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Entire industries in Germany could collapse due to Russian natural-gas supply cuts: union head

Robert Habeck
Germany's Economic Minister Robert Habeck speaks to press in Dusseldorf, Germany. Roberto Pfeil - Pool/Getty Images

  • Germany's top union official said entire industries could collapse due to Russia's natural-gas cuts.
  • Europe's largest economy is heavily reliant on natural gas piped in from Russia.
  • A key gas pipeline will shut from July 11-21 for maintenance amid fears supplies will not resume after that.
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Entire industries in Germany could collapse due to natural-gas supply cuts from Russia, said Yasmin Fahimi, the country's top union official.

"Entire industries are in danger of collapsing permanently because of the gas bottlenecks: aluminum, glass, the chemical industry," Fahimi, the head of the German Federation of Trade Unions, told Bild am Sonntag. "Such a collapse would have massive consequences for the entire economy and jobs in Germany."

The chemical industry, which employs about 346,000 people, is the third-largest industry in Germany, according to Germany Trade & Invest, the country's investment promotion agency.

Germany — Europe's largest economy —  is reliant on piped natural gas from Russia, which accounts for 35% of its imports of the fuel. The industrial powerhouse imports almost all of the natural gas it uses, which accounts for about a quarter of the country's total energy mix, according to the economy ministry.

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The country's energy crisis is already driving inflation to record highs, which threatens social stability, Fahimi told Bild am Sonntag.

Russian state gas giant Gazprom has already cut gas flows to Germany via the key Nord Stream 1 pipeline by 60% from last month, citing an equipment hold-up in Canada as a result of sanctions over the war in Ukraine. 

Berlin fears the situation may get worse after the pipeline's scheduled shutdown for maintenance from July 11 to July 21. Germany's economy minister Robert Habeck said last week natural-gas flows may not resume after the scheduled works, which would in turn impact fuel storage ahead of winter, when demand spikes.

"We aren't dealing with erratic decisions but with economic warfare, completely rational and very clear," Habeck said at an event on Saturday, Bloomberg reported.

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Germany — Europe's largest economy — moved into the second stage of its three-stage emergency gas plan last month after Russia slowed supplies to the country. If the situation worsens, the country may start rationing natural gas in the last of the three-stage plan, as outlined by Germany's economy ministry.

Under the country's emergency plan, industry would be first in line for supply cuts. The move could devastate the economy and lead to job losses, Germany business leaders and unions have said.

Habeck said natural-gas rationing would likely hit factories not connected to the residential networks first, per Bloomberg.

Benchmark Dutch natural-gas futures have more than doubled year-to-date.

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