Germany can hardly rely on energy supplies from Russia anymore.

The Federal Association of Energy and Water Industries (BDEW) sees it that way and warns of the consequences, because Russian President Vladimir Putin wants gas deliveries from his country to be paid for in rubles in a week's time.

"There are concrete and serious indications that we are coming to a deterioration in the gas supply situation," said Kerstin Andreae, Chair of the BDEW Executive Board, on Thursday.

Christian Geinitz

Business correspondent in Berlin

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Jan Hauser

Editor in Business.

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The association, which represents around 2,000 companies from the industry, called on the federal government to declare the early warning level in the national “gas emergency plan”.

This is the first of three crisis levels, which means that only an emergency is initially considered likely.

The energy company Eon also supports this proposal because "in the current situation we have to prepare for many conceivable scenarios in a forward-looking and precautionary manner".

The declaration of the early warning level makes it easier to coordinate all relevant market players with the responsible political and administrative bodies.

The Federal Ministry of Economics, on the other hand, rejects this and sees the security of supply for gas as guaranteed - at present.

"There is currently no supply shortage in Germany," said a spokeswoman for Economics Minister Robert Habeck (Greens).

"But the situation must continue to be closely monitored." Putin's announcement that gas would in future only be delivered for rubles was noted and will be "closely examined and evaluated".

The spokeswoman repeated Habeck's statement that Putin's move "according to our information is a violation of the private contracts, since these are usually settled in euros".

The handling of this breach of contract will be examined.

Prepare for emergencies

The Federal Network Agency is coordinating the preparations for a possible worsening of the situation in which the supply of natural gas to industrial customers would have to be restricted.

In this case, the Bonn authority would take control of the gas flows as a "federal load distributor".

The basis is the government's "Gas Contingency Plan", which contains general criteria as to how the gas allocation should then look like.

There is no shutdown plan or ranking of companies.

The supply of household customers would have priority.

"We will continue and deepen the talks on crisis prevention in the gas sector," said a spokesman for the authorities.

There was a first, high-ranking round with representatives of the industry and the network operators last Friday.

As it was said by participants, it should continue next week at the level of working groups.

Technical questions such as inquiries about consumption, company information or contacts in the company's crisis teams are on the agenda.

Legal issues should be examined in order to create security for network operators if they actually restrict delivery.

Supply chain disruptions feared

The German Chemical Industry Association (VCI), whose production often depends on the gas supplies, is also involved in this discussion.

With a short-term and then longer-lasting supply failure, the association expects supply bottlenecks in your companies by autumn at the latest.

"This would then involve deep cuts in the production level of the industry," said a spokesman.

This affects both large energy-intensive companies and medium-sized companies.

The effect on the entire industry in Germany would be propagated via the value chains. Almost all sectors would be affected by such interruptions in their supply chains - agriculture, food, automobiles, cosmetics and hygiene, construction, pharmaceuticals or electronics.

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