Gas crisis: German aluminium industry prepares for the worst, draws up contingency plans

The aluminium industry is a highly energy-intensive sector and the German aluminium industry is getting ready for the extreme situation in the aspect of the uncertainty in the gas supply. On 1^st July 2022, the President of Aluminium Deutschland e. V. (Aluminium Association of Germany), Hinrich Mählmann said, “Preparation for the worst-case scenario consists of companies drawing up emergency plans.”

He further added, “It is about which gas consumers have to be switched off first and then subsequently. However, this is only possible to a certain extent, after which the companies would have to be closed. Then the contingency plan consists of managing liquidity in such a way that the companies survive at least for a certain period. But this period is also limited.”

The aluminium industry in Germany employs over 60,000 people from around 240 companies. With companies such as Hydro Aluminum, Speira, and Trimet Aluminum, the industry recently reported sales of almost 22 billion euros. As one of Germany's largest gas consumers, it ranks alongside the chemical, steel, glass, and paper industries.

“The availability of gas is of enormous importance for the industry and its production processes. The products would be heat treated several times. This includes melting during recycling or heating up during processing’, Mählmann said.

There is no easy way to replace the gas and it also cannot be done at short notice. Almost nine out of ten aluminium companies cannot switch to another energy source if gas is not available in the short term, according to a survey conducted by Aluminum Germany. Most companies would cease production even if gas supplies were cut by 30 per cent.

However, in Germany, the energy-intensive sectors are raising their lobbying efforts to prevent fuel rationing in the event of a gas emergency.

In light of the discussion about systemic relevance and priorities, Mählmann reported, “The Federal Network Agency surveyed the major gas end consumers and drew their conclusions from this. If a manufacturer of aluminium packaging for the pharmaceutical industry, which is undoubtedly systemically important, does not get his preliminary products, so-called slugs, it didn't help him either. Neither can an electric car manufacturer sell a car without an aluminium battery box.”