Not every journey to a summit ends there. The German chemical industry will also have to realize this on Wednesday. Supported by Prime Ministers, employer bosses and trade unionists, she set off for the Chancellery for the “Chemistry Summit”. But the assault on the summit ended before the ascent had even begun. Even at the first fork there were disagreements about the right path. And now we’re going to think about it thoroughly.
The entourage left the Chancellery on Wednesday shortly after two o’clock, and the disappointment was palpable. People leave the scene with “mixed feelings,” says Markus Steilemann, head of the chemical company Covestro and also the industry association VCI. On the one hand, it became clear that the urgency of the issues was “recognized”. On the other hand, the most urgent issue was not addressed, namely the relief of electricity prices. “If we don’t have a short-term solution in this area today, we no longer have to worry about future issues,” says Steilemann. “I would like to put it that dramatically.” Or, as North Rhine-Westphalia’s Prime Minister Hendrik Wüst (CDU) says: “It’s five to twelve.”
If you believe participants, Chancellor Olaf Scholz had to listen to several such warnings at the two-hour meeting. But the Chancellor replied that things were definitely going on. For example, when expanding energy networks, which could give hope for falling prices. Clearly he was unable to satisfy his listeners.
The goal is a chemistry pact – but what should that look like?
Michael Vassiliadis, head of the Mining, Chemicals and Energy Industrial Union and, as a Social Democrat, actually a comrade of Scholz, said the meeting was “somewhat disappointing”. Although the problems were analyzed, the main problem was not solved. “The most important thing is that we quickly continue this dialogue,” says Vassiliadis.
Just how exactly this should happen and when is an open question. Nor is it clear from the paper that the Federal Chancellery prepared before the meeting, which was intended to outline the way forward in its six points. “The exchange on the general conditions of the chemical industry should be continued,” it says at the end, “with the aim of a chemicals pact.”
But on Wednesday that goal seems a long way off. Some heads of government also attended from the state chancellery. Among them is Malu Dreyer, in whose federal state of Rhineland-Palatinate Ludwigshafen is located and therefore the headquarters of the chemical company BASF, the largest employer in the region. She thinks it’s a “very important first step to be part of the conversation on this topic.” “It is of course an open question as to how the chemical industry can be relieved in the short term when it comes to the issue of electricity prices,” admits the Social Democrat.
“We can only fulfill our diverse future tasks in Germany if the competitiveness of the chemical industry is quickly restored,” said BASF CEO Melanie Maas-Brunner after the conversation. The conversation with the Chancellor was therefore extremely important, but “only a first step” towards a chemicals pact between industry, unions and politics.
Just at the beginning of the month, the 16 country heads made a “Brussels Declaration” during a visit to the EU capital. In this they jointly campaigned for relief from industrial electricity prices. They also wanted to show unity towards the EU Commission. But after the meeting in Berlin, it doesn’t seem as if they had come very far in the three weeks. In the federal government, they have so far only had Federal Economics Minister Robert Habeck (Greens) on their side. Christian Lindner (FDP), the finance minister, is afraid of the costs, and Chancellor Scholz also spoke out early on against comprehensive aid.
Another player is now appearing at the chemistry summit: the Bundestag. In the government paper for the meeting, he is supposed to have a say on energy prices: The federal government is aware of the importance of competitive energy and electricity prices, it says. “It is in discussions with Parliament about proposals on how the electricity supply can be designed in such a way that electricity prices can be stabilized and planning security can be improved.” What exactly this stabilization of prices could mean remains unclear.
But the pressure is there, on Wednesday in the form of a short report from the German Economic Institute (IW). According to this, three quarters of energy-intensive companies have already reduced their production permanently or temporarily, are planning to do so or are thinking about it. Cutting back industrial production in Germany is not a scenario that could possibly happen at some point in the future. “It’s already happening and numerous companies are considering cutting back production.”
The energy price crisis has made Germany’s locational disadvantages “clearly visible.” As a result of the “significantly increased energy prices”, the competitiveness of energy-intensive companies has deteriorated. Even the fact that energy prices have fallen again in the meantime has not made the competitive disadvantages disappear, according to the short report. This is based on a survey of 148 companies in the energy-intensive sectors of paper, chemicals and metal production and processing. The survey is not representative, but shows “clear trends”.
In China and the USA in particular, companies see significantly more favorable production conditions. That’s how they say it in the Chancellery. A certain difference can be made up for by other advantages of Germany as a location. But not the gap that currently exists between prices in Germany and China, for example.
For the time being, however, at the fork in the road, nothing moves forward and nothing goes back. A “process” should now begin to find out the path to the summit, i.e. a pact between the government and the chemical industry. What exactly should this process look like? Shortly after two on Wednesday, no one knew that.