead with this expansion and reduce unnecessary cost burdens. We, the industry, will invest in new capacities for renewable energy and new technologies for electrification. We need to connect climate, energy, and industrial policies. This will secure jobs and prosperity in a sustainable way. This is essential for public acceptance of climate protection.
You're probably wondering, what will BASF do with all of this electricity? Let me give you two examples from our carbon management program. The first example is hydrogen. We produce large volumes of hydrogen. In Ludwigshafen alone, more than 250,000 metric tons per year. This production causes significant CO2 emissions, around 10 metric tons of CO2 per ton of hydrogen. How can hydrogen be produced with fewer emissions? To do this, there are two possible sources, water or methane. The latter is better known as natural gas. If the molecules are split using electricity from renewable sources, it is possible to produce hydrogen with zero emissions in both cases. Politicians are vigorously promoting the development of water electrolysis. Our experts are additionally developing methane pyrolysis. It has one major advantage.
It requires only one-fifth as much electricity as water electrolysis, which is an important argument, especially as long as renewable energy is in short supply. Moreover, this process can deliver hydrogen at significantly lower costs. We've just started up a pilot plan, and this shows how important technology openness is. My second example is the electrification of our steam crackers. We use them to produce basic chemicals. These plants have giant furnaces where the chemical reaction takes place at temperatures of 850 degrees centigrade. To heat the furnaces, we've been using natural gas, which emits a lot of CO2. In Ludwigshafen alone, the figure is 1 million metric tons of CO2 per year. We want to change this with electrically heated furnaces. We want to replace natural gas with electricity from renewable sources.
The process can be carried out without CO2 emissions in normal operations, which is not easy to do. Together with our partners, SABIC and Linde, we developed a technology. We want to use it to retrofit one furnace at our cracker in Ludwigshafen as a first step. After this, we will investigate commercial application. As you can tell, for us, sustainability and innovation are inextricably linked. Our approximately 10,000 employees in R&D are paving the way here. Around the globe, they are working on new solutions. At BASF, they can rely on the largest platform for innovations in the chemical industry. You are surely asking yourselves, how will BASF remain profitable while investing more in climate protection? You know our Accelerator products. They are products that make a substantial contribution to sustainability compared to competitors. These products have higher growth rates and a higher profitability.
We therefore want to increase our sales with these products. Our target is EUR 22 billion in 2025. To put this in perspective, our Accelerator sales were EUR 16.7 billion in 2020. Accelerator products also have a significantly smaller carbon footprint compared with the industry average. They'll drive our future growth, and we are therefore well on track. More and more often, environmental awareness is influencing purchasing decisions. This is also true for our customers.
They are increasingly asking us to reduce the carbon footprints of BASF products for them. We are therefore providing transparency about the CO2 emissions of our products. We are the first company in the chemical industry worldwide to present our customers with a carbon footprint for all of our 45,000 sales products. To do so, we've developed our own digital solution. We can use it to determine the total value of CO2 emissions for our products.
The value includes all emissions from cradle to gate. We thus combine sustainability and digitalization in an innovative offering. This, in turn, helps our customers with their own carbon footprints. Consumers also need to be willing to pay more for products with smaller carbon footprints. After all, industry must invest in new processes and plants, and the operating costs for new CO2-free technologies are higher. The demand exists in all customer industries. Over time, consumers will increasingly purchase CO2-reduced products and pay more for them. We are already seeing this with food and its sugar content. Also here, it all started with transparency about the ingredients. Step by step, we are reducing the carbon footprint of our products. In doing so, we are closely working together with our customers. We respond to their plans and expectations, and we are doing this in a number of ways.
Our circular economy program also makes a contribution. With this program, we decouple economic growth from resource consumption. We thus conserve the limited resources on our planet and use them efficiently. In some ways, we've been doing this for a long time. In our Verbund, we reutilize byproducts and waste, but we can even become better. In the long run, we are striving towards a carbon neutral circular economy. By 2025, we plan to transform 250,000 metric tons of recycled and waste-based raw materials into new products each year. By 2030, we want to increase our sales generated by solutions for the circular economy by EUR 17 billion, which would be doubling today's level. Dear shareholders, we support the objectives of the Green Deal. It can be a major opportunity for Europe and for our industry. The right conditions will be decisive, however.
In this area, the United States and China are putting their focus on funding and supportive measures. This is how they are effectively promoting the transformation of industry. We are concerned about some of the developments in Europe. Europe already has the most comprehensive chemicals policy worldwide. We must not abandon established principles and regulations. This would have enormous consequences for us as the fourth largest industry in Europe and for many of our customers along the entire value chain, not to mention for many products. Products which play an essential role in making the Green Deal a success. I'd like to stress this once more. We need a new spirit of cooperation between policymakers, business, industry, and society. We need to be open to new things and boldly tackle challenges. We need support for new technologies and more renewable energy at competitive prices.
With this kind of fundamental approach, we will achieve the ambitious climate protection goals on the one hand, while also maintaining competitiveness on the other. This enables growth for future prosperity. For the future of Europe, this combination would be ideal. To finish up, let's take a look at the year 2021. What do we expect? We expect the global economy to recover from its slump. It is forecast to grow by 5% compared with the previous year. Industry is also expected to grow again compared with 2020. We expect a significant uptick in the automotive industry, for example. We likewise anticipate 5% growth in global chemical production. This will be considerably higher than the level of the previous year. However, there are still significant uncertainties. The pandemic is not yet over, and our forecast takes this into account.
Since global economic activity has recovered more strongly than we previously forecast, we've raised our sales and earnings outlook published in February. For 2021, we now expect sales of between EUR 68 billion and EUR 71 billion, and we anticipate EBIT before special items of between EUR 5 billion and EUR 5.8 billion. Overall, we are in a good position. Together with our customers, we want to grow profitably and sustainably in 2021. We look confidentially into the future. Finally, let me also take a look into the past. BASF founder Friedrich Engelhorn would have turned 200 on July 17th this year. He was a courageous entrepreneur, a visionary, full of energy and ideas. Friedrich Engelhorn overcame the challenges of his time. He was firmly committed to innovation, and today, this is also how we approach the future. On our journey, we will take inspiration from his virtues.
Dear shareholders, I said it a year ago and I express this again with a lot of hope today. I look forward to seeing you again at Rosengarten Congress Center. Thank you very much for your support and your trust.
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