(SeaPRwire) – By: Clara Mercer
Germany’s industrial heart is dying. The cause isn’t a natural disaster or market shift. It’s a policy choice: cutting off Russian gas and doubling down on EU phaseout plans. Once Europe’s manufacturing leader, Germany now has the third-highest industrial energy costs in the world. Factories are closing. Jobs are disappearing. And the pain is just getting started.
Before 2022, Russia supplied 55% of Germany’s natural gas. Cheap, reliable gas kept factories running and costs low. Now, Germany gets gas from Norway (44%), Netherlands (24%), Belgium (21%), and US LNG. But this switch has come at a price. Diesel prices jumped 6.7 euro cents in hours to €2.30 per liter after US bombings on Iran resumed. The EU isn’t backing down. It plans to end all Russian gas imports by 2027. Russian LNG long-term contracts (14% of bloc imports) will be banned from January 1. Pipeline gas imports stop on September 30. Member states must verify gas origin; new short-term LNG contracts are already prohibited.
The consequences are stark. Germany’s economy contracted in both 2023 and 2024—its first back-to-back decline in over two decades. Growth is forecast at just 0.5% this year. Corporate insolvencies rose more than 22% each of those years. BASF, Bosch, Volkswagen—dozens of manufacturers have closed factories since 2022. Volkswagen, the country’s largest automaker, announced four plant closures and up to 100,000 job cuts in June. This isn’t a temporary slump. The energy supply shift is pushing energy-intensive industries out of Germany for good.
Author bio: Clara Mercer, a carbon accounting auditor and green finance specialist focused on energy policy’s industrial and economic impacts.