Truck drivers are becoming restless as the AdBlue shortage is slowing down German industry
After months of supply chain chaos, driver shortages and rising fuel prices, the German trucking industry is facing a new crisis: a chronic shortage of the fluid to keep its vehicles running.
AdBlue, a mixture of urea and deionized water, is the lifeblood of logistics. But stocks are drying up after SKW Piesteritz, a company in the eastern German city of Wittenberg that is one of the largest German sources for the solution, shut down production to cope with soaring gas prices.
Dirk Engelhardt, chairman of BGL, a trade association for the transport industry, said he was being besieged by concerned companies running out of AdBlue, which neutralizes nitrogen oxide emissions from diesel engines.
“Trucks can’t drive without them,” he said. “There will be such a public outcry when supply chains collapse and supermarkets empty.”
The German economy is headed for a recession, weighed down by the worst energy crisis since World War II. Moscow’s decision to halt gas supplies has pushed prices four times higher than a year ago – prompting some energy-intensive plants to shut down operations, despite the government promising generous subsidies to keep costs down.
With the complete shutdown in August, SKW Piesteritz became one of the most prominent victims of the gas price surge. It later brought one of its two production lines back to “minimum levels,” spokesman Christopher Profitlich said, but the second remains offline. “If we had kept producing, we would have lost 100 million euros every month,” he said.
SKW’s closure has already had a huge impact on fertilizer stocks at German farms, causing problems for slaughterhouses, food packers and breweries that rely on the carbon dioxide it produces – a by-product of ammonia.
However, the sharp drop in AdBlue production is expected to have even greater economic consequences.
Engelhardt said that more than 90 percent of Germany’s 800,000 trucks need the solution, consuming a total of 2.5 to 5 million liters a day.
“We’re getting the first calls from carriers who are out of AdBlue and aren’t getting supplies,” he said at the end of September. “This could soon take on proportions that we can no longer contain.” Those who can still buy AdBlue complain that the prices for the solution are up to seven times as high as they were a year ago.
Supermarket chains, scarred by the shortages of staple foods seen during the coronavirus pandemic, are already expressing concern. A spokesman for Aldi Süd, one of the largest German discounters, said the company takes the current situation “very seriously”.
“We are of course in close contact with our suppliers and respond to the latest developments,” she adds.
Not only trucks rely on the solution. “This applies to all vehicles on four wheels and weighing more than 3-4 tons,” said a forwarding company in southern Bavaria. “What happens to all the ambulances, fire engines and tractors that also run on diesel?” Transport companies are increasingly dependent on expensive imports from a limited group of producers.
SKW is not the only chemical manufacturer to reduce production. The Norwegian group Yara announced in August that it would reduce the capacity of its European ammonia plants by 65 percent. German chemical giant BASF has shut down ammonia production at its huge Ludwigshafen site in south-west Germany and is buying the compound on the global market instead.
The problems affect all industries that consume a lot of energy. Latest official data showed that between July and August, glass and ceramics production fell 2.8 percent, chemicals fell 3.1 percent, while coke and oil refineries saw production fall 4.5 percent. The toilet paper manufacturer Hakle filed for bankruptcy in September, citing the rise in energy and raw material prices.
The situation is also not expected to resolve quickly, despite the recent fall in gas prices from record summer highs. The IMF expects the German economy to shrink by 0.3 percent next year – the worst performance of any major economy excluding Russia. Markus Steilemann, head of the chemical lobby group VCI, recently warned that Germany was in danger of developing from an “industrial country” into an “industrial museum”.
The government has tried to solve the energy crisis with a €200 billion package of measures.
Berlin is hoping for some peace from the heart of its package – a “gas price brake”, in which the prices for a basic quantity of gas and electricity are capped and consumption is above normal market prices.
But for energy-intensive plants like SKW Piesteritz, the gas price is still too high to justify a return to normal operation. “For the industry, the price brake will only take effect in January, for us it’s too late,” said Profitlich.
Additional reporting by Harry Dempsey and Olaf Storbeck
https://www.ft.com/content/c2dd5b8a-2e65-40bd-a09f-218037cff528 Truck drivers are becoming restless as the AdBlue shortage is slowing down German industry