Germany’s chemical production is forecast to increase 1.0% year on year in 2012

(ICIS) -- Germany’s chemical production is forecast to increase 1.0% year on year in 2012 as growth weakens compared with 2011, the country’s chemical producers’ trade group, Verband der Chemischen Industrie (VCI), said on Wednesday.

In 2011, Germany’s chemical production is set to grow by 4.0% year on year, VCI said, below the 5.0% year-on-year growth the group had forecast. “It is difficult to make an accurate forecast for the coming 12 months,” said Klaus Engel, the president of VCI and CEO of specialty chemicals major Evonik.

Engel pointed to the unresolved government debt crises in the eurozone and the US as factors causing increasing uncertainties among customers and producers. VCI hopes a planned summit of EU leaders in Brussels will be able to resolve the eurozone crisis, he added.

Meanwhile, Germany-based chemicals producers are facing additional uncertainties from rising electricity costs because of the country’s renewable energy law, the Erneuerbare-Energien-Gesetz (EEG), and emissions trading. In 2011 alone, the chemical industry’s costs from the EEG and related legislation added up to EUR 1.3bn (USD1.7bn), Engel said.

A further challenge is Germany’s move to abandon nuclear power generation following the catastrophic shutdown at the Fukushima nuclear plant in Japan caused by an earthquake and tsunami earlier this year. Germany has already taken eight of its older nuclear plants out of operation and all such plants will be phased out by 2022.

mrcplast.com