German chemicals group BASF SE has formally received funding approval for a EUR-124.3-million (USD 136.2m) state grant for a planned green hydrogen plant at its Ludwigshafen headquarters, with the project now set to enter its construction phase.

The financing will be granted by the German Federal Ministry for Economic Affairs and Climate Action with the government of the federal state of Rhineland-Palatinate providing up to EUR 37.3 million of the total amount.

The Hy4Chem-EI project, realised in partnership with Siemens Energy, will see the installation of a 54-MW proton exchange membrane electrolyser with a capacity to produce up to 8,000 metric tons of hydrogen annually using electricity from renewable energy.

BASF will primarily use the output of the plant as a raw material to decarbonise its chemical production processes. A portion will also go for transport applications in the Rhine-Neckar Metropolitan Region.