Chemicals producer BASF to axe jobs at energy intensive production sites in Germany
Clean Energy Wire
Chemicals company BASF will cut up to 2,600 jobs worldwide due to cost pressure from the energy crisis, with the majority of positions axed in Germany. The company said it will cut up to 700 jobs at its headquarters in the western German city of Ludwigshafen, where it plans to shut down several energy intensive production lines such as ammonia and associated fertiliser production, “to reflect the changed framework conditions”. Production will be moved to Belgium, the U.S. and Asia, BASF said. Company CEO Martin Brudermüller said the company was “very confident” most employees made redundant in production could find jobs in other branches of the company but warned that the company will remain under pressure to stay profitable also in 2023.
Due to skyrocketing production prices as a result of the energy crisis, the company — one of Germany’s biggest individual gas consumers — announced last year that it would seek to cut costs of 500 million euros annually by 2024. BASF faced additional energy costs of 3.2 billion euros in 2022, of which 84 percent was accrued in Europe. CEO Brudermüller said both higher energy costs and “overregulation” were becoming a burden for the region. The production facility closures will lead to a “significant reduction in the power and natural gas demand at the Ludwigshafen site,” BASF said, adding that this will reduce the company’s global CO2 emissions by about four percent (0.9 million metric tonnes) per year. Brudermüller said the company would seek to “develop Ludwigshafen into the leading low-emission chemical production site in Europe” by making use of heat pumps, renewable power installations and hydrogen.
BASF is the owner of gas producer Wintershall DEA, which incurred heavy losses due to its involvement in the now defunct Nord Stream 2 pipeline that was planned to connect Germany with Russia. The highly controversial project was suspended shortly before its completion due to Russia’s invasion of Ukraine and Wintershall DEA had to write off large parts of its business activities in Russia.