High Energy Costs Are Strangling Companies in Germany For decades, BASF was not only Germany’s largest chemical company, but at times also the largest chemical group in the world.

Beginning in 2022, and especially in 2023 and 2024, the company announced massive cost-cutting programs and job cuts in Germany, while at the same time investing billions in new plants in China.

BASF justified this by pointing to high energy prices in Germany and Europe’s declining competitiveness.

In February 2024, BASF stated that it would have to save an additional one billion euros per year at its Ludwigshafen site alone by the end of 2026; high energy costs, weak demand, and excessive production costs in Germany were explicitly cited.

At the same time, BASF is investing up to 10 billion euros in its new integrated production site in Zhanjiang, China.

Today, many see the BASF case as a symbol of how high energy costs and growing bureaucracy are weakening Germany as an industrial location and prompting major companies to shift growth and investment to Asia.

Many Companies Want to Leave Germany’s economic output has been stagnating for seven years, and one of the causes is the massive rise in energy prices.

In his book “Absturz.

So retten wir Deutschland” (“Crash: How We Can Save Germany”), economist Daniel Stelter writes that, according to a survey, 63 percent of industrial companies see their competitiveness at risk.

Among energy-intensive industrial companies, the figure is even higher.

Among large energy-intensive companies with more than 500 employees, two-thirds are now planning to relocate.

Russia’s war against Ukraine plays a role.

But the crisis began long before that, triggered by the so-called “Energiewende,” which began under Angela Merkel and was continued by Robert Habeck, who at the time served as Economy Minister for the Green Party.

At its core, this is about transforming Germany’s energy sector from a market economy into a planned economy controlled by political ideology.

The “Energiewende” Is Expected to Cost 5 Trillion Euros “The German Energiewende is being implemented without regard to costs,” writes economist Stelter.

When asked at the time, the Economics Ministry led by Robert Habeck stated that it was neither sensible nor necessary to quantify the costs of the Energiewende so far.

Stelter estimates that around 500 billion euros have already been spent on the “Energiewende.” Once the transformation is completed, calculations suggest the total will be between 4.8 and 5.4 trillion euros.

“I dare to make the firm prediction,” Stelter writes, “that this transformation will not happen — for the simple reason that the German economy will not survive it.” When critics object that Germany is responsible for only 1.6 percent of global CO2 emissions (China: 30 percent!), supporters of the Energiewende always reply that Germany serves as a role model and that other countries will follow our example.

Katharina Dröge, chairwoman of the Green Party parliamentary group in the Bundestag, described German energy policy in an interview as an international success model.

“Our Energiewende here in Germany is being copied all over the world,” Dröge said.

This claim is absurd.

Stelter counters: “With our Energiewende, we are not a role model for the world.

Politicians should finally admit that they have led us down the wrong path over the past 25 years,....