Germany’s network regulator, which would be in charge of gas rationing in the case of a supply emergency, has received a slew of exemption requests from industries across the board, highlighting concerns about potential production cuts and eventual losses.

Germany is in the second of three stages of an emergency plan in response to a drop in gas flows from Russia, its primary supplier, posing a serious dilemma for industry, which accounts for a quarter of the country’s gas demand.

Chancellor Olaf Scholz said on Tuesday that gas prices, which have risen owing to concern over Russian supply, would not fall rapidly since governments around the world saw the fuel as a bridge on their route to decarbonisation.

While industry and authorities strive to figure out what will happen in phase three, when rationing begins, certain sectors have begun to call for leniency, and some companies have begun to change work methods to cut energy use.

“There will be no application procedure. The Federal Network Agency continues to get letters from almost every sector “In e-mailed statements, a representative for Germany’s network regulator (BNetzA) stated.

“Blanket exemptions are not provided for in the current law,” the spokesperson said, adding the regulator maintained “a constant dialogue” with industry to prepare for a gas supply emergency.

The glass, steel, pharmaceutical, and chemical industries, which use gas to create everything from plastics and fertilizer to fibers and solvents, have all openly expressed their concerns.

Around 120 BNetzA employees work on crisis prevention and management.

In an energy standoff rooted in Moscow’s invasion of Ukraine, Russia’s Gazprom (GAZP.MM) is supplying 20% of the typical capacity of the Nord Stream 1 pipeline, which normally carries approximately a third of Russian gas exports to Europe.

The regulator has begun collecting data from Germany’s major industrial players, claiming a “very high” level of involvement from 2,750 enterprises.

BNetzA has stated that it is attempting to compile a shutdown list for industry based on six factors, including a company’s size, economic impact, costs, and how long it would take to restore specific facilities.

“Everyone is now clear about how serious the situation is,” said Alexander Theusner of the legal firm Roedl & Partner to Reuters, who has been assisting clients to draft the letters.

When it comes down to it, private households will have some but not complete priority over industry, while hospitals, care facilities, and other public sector organizations with particular needs would be the last to be disrupted.

Source: Reuters

LEAVE A REPLY

Please enter your comment!
Please enter your name here