German Chemical Industry Will Face Challenges

May 20, 2022

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Recently, in response to the European Commission’s sixth round of sanctions against Russian oil imports, the German Chemical Industry Association (VCI) issued a warning that the German chemical and pharmaceutical industry will face challenges.

The German Chemical Industry Association (VCI) said it supported the EU’s new sanctions package against Russia. However, the agency is concerned that the move will lead to further increases in the prices of crude oil and naphtha in Germany. Wolfgang Grober ntrup, managing director of the German Chemical Industry Association (VCI), said: “we are worried that crude oil prices will rise further and raw material prices will rise. The competitiveness of the industry is bearing an increasing burden.” VCI is not worried about the supply of crude oil and naphtha.

The German Chemical Industry Association (VCI) also said that the German chemical industry needs more than 14 million tons of naphtha to produce petrochemical products every year. According to the data of the German Chemical Industry Association (VCI), naphtha currently accounts for 72% of the raw materials of the German chemical industry, which is the most important raw material, followed by natural gas accounting for 14% and biomass accounting for 13%. VCI said that in terms of raw materials, the EU’s ban on the import of crude oil from Russia poses less serious challenges to the German chemical and pharmaceutical industries than the interruption of natural gas supply. Crude oil and naphtha can be obtained from different regions in the world market, and supplementary transportation channels through pipelines or oil tankers have been established. The agency also acknowledged that the logistics problems in Germany, especially the supply to eastern Germany, still need to be solved.

According to soliao.com, at present, the Russian European “friendship” oil pipeline transports crude oil from Russia to refineries in EU countries such as Austria, the Czech Republic, Hungary, Poland and Slovakia, and finally reaches eastern Germany, with a total length of 4000 kilometers. It is the longest crude oil pipeline in the world. It is estimated that 11% of Europe’s ethylene production capacity depends on naphtha derived from the friendship pipeline.