Germans brace for Russian gas disruption as war in Ukraine continues

BERLIN — German automakers and suppliers have said they are preparing for the possibility that Russia will cut gas supplies following the conflict in Ukraine.

Gazprom, Russia’s major state-owned energy company, last week fired a warning shot against countries supporting Ukraine by cutting off gas supplies to Poland and Bulgaria. These two countries have refused Russia’s request to pay for natural gas in rubles rather than dollars, a position supported by most European countries.

Germany, Europe’s largest economy, is particularly dependent on Russian natural gas. Russia accounted for 55% of Germany’s gas imports in 2021 and 40% in the first quarter of 2022, according to Reuters.

The German government has activated an emergency energy plan, calling on industry and households to save energy and reduce their consumption. Rationing could be imposed in the future, and if so, industry will be on the front line for power cuts, Germany’s economy ministry said.

Gas plays a crucial role in the automotive industry, from heating production halls to running manufacturing processes, a Mercedes-Benz Group spokesman said. Automotive News Europe in an emailed statement.

“If the gas supply were to be cut off, it would affect a large part of the economy,” the Mercedes statement said.

“We are constantly looking for ways to save energy and are stepping up these efforts given the current situation,” he said. “We are monitoring the situation closely and are in close contact with the German government.”

BMW said electricity and gas prices are hedged over the long term through various mechanisms. “We continue to monitor the volatile situation closely and are in communication with the authorities,” the automaker said.

Audi said its parent company, the Volkswagen Group, is also in regular contact with authorities, network operators and suppliers to be able to assess further developments at an early stage and take necessary measures.

“At present, the gas supply to the plants of Volkswagen AG and brands in Germany is secure,” Audi said in a statement.

“Volkswagen sources its natural gas from the German interconnected network, which can cover current German demand.

“As a result, the supply of natural gas to factories and power stations and boiler rooms is guaranteed until further notice. It is up to the suppliers to decide from which sources they obtain their natural gas,” Audi said.

Robert Bosch said gas provides 20% of its energy needs, so the mega-supplier does not need very large quantities.

However, some of its suppliers do, he said, particularly those involved in semiconductor production.

“At this time, we can supply our manufacturing and operations sites,” a spokesperson said.

“This is due to our forward-looking sourcing strategy and the high level of energy efficiency that the Bosch Group has already achieved by becoming climate-neutral globally in 2020.”

The supplier monitors the market for energy sources such as gas and electricity and examines the precautions to be taken in Europe for the coming winter.

Bosch said it is “preparing for various scenarios and taking precautions to ensure we can continue to supply our customers in the event of gas supply regulations, or to minimize any potential impact.

“This can be done, for example, by using alternative energy sources, for example by using fuel oil instead of gas for heating, and in some cases also for thermal processes.”

ZF Friedrichshafen declined to comment on “speculative political issues”, but said it was still trying to anticipate possible developments to prepare for them.”

A Continental spokesperson said the supplier is “continuously evaluating all options available to us”.

Reuters and Bloomberg contributed to this report.

Comments are closed.