Germany imposes gas surcharge, chemical industry may suffer

Latest News: August 18 news, Gazprom (Gazprom) said on the 16th that European natural gas prices may soar 60% this winter due to the continued decline in the company’s exports and production due to Western sanctions. Reach more than 4,000 US dollars per thousand cubic meters (about 27 yuan per cubic meter). Data released by the European Energy Exchange on the 16th showed that the benchmark price for electricity delivered in Germany next year rose 2.7% to 490 euros per megawatt hour, hitting a new high for the fifth consecutive session.

In order to save German energy companies that are buying natural gas at super-high prices, the German government will impose a natural gas surcharge of 2.419 euro cents per kWh from October, which can be adjusted every three months. The surcharge will continue By April 1, 2024.

The German Chemical Industry Association (VCI) immediately said that it is estimated that the introduction of natural gas surcharges will cost the country’s chemical and pharmaceutical industry more than 3 billion euros a year. The VCI is in “in-depth dialogue” with the federal government on such relief.

According to the German Glass Association, each factory in the glass industry will face a loss of 50 million euros if Russia stops supplying natural gas. The stoppage of glass means that supply chains in the European food, pharmaceutical, medical, automotive, solar and construction industries will be disrupted at the same time. In some special categories, the suspension of production in Europe even means a global shortage of downstream products.

According to VCI data, the chemical industry accounts for about 15% of Germany’s natural gas consumption, using about 2.8 million tons of natural gas as chemical feedstock every year, and 99.3TWh of natural gas for steam and electricity production, accounting for 27% and 73% of the industry’s natural gas use, respectively. %.

The VCI has warned that many companies are on the brink of collapse due to the multiple burdens of high gas and electricity prices, as well as expensive raw material costs. Chemicals company BASF is looking into replacing natural gas with fuel oil at Germany’s second-largest plant. The Henkel Group, which specializes in adhesives and sealants, is considering whether employees can work from home. At the same time, another chemical company, Covestro, also said that the shortage of natural gas may cause its German plant to encounter a force majeure shutdown.

VCI Director General Wolfgang Gross Entrup said that while the chemical industry recognized the need for the tax, it was concerned about its impact. The VCI advocates keeping gas surcharges as low as possible through state subsidies. In addition, the collection period should be extended as long as possible to avoid short-term overburdening of the industry and consumers.