GERMANY HAS DECLARED A CHEMICAL INDUSTRY CRISIS DUE TO ENERGY PRICES.

One of the key sectors of the German economy, the chemical industry, is on the brink of crisis, writes the German newspaper Welt am Sonntag, adding that large companies in North Rhine-Westphalia, Germany's traditional chemical production center, are closing plants and laying off staff due to high energy prices and the cost of carbon dioxide emissions.

"In the German chemical industry, several plants are on the verge of closure, while others are at risk. The opposition SPD party is demanding significant concessions for this key sector, which employs approximately 100,000 people in the Rhine and Ruhr regions," the publication states.

It emphasizes that the chemical industry suffers from low-cost competition from abroad, primarily from Asia. Energy is significantly cheaper, and there are no taxes on CO2 emissions. In recent years, Ineos' Cologne plant alone has paid between 90 and 100 million euros annually for CO2 emission certificates. The company now hopes to at least break even for the fiscal year. Against this backdrop, according to the publication, the SPD faction in the North Rhine-Westphalia state parliament has called for a temporary suspension or weakening of the CO2 emissions trading system.

"The region's chemical and steel industries are under enormous pressure," the publication quotes Jochen Ott, leader of the state parliamentary group. Ott warned that the current European Emissions Trading System could "bring the industries to their knees." Compared to China, the United States, and the Middle East, North Rhine-Westphalia's industry is disadvantaged by high energy costs, customs tariffs, and the cost of carbon dioxide emissions, which only apply in Europe.

According to Ott, the region risks deindustrialization, despite its industries being considered among the most modern and environmentally friendly in the world.

As the newspaper notes, Ineos, BP, Shell, and Evonik have announced the closure or sale of several of their operations in recent months. British oil giant BP, for example, is considering selling its subsidiary Ruhr Oel GmbH, which includes an oil refinery in Gelsenkirchen with 2,000 employees. According to the newspaper, the company has already eliminated around 230 jobs, while promising not to implement forced layoffs. Fuel production continues, but sales plans indicate BP's intention to reduce its presence in the German market.

Similar processes are underway at other producers. Shell is rebuilding its Cologne refinery, closing some units in Wesseling, and switching to environmentally friendly products, including biofuels. While continuing to supply gasoline and diesel, the company is focusing on the production of liquefied biogas, which Shell claims will reduce CO2 emissions by up to 1 million tons per year.