Europe is witnessing one of history’s worst energy crises in the face of the Russia-Ukraine cross-border dispute. With Russia’s decision to cut down its gas supplies, the entire region is facing an energy downfall.
Most of the energy-intensive sectors have slowed down their production rates, which in turn is impeding overall economic growth.
It is worth noting that, various European nations are credited for the production and manufacturing of a high volume of chemical products. In fact, Europe accounts for the production of more than 20% of ammonia as compared to other regions of the world.
But, the energy crisis has slashed the production capacity of several chemical manufacturing units. Apart from ammonia, the region is also known for producing other energy-intensive chemicals such as melamine, caprolactam, and methanol, among others.
Soaring electricity costs take a toll on the economy
The ongoing energy crisis in the region is powered by the aftereffects of the COVID-19 pandemic along with Russia’s decision to shut its Nord Stream 1 gas pipeline.
Sources claim that as a result of this crisis, the electricity bill for residential and commercial complexes across Europe will witness a robust surge.
In fact, it is anticipated that a European family would receive energy bills of up to EUD 500 per month from early next year.
The skyrocketing energy bills will push chemical producers and manufacturers to reduce their production capacities. Moreover, some of the business owners might also decide to back out from their energy-intensive businesses to escape excessive commercial energy bills.
Expert analysis claim that the situation would be worse during winter months owing to the seasonality of natural gas usage. It is evident that Europe consumes higher energy across residential and commercial complexes due to the weather extremities.
Although various governments are undertaking pivotal decisions to deal with the economic crisis, the implementation of these interventions is expected to take months if not years.
Some governments have suggested the related authorities buy natural gas from industrial users and store it for future use.
But as per experts, this might solve the affordability issue but smarter measures are needed to deal with the quantity issue.
