Azernews.Az

by Alimat Aliyeva

The European chemical industry is currently undergoing its most severe crisis in the past quarter-century, according to Markus Kamieth, Chairman of the Board of German chemical giant BASF, AzerNEWS reports.

He noted that the situation is especially challenging in energy-intensive sectors, such as ammonia production. Rising energy prices, along with the European Union’s carbon emission regulations, are placing additional pressure on manufacturers and significantly increasing production costs.

Despite these difficulties, BASF’s leadership remains cautiously optimistic about the long-term future of the industry. Kamieth believes that in ten years Europe will still maintain a strong chemical sector, although its structure, production base, and business models will likely look very different from today.

In recent years, BASF has faced multiple challenges, including high energy costs in Germany, global overcapacity in chemical production, and growing competition from Chinese manufacturers. One of the company’s key sites, the Ludwigshafen production complex—employing around 33,000 people—has struggled with profitability for an extended period.

As part of its restructuring strategy, BASF has announced plans to reduce fixed costs in its core business by 20%, which will likely include workforce optimization. The company is also reshaping its portfolio: it plans to sell a majority stake in its coatings division to U.S. investment firm Carlyle and is preparing its agricultural solutions unit for a potential stock market listing.

Experts link the current difficulties of Germany’s chemical industry to a combination of post-pandemic disruptions, global supply chain instability, and the ongoing energy crisis, which intensified after the reduction of Russian natural gas supplies to Germany.

Founded in 1865, BASF’s Ludwigshafen site remains the world’s largest integrated chemical complex and continues to be a cornerstone of the company’s global operations.

An interesting aspect of the current transition is that European chemical companies are increasingly investing in “green chemistry” and low-carbon production technologies. While these investments aim to secure long-term sustainability, they also add short-term financial pressure—creating a difficult balance between environmental goals and industrial competitiveness.