{"id":424524,"date":"2026-02-03T19:03:00","date_gmt":"2026-02-03T18:03:00","guid":{"rendered":"https:\/\/climatescience.press\/?p=424524"},"modified":"2026-02-03T19:03:03","modified_gmt":"2026-02-03T18:03:03","slug":"germanys-chemical-reckoning-how-europe-is-dismantling-its-industrial-core","status":"publish","type":"post","link":"https:\/\/climatescience.press\/?p=424524","title":{"rendered":"Germany\u2019s Chemical Reckoning: How Europe is Dismantling its Industrial Core"},"content":{"rendered":"\n
\"Aerial<\/figure>\n\n\n\n

<\/p>\n\n\n\n

“The Agonising Decline of One of Europe\u2019s Core Industries,” describes Germany’s chemical sector crisis as a symptom of broader self-inflicted industrial decline in Europe.<\/p>\n\n\n\n

Energy and environment policy analyst Tilak Doshi argues that Germany’s once-dominant chemical industry- home to giants like BASF and a cornerstone of “Made in Germany” manufacturing- is undergoing an irreversible collapse.<\/p>\n\n\n\n

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German chemical plants operated at around 70% capacity in 2025\u2014the lowest since 2002 (or even 1991 in some metrics)\u2014well below the ~80-82% needed for profitability.<\/p>\n\n\n\n

Production volumes (excluding pharmaceuticals) fell ~2.5% in 2025, with sales down ~3%; forecasts for 2026 show further declines (e.g., volumes -3.5%, prices -2.5%).<\/p>\n\n\n\n

Overall EU chemical output remains 6-10% below pre-crisis (2014-2019) levels, with Germany seeing steeper drops (up to 15% in some periods).<\/p>\n\n\n\n

Cumulative closures: Europe lost ~37 million tons of capacity from 2022-2025; petrochemicals hit hardest (14% of capacity shuttered).<\/p>\n\n\n\n

Major players like BASF have permanently scaled back in Germany (e.g., closing fertilizer\/ammonia plants in Ludwigshafen, shifting to Belgium\/US\/Asia), with thousands of job cuts (BASF alone announced 2,600+ in recent years).<\/p>\n\n\n\n

Broader trends: Investments fleeing Europe (three-quarters of German energy-intensive firms shifting abroad), weak demand from autos\/construction, and import surges from China.<\/p>\n<\/blockquote>\n\n\n\n

_________________________________________________________________________________________________________<\/p>\n\n\n\n

<\/p>\n\n\n\n

From Tilak\u00b4s Substack<\/a><\/p>\n\n\n\n

By Tilak Doshi<\/a><\/p>\n\n\n

\n
\"Aerial
BASF plant in Ludwigshafen, 1881 https:\/\/commons.wikimedia.org\/wiki\/File:BASF_Werk_Ludwigshafen_1881.JPG?uselang=en#Licensing<\/a><\/em><\/figcaption><\/figure>\n<\/div>\n\n\n

In its \u2018Climate & Energy\u2019 newsletter on Thursday, the\u00a0Wall Street Journal<\/em>\u2019s\u00a0report<\/a>\u00a0on Germany\u2019s chemicals industry headlined \u2018The Agonising Decline of One of Europe\u2019s Core Industries\u2019 reads less like an industry report than a forensic examination of an industrial autopsy. Once Europe\u2019s formidable manufacturing powerhouse, Germany is now presiding over the steady dismantling of one of its most foundational industries \u2013 chemicals \u2013 under the combined weight of self-inflicted energy scarcity, climate moralism and geopolitical miscalculation.<\/p>\n\n\n\n

In Politico<\/a><\/em>\u2019s<\/a> view, the auto sector has already assumed the role of Exhibit A in Germany\u2019s economic self-harm. But chemicals \u2013 the industry that quite literally underpins modern industrial civilisation \u2013 now stands exposed as Exhibit B. The collapse of chemicals manufacturing in Germany will be unsalvageable: when energy costs explode, feedstocks disappear and plants shut, financial investments and physical capital relocate not easily but in an irreversible rupture with previous arrangements.<\/p>\n\n\n\n

The Industry That Built Modern Germany and the World<\/strong><\/p>\n\n\n\n

As Vaclav Smil<\/a> authoritatively established, the four foundational materials of human civilisation are steel, cement, plastics and ammonia. But ammonia is the most fundamental because it sits upstream of life itself rather than merely infrastructure. Through synthetic nitrogen fertilisers enabled by the Haber\u2013Bosch process<\/a>, ammonia underwrites modern agriculture and thus the food supply for roughly half the world\u2019s population, without which steel mills, concrete cities and plastic goods would be socially meaningless luxuries. A civilisation can endure with less concrete or fewer polymers, but it cannot survive the loss of fixed nitrogen \u2013 making ammonia not just an industrial input, but the metabolic backbone of modern human existence.<\/p>\n\n\n\n

Germany\u2019s rise as an industrial nation was inseparable from chemistry. Long before automobiles or machine tools defined its export prowess, German scientists and firms were pioneering breakthroughs<\/a> in dyes, pharmaceuticals, fertilisers and industrial processes that transformed global production. The synthesis of ammonia via the Haber\u2013Bosch process \u2013 enabling nitrogen fixation at scale \u2013 stands as one of the most consequential technological innovations in human history. It fed billions, powered agricultural productivity and anchored Germany\u2019s early chemical supremacy.<\/p>\n\n\n\n

From roughly 1870 to the First World War, the global chemicals industry was overwhelmingly dominated by Germany, with Britain a distant and increasingly worried second and the United States very much a latecomer. In the long arc of industrial capitalism, BASF and Imperial Chemical Industries stand as two of the defining titans of the chemicals revolution that reshaped Europe from the late 19th Century onward.<\/p>\n\n\n\n

BASF<\/a> was founded in 1865 on the banks of the Rhine at Ludwigshafen. Apart from BASF, Germany produced a remarkable constellation of world-leading chemical companies that, together, made the country the unquestioned global centre of industrial chemistry from the late 19th Century through much of the 20th. Founded in 1863, Bayer rose to prominence through synthetic dyes, then pharmaceuticals and agrochemicals. Its most famous early product, aspirin, symbolised the shift from chemistry as craft to chemistry as science-driven mass production. Hoechst (founded 1863) was BASF\u2019s and Bayer\u2019s great peer, excelling in dyestuffs, pharmaceuticals and industrial chemicals. Britain\u2019s answer to German chemical supremacy arrived later and more defensively. Imperial Chemical Industries<\/a> was formed in 1926 through the merger of four major British firms, explicitly to counter German dominance in chemicals that had become glaring during the First World War.<\/p>\n\n\n\n

Germany\u2019s rise as an industrial power with chemicals as the most important arrow in its quiver was not merely a national success; it was civilisational. Chemistry, more than textiles or steel, became the silent engine of modernity \u2013 transforming agriculture, medicine, warfare and manufacturing itself. This was not accidental. German chemical firms amassed deep intellectual property portfolios, established world-leading research laboratories and \u2013 somewhat ironically, with the hindsight brought about by the experience of Energiewende<\/a><\/em> (energy transition) \u2013 benefited from an abundant supply of domestic sources of coal. For much of the 20th Century, chemicals were not merely another sector; they were the backbone of Germany\u2019s export economy and technological prestige.<\/p>\n\n\n\n

Europe as a whole followed a similar trajectory. From fertilisers to pharmaceuticals, polymers to speciality chemicals, the continent built an industrial base that assumed \u2013 as a matter of physical necessity \u2013 reliable access to low-cost energy. That assumption has now been abandoned. Once coal was displaced by abundant natural gas \u2013 first from the North Sea and later, far more decisively, from Russian pipelines \u2013 Europe\u2019s energy-intensive chemicals industry achieved its modern scale and global competitiveness, with Germany at its centre. Russian pipeline gas, delivered reliably and at low marginal cost, became the keystone input that allowed European chemical producers to outcompete rivals despite higher labour and regulatory costs.<\/p>\n\n\n\n

The rupture came not merely from \u201cmarket volatility\u201d but from the abrupt loss of that gas \u2013 following the destruction of the Nord Stream pipelines and the wider sanctions regime \u2013 which boomeranged<\/a> as a structural surge in gas and food prices. That energy shock did not wound German chemicals temporarily; it removed the economic foundation on which the industry had been built, turning decline from a cyclical downturn into a permanent de-industrialisation process.<\/p>\n\n\n\n

Chemical manufacturing is among the most energy-intensive activities known to modern economies. Natural gas is not merely a fuel; it is a feedstock, a reagent and an irreplaceable input in the production of ammonia, methanol and countless downstream products. To imagine a competitive chemicals sector without abundant, affordable gas is to imagine steelmaking without iron ore.<\/p>\n\n\n\n

Yet Germany\u2019s energy policy has done precisely that. The decision to dismantle nuclear power, throttle domestic fossil fuel production and sanction Russian gas \u2013 without credible substitutes \u2013 was undertaken as a moral crusade<\/a>. Energy realism was sacrificed at the altar of climate virtue. The consequences were inevitable.<\/p>\n\n\n\n

Energy prices surged far above those faced by competitors in the United States and the Middle East. Margin compression became chronic. Production cuts turned into permanent closures. Once massive chemical plants shut, they do not reopen. Capital is mobile; sunk costs are not. In chemistry, as elsewhere in the natural world, thermodynamics always wins. You cannot legislate away input costs.<\/p>\n\n\n\n

Sanctions, Self-Harm and the Fertiliser Exception<\/strong><\/p>\n\n\n\n

The geopolitical dimension of Germany\u2019s predicament only deepens the absurdity. Europe\u2019s sanctions regime against Russia was implemented with moral fervour but economic naivety. Natural gas flows were severed without a replacement strategy that acknowledged scale, reliability or price. In the event, US LNG imports, at least three to four times more expensive than Russian piped gas, proved to be an expensive and partial substitute.<\/p>\n\n\n\n

Even Brussels recognised the limits of ideological purity. Despite the sanctions, the EU remains a significant customer<\/a> for Russian liquefied natural gas (LNG), having imported approximately \u20ac7.2 billion worth in 2025 despite plans to ban such imports by 2027. Russian fertiliser exports were quietly exempted from sanctions<\/a> \u2013 an implicit admission that agricultural collapse is not a price voters will tolerate. Fertilisers are not optional; they are existential. The exemption stands as a tacit confession that Europe\u2019s energy and industrial strategy is riddled with contradictions.<\/p>\n\n\n\n

If fertilisers cannot be sanctioned because crops would fail, why was the upstream gas supply so casually sacrificed? The answer, of course, lies not in economics but in political symbolism. Fertiliser scarcity would have directly produced visible hunger. Chemical plant closures produce quieter decay \u2013 job losses, hollowed regions and de-industrialised supply chains.<\/p>\n\n\n\n

Markets, unlike governments, respond to incentives rather than narratives. Faced with punitive energy costs and regulatory hostility, Europe\u2019s chemical giants have begun relocating capital abroad<\/a>. The United States, with its shale gas abundance and comparatively pragmatic industrial policy, has emerged as a prime destination. So too have parts of the Middle East, where feedstock costs reflect geological reality rather than moral aspiration.<\/p>\n\n\n\n

The symbolism of Europe\u2019s flagship chemical firms investing billions overseas while shuttering domestic plants should not be underestimated. This is not offshoring in search of marginal gains. It is capital flight from a policy environment that has rendered large-scale chemical production uneconomic. The Oxford Economics analysis<\/a> cited in industry reports is blunt: chemicals are a keystone sector. Their decline cascades through pharmaceuticals, construction materials, agriculture and consumer goods.<\/p>\n\n\n\n

Between 2019 and 2025 Q2, the European chemical sector\u2019s output declined significantly. It has contracted by 30% in the UK, 18% in Germany, 12% in France and 7% in Belgium. Output levels have been hit by reduced price competitiveness due to higher gas and electricity prices than elsewhere, higher environmental and other regulatory costs and excess global capacity, largely driven by China.<\/p>\n\n\n\n

Europe\u2019s climate agenda increasingly functions as industrial policy in reverse. Carbon pricing, emissions trading and regulatory constraints are imposed domestically with little regard for global competitiveness. Production migrates to jurisdictions with lower costs and weaker constraints, often resulting in higher global emissions \u2013 the very outcome climate policy claims to oppose.<\/p>\n\n\n\n

This is not merely a technical flaw. It is a conceptual failure. Policymakers conflate decarbonisation targets with economic strategy, assuming that \u201cgreen\u201d innovation will materialise on command and that intermittent renewables can substitute for dense, dispatchable energy at industrial scale. Chemistry exposes this fantasy mercilessly.<\/p>\n\n\n\n

Europe\u2019s Silent Unravelling<\/strong><\/p>\n\n\n\n

Germany\u2019s predicament is not accidental. It is the logical outcome of deliberate choices. Nuclear phase-out, gas dependency without diversification, sanctions without contingency and climate regulation without competitiveness safeguards together constitute a blueprint for de-industrialisation. The tragedy is that this is unfolding in a country that once understood industrial ecosystems intimately. Germany knew that manufacturing excellence rested on ready access to energy resources, technical skill and export competitiveness. Today, it lectures the world on sustainability while dismantling the very industries that made its prosperity possible.<\/p>\n\n\n\n

Europe more broadly is following the same path. High-energy industries are labelled \u201chard to abate\u201d \u2013 bureaucratic shorthand for \u201cpolitically inconvenient\u201d. Instead of confronting physical realities, policymakers outsource production and import finished goods, congratulating themselves on territorial emissions reductions while global emissions rise.<\/p>\n\n\n\n

The most sobering aspect of chemical industry decline is its irreversibility. Blast furnaces can sometimes be relit; vast chemical complexes rarely are. The specialised workforce disperses. Supply chains fracture. Intellectual capital migrates. Skilled communities hollow out. This is why industry warnings carry such urgency. Once Europe relinquishes large-scale chemical manufacturing, it forfeits strategic autonomy across medicine, food, defence materials and related advanced materials technologies. Dependence replaces resilience.<\/p>\n\n\n\n

The WSJ<\/em>\u2019s reporting captures only the surface of this unravelling. Beneath it lies a deeper malaise: Europe has lost faith in its own industrial vocation. It prefers to regulate rather than produce, to moralise rather than compete. Yet the world does not pause for European introspection. The United States under the Trump administration is focused on re-industrialising with its energy dominance agenda<\/a> along with tariff policy. Asia and the Middle East continue to expand capacity.<\/p>\n\n\n\n

Europe alone seems determined to prove that prosperity can survive without production. It cannot.<\/p>\n\n\n\n

Germany\u2019s chemical reckoning is therefore not a sectoral story but a civilisational one. It illustrates what happens when political elites elevate symbolic virtue over material competence, when policy is shaped by narratives rather than real constraints and when energy is treated as an ethical problem rather than an economic necessity. The country\u2019s chemical industry once symbolised the triumph of science, industry and energy harnessed in service of human progress. Its current decline symbolises something else entirely: the delusional triumph of ideology over physics and economics among policy elites. And, as ever, the twin disciplines will have the final word. As will chemistry.<\/p>\n\n\n\n

This article was first published in the Daily Sceptic https:\/\/dailysceptic.org\/2026\/02\/02\/germanys-chemical-reckoning-how-europe-is-dismantling-its-industrial-core\/<\/a><\/em><\/em><\/p>\n\n\n\n

Dr Tilak K. Doshi is the <\/em>Daily Sceptic\u2018s Energy Editor. He is an economist, a member of the CO2<\/sub> Coalition and a former contributor to <\/em>Forbes. Follow him on Substack<\/a> and X<\/a>.<\/em><\/p>\n\n\n

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\"A<\/figure>\n<\/div>\n\n\n

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“The Agonising Decline of One of Europe\u2019s Core Industries,” describes Germany’s chemical sector crisis as a symptom of broader self-inflicted industrial decline in Europe.<\/p>\n

Energy and environment policy analyst Tilak Doshi argues that Germany’s once-dominant chemical industry- home to giants like BASF and a cornerstone of “Made in Germany” manufacturing- is undergoing an irreversible collapse.<\/p>\n","protected":false},"author":121246920,"featured_media":424534,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_coblocks_attr":"","_coblocks_dimensions":"","_coblocks_responsive_height":"","_coblocks_accordion_ie_support":"","advanced_seo_description":"","jetpack_seo_html_title":"","jetpack_seo_noindex":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":false,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":true,"token":"eyJpbWciOiJodHRwczpcL1wvY2xpbWF0ZS1zY2llbmNlLnByZXNzXC93cC1jb250ZW50XC91cGxvYWRzXC8yMDI2XC8wMlwvQVFPQ0ZUYWs3eWltOG1xdENSVENHSk5FS2NDbkllY2tUZWhhNEZpNUdwRTZUZkc5MmdSMnJ0RHRWTk9RQXhIMHREcnZQYXM4QUdjemJvSC05bE5panFFbmtLeFZWemRmVXFPdDA0QnIybEZoYUZlOVZMNU1kcTRZUmJEeTBncDUtMTAyNHg1NjUuanBlZyIsInR4dCI6Ikdlcm1hbnlcdTIwMTlzIENoZW1pY2FsIFJlY2tvbmluZzogSG93IEV1cm9wZSBpcyBEaXNtYW50bGluZyBpdHMgSW5kdXN0cmlhbCBDb3JlIiwidGVtcGxhdGUiOiJoaWdod2F5IiwiZm9udCI6IiIsImJsb2dfaWQiOjE1NTgxMjQ0OX0.xJu36WYkaVR8UnQWRERe830dTHMaJ-7Ge9WjqhbsiVUMQ"},"version":2},"jetpack_post_was_ever_published":false},"categories":[1],"tags":[691841183,691824677,691828206,691821210,691822094,691828226,691840494,691819142,691841181,691818051,691841182,691821012],"class_list":["post-424524","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uncategorized","tag-basf","tag-bayer","tag-carbon-pricing","tag-climate-agenda","tag-deindustrialisation","tag-economic-crisis","tag-energiewende-energy-transition-3","tag-energy-policy","tag-europes-core-industries","tag-germany","tag-haber-bosch-process-2","tag-liquefied-natural-gas-lng","fallback-thumbnail"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2026\/02\/AQOCFTak7yim8mqtCRTCGJNEKcCnIeckTeha4Fi5GpE6TfG92gR2rtDtVNOQAxH0tDrvPas8AGczboH-9lNijqEnkKxVVzdfUqOt04Br2lFhaFe9VL5Mdq4YRbDy0gp5.jpeg?fit=1565%2C864&ssl=1","jetpack_likes_enabled":true,"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/paxLW1-1Mra","jetpack-related-posts":[{"id":328477,"url":"https:\/\/climatescience.press\/?p=328477","url_meta":{"origin":424524,"position":0},"title":"As Europe Deindustrializes: Is it Undergoing Economic Suicide","author":"uwe.roland.gross","date":"05\/13\/2024","format":false,"excerpt":"In an illuminating piece by Tilak Doshi on Forbes, the economic trajectory of Europe under the weight of its environmental policies is critically analyzed. 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From time to time (see, for example, here and here) I have described a vision where some state or country runs headlong into a \u201cgreen energy wall\u201d \u2014 an impassable barricade of physical impossibility, characterized by scarcity and blackouts,\u2026","rel":"","context":"In \"Energy Prices\"","block_context":{"text":"Energy Prices","link":"https:\/\/climatescience.press\/?tag=energy-prices-2"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2024\/01\/0death-road-to-nowhere.jpg?fit=1200%2C824&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2024\/01\/0death-road-to-nowhere.jpg?fit=1200%2C824&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2024\/01\/0death-road-to-nowhere.jpg?fit=1200%2C824&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2024\/01\/0death-road-to-nowhere.jpg?fit=1200%2C824&ssl=1&resize=700%2C400 2x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2024\/01\/0death-road-to-nowhere.jpg?fit=1200%2C824&ssl=1&resize=1050%2C600 3x"},"classes":[]},{"id":239918,"url":"https:\/\/climatescience.press\/?p=239918","url_meta":{"origin":424524,"position":5},"title":"Environmentalism will be the ruin of Germany","author":"uwe.roland.gross","date":"01\/15\/2023","format":false,"excerpt":"The green elites are sabotaging Europe\u2019s most powerful economy.","rel":"","context":"Similar post","block_context":{"text":"Similar post","link":""},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/01\/image-712.png?fit=1200%2C593&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/01\/image-712.png?fit=1200%2C593&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/01\/image-712.png?fit=1200%2C593&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/01\/image-712.png?fit=1200%2C593&ssl=1&resize=700%2C400 2x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/01\/image-712.png?fit=1200%2C593&ssl=1&resize=1050%2C600 3x"},"classes":[]}],"_links":{"self":[{"href":"https:\/\/climatescience.press\/index.php?rest_route=\/wp\/v2\/posts\/424524","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/climatescience.press\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/climatescience.press\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/climatescience.press\/index.php?rest_route=\/wp\/v2\/users\/121246920"}],"replies":[{"embeddable":true,"href":"https:\/\/climatescience.press\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=424524"}],"version-history":[{"count":10,"href":"https:\/\/climatescience.press\/index.php?rest_route=\/wp\/v2\/posts\/424524\/revisions"}],"predecessor-version":[{"id":424538,"href":"https:\/\/climatescience.press\/index.php?rest_route=\/wp\/v2\/posts\/424524\/revisions\/424538"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/climatescience.press\/index.php?rest_route=\/wp\/v2\/media\/424534"}],"wp:attachment":[{"href":"https:\/\/climatescience.press\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=424524"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/climatescience.press\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=424524"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/climatescience.press\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=424524"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}