The level of the Rhine is expected to drop to a historic and dangerous low, directly threatening the transport of fuel to Europe. Water levels in the town of Kaub west of Frankfurt are expected to drop below 40cm on Friday, with further declines in the coming days.
The Rhine is used to transport hydrocarbons, chemicals, grain and a multitude of other commodities. The confluence of climate change and the current “perfect storm” of energy, inflation and geopolitical crises in Europe has sent prices soaring.
How do companies deal with the problem?
In Germany, many companies have already started taking steps to tackle the problem. Chemical producer BASF SE is increasingly using trains to transport its goods and has also ordered specialized low-draft barges. The company, although not affected so far, has announced that it may be forced to reduce production capacity at some of its industrial units in the coming weeks.
Uniper SE, for its part, announced that it will not be able to transport enough coal by rail to supply its industrial units in the long term.
Steel giant Thyssenkrupp AG said a special crisis response team was meeting daily to find solutions, while underlining that it was already using special low-draft barges to continue supplying its Duisburg plant.
If the problems continue into September, there will be a dramatic increase in the demand for goods transport by road.
River transport of fuel
Low water levels prevent the ability to load enough goods onto barges and cause “traffic” problems on the river. It should be noted that the water level in the town of Kaub is expected to reach 33 centimeters by Monday.
The capacity to transport 400,000 barrels/day of petroleum products through the waterway linking the Amsterdam-Rotterdam-Antwerp (ARA) regions with Germany and Switzerland will be under immediate threat, according to Facts Global Energy. Inventories of diesel and related fuels in the ARA region are at their lowest levels since at least 2008.
The crisis of the Rhine and Europe’s other rivers will affect the waters of landlocked European countries in central and eastern Europe, according to the International Energy Agency (IEA).
