Germany's chemical sector stands as a core pillar of the nation's economy, ranking third after automotive and mechanical engineering. It generates hundreds of billions in annual revenue and directly employs about half a million people.
The industry, however, has been beset by crisis in recent years, weighed down by high energy costs, growing regulatory burdens, a persistently weak economy, and intense competition from abroad.
Chemical production requires large amounts of energy, not just electricity but also heat, steam and pressure. So, when energy prices rise, it erodes firms' global competitiveness and profitability.
Since Russia's full-scale invasion of Ukraine in February 2022, and the resulting loss of cheap Russian gas, German chemical companies have faced some of the highest energy prices globally.
The US‑Israel war against Iran this year has compounded these challenges. It triggered another spike in energy prices while disrupting supply chains and causing shortages of key raw materials.
