Severe heatwaves and drought are impacting key waterways in several countries across Europe, including the Rhine, Danube, and Elbe rivers. The cumulative deficit in rainfall and extremely warm temperatures have pushed water levels to new lows, even compared to similar events in 2018 and 2022. Low water levels are inhibiting logistics movements in parts of the region by limiting or completely restricting cargo vessel loads.
Beyond logistics impacts, production disruptions are occurring because of a lack of water for vital plant functions like cooling and power generation, or due to supply disruptions of raw materials from hampered logistics flows. Heat and drought conditions are expected to persist. As a result, the situation has the potential to grow worse in the coming weeks.
Rhine River water level falls to record low
On August 12, the water levels at the shallowest sections on the Rhine near Kaub, Germany, stood at 10 centimeters. This is well below the previous record low of 25 centimeters that occurred in October 2018. Shipping authorities restrict how much cargo barges can carry on the Rhine when water levels fall below 78 centimeters at the Kaub gauge.
The initial restrictions permitted vessels to carry one-third of their capacity. However, falling water levels have meant that vessels can now only carry 10-20% of capacity. As a result, freight rates for barges have increased by roughly 250%.
Impact on industrial production
The water shortages on the Rhine River have had a direct impact on the steel and chemical industries in Germany.
BASF SE has warned that it could face production stoppages and have to declare force majeure at its sites along the Rhine River because of the falling water levels. The company is pivoting its logistics strategy and shifting barge volumes to truck and rail alternatives. However, the scalability of alternatives like this is limited. It can take roughly 80-100 trucks to replace the capacity of a single barge.
Covestro AG already declared force majeure on polyether polyols at its plant in Dormagen, Germany, because of the low water levels. The company uses the Rhine River to ship approximately 30% of its manufactured products. In addition, it also uses the Rhine River to bring in 75% of raw materials needed for production.
Lanxess AG also experienced difficulties at its sites in Germany due to the falling water levels. Some market sources indicate that the company’s phthalic anhydride (PA) production at its Uerdingen facility in Germany is facing operational issues. Chemical shipments comprise roughly 11% of all shipments on the Rhine. This highlights the risk that this sector faces during the ongoing low water crisis.
Steel production has also faced impacts. ThyssenKrupp AG is suspending shipments via its own Rhine barges in favor of chartering specialized low-draft vessels. The company has also cut its blast-furnace output in Duisburg, Germany.
Total loss in value added for Germany’s economy due to low river water levels and associated impacts could fall in the range of €1-2 billion ($1.15-2.3 billion) in Q3 of 2026 alone. The drought event in 2018 was estimated to have cost Germany 0.3% of GDP growth, or roughly €110-12 billion ($12-14 billion).
Low water levels on the Danube River
July 29, the water levels at the Danube River’s gauge in Hungary stood at 23 centimeters. This broke its previous record low in 2018 of 33 centimeters.
Hungary and Romania reduced output at their nuclear power plants due to insufficient water resources and elevated river temperatures from the Danube River.
Historical water levels show that the Danube reaches its annual low point in August or September. This is raising fears that water levels could continue to fall.
The Prime Minister of Hungary, Peter Magyar, issued wide-ranging water-use restrictions and mandatory consumption curbs for large industrial users.
Capacity restrictions have disrupted logistics on the Danube River since July 4. Authorities implemented capacity restrictions that forced vessels to carry only 30-40% of their full capacity. Surcharges could increase shipping rates by 100%.
Shippers would normally turn to rail as an alternative for barge shipments. The drought and energy constraints have also affected rail transportation in Hungary. Authorities have restricted cargo rail services from 17:00 to 22:00 local time since August 3 to reduce electricity demand. The dual pressures of low river water levels and restricted rail cargo movement place significant strain on freight movements.
In Romania, Nuclearelectrica shut down Unit 1 at its nuclear power plant in Cernavodă in late July. It later announced that Unit 2 would be shut down by August 13 as well. The government of Romania has taken several measures to divert water to cover industrial needs. These include a controlled underwater blast to redirect needed cooling water towards the country’s only nuclear plant.
Heatwaves affect water levels across Europe
Low water levels have affected countries across Europe. At least 11 countries in the region reporting logistics impacts due to falling river water levels or disruptions to the supply of water for industrial uses. Many of the waterways affected are responsible for both domestic and international freight. This poses a risk to cargo movements across the region and beyond.
Growing number of industries impacted by lower water levels across Europe
In 2025, the dominant products shipped via inland waterways in the European Union were:
- Metal ores
- Coke and refined petroleum products
- Chemicals
- Rubber
- Plastic
- Nuclear fuel
- Agricultural products
All these now face a growing risk of being delayed due to low water levels on several of the region’s major waterways.
As of mid-August, Everstream Analytics has tracked operational disruptions at more than a dozen companies across Europe due to falling water levels. These include major chemicals, steel, and automotive manufacturers.
The agricultural and livestock sectors have also been impacted. Persistent high temperatures have increased water requirements for crops and livestock. This is driving up costs for irrigation, feed, insurance, and disaster prevention. This is despite governments restricting water for irrigation uses.
Amid draft limits and capacity constraints in the inland waterways, the voyage time for cargo has doubled. Even specialized, shallow-draft vessels are now forced to move at highly reduced speeds to avoid running aground.
This has increased the uncertainty over the availability of raw materials, leading to the declaration of production shutdowns or force majeure across several industries.
With low water levels potentially lasting well into September, business impacts in industries already facing production disruptions are likely to get worse.
Industries that rely less on river transport and have been able to avoid operational issues so far will also face a growing risk of business impacts. This is due to delivery delays and rising transport costs if the current drought conditions persist for the rest of the summer.
Everstream clients are receiving more detailed insights and recommendations about this risk.
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