Companies in Germany forced to slow, halt production due to gas prices
The rising cost of gas is causing companies to slow down or completely halt the production of goods and services.
The Association of German Chambers of Commerce and Industry (DIHK) said on Monday that a growing number of enterprises in Germany are forced to stop or reduce production due to increased gas prices.
An evaluation issued by the DIHK on Monday showed that "a total of 16% of industrial companies are forced to respond to the current energy situation by reducing production or partially abandoning some areas."
According to the evaluation, the energy-intensive economy is particularly badly affected: the values here are consistently twice as high as the average for the industry. A total of 32 percent of these energy-intensive companies are dealing with a reduction in production or a (partial) task of business areas. Almost a quarter of them, i.e. a total of 8 percent of all energy-intensive companies, have already implemented appropriate measures. A further 10 percent of the energy-intensive say they are in a corresponding dismantling process, and an additional 14 percent have such steps in their planning.
The DIHK evaluation also shows that many companies still have to procure significant quantities of gas for 2022 in the middle of the year. Only half of the industrial companies have already covered their gas requirements through contracts. More than a third still have to buy more than 30 percent of their annual requirements for 2022. This corresponds to a projected volume of up to 50 terawatt hours of gas.
DIHK President Peter Adrian said the numbers were "alarming," and added that they portray the extent to which the high energy prices burden the German economy.
Earlier this month, German authorities adopted a law that would enable the restoration of coal-fired power plants mothballed for climate protection reasons. It also proposed the possibility of restarting thermal power plants, operating on brown coal, which is the most harmful to the environment.
At the end of June, Berlin announced the activation of the second stage of the emergency plan for gas, which involves saving measures.
If stage three is announced, the German Federal Network Agency will regulate who provides energy, prioritizing households.