C&EN: tough days in the German chemical industry
In this week's C&EN, a very thorough article on the German chemical industry after the natural gas crisis (article by Vanessa Zainzinger):
...But the natural gas crisis that has bruised European competitiveness in chemical manufacturing hit Germany disproportionately hard. With a sharp decline in production, disrupted supply chains, and enormous energy costs, firms are considering the possibility that Germany’s days as a chemical industry stronghold are over...
The crisis has been a death sentence for some energy-intensive production lines in Germany. Trinseo closed its styrene facility in Böhlen, and Olin announced that it intends to shut down methylene chloride and chloroform production in Stade by the third quarter.
In Ludwigshafen, BASF permanently closed two of its ammonia plants “because they are no longer competitive,” a spokesperson says. The industry giant is also idling other units there, including downstream nitrogen fertilizer facilities, a caprolactam plant, and capacity for soda ash.
BASF had $3.4 billion in additional costs in 2022 as a result of the energy price hike. “In April 2022, if gas supplies had fallen to less than 50% of 2021 levels, we would have been forced to idle the entire [Ludwigshafen] site,” CEO Martin Brudermüller said in his speech at BASF’s annual press conference in April.
The firm coped by curbing energy-intensive production and cutting thousands of jobs, as well as switching some of its power plants to oil. “Today, we would be able to operate our largest site even if we received only around 30% of the natural gas volumes,” Brudermüller said. “And as of this fall, in extreme cases, we could make do with only around 10%.”
It's hard to imagine that Germany (especially BASF!) will see permanent structural change from this crisis, but it is quite clear that it will be a while before things revert back to pre-2022 normal. Here's hoping things get better.