Measuring the Vulnerability of an Energy Intensive Sector to the EU ETS under a Life Cycle Approach: The Case of the Chlor-Alkali Industry

Isabel Garcia-Herrero,Angel Irabien,Maria Margallo,Raquel Onandía,Jara Laso,Ruben Aldaco

doi:10.3390/su9050837

Abstract

The EU Emissions Trading System (EU ETS), which is a cornerstone of the EU’s policy to combat climate change, has been criticised by its effects on the competitiveness of intensive energy demanding industries, and in particular, of the chlor-alkali sector. The main chlorine application in Europe is the production of polyvinyl chloride (PVC) from ethylene dichloride (EDC) as intermediate. Since chlorine is mainly traded in terms of derivatives, the aim of this work is to assess the vulnerability of the European chlor-alkali industry to chlorine replacement by imported EDC. An Energetic, Economic and Environmental Sustainability Assessment (EEESA) methodology is proposed based on the main variables affecting EDC production. Moreover, the influence of the EU ETS compensation measures and the emission allowance price in the current (mercury, diaphragm and membrane) and emergent (oxygen-depolarized cathodes (ODC)) technologies is studied. The most vulnerable scenarios become mercury and diaphragm technologies due to energy consumption. However, the salt price dependency on the quality requirements substantially influences the EEESA results. This analysis also shows the importance of hydrogen valorisation, whose major impact is observed in ODC scenario.

Highlights

One of the pillars of the European energy and climate change policy is the creation of the internal energy market
The implementation of policies aimed to the reduction of environmental impacts such as the EU Emissions Trading System (EU ETS) specially affects to the energy intensive industries, which require for a specific sustainability-oriented assessment
The most favourable option in terms of energetic, economic and environmental sustainability is represented by Scenario 2 (S2), which describes membrane technology using three-effect evaporation for NaOH concentration

Summary

Introduction

One of the pillars of the European energy and climate change policy is the creation of the internal energy market. After several liberalisations of the electricity market, the evolution of the energy price has not been as expected and the energy policies from the different countries do not agree to clarify the future competitiveness of the sector. The policies can be considered complementary if each tool is aimed at correcting a market failure or overlapping if they reduce the overall effects that each instrument stand-alone could generate in the market. Several such works study these interactions between energy and climate policies [3,4,5,6,7]. Compensation of Indirect Costs and Distorsion of Competition; FEIQUE: Madrid, Spain, 2017. (In Spanish)

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