For 400 years, Carletta Heinz’s family has produced custom glass bottles for the world’s leading perfumeries in a factory on the edge of the Franconian Forest in Germany.

But Russia’s invasion of Ukraine could force the 38-year-old CEO to shut down the company before entering the 5th century.

In the face of chronic gas shortages, she said, if Moscow decides to cut supplies to European countries that have imposed sanctions on Russia over the war, “we will not be able to survive as a company”. “We have to close [glass-melting furnaces] Totally, we will lose the workforce. . . It will be very difficult to restart production after a year or two. “

Heinz-Glas isn’t the only German company raising the alarm. More than half of the gas the country consumes each year comes from Russia – the highest share of all major EU economies – and gas-dependent industries have warned that in winter their operations could be at the mercy of Moscow.

German government fears on Wednesday that Russia would cut off gas supplies after European Union countries rejected Moscow’s demands to pay in rubles added to their fears. The first of three warning phases is activated in its emergency supply plan.

Our country really failed to find a second source [for gas]. . . no company would do this

Under a law enacted during an oil embargo by Arab exporters in the 1970s, German industry would be forced to reduce gas consumption in the event of a shortage and reserve supplies for critical infrastructure and households.

The move is estimated to cost Europe’s largest economy tens of billions of euros and could tip it into recession. Union leaders have warned that hundreds of thousands of jobs will be at risk.

The German economy may even enter “the worst crisis since the end of World War II,” Martin Brudermüller, chief executive of BASF, the world’s largest chemical company by sales, told the Frankfurter Allgemeine Zeitung on Thursday.

Christian Seyfert, head of VIK, which represents energy-intensive German groups such as steel or chemical manufacturers, said the crisis was “certainly worse than [Covid-19] Pandemic”.

The coronavirus “has hit our members hard, but the economy recovered quickly, in part due to demand from China,” he said. “It’s a more worrying situation.”

While many German companies have adjusted their earnings forecasts to deal with rising energy costs due to the war, some of the country’s core industries have said they will not be able to operate without sufficient gas supplies.

Heinz-Glas’s furnaces – most of which are heated to 1,600 degrees Celsius with gas – operate around the clock, with about six glowing bottles emerging from the production line each day. They are delivered to renowned clients around the world, including Yves Saint Laurent, Tiffany and Estée Lauder.

If it cools, the molten glass in the furnace solidifies and the equipment has to be replaced, costing millions of euros.

The much larger chemical and steel industries face a similar dilemma. According to its representative agency VCI, about 15% of Germany’s natural gas supply is consumed by the chemical sector. BASF’s plant in Ludwigshafen in southwestern Germany – the world’s largest integrated chemical plant – uses nearly 4 percent of the country’s natural gas.

While natural gas used to generate electricity can be replaced by coal-fired power stations, its role as a raw material or fuel for blast furnaces and other industrial processes is not easily replaced.

BASF told the Financial Times that if gas deliveries fell below 50% of normal levels, the steam cracker (a device that breaks down hydrocarbons into their basic chemical components) at its Ludwighsafen plant would stop entirely, jeopardizing use in medical treatments. , the supply of hygienic substances and food.

Henrik Follmann, head of Follman Chemie, a family-owned chemical maker based in the western German state of North Rhine-Westphalia, said the supply of natural gas is crucial for naphtha production. “We need this raw material,” he said. “If we don’t understand, the refineries will stop, the chemical industry will stop, and the entire German industry will stop.”

He added: “I supply chemicals to the wood and furniture industries – if they don’t get it from me, what will they do? The same goes for the chip-making industry or the car-making industry that relies on chemicals.”

Steelmakers were similarly appalled by the government’s proposal. In the western city of Duisburg, blast furnaces at Europe’s largest steel plant rely on natural gas as a backup if coal runs short.

A person close to Thyssenkrupp, which owns the plant, said: “Being under critical mass of natural gas [supply] would be dangerous. This will cause serious damage to our assets. ”

Analysts said any cut in German gas supplies is unlikely to exceed 50%. They argue that so-called “demand destruction” caused by soaring prices would reduce gas consumption. Meanwhile, BDEW, which represents German utilities, said about a third of Russian imports could be replaced by products from other countries.

Efforts to curb domestic gas use could further ease the pain.According to Allianz economists, amid a supply crunch, “for everyone [percentage point] Household gas consumption is reduced. . . manufacturing will protect up to 25,000 jobs”.

It’s unclear whether energy suppliers will be considered liable if they fail to deliver gas to customers. Christian Hampel, a partner at BDO Legal who advises companies on the potential consequences of gas shortages, said the utility group would not be able to get compensation if the government forced suppliers to cut deliveries.

But “as long as alternative purchases are possible, gas suppliers have to deliver,” he added. Suppliers’ economic survival “may be at risk” if they are forced to pay high alternative gas prices or compensate customers, he said.

While German industry has faced energy crises in the past, the government appears unprepared this time around, executives said.

Carletta Heinz’s father, Carl-August, led the family’s glass company through the oil embargo of the 1970s. But the retired 71-year-old said the crisis was “clearly more dangerous”.

Moving production from Germany “will be a last resort,” said Carletta Heinz. She remains uninterested in the political decisions that make her company an existential threat.

“Our country really failed to find a second source[for gas],” she said. “No company would do that. “