Wettbewerbseffekte des EU-ETS

Transcription

1 Wettbewerbseffekte des EU-ETS Berliner Energietage Mai 2008 Karsten Neuhoff Misato Sato, Michael Grubb Jean-Charles Hourcade, Damien D ly Felix Matthes, Verena Graichen

2 Outline Introduction Quantitative assessment Cross-country comparison Deep dive: cement, steel, refining Policy options for addressing leakage impacts

3 The challenge for emission reductions Assumed emission growth business as usual 1%/year 5 4 Gt CO 2 in EU Linear 75% reduction trajectory

4 Future carbon targets determine strategic choices Illustrative BAU Energy Efficiency Gas Renewables CCS/ additional nuclear Oil Conventional coal today European CO2 emissions year

5 How does it all fit together? Assumed emission growth business as usual 1%/year 5 4 Gt CO 2 in EU-27 Renewable target(s) 3 2 Linear 75% reduction trajectory 1 Contribution from new low carbon technology portfolio Trajectory Kyoto target 20% without internat. action

6 Outline Introduction Quantitative assessment Deep dive: cement, steel, refining Policy options for addressing leakage impacts

7 Potential Net /Maximum Value at Stake 20% 15% 10% 5% 0% Competitiveness is a sector/product issue Electricity Cement, lime& plaster Pulp, Paper, Printing & Publishing Food & tobacco Wood Fabricated metal Plastic & rubber Glass & Ceramics Basic Metals (incl. Iron & Steel) Transport equip. Coke oven & refined petroleum Chemicals Machinery MVAS: Max. Value At Stake (no free allocation) NVAS: Net Value At Stake (100% free allocation; exposure to electricity price only) Non-Ferrous Metals Electrical & optical equipment Textiles 0% 10% 20% 30% 40% 50% UK trade intensity from Non-EU Assumptions: CO2 price= 20/tCO2; Pass through in electricity = 10/mwh

8 Outline Introduction Quantitative assessment Methodology Sub-sector analysis Cross-country comparison Deep dive: cement, steel, refining Policy options for addressing leakage impacts

9 Construction sector: cement production dominates emissions, highest MVAS, relatively low NVAS accounts for c.10% of aggregate sector value-added Potential Net and Maximum Value At Stake 35% 30% 25% 20% 15% 10% 5% 0% Manufacture of cement (SIC 26.51); GVA 409 million (2004) Manufacture of lime (SIC 26.52); GVA 26 million (average ) MVAS 126% Total sector GVA in ,359 million 0% 20% 40% 60% 80% 100% Non- EU Trade Intensity Man. of cement Man. of concrete products for construction purposes Man. of plaster products for construction purposes Man. of ready-mixed concrete Man. of other articles of concrete, plaster and cement Cutting, shaping and finishing of stone Production of abrasive products Man. of other non0metallic mineral products n.e.c. Man. of lime Assumptions: CO2 price= 20/tCO2; Pass through in electricity = 10/MWh

10 Iron and Steel: Basic Iron & Steel production dominates emissions, MVAS c.25%, c.10xnvas, accounts for half sector value-added Potential Net and Maximum Value At Stake 30% 25% 20% 15% 10% 5% 0% Total Sector GVA in ,139 million Manufacturing of basic iron and steel (SIC 27.10); GVA 1,064million (2004) MVAS 27%. 0% 20% 40% 60% 80% 100% Non-EU Trade Intensity Man.of basic iron & steel and of ferro0alloys (ECSC) Man. of cast iron tubes Man. of steel tubes Cold draw ing Cold rolling of narrow strip Cold forming or folding Wire draw ing Casting of iron Casting of steel Assumptions: CO2 price= 20/tCO2; Pass through in electricity = 10/MWh

11 Energy production (non-electric) dominated Potential Net and Maximum Value At Stake 12% 10% 8% 6% 4% 2% 0% by refineries; coke linked to steel Manufacturing of refined petroleum (SIC 23.20); GVA 2,300 million (2005)* Manufacturing of coke oven products (SIC 23.10); GVA 10 million (average of ). 0% 20% 40% 60% 80% 100% Non-EU Trade Intensity Total sectoral GVA for ,627 million* Assumptions: CO2 price= 20/tCO2; Pass through in electricity = 10/MWhh

12 Potential Net and Maximum Value At Stake 10% 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% 4 digit: Food, Beverage and Tobacco it sthe malt Manufacturing of malt (SIC15.97); GVA 64million (2004) Total Sector GVA for ,516million 0% 20% 40% 60% 80% 100% Non - EU Trade Intensity Production and preserving of meat Production and preserving of poultrymeat Production of meat and poultrymeat products Processing and preserving of fish and fish products Processing and preserving of potatoes M an. of fruit and vegetable juice Processing and preserving of fruit and vegetables n.e.c. M an. of crude oils and fats M an. of refined oils and fats M an. of margarine and similar edible fats Operation of dairies and cheese making M an. of ice cream M an. of grain mill products M an. of starches and starch products M an. of prepared feeds for farm animals M an. of prepared pet foods M an. of bread; fresh pastry goods and cakes M an. of rusks and biscuits; preserved pastry goods and cakes M an. of cocoa; chocolate and sugar confectionery Processing of tea and coffee M an. of condiments and seasonings M an. of other food products n.e.c. M an. of distilled potable alcoholic beverages M an. of beer Man. of malt Production of mineral waters and soft drinks M an. of tobacco products M an. of sugar Assumptions: CO2 price= 20/tCO2; Pass through in electricity = 10/mwh

13 Potential Net and Maximum Value At Stake 10% 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% Finishing of textiles (SIC 17.30) GVA 230million (2004) 4 digit: Textiles and Leather Manufacturing of nonwovens; (SIC 17.53) GVA 45million (2004) 0% 20% 40% 60% 80% 100% Non-EU Trade Intensity Total sector GVA in ,150 million Other textile weaving (SIC 17.25) GVA 6million (2004) Preparation & spinning of worstedtype fibres Preparation & spinning of flaxtype fibres Throwing,preparation&texture of silk,synthetic/artificial filament yarn M an. of sewing threads Cottontype weaving Woollentype weaving Worstedtype weaving Silk0type weaving Other textile weaving Finishing of textiles M an. of madeup textile articles, except apparel M an. of carpets and rugs M an. of cordage, rope, twine and netting M an.of nonwovens&articles made from nonwovens except apparel M an. of other textiles n.e.c. M an. of knitted and crocheted hosiery M an. of leather clothes M an. o f wo rkwear M an. of other outerwear M an. of underwear M an. of other wearing apparel and accessories n.e.c. Dressing &dyeing of fur; man. of articles of fur Tanning and dressing of leather M an. of luggage, handbags and the like, saddlery& harness M an. of footwear M an. of knitted and crocheted fabrics Assumptions: CO2 price= 20/tCO2; Pass through in electricity = 10/MWh

14 Cost increase relative to value added 50% 40% 30% 20% 10% 4% 2% 0% Lime Cement Basic iron & steel Results of cost screen Impact from direct emissions Impact from indirect emissions (electricity) Starches& starch products Other inorganic basic chemicals Fertilisers & Nitrogen Refined petroleum Aluminium Household paper Non-wovens Industrial gases Coke oven Pulp & Paper Malt Preparation of yarn Copper Other textile weaving Rubber tyres & tubes manufact. Hollow glass Finishing of textiles Casting of iron Flat glass Veneer sheets 0.0% 0.2% 0.4% 0.6% 0.8% 1.0% Share of GDP of a country Retreading/ rebuilding tyres UK GDP

15 Outline Introduction Quantitative assessment Methodology Sub-sector analysis Cross-country comparison Deep dive: cement, steel, refining Policy options for addressing leakage impacts

16 The German data Price increase assumption= 20/tCO2, electricity cost pass-through =19.34 /MW

17 Trade intensity of top 23 sectors with Non- EU and EU countries in UK and Germany Lime UK trade intensity from non-eu UK trade intensity from within the EU Cement Germany trand intensity from non-eu Germany trade intensity from within the EU Basic iron & steel & ferro-alloys Refined petroleum products Fertilizers & nitrogen compounds Aluminium & aluminium products Other basic inorganic chemicals Pulp, paper & paperboard Malt Coke oven products Industrial gases Non-wovens except apparel Household&sanitary paper goods Textile finishing services Hollow glass New rubber tyres Retreaded pneumatic tyres, of rubber Veneer sheets,plywood,laminboard etc Flat glass Other textile weaving Copper production Silk,synthetic/artificial yarn Casting services of iron 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Trade intensity from outisde and within the EU

18 Outline Introduction Quantitative assessment Methodology Sub-sector analysis Cross-country comparison Deep dive: cement, steel, refining Policy options for addressing leakage impacts

19 Cement already faces widely divergent domestic prices Climate Strategies IDDRI Meeting 13th September 2007

20 Mt of cement Is the picture changing? «The rise in non EU imports» Destination of non EU Imports FRANCE PORTUGAL HUNGARY SPAIN ITALY OTHERS BULGARY

21 Mt of cement Origin of non EU Imports Is the picture changing? «The recent surge in Chinese imports» CHINA CHINE TURKEY EGYPT THAILAND CROATIA INDIA RUSSIA VENEZUELA OTHERS

22 Difference in operating costs between the EU and the RoW Trade Barriers Trade barriers International Pressure on EU market Service differentiation Availability, vertical integration, price stability Product differentiation Colour, strenght, workability, consistency Cost of instability Risk: retaliation, market immaturity Import restriction Consumption / Capacity Anti-competitive behaviours. Balance on the markets abroad (& domestic) Transport Road cost, sea cost, storage facility NB: Barriers are lower for EU transnational firms

23 Impact of cost pass-through on imports and overall production

24 Impact on profits and demand for the EU cement and steel industries of different carbon prices, allocation and cost pass-through decisions

25 EU 25 refining capacity, throughput and consumption of refined products mio barrel/year Capacity Consumption Throughput

26 Regional refining margins $ 2006/barrel Singapore Texas NWE Brent Cracking

27 Outline Introduction Quantitative assessment Methodology Sub-sector analysis Cross-country comparison Deep dive: cement, steel, refining Policy options for addressing leakage impacts

28 Leakage is a focused way to analyse competitiveness concerns Focus on leakage, not competitiveness per se: Competitiveness concerns ~ Production moves, jobs/tax revenue lost Leakage ~ Production moves, emissions re-locate > leakage gives an environmental focus and clear criteria Profitability of firms is a different issue free allocation can protect profitability might provide one approach to fund innovation but does not ensure competitiveness or prevent leakage

29 A carbon price works through the value chain. This can be supported by policies that address leakage. Substitution Leakage Forgone substitution/innovation Without measures With free allocation Leaner Lower clinker structures content Other building materials Efficiency Clinker Cement Concrete Building Clinker imports Cement imports Some leakage Without measures With unconditional allocation

30 Cement sector Illustrative for UK - but numbers can still change significantly Electricity GVAS/ CO2 GVAS 70% 60% 50% 40% 30% 20% 10% 0% Clinker Cement Cost increase electricity Cost increase ele+co2 Cost increase electricity from clinker Cost increase ele+co2 from clinker Concrete products (concrete products for construction; mixed concrete etc) GVA (million Euro) Most leakage concerns from clinker easily transportable

31 Steel sector Illustrative for UK - but numbers can still change significantly Electricity GVAS/ CO2 GVAS 50% 40% 30% 20% 10% 0% Semi Finished Hot rolled iron& steel Gross value added (million Euro) Most exposure from BOF (and possible coke oven) Steel can be transported at semi-finished stage Cost increase electricity Cost increase ele+co2 Cost increase electricity from slab Cost increase ele+co2 from slab

32 Three approaches address leakage for Cost Conditional free allocation Initial evaluation Little substitution to low carbon products/services Distorts investment Bureaucratic constraints for innovation Risk of lock-in exposed sectors Cost Export taxes Border adjustment Has to be aligned with international climate engagement Requires at least informal international cooperation Cost CO costs 2 Price level Government led sectoral agreement Requires strong policies of developing countries Risk of low common denominator

33 Wettbewerbseffekte des EU-ETS Leakage is only of potential concern for sub-sectors Cost increases need to be analysed in context Commitment important that leakage is addressed For credibility of scheme For low carbon investment Three options exist to address leakage concerns Have to be sector by sector Choice can wait for international coordination and analysis