Low river levels threaten production in German chemicals sector

The German chemical industry has warned that low water levels on the Rhine and other rivers could force companies to cut production as transport costs rise and supply chains come under pressure, reported dpa.

"If ships are forced to carry smaller loads or cannot operate at all, costs rise, supply chains come under pressure and production is restricted," Wolfgang Grosse Entrup, managing director of the industry association VCI, told dpa.

The warning came ahead of a conference on low water levels convened by Transport Minister Steffen Bilger in Bonn on Thursday.

The Kiel Institute for the World Economy estimates that low river levels could cost Germany between €1 billion and €2 billion ($1.15 to $2.3 billion) in lost economic output in the third quarter and reduce gross domestic product by 0.1% to 0.2%. The economy grew by 0.2% in the second quarter.

The Rhine is one of Europe's most important waterways. Chemical companies including BASF, Evonik and Covestro use it to transport products such as methanol, butane, propane and ammonia.

Around 20 million tons of chemical products were transported on German inland waterways in 2024.

BASF normally moves about 40% of goods at its main Ludwigshafen site by ship but is now shifting some freight to trucks and rail.

However, major construction work on the railway line along the Rhine's eastern bank is limiting rail capacity between Cologne and the Rhine-Main region.

The VCI said better forecasts and low-water vessels helped, but prolonged extreme conditions could still disrupt logistics and production.