Three people have been hospitalized with severe injuries. Due to the severe smoke caused by the explosion and subsequent fire, 1.8 thousand people have been forced to leave their homes, according to the Bild newspaper.
Over 200 firefighters have taken part in the operation to extinguish the fire and eliminate the consequences of the explosion.
The explosion took place at around 5:30 a.m. (03:30 GMT) near the city of Ingolstadt.
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The cause of the explosion has not yet been established.
"The work to extinguish the flames is continuing," the police said.
Emergency services have asked nearby residents to "keep their doors and windows closed because of the smoke."