BDI chief: Some energy-intensive industries will disappear from Germany

Germany should decide how much strategic sovereignty it wants in the production of energy-intensive raw materials, says Siegfried Russwurm, head of the German industry association BDI. Domestic production in key energy-intensive sectors will come at a cost as Germany decarbonizes its energy system.

"If strategic sovereignty is important to us, we have to accept that it comes at a price and be prepared to bear higher costs,"Russwurm said in an interview with Süddeutsche Zeitung.

According to Russwurm, Germany should start a debate to answer the question of whether energy-intensive industrial sectors should remain in Europe, in Germany or in individual federal states. "There is far too little discussion about all this," he added.

Given Germany's relatively high energy prices, energy-intensive sectors in the country face fundamental questions about their future.

"Some things will disappear from Germany," says Russwurm, citing ammonia as an example. It is used in industrial processes including the production of fertilizers, plastics, explosives, pharmaceuticals and rubber, as well as in petrochemicals. Ammonia is currently produced from fossil-based hydrogen.

In the future, so-called green hydrogen will be produced mainly in countries with favorable conditions for renewable energy and imported into Germany in large quantities. This calls into question whether relatively expensive domestic production should continue alongside it, Russwurm argues.

Support for energy-intensive sectors

Germany wants to retain its status as a major industrial power. The introduction of a long-term industrial electricity price was advocated by the coalition parties SPD and the Greens, but Chancellor Olaf Scholz (SPD) and Finance Minister Christian Lindner (FDP) opposed it.

The German government eventually agreed on a five-year measure worth several billion euros to lower electricity prices for manufacturing industries. It includes reducing the electricity tax to the European Union minimum, compensating energy-intensive sectors for part of their emissions allowance costs, and limiting grid fees.