After the EU announced the imposition of sanctions on Russia, many EU countries followed suit and imposed sanctions on Russia in all aspects. However, the sanctions on Russian energy have caused some countries that are highly dependent on Russian energy to encounter energy crises. Among them, due to insufficient supply of natural gas in Germany, many domestic factories are facing a crisis of production suspension. German Deputy Prime Minister and Minister of Economics and Climate Protection Habeck recently stated that if there is an energy shortage across the country, all factories will suspend operations and will be difficult to recover in a short period of time.
What Habeck said is exactly the dilemma Germany is currently facing. On June 30, according to observer website , chemicals giant Bavs may be forced to shut down its comprehensive chemical production base in Ludwigshafen, Germany, due to tight natural gas supply in Germany.
Giant companies like Baffs are about to close their factories due to this energy crisis. You can imagine how serious the energy supply shortage in Germany is. But the reason why Germany has this problem is entirely caused by Germany itself. Before the outbreak of the Russian-Ukrainian conflict, environmentalism was prevalent in Germany. Driven by environmentalists, Germany has shut down nuclear power plants and phased out polluting coal in favor of cheap natural gas from Russia. Natural gas is indeed clean, environmentally friendly and pollution-free, but it is too dependent on Russia. Natural gas from Russia once accounted for 55% of Germany's imported natural gas.
After the conflict between Russia and Ukraine broke out, in response to the EU's call, Germany suspended the Nord Stream 2 project that it had previously developed with many EU countries. In the plan, the Nord Stream 2 pipeline will be able to transport 55 billion cubic meters of natural gas to European countries every year. If this project has not yet been truly implemented, it will not have a particularly big impact on Germany. Then Russia's subsequent action was to give Germany a hard blow from the front.
Before Nord Stream 2, Russia transported natural gas to Europe through the Nord Stream 1 pipeline. However, Gazprom previously announced that because Germany's Siemens failed to transport the natural gas pump equipment for repair back to Russia in time, only three devices at the Bordovaya Natural Gas Compression Station were available. This has greatly reduced the gas transmission volume of the Nord Stream 1 pipeline, which can transport 167 million cubic meters of natural gas every day and night, to the level of transporting 100 million cubic meters of natural gas every day and night. This was not over yet. It didn’t take long for Ross Gazprom to cut off the Nord Stream 1 pipeline again on the grounds of annual maintenance, reducing the daily gas transmission volume to 67 million cubic meters.
This has made Germany's energy shortage problem more serious, which has also brought about other problems. Habeck previously said that the German government has lowered Germany's GDP growth forecast in 2022 from 4.1% to 2.2%. Habeck pointed out that the forecast is based on Germany being able to continue importing Russian natural gas. If the import of Russian natural gas is banned or Russia blocks the supply of natural gas, the German economy will decline.
From now on, the trend of economic recession in Germany has already occurred. Unless absolutely necessary, Buffs will not choose to close the factory. Now that the news is out, it means that it will be difficult to sustain it. Life for other factories in Germany will not be any easier. Germany, which is world-famous for its industry, has seen a large number of factories close and its economic situation can be imagined.
What Bavs is better than other German factories is that it has found an escape route for itself early and is preparing to turn to the Chinese market. As early as 2019, BASF announced the official launch of the Zhanjiang integrated base project, and the first production device will be put into operation in 2022. The entire project has an investment of US$10 billion and will be officially completed in 2030. After the completion of this base, it will become BASF's third largest integrated production base in the world, second only to Ludwigshafen and Belgium's Antwerp base.
In the Russian-Ukrainian conflict crisis that has detonated in Europe, China has become a good place for foreign investors to avoid risks. China welcomes any company that invests, as long as it respects China and abides by relevant Chinese laws and regulations.
