German chemicals group BASF SE has received formal funding approval for a EUR 124.3 million state grant (USD 136.2 million) to proceed with its planned green hydrogen plant at its Ludwigshafen headquarters. The financing, provided by the German Federal Ministry for Economic Affairs and Climate Action, with additional support from the government of the federal state of Rhineland-Palatinate (up to EUR 37.3 million), will propel the project into its construction phase.

In collaboration with Siemens Energy, the Hy4Chem-EI project aims to install a 54-MW proton exchange membrane electrolyser capable of producing up to 8,000 metric tons of hydrogen annually using electricity from renewable sources. The generated hydrogen will primarily be utilized by BASF to decarbonize its chemical production processes, with a portion allocated for transport applications in the Rhine-Neckar Metropolitan Region.

Anticipated to be one of Germany's largest electrolyser facilities upon completion, the Ludwigshafen plant is slated to commence operations in 2025. The funding approval follows Germany's clearance from the European Commission approximately a year ago to allocate a grant of EUR 134 million for the Hy4Chem-EI project.