(Reuters) – Germany’s chemical sector needs regulation changes and an easing of burdens that weigh on the industry as it aims for climate neutrality and to remain competitive, industry lobby VCI said on Thursday.
The crises of the past few years have left their mark on the balance sheets of chemical and pharmaceutical companies, but they are also influencing the industry’s climate transformation, VCI said in a statement as it published two studies it commissioned.
In one study focused on the mood in the industry, the Boston Consulting Group said nearly three quarters of respondents currently consider it unlikely they will invest in new plants and sites in Germany, citing bureaucracy, high energy costs and long approval procedures.
In the other study by VCI’s platform Chemistry4Climate, focused on the industry’s energy usage, it noted the decline in production was reducing the industry’s demand for electricity and hydrogen.
“However, this does not automatically make the path to climate neutrality any easier,” VCI official Wolfgang Grosse Entrup said. “On the contrary: the climate will not be helped by the decline in German production, and our location will become more susceptible to supply chain problems.”
The chemicals sector, Germany’s third-largest industry that employs roughly half a million workers, continues to struggle with tepid demand and higher prices for raw materials and energy.
“In our industry, the problems of the location are like a magnifying glass. But they affect all sectors. We now need a comprehensive and long-term innovation and growth agenda at full speed,” Entrup said.
“Nothing less than the German model of prosperity is at stake. This should be the top priority across party lines,” he added.
(Reporting by Tristan Veyet in Gdansk, editing by Jane Merriman)
