Russia has halted gas supplies to Europe via Nord Stream 1 indefinitely.
Initially, the need for maintenance on the pipeline’s only remaining compressor, announced 31 August, was cited as the reason for the shutdown by Russia’s state energy company Gazprom, with the intention of cutting gas flow to Germany until 3 September.
Moscow had originally blamed maintenance issues and sanctions, which it said was preventing the return and installation of equipment, while Germany refuted Russia’s claim of there being technical issues on Nord Stream.
But Gazprom has since announced that supplies will remain halted indefinitely following the detection of a leak.
German specialty chemicals giant Evonik last month communicated that it was ‘prepping’ for a potential gas stop if Russia were to officially or unofficially cut off supply.
Alternative energy sources were said to be able to replace up to 40% of natural gas supply for the region without significantly affecting chemicals production, Evonik said.
The most significant measures have been implemented at Evonik’s largest German facility in Marl; at its new gas-fired power plant, liquefied petroleum gas (LPG) is used instead of natural gas to generate energy.
Moreover, a coal-fired power plant in Marl – which had originally been eyed for shutdown this year – is also making a contribution to securing energy supply.
With Germany as a whole looking to wean itself off Russian gas imports by mid-2024, how are other specialty chemicals players and cosmetics manufacturers with Germany-based plants planning to ensure supply?
BASF: Restart coal-fired power plants
“At present, natural gas is supplied to all of BASF’s European sites on an as-needed basis. Likewise, we currently have sufficient gas available at our Personal Care sites to run our production at full capacity,” says BASF's Dr Michael Stang, Managing Director, Vice President Personal Care Europe, Site Management Düsseldorf.
“The German government recently declared the alert level, the second stage of the gas emergency plan. Among other things, this includes legal measures to restart coal-fired power plants in Germany to reduce gas consumption. BASF activated a task force to attend to these recent developments with the highest urgency and priority.
“For the production site in Düsseldorf Holthausen, we obtain our essential energy (electricity and steam) from Henkel's on-site power plant. Henkel also operates a coal-fired boiler at the Holthausen site, the extended use of which has been approved by the authorities. This means that energy supply could initially be ensured even with reduced gas volumes.”
Bayer: Reduce natural gas dependency
“Bayer has evolved into a life science company in recent years; the issue of energy costs is therefore no longer as important to our company as it once was,” says a spokesperson for Bayer.
“Last year, for example, our direct and indirect energy costs accounted for only about 3% of total manufacturing costs.”
The spokesperson adds that the German company is reducing its dependence on fossil fuels “because we have set ourselves ambitious sustainability targets and want to become climate neutral by 2030”.
“Last year, for example, we increased the share of renewable energies in our electricity procurement mix to around a quarter.
“Nevertheless,” they continue, “we still need reliable and affordable access to various energy sources in order to supply patients and farmers with medicines and agricultural inputs safely and at reasonable cost. Therefore, since beginning of the war in Ukraine, we have worked extensively on implications and mitigation measures of a potential cut in natural gas supply.
“For our own operations we are well prepared to largely mitigate a potential exposure by year end 2022. We have already achieved wide technical readiness to significantly reduce natural gas dependency and launched programs to save energy. That way, we also want to contribute to securing the natural gas supply in Germany. In addition, we built up finished goods inventory where possible.
“A higher degree of uncertainty stems from the indirect exposure via our supplier network. We closely collaborate with our suppliers and contract manufacturers, build buffers for critical raw materials and packaging goods, and identify alternative sourcing options from less affected geographies.
“From today’s perspective, based on the well-advanced preparation of our sites and our proactive risk management, we do not expect any material financial impact for the fiscal year 2022.”
Henkel: Cannot currently do without gas
80% of the electricity at Henkel’s site in Düsseldorf is generated by the combined heat and power systems of its own power plant
“Thanks to our diversified energy portfolio, we are well positioned, but we cannot currently do without gas,” a Henkel spokesperson tells Cosmetics Business.
“This also applies even though our production is not very energy-intensive compared to other chemical companies.
“We cover 80% of the electricity needed at the Henkel site in Düsseldorf with electricity generated by the combined heat and power system of our own power plant.
“Here, electricity generation is linked to the site's heat requirements, so that electricity is generated as a by-product of heat generation.”
They add: “Our power plant runs predominantly on gas. The operation of the power plant was actually supposed to switch to 100% gas operation starting in fall. But we can also use more coal or oil. Compared with today's operation, we could thus save around a third of the gas when using coal, and around half compared with full gas operation.
“In view of the current uncertainties on the energy market, we have reactivated our coal-fired boiler again to the extent that we can continue to use coal this winter.”
Beiersdorf: Set up a crisis team
“We are preparing intensively for a possible restriction of natural gas deliveries in order to avoid production loss,” a spokesperson from Beiersdorf shared.
“Since May 2022, we have set up a crisis team that is working diligently on the operational and technical implementation of backup scenarios.
“We save energy in many different ways. This includes, for example, switching off non-safety-related outdoor lighting or other technical devices. We obtain natural gas and biogas from the German network. We are currently assuming that the gas supply will not be completely discontinued, but that the providers will reduce the supply. In this case we would be able to bridge bottlenecks with various technical measures – such as the use of diesel generators – and thus minimise production restrictions.”
Since January 2022, Beiersdorf’s Production Center in Berlin has exclusively used biomethane produced in Denmark
They add: “Since 2020, we have been sourcing 100% electricity from renewable energy sources at all office and production sites worldwide. In addition, we have installed photovoltaic systems at 12 of our production and office locations, with which we can cover part of our own electricity requirements independently.
“In addition, energy-efficient, modern buildings and production sites make a significant contribution to achieving our ambitious climate targets. We are continuously converting our plants; since January 2022, our Production Center in Berlin has been the first Beiersdorf Plant to exclusively use biomethane. This reduces GHG emissions by 99%.
“The biogas is produced in Denmark from organic waste and fed into the European gas network.”
This article was updated on 3 September 2022 to reflect the announcement of the indefinite shutdown of Nord Stream 1.
