BASF, the world’s largest chemical producer, is blaming sky-high natural gas prices for a weak third quarter earnings report. The company noted it was looking at longer-term cost cutting across its European locations.

The chemical giant, which offers a wide variety of products from fertilizers and glues to petrochemicals, announced it was implementing an aggressive series of cost cutting measures to offset the losses from high energy costs, reduced growth in a slowing economy, and over-regulation.

In a statement, Martin Brudermueller, the company’s CEO, said, “These challenging framework conditions in Europe endanger the international competitiveness of European producers and force us to adapt our cost structures as quickly as possible and also permanently.” He noted that the price of gas on the spot market was five to six times higher for his company than it was in the United States. Gas is used as a feedstock for chemical reactions that produce many valuable products, such as the ammonia used to produce fertilizer.

Between January and September the chemical producer’s European sites were forced to absorb additional costs amounting to €2.2 billion ($2.2 billion). That included the Ludwigshafen facility in southwest Germany, the company’s largest complex. There it manufactures products ranging from plastics and pesticides to vitamins and foam chemicals.

Earlier this month the company had announced it would enact a cost-reduction plan which would be implemented through the end of 2024. The plan would entail some reductions in workforce and would look to save roughly €500 million, or about 10% of costs. The company said it would be looking at longer term restructurings as well to further reduce costs over time.

The company issued its third quarter earnings report on Wednesday, where it noted revenue before taxes decreased by €538 million ($539 million) year-on-year to €1.2 billion ($1.2 billion). Net income fell €344 million ($344 million) compared to one year prior in 2021 to €909 million ($911 million).