Rising gas prices threaten German industry

Rising gas prices threaten German industry

According to RWE boss Markus Krebber, the current high prices for imported liquid gas represent an obstacle to the recovery of German industry to the level before the Ukraine war. Due to the structurally higher gas prices in Germany, due to the dependence on LNG imports, Krebber sees a disadvantage for the local industry. Although European gas prices have fallen by 90 percent compared to the record levels of 2022, they are still well above the pre-crisis averages and are almost two-thirds higher than in 2019. Germany had to stop its natural gas deliveries from Russia due to Russia's war of aggression against Ukraine.

Krebber criticized Angela Merkel's decision in 2011 to shut down nuclear power plants without an adequate replacement for Russian pipeline imports as a mistake. He emphasized that it is important to think about alternative energy sources and to advance appropriate technologies as soon as the shutdown occurs. The long-term impact of this decision is now reflected in structurally higher gas prices and dependence on expensive LNG imports.

German industry is expected to see a slight recovery, but energy-intensive sectors could face a significant drop in demand. Price increases and uncertainty in the energy market are making it difficult for companies to control their production costs and maintain their competitiveness. The search for long-term solutions and a diversified energy supply will be crucial for German industry to remain competitive on a global level in the long term.