Topic analysis

Germany: Chemical industry down, but not out

Germany’s chemical industry, a core economic pillar employing approximately half a million people, has faced severe challenges since 2022 including skyrocketing energy costs (exacerbated by the Ukraine invasion and US-Israel war against Iran), weak European demand, and regulatory burdens, leading to a 22% drop in revenue, production cuts, over 13,000 job losses, and companies like BASF expanding operations abroad. Industry groups such as VCI and experts from ifo Institute and DIW Berlin call for policy interventions—including subsidized electricity, reformed EU carbon pricing, guaranteed long-term gas supplies, and regulatory simplification—to restore competitiveness, noting full-scale relocation is unlikely but continued overseas expansion may occur without improved framework conditions.