Bitumen production in Schwedt
Road construction bottlenecks feared due to oil embargo
May 10, 2022, 6:20 p.m
Should the operation of the oil refinery in Schwedt be stopped abruptly, this will not only affect employees and the energy supply of East Germany. Industry representatives warn that there could also be serious consequences for road construction.
According to Peter Hübner, President of the Main Association of the German Construction Industry, stopping Russian oil deliveries to the PCK refinery in Schwedt could have extreme consequences for road construction. The refinery in Schwedt produces “a third of the bitumen required for road construction in Germany, namely 1.3 out of four million tons,” Hübner told the “Wirtschaftswoche”. On a third of the construction sites there is a risk of a shortage of the necessary building materials.
The EU countries are currently negotiating an oil embargo against Russia. During a visit to the PCK refinery in Schwedt, Brandenburg, Federal Minister of Economics Robert Habeck emphasized on Monday that the site should remain in place even if oil deliveries from Russia were stopped. The refinery is the most important supplier of petroleum products in the Berlin-Brandenburg area.
Hübner, who is also CEO of the road construction group Strabag, warned of a lack of awareness in the federal government of the problem of supplying the construction industry with petroleum products. “Federal Minister of Economics Robert Habeck is dealing intensively with Schwedt,” said Hübner. However, the relevance of bitumen production for road construction has so far been missing in its statements.
“Wave of stopped construction investments will come”
The construction plans of industrial companies are also suffering severely from the increased raw material and energy prices. According to Hübner, German industry will not implement up to 40 percent of the originally planned construction projects. “A wave of halted construction investments is inevitably coming our way,” he warned. The costs for new commercial construction projects are therefore likely to increase by 20 to 30 percent. Hübner therefore expects investment losses in the billions. The companies MAN Energy Solutions and the Flensburg brewery have already put plans for new logistics centers on hold. Investments of 65 million euros were planned.
After Habeck’s visit, Brandenburg’s Prime Minister Dietmar Woidke also urged security of supply and the preservation of the PCK refinery. “Now action must follow,” said the SPD politician. He demands from the federal government to secure the supply in East Germany, to preserve the jobs of PCK and the companies involved and to provide financial support for a conversion of the refinery.
The Federal Government Commissioner for Eastern Europe, Carsten Schneider, sees the planned oil embargo as an opportunity to quickly convert the refinery to more climate-friendly production. “No one wants to work with the owner Rosneft anymore,” said the SPD politician on the RBB24 info radio. Therefore, a complete upheaval is necessary in Schwedt.
“Enormous risk for East Germany”
The “Druschba” (Friendship) pipeline from Russia, whose oil is processed at PCK, ends in Schwedt. The refinery mainly supplies Berlin and Brandenburg with fuel. According to the state government, around 1,200 people are employed there. Habeck is looking for alternative oil sources via the ports of Rostock and Danzig. However, this cannot ensure the complete performance of the refinery. In addition, according to the Federal Ministry of Economics and Technology, some oil can initially come from the national reserve.
The federal government is considering expropriation or a trust solution for PCK as a last resort. The Bundestag wants to discuss legislative plans on Thursday. The operators of the Leuna refinery in Saxony-Anhalt have already initiated alternatives for Russian oil. The left-wing faction in the Bundestag is against an EU import ban on Russian oil. An embargo would be an “enormous risk for East Germany, but also for the economy in Germany as a whole,” said parliamentary group leader Amira Mohamed Ali in Berlin. “And we believe that this path should not be taken.” There are also big question marks as to whether an oil embargo would slow down Russia’s war of aggression in Ukraine.