The chemical manager warns of the consequences of a gas delivery stop.
(Photo: WILLI NOTHERS)
Dusseldorf In the debate about a possible boycott of gas supplies, the chemical industry is urgently warning of the consequences for the entire economy. Manufacturers fear a chain reaction in the deeply networked industry if chemistry, as a supplier of many basic products, were paralyzed by a stop to Russian gas supplies.
This became clear on Thursday at the Handelsblatt Annual Chemistry Conference 2022, in which 160 participants took part digitally and in person at the Düsseldorf publishing house. Leading chemical managers praised the actions of the federal government, which continues to reject a gas supply stop.
“There is no question: we all follow the primacy of politics without reservation,” said Christian Kohlpaintner, CEO of the world’s largest chemicals dealer Brenntag from Essen. But one is grateful for the prudent approach of the federal government in the debate about Russian gas.
Natural gas is by far the most important energy supplier for the chemical industry. If a single plant fails, this threatens to paralyze entire value chains, since important preliminary products for cars, medicines or building materials, for example, are then missing.
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BASF boss Martin Brudermüller called on politicians to push ahead with the expansion of renewable energies with full force. Only in this way can the green transformation of chemistry and the phasing out of Russian gas supplies succeed. The “Easter package” decided by the federal government this week to accelerate the expansion of renewable energies is the right step.
criticism of economists
At the same time, the industry criticizes the assessment made by economists that, according to their models, a gas supply stop would be manageable for the German economy. “It’s very irritating to me what simple calculations are being made,” said Christian Hartel, CEO of Munich-based Wacker Chemie.
Sharp criticism came at the conference from their own guild. Bert Rürup, chief economist at the Handelsblatt and President of the Handelsblatt Research Institute, said he was surprised at the “tone of conviction” with which renowned economists considered an overall economic slump of three percent to be manageable.
Because the consequences would be massive personnel distribution effects. Judging this is beyond the competence of economists. “That’s clearly a task for politicians,” said Rürup.
In any case, the economist did not paint a rosy picture for the future of German chemistry. The conflict with Russia will promote a new division of the world order: with resource-rich Russia and resource-hungry China on the one hand and the USA with an “America first” strategy on the other.
Such a development would be poison for Germany’s business model with its export strength and the pronounced dependence on China in many sectors, said Rürup.
Green production and CO2 neutrality as a goal
The chemical industry is aware of the challenges it faces. They were huge even before the war began: because chemistry has initiated a comprehensive conversion towards green production and CO2 neutrality. The plans drawn up over the past two years are also based on inexpensive – and above all sufficiently available – natural gas as a transitional technology.
The ambitions of companies in the green transformation are high. “It’s going to be a lot more challenging to keep up this pace from now on,” said Frank Balhorn, chemical expert at bank BNP Paribas. He is now calling for a “certain slowdown”.
Other industry experts, on the other hand, advise companies not to back down when it comes to green conversion. The industry should have gotten into the circular economy much earlier, says Frank Jenner, head of the global chemical business at the consulting firm EY. “This omission must be compensated for as quickly as possible.”
With progress in the circular economy, important raw materials can be obtained from waste through recycling, for example, which Germany is currently introducing on a large scale.
Brudermüller emphasized that BASF continues to fully support the climate goals it has set itself and the goals of the EU’s Green Deal, because climate change won’t wait. But he warns: “If we lose our international competitiveness, the Green Deal will fail.”
More: Early warning level declared: These industries would be hit hardest by a gas supply stop