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ENERGY

German minister accuses gas-supplying countries of ripoff prices

Federal Economics and Climate Minister Robert Habeck says friendly countries are charging Germany too much for gas and should show more solidarity.

Published: 5 October 2022 10:35 CEST
German Economy and Climate Minister Robert Habeck speaks in Berlin.
German Economy and Climate Minister Robert Habeck speaks in Berlin. Photo: picture alliance/dpa | Kay Nietfeld

Habeck, from the Greens, singled out the United States in particular, saying it was charging excessive Mondpreise – or ‘moon prices’ – a German expression for an overly high fee or ‘ripoff’.

Before Russia invaded Ukraine in February, Germany sourced 55 percent of its natural gas – which half of German homes use for heat – from Russia.

Now that Russia has shut off deliveries to Germany in retaliation for EU sanctions, Germany has had to turn to suppliers like Norway and temporary liquefied natural gas terminals (LNG) on its north coast to get gas from faraway places like the US and Qatar.

With Europe in general – and Germany in particular – facing an energy crisis this winter and power bills more than doubling, Habeck called on the US to return historical favours.

‘The US approached us when oil prices skyrocketed,’ Habeck told the Neue Osnabrücker Zeitung newspaper. ‘European countries tapped into their national oil reserves as a result. I think such solidarity would also be good for curbing gas prices.’

Habeck also says European countries should band together through the EU to negotiate more favourable gas prices with offshore suppliers, in order to get a better bargain by not bidding against each other.

Other EU countries, however, have blasted Germany for rejecting a Europe-wide gas price gap and planning on moving ahead with its own – a key measure in a new €200 billion spending package announced last week that dwarfs the energy relief supplied by any other European country.

READ ALSO: Germany to thrash out details of €200 billion energy support package

Such a gas price cap would see a maximum amount households would pay for at least a ‘basic level of consumption,’ possibly around 75-80 percent of what the average family uses, with 20-25 percent of consumption allowed to float, in order to incentivise people to save energy.

The government would then be on the hook to pay the difference between the capped level for consumers and the market rate – something that could cost billions in new debt.

The federal government’s expert group says it is working flat out to present ministers with its exact proposal for how a cap should work in practice by the weekend.

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ENERGY

In climate push, German chemical maker swaps oil for sugar

At one of Europe's largest chemical complexes, German group Covestro is trialling the manufacture of a key product using sugar as a base material instead of oil, as the industry seeks to reduce its carbon footprint.

Published: 10 March 2024 13:02 CET
In climate push, German chemical maker swaps oil for sugar

The pilot project involves producing “aniline”, a chemical used in making foams — used widely in mattresses and armchairs, as well as building insulation.

While large-scale, commercial production is probably years away, the experiment marks a small step in the chemical industry’s battle to slash carbon emissions as Earth faces a dire climate emergency.

Of the 100 million barrels of oil produced worldwide every day, “a quarter goes directly into the chemical industry,” said Walter Leitner, from Aachen University, which has been involved in the aniline project for a decade. “The chemical industry needs to be completely rebuilt.”

Plastics manufacturer Covestro — a former division of chemical giant Bayer — started trials at its complex in the western city of Leverkusen at the end
of 2023, after laboratory tests.

In a 100-square-metre (1,080-square-foot) room, aniline, a transparent fluid, is extracted from a 600-metre network of intertwined pipes.

Using a process developed by University of Stuttgart researchers, fermented sugar is treated with chemicals to make the product. Aniline is used as the base ingredient for chemical MDI, which is an essential material in manufacturing foams.

Traditionally, aniline has been obtained from crude oil derivatives like naphtha and benzene, but producing it emits large quantities of carbon dioxide, a key greenhouse gas.

Around six million tonnes of aniline are produced globally a year, around one million tonnes of it by Covestro. So far, the pilot project in Leverkusen produces just a tiny part of this, extracting just half a tonne of aniline a day.

Punishing energy costs

Some experts are sceptical about such an approach. The use of plant matter in manufacturing may cut out fossil fuels but whether it can lead to carbon neutrality “is often questionable”, Jens Guenther, from Germany’s Federal Environment Agency, told AFP.

This is particularly the case when it comes to the use of “so-called cultivated biomass like maize, sugar cane and sugar beet,” he said.

Janine Korduan, from environmental NGO BUND, pointed out that industrial agriculture generates “CO2 and methane emissions through land conversion and
the production of fertilisers and pesticides”, and also leads to “major losses of biodiversity and high water consumption”.

Nevertheless, Guenther said the use of plant matter in production processes would likely produce significantly lower greenhouse gas emissions than using fossil fuels, although opting for waste materials rather than crops produced in large-scale farming would be preferable.

Other German companies are experimenting in the area. Chemical giant BASF is seeking to use organic waste, agricultural products or vegetable oils to produce basic chemicals like aniline.

There are many barriers to taking such projects further, however. These range from the availability of the necessary organic matter, which is in great demand as the green transition gathers pace, to higher costs when compared to producing such chemicals with oil.

Scaling up the process will only be justified if it leads to “significant CO2 savings” in the manufacturing process, said Thorsten Dreier, a member of Covestro’s management board who is overseeing the technology.

There will also need to be proof that money “can be made in a competitive environment, in order to finance research here”, he said.

And for Germany, a major challenge will be persuading manufacturers to set up costly new sites for processing chemicals. The energy-intensive chemicals sector in Europe’s top economy has been facing a crisis since Moscow’s invasion of Ukraine curtailed cheap Russian gas imports, sending power costs soaring.

Many companies are now more focused on shifting production to cheaper locations overseas, rather than expanding at home.

“Energy costs in Germany are currently three to four times higher than in the United States,” while a bloated bureaucracy is also weighing on industry, warned Dreier.

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