The German chemical industry has been in a prolonged crisis for several years, marked by declining capacity utilization and rising losses. Many plants are now operating at only around 70 percent capacity, even though profitability is typically achieved only at approximately 80 to 85 percent. The main cause is significantly higher energy prices for electricity and gas compared to international competitors, in some cases two to three times higher than in the United States or China. Since energy costs account for up to 60 percent of production costs and a large share of chemical products is exported, the industry is losing substantial competitiveness. At the same time, cheaper imports from China are entering the market, often offered at significantly lower prices, putting additional pressure on domestic production.
The consequences are reflected in job cuts, plant closures, and the withdrawal of major corporations from Germany. Companies are reducing capacity or relocating production abroad, while domestic investment is stagnating or even declining. Many chemical parks, which have developed over decades and are closely interconnected, are coming under increasing pressure. Within these complex networks, companies depend on one another, as intermediate and by-products are further processed. If a key producer fails, for example in the production of basic chemicals, this can trigger chain reactions and severely impact numerous other businesses.
In addition, many facilities are facing costly modernization due to their age, which is often no longer carried out given the uncertain economic conditions. Instead, plants are being shut down, increasing fixed costs for the remaining companies and further worsening the economic situation. At the same time, a shortage of skilled workers is growing, as fewer employees are entering the industry and jobs are being cut. Estimates suggest that only about 20 percent of plants are still operating profitably, while around 50 percent are generating losses and many facilities are running only in emergency mode