In August 2026, Europe is facing a crisis that goes far beyond drought in the fields and forest fires. This time, water is disappearing from the beds of the largest rivers on which power plants, factories and transport depend. The Rhine and the Danube, the continent’s two most important waterways, are breaking unenviable records for low water levels, forcing companies to cut production and governments to introduce emergency austerity measures. This is no longer just an agricultural problem. This is a problem for the entire European economy.
Over the past few years, the debate on the effects of climate change has focused primarily on agriculture, which was the first to feel the lack of rainfall and rising temperatures, and on forest fires, which in summer became increasingly severe and destructive. Meanwhile, 2026 brings a completely new quality of threat, as extreme drought hits the energy and industrial sectors, which until now were seen as relatively resilient to such phenomena. The water in the rivers, which just a few months ago seemed like an endless resource, is now a scarce commodity for which nuclear power plants, refineries, steel mills and chemical plants compete, as well as inland navigation, which in many regions of Europe is the backbone of efficient supply chains. What a decade ago seemed like an abstract scenario is today a daily reality faced by governments and businesses across Central and Western Europe, forced to make dramatic decisions to cut production or even temporarily suspend operations.
The most spectacular and alarming effect of the drought is the paralysis of Hungarian nuclear energy, as the Paks power plant, which supplies more than 40 percent of Hungary’s electricity, has been practically shut down, with only one of its four reactors operating, meaning that the entire facility is running at only 215 to 240 megawatts, or about 10 percent of its nominal 2,000 megawatts. The cause is not a technical failure or human error, but the record-low level of the Danube, from which water is drawn to cool the reactors, because without sufficient cooling water, the reactors cannot operate safely, and continued operation would pose a risk of overheating and serious accidents. Prime Minister Peter Magyar warned that the country faces five of the most critical days, and a full shutdown of the plant is still a real scenario from hour to hour, meaning that Hungary could face serious power shortages that would force the government to introduce further restrictions on electricity consumption. On Sunday, the last turbine was kept running thanks to Hungarians reducing their energy consumption by about 700 megawatts, but the situation remains dramatic, as forecasts indicate that the Danube water level will continue to fall, and the plant could remain shut down for several weeks, forcing Hungary to increase energy imports from neighbouring countries, which are themselves struggling with similar problems.
The problem does not only affect Hungary, as in Romania, due to the record-low level of the Danube, a unit at the Cernavoda nuclear power plant was shut down, and to save reactor cooling, the Romanian army launched an unprecedented operation to blast underwater rocks, trying to change the river’s course and increase the water supply to the power plant, a desperate but necessary action in the face of the growing crisis. Serbia is also feeling the effects of the drought, as the country’s largest hydroelectric plant, Djerdap 1, is producing only one third of its average daily output, forcing the operator to activate reserve power sources, and the Kostolac coal-fired power plant has also had to cut production due to a lack of water to cool its systems, showing that the drought has paralysed the entire region and affected practically all types of power plants. Hungary, Romania and Serbia, which until now could rely on stable energy supplies from their own sources, today have to import electricity from other countries, which further burdens transmission systems and causes wholesale energy prices to rise, which in turn translates into higher bills for end consumers.
German industry faces a logistical nightmare
The Danube is not the only river drying up, as the Rhine, the backbone of Western European logistics, is reaching record-low levels, with catastrophic consequences for German industry, which relies heavily on inland waterway transport. At Kaub, a key measuring point, the gauge has fallen below the critical level of 30 centimetres, reaching 27 centimetres at the end of July, while in Cologne 66 centimetres were recorded, a historic low, and in Düsseldorf the gauge showed just 21 centimetres, two centimetres less than during the previous record in 2018, which practically means that the Upper Rhine and the Main are cut off from the Amsterdam-Rotterdam-Antwerp trading hub. Inland vessels are unable to pass the bottleneck at Kaub, and those that can still sail have to reduce their loads to a minimum, causing transport times to double and costs to skyrocket.
The consequences for German industry are catastrophic, because in the Ruhr region, where most of Germany’s steelmaking capacity is located, river transport is of immense importance, and almost a third of freight for the steel industry is transported by barges, which are currently using only about 40 percent of their capacity, meaning that transport rates have increased by 40 to 60 percent. Thyssenkrupp Steel, one of Europe’s largest steel producers, has cut production and suspended its own barge fleet, and the industry is talking about a drop in transport capacity of as much as 40 percent, which, combined with disruptions in rail transport in Germany due to poor infrastructure and track modernisation, is creating a logistical nightmare for the entire sector. The drought is hitting the heart of German industry, forcing companies to look for alternative transport routes, which are more expensive and less efficient, which in turn raises production costs and reduces the competitiveness of German products on world markets.
The chemical industry and refineries on the edge
Low river levels are not limited to steelmaking, as the chemical and petrochemical industries, which also rely heavily on inland waterway transport, are facing serious difficulties that could threaten the continuity of production at many plants across Western Europe. Refineries and chemical plants need not only raw materials delivered by barges, but also water for cooling and production processes, and the lack of water and transport restrictions are forcing companies to look for more expensive alternatives, raising production costs and hitting the competitiveness of European industry on world markets. In the chemical and petrochemical industries, river transport costs have risen to record levels, and many companies are struggling with delays in raw material deliveries, which in the case of plants operating in continuous mode can lead to stoppages and huge financial losses.
In the face of the crisis, French energy company EDF shut down three nuclear reactors and reduced production at several others, because the temperature of the rivers used for cooling was too high to discharge warm water into them without risk to ecosystems, showing that the drought problem affects the whole of Europe, from the south to the centre.
Nuclear output restrictions in France reached a new record, reaching 9.2 gigawatts, or 14.56 percent of installed capacity, meaning that the French energy system, which for years relied on stable nuclear production, is now exposed to serious disruptions that could affect energy prices across Western Europe. The chemical industry, one of Europe’s largest energy consumers, is feeling the effects of these restrictions particularly acutely, as high electricity prices and limited availability of raw materials are forcing companies to cut production or temporarily suspend operations.
Governments introduce emergency measures
In the face of the crisis, the governments of Hungary and Romania have introduced emergency measures to reduce energy consumption and avert the risk of a blackout, which in the worst case could lead to the paralysis of entire regions and serious economic losses. The Hungarian prime minister appealed to citizens and businesses to reduce electricity consumption during peak hours, between 5 p.m. and 10 p.m., when energy demand is highest and the system is under greatest strain. A ban on watering sports fields and filling swimming pools was introduced, rail freight transport was halted during peak hours, and the state administration switched to remote working for the first three days of the week, to reduce energy demand in public buildings. Illuminations on buildings were switched off, and more than 100 cities and towns were subject to water use restrictions aimed at reducing consumption of this scarce resource.
Hungary managed to reduce energy consumption by 700 megawatts, but this is still not enough to ensure system stability, as the Paks power plant is still operating at only 10 percent of its nominal capacity, and the transmission system operator MAVIR must constantly balance production and demand to avoid overloads and failures. Romania is also appealing to citizens and industry to reduce energy consumption, and large companies such as Dacia and Ford have halted production to relieve the system, a significant voluntary contribution to reducing energy consumption and showing that the crisis has already affected not only the public sector but also the region’s largest employers. Romania’s prime minister thanked companies that have already mobilised and confirmed that individual adjustment plans have been agreed with major industrial consumers, providing for temporary production halts during peak demand hours.
A crisis on a decadal scale. Is Europe prepared?
The 2026 drought is the most serious water crisis in decades, as the European Drought Observatory indicates that conditions remain critical across much of the continent, and forecasts for the coming weeks offer no improvement, meaning the problem will worsen before any improvement occurs. Researchers from World Weather Attribution point out that the current drought is not solely due to a lack of rain, because extreme temperatures accelerate evaporation from the soil, vegetation, rivers and reservoirs, meaning that even a similar rainfall deficit now leads to faster surface drying than in a cooler climate, which means that traditional drought forecasting models are no longer effective. Conditions conducive to such strong evaporation have become about 80 times more likely in Western Europe and about 40 times more likely in its eastern part due to climate warming, meaning that such phenomena will occur more frequently and with greater intensity.
The economic effects are already being felt, as the 2025 drought is estimated to have cost the European Union around 29.4 billion euros, and this year’s losses could be even greater, as the water crisis is moving from the fields and forests to the most important links in the economy, meaning that this is no longer just a problem for agriculture, but a problem for the entire European economy, requiring immediate action at both national and EU level.
The European Commission is closely monitoring the situation and is ready to convene an emergency meeting of the Electricity Coordination Group in connection with the Paks shutdown, but so far it appears that actions are more reactive than proactive, raising concerns that Europe is not prepared for such crises, which in the future could become the new normal. Europe must prepare for the fact that droughts like this will become the new normal, and this means the need to adapt infrastructure, energy and logistics systems to conditions that just a few years ago were considered extreme but are now becoming everyday reality.
Photo: Pixabay
