• 27 – 29 September 2022
  • Exhib. Centre Düsseldorf

What would be the consequences of a gas supply stoppage?

May 30, 2022
Düsseldorf

The availability of gas is of enormous importance for the aluminum industry and its production processes. The raw material cannot be replaced in the production process, so production would also have to come to a standstill in this industry in the event of a supply stoppage.

Supply disruptions would also affect an even more important industry: Almost half of the aluminum sector's sales are to the automotive industry.

A member survey conducted by Aluminium Deutschland at the end of April showed that nine out of ten companies in the German aluminum industry would not be able to switch to another energy source if gas were no longer available in the short term. Production would already come to a standstill at half of the companies from a reduction in gas supply of up to 30 percent, and at a further quarter this would be the case with a cut of 30-40 percent. "We need a reliable and preferably ecological energy supply at competitive prices. Otherwise, we run the risk of becoming even more dependent on trading partners, some of whom are unpredictable. Gas is still indispensable for the aluminum industry and its production processes. If gas supplies from Russia were to be cut off, this would have a dramatic impact on the operations of the German aluminum industry and very soon on the large number of our customer industries," says Hinrich Mählmann, President of Aluminium Deutschland.

 

Will higher energy prices be passed on?

Aluminum processors, coaters or the recycling companies are affected by the high energy prices. Natural gas, for example, is around four times as expensive as it was a year ago. Here, too, many companies are threatened with production cutbacks or shutdowns. And whether and how the sharp rise in purchasing prices can be passed on to customers is uncertain. The industry is more dependent than ever on short-term solutions and help from politicians, otherwise fewer and fewer companies will be able to tackle the long-term transformation of the industry.

 

Call for long-term mechanisms

"There is no doubt that the current economic fallout has hit European companies hard, particularly the aluminum industry, which is already facing enormous challenges on a global scale, such as unfair trade practices and higher energy costs. This crisis has increased the urgency for Europe to strengthen its resilience in low-carbon energy sources and raw materials, which are strategic for the Green Deal. We therefore call on EU policymakers to define long-term mechanisms to facilitate the production, accessibility and consumption of low-carbon energy at globally competitive prices," says Ingrid Jörg, chair of European Aluminium.

Text: Alwin Schmitt