German chemical industry 'worried' about embargo on Russian hydrocarbons
Jörg Rothermel, director of the energy department of the German Federation of Chemical and Pharmaceutical Industries (VCI).
© VCI Press Service / DR
Text by: Mounia Daoudi Follow
3 mins
The German chemical industry is the first in Europe and the fourth in the world, with an annual turnover of nearly 200 billion euros.
Many other areas depend on it, such as the pharmaceutical industry or the automotive industry.
And according to Jörg Rothermel, director of the energy department of the German Federation of Chemical and Pharmaceutical Industries (VCI), the embargo on Russian oil is "
worrying
" not for "
supply
", but for the "
consequences of a price increase
”.
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RFI
: What are the consequences for the German chemical industry of the embargo on Russian oil, decided by the European Union
?
Jörg Rothermel:
In our sector, we use oil as a raw material in only 15% of our production.
We consider that the supply of raw materials is largely assured, in particular thanks to the European network.
We should not expect any special restrictions.
What worries us, however, is that
this embargo on Russian oil
will result in an increase in oil prices, and consequently an increase in those of our raw materials - which will weigh on our production.
If in other regions of the world the prices of raw materials do not rise as much as in Europe - where we are precisely
subject to an embargo
oil - our chemical industry will be less competitive and our production will decrease.
Therefore, we would import more from countries where these products can be produced at lower cost.
Are there alternatives to Russian oil
?
It is possible to source oil from other producers on the world market, for example in the Middle East or the United States.
The oil supply in Germany and Europe is assured.
But unlike oil, we could not replace Russian gas in the short term, because we depend on Russian gas pipelines.
For oil, there is a fully established logistics system, which is not the case for gas.
Liquefied natural gas (LNG) is an
alternative
.
But on the one hand, its availability on the world market is limited and on the other hand, we do not have a single terminal where this liquid gas can be delivered.
So we would first have to set up appropriate logistics systems.
Moreover, there are more oil
-exporting countries than gas-exporting countries
.
Up to 55
% of the gas consumed in Germany comes from Russia.
During the extraordinary European Council at the end of May 2022, French President Emmanuel
Macron affirmed that he could not rule out a new package of sanctions against Russian gas
.
What does this mean for the German chemical industry
?
In the event
of a gas embargo
, we would face a shortage situation within a few months.
This would lead to a reduction in production.
The chemical industry is the biggest consumer of gas in Germany: about 15% is intended for our sector.
For us, gas is important in two respects.
On the one hand, we need it as energy.
On the other hand, we use natural gas, like oil for that matter, as a raw material.
This means that we also manufacture chemical products from natural gas, with which we can, for example, produce fertilizers or plastics.
These chemicals are almost all used in industrial production, for example plastics for household appliances or cars.
In the event of a gas embargo, entire industrial creative chains would come to a halt.
We support the decisions taken at national level and in Europe.
But if we hurt ourselves more than the one we punish, we think it doesn't really make sense.
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