BASF and Covestro chiefs have taken their case on EU carbon costs directly to German Chancellor Friedrich Merz. They warn that BASF's emissions allowance spending could reach 1 billion euros by the mid-2030s, and they want a shallower reduction path for the ETS plus fewer strings on free allowances. The stakes are high: Carbon Market Watch values free certificates for energy-intensive industry at roughly 39 billion euros a year, so any rule change would directly affect how chemical companies plan investment. Meanwhile BASF is pushing its own decarbonization work forward. A large industrial heat pump is scheduled to deliver up to 500,000 tonnes of CO2-free steam a year from mid-2027. The company also announced regulatory approvals, a Nanjing electronics materials investment agreement, and a cosmetic innovation letter of intent. The financial yardstick is the raised 2026 EBITDA forecast of 7.4 to 7.8 billion euros, so investors will watch whether these projects convert into real earnings.
