Would a Russian Gas Ban Crush German Industry?

As pressure builds for an embargo, business warns of a disaster

- By William Wilkes and Monica Raymunt, with Wilfried Eckl-Dorna and Chris Reiter

Along the banks of the Rhine, Europe's biggest chemical factory churns out the building-block compounds for the country's powerhouse automotive, pharmaceutical, and agricultural industries all fueled by pipelines filled with Russian gas.

BASF SE's plant in Ludwigshafen is emerging as a symbol of Germany's opposition to a full embargo on Russian gas amid rising calls to punish President Vladimir Putin for his war on Ukraine. Cutting it off, BASF says, could render its factory—the biggest supplier of the base chemical acetylene— inoperative, sending shock waves through many industries and causing Germany’s economy irreversible damage.

The warnings, echoed by ArcelorMittal, Thyssenkrupp, and others, have alarmed policymakers in Chancellor Olaf Scholz’s administration, which has been scrambling to offset Germany’s reliance on Russia for roughly one-third of its energy. But the debate is raging over whether the economic pain from a gas embargo would be as deep and lasting as the industry says.