Emission-intensive Industries Research Articles

Environmental regulation and intermediate imports: Firm-product-level evidence

This study examines the effects of domestic environmental regulations on import activity. Using a panel of firm-product-level data and variations in regulatory stringency across products established by China’s Eleventh Five-Year Plan for Environmental Protection (covering 2006–2010), it reveals that tougher regulations on emission-intensive industries at home led to increases in downstream manufacturers’ imports of emission-intensive intermediate inputs. Specifically, a 1% increase in sulfur dioxide emission intensity resulted in a 0.026% increase in intermediate imports after the implementation of the regulation. A back-of-the-envelope calculation suggests that, although the regulation increased emissions in source countries, it reduced global emissions of sulfur oxides and carbon dioxide. This is because the increases in imports caused by the regulation mainly came from countries with lower emission intensity than China. The regulation did not disproportionately increase imports from or emissions in developing countries.

Deconstructing corporate net-zero and climate neutrality targets in the German chemical industry

ABSTRACT Companies are becoming ever more present actors in climate change governance and increasing numbers of mostly multinational companies are pledging to become greenhouse gas neutral, climate neutral, or to reach for net-zero emissions. This article deconstructs net-zero, greenhouse gas and climate neutrality targets of 51 chemical companies in Germany. A brief contextualization of companies as actors in climate change governance and an overview of the German chemical sector as an emission-intensive industry are given. Evaluation criteria for corporate greenhouse gas and climate neutrality targets are developed by comparing seven existing or emerging industry and non-governmental standards and guidelines for (corporate) net-zero, climate and greenhouse gas neutrality. The criteria are then applied to the climate and sustainability targets of 51 companies in the German chemical sector. Results show that the targets vary greatly in terms of their actual definition, the target year and covered emissions, the timeline and planned implementation measures. Only some companies underpin their targets with strategic decarbonization approaches while others rely heavily on offsetting their emissions. This heterogeneity highlights the need for unified assessment criteria and in-depth analysis of corporate climate strategies to rule out greenwashing. Recommendations for target definitions and minimum criteria are given.

Carbon emissions drivers in Brazilian regional production chains: Value-added and consumption-based approaches

This article aims to analyse carbon emissions in Brazil by decomposing consumption and income-based structural factors from 2011 to 2018. It utilizes environmentally interregional input-output models to quantify these factors. The findings reveal an imbalanced pattern of carbon generation, with economically prosperous regions driving emissions due to demand and supply factors. Production structure and economic activity are key drivers of CO2 emissions on the consumption and value-added side. Wealthier areas in Brazil, known for diverse and value-added production, have lower emission-intensive industries. However, those areas economically benefit from emissions generated by resource-intensive sectors in less prosperous regions. These findings highlight the need to distribute emissions responsibility spatially and implement measures to penalize regions benefiting from primary factor utilization. By promoting equitable environmental responsibility, policies can encourage sustainability and discourage emissions concentration in economically advantaged areas.

How does world economic policy uncertainty influence the carbon dioxide emission reporting and performance? Study of Fortune Global 500 firms.

This study contributes significantly to the field by utilising the World Economic Policy Uncertainty (WEPU) Index, as devised by (Ahir in Nat Bureau Econ Res2022), to scrutinise its impact on carbon dioxide emission reporting and performance. Employing the generalised method of moments (GMM) on a substantial dataset of 604 Fortune Global 500 firms spanning from 2005 to 2020, our analysis reveals crucial insights. The research elucidates the dual influence of WEPU Index: a positive correlation with carbon dioxide emission reporting and a negative correlation aimed at mitigating adverse effects and promoting sustainable practices, thereby enhancing firm trust. Moreover, the findings shed light on how companies in emission-intensive industries tend to ramp up carbon dioxide emission reporting, potentially to bolster investor confidence, particularly during high WEPU Index periods. Furthermore, this study uncovers a compelling association between high emitters and lowered carbon dioxide emission performance, stemming from political and social pressures to integrate environmental considerations. Notably, this pressure intensifies during periods of increased WEPU Index. The empirical results presented in this study carry immediate practical implications. Specifically, they offer valuable insights for regulatory bodies and industry associations, guiding the development of enhanced environmental and social reporting regulations and guidelines, particularly concerning carbon emission reporting and performance.

Energy and Emissions Intensive Industries (DOE)

Energy and Emissions Intensive Industries (DOE)

The industry transformation from fossil fuels to hydrogen will reorganize value chains: Big picture and case studies for Germany

In many industries, low-carbon hydrogen will substitute fossil fuels in the course of the transformation to climate neutrality. This paper contributes to understanding this transformation. This paper provides an overview of energy- and emission-intensive industry sectors with great potential to defossilize their production processes with hydrogen. An assessment of future hydrogen demand for various defossilization strategies in Germany that rely on hydrogen as a feedstock or as an energy carrier to a different extent in the sectors steel, chemicals, cement, lime, glass, as well as pulp and paper is carried out. Results indicate that aggregate industrial hydrogen demand in those industries would range between 197 TWh and 298 TWh if production did not relocate abroad for any industry sector. The range for hydrogen demand is mainly due to differences in the extent of hydrogen utilization as compared to alternative transformation paths for example based on electrification. The attractiveness of production abroad is then assessed based on the prospective comparative cost advantage of relocating parts of the value chain to excellent production sites for low-carbon hydrogen. Case studies are provided for the steel industry, as well as the chemical industry with ethylene production through methanol and the production of urea on the basis of ammonia. The energy cost of the respective value chains in Germany is then compared to the case of value chains partly located in regions with excellent conditions for renewable energies and hydrogen production. The results illustrate, that at least for some processes – as ammonia production – relocation to those favorable regions may occur due to substantial comparative cost advantages.

China's economic restructuring reduced emissions of polycyclic aromatic hydrocarbons (PAHs) in the post-global financial crisis era

Polycyclic aromatic hydrocarbons (PAHs) emissions driven by transboundary supply-chain activities across Chinese provinces are largely unknown. In this study, we comprehensively assessed the dynamics of production-, consumption-, and income-based PAHs emissions from individual Chinese provinces in China from 2007 to 2017. We also examined the critical supply-chain paths and socioeconomic drivers behind the changes in PAHs emissions and explored their correlations with China's economic restructuring during this period. We found that production-, consumption-, and income-based PAHs emissions have decreased to lower levels in 2017 (45.6, 36.2, and 40.1 kt, respectively) than those (52.8, 37.5, and 43.6 kt, respectively) in 2007. The dominant contributors of trade-driven PAHs emissions were located in the northern inland provinces with rich coal resources and the southeastern coastal provinces with dense populations and developed economies. China's economic restructuring reduced PAHs emissions in these provinces in the post-global financial crisis era, benefiting from improvements in emission intensity and trade structure. Concurrently, migrating energy- and emission-intensive industries into less affluent provinces (e.g., Xinjiang, Jiangxi, Henan, Anhui, and Yunnan) changed the roles of emission factors (from the demand side), primary input structure and energy mix (from the supply side) from driving down to driving up PAHs emissions. These changing drivers exerted a greater upward influence on PAHs emissions than the overall downward influence exerted by other drivers, thereby causing emissions outsourcing and leakage. This study explored the effects of economic structural transition on interprovincial trade-driven PAH emission transfer, offering valuable insights for policymakers to formulate policies for mitigating PAHs emissions.

Intra-EU trade-embodied carbon emissions: Is there voting for dirty comparative advantages?

I use voting outcomes from the European Parliament to construct a novel sector-specific measure for revealed environmental policy preferences for EU member states. Applying a theory-consistent structural gravity model on intra-EU carbon embodied in trade between 2000 and 2014, this study finds that binding multilateral environmental agreements successfully eliminate comparative advantages for emission intensive industries.

Optimization of the sustainable production pathways under multiple industries and objectives: A study of China's three energy- and emission-intensive industries

Sustainable production pathways are essential for the greening of the industrial sector. To develop the comprehensive optimal pathway, it is important to consider the interactions between multiple industries and objectives. While previous studies have combined several objectives in this field, the simultaneous optimization of multiple industries is still lacking. This study simulates the system of industrial sustainable production measures, including 184 measures in seven types, and proposes the optimization model in China's iron and steel, cement, and coal-fired power industry as cases. To solve this problem with large-scale variables and high-dimensional objectives, this study develops the solution approach including the objective decomposition mechanism and non-dominated sorting genetic algorithm–II–elimination and choice expressing reality (NSGA–II–ELECTRE-III) algorithm, with final decision schemes selected by the Vague-set based approach. Results show that though the energy and emission objectives within an industry are synergic, but the relationships between different industries are almost irrelevant. By 2035, The three industries are estimated to reach energy conservations and emission reductions of 5.2–66.8% compared to 2017. The optimal solutions can exceed the air pollutant emission reduction targets but take risks of reaching energy conservation and CO2 emission reduction ones. The main contribution measures in the three industries are the integration of production equipment structure upgrade and cleaner production technology promotion, production output limitation, and production equipment structure upgrade, respectively, with 57 measures being prior for promotion. In sum, this study provides new solution methods and several policy suggestions for industrial sustainable production management.

Green Transition: Identifying Vulnerable Industries and Bank Loans in the Czech Republic

ABSTRACT This paper aims to identify the most emission-intensive industries in the Czech economy using an environmentally extended input-output framework to determine whether decarbonization of the economy might jeopardize financial system stability. The main contribution of this paper to the existing literature lies in connecting bank industry-specific loan exposures with industry-specific emission intensities, which are used to calculate potential credit losses after the introduction of a carbon tax. The analysis shows that the Czech banking sector is not significantly concentrated in industries which are most vulnerable to decarbonization of the economy and threats to the financial stability of the green transition are currently low.

The European carbon border adjustment mechanism: a small step in the right direction

We estimate the effects of a European Carbon Border Adjustment (CBA) mechanism on exports, real GDP, welfare and emissions using the multi-region, multi-sector structural gravity model of Larch and Wanner (2017). Incorporating the main industries covered in the proposal of the European Commission from mid-2021, as well as its other design features, and assuming prevailing CO2 prices, we find only small effects of the European CBA mechanism. EU exports are estimated to decline by 0.04%, while CO2 emissions in EU countries increase by 0.24%. These negligible results mask larger adjustments at the sectoral level. The structural changes will shift the EU economy towards more emission-intensive industries, which will make achieving its climate goals harder. On the positive side, the European CBA mechanism will reduce global emissions by 0.08%. Given the minute economic costs in terms of GDP and welfare losses, the CBA mechanism seems an appropriate policy tool, though its proposed design will not be able to make a significant contribution to mitigating global climate change.

Climate reputation risk and abnormal returns in the stock markets: A focus on large emitters

Reputation risk is among the possible climate transition risks companies face, especially in emission-intensive industries. Failing to meet stakeholders' expectations about the contribution to climate goals might influence investors' strategies and produce financial damages. We look at the climate-related social media talk in a sample of highly polluting companies. For these companies, reputation risk materialises if their climate talk is perceived as not coherent with their action-taking. We then assess the impact of climate talk on short-term stock market performance, as measured by abnormal returns, and find a positive association between climate-related social media talks and abnormal returns. The strength of this association lowers during peak days of social media attention on climate-related topics.

How carbon emission reduction is going to affect urban resilience

In tackling climate change and promoting sustainable development, carbon emission reduction through means of cleaner production, circular economy and eco-innovation, etc., may lead to increased resilience of an urban system. This study aims to explore the impact of carbon emission reduction on urban resilience and its spatial-temporal characteristics with a sample of 267 prefectural-level cities from 2006 to 2019 in China. Firstly, this research conceptualizes urban resilience as economic prosperity, social wellbeing, cleaner environment and analyzes the impact mechanism of carbon emission reduction on these three dimensions. Then in the empirical analysis, the urban resilience assessment index is built to quantitatively evaluate urban resilience in Chinese cities and its spatial-temporal characteristics. Subsequently, the impact of carbon emission on urban resilience is investigated through geostatistical analysis. The results show that the urban resilience level in China shows significant spatiotemporal heterogeneity. High resilience cities are clustered in the Beijing-Tianjin-Hebei region, Yangtze River Delta region and Pearl River Delta region, while lower resilience cities are in the northeast, northwest and southwest regions. Moreover, urban resilience in Chinese cities is mainly contributed by the economic subsystem. Over the study period, carbon emission reduction is positively related to urban resilience with high resilience and high carbon emission reduction agglomerated over space. Furthermore, the agglomeration effect increased from 2006 to 2019. These indicate that in the past fifteen years, urban resilience in Chinese cities is highly dependent on regional economic development which is still reliant on emission-intensive industries. The research provides important references for China's carbon emission reduction and resilience-building policies. Spatial heterogeneities need to be acknowledged to focus on key areas of emission reduction and resilience improvement in policymaking and implementation.

The impact of technology learning and spillovers between emission-intensive industries on climate policy performance based on an industrial energy system model

Sustainable energy transition is garnering attention as a method to achieve emission reduction targets. In this transition, technology learning and spillovers, which are representative sources of technological change, have significant implications. Most previous studies focused on inter-country and inter-region spillovers, although spillovers can be observed at the various levels. This study develops the industrial energy system model, which explores learning and inter-industry spillovers at the technology level, and investigates learning and spillover effects on climate policy performance. The model reflects spillovers between industrial common technologies based on an iterative approach and describes the effects of learning and spillovers on technology characteristics, such as technology efficiency. The results describe that not only the speed of learning but also the existence of spillovers is important for sustainable industrial energy systems. Spillovers also help to mitigate industrial emissions with less subsidies for efficient technologies and affects the preference of industries for a carbon tax. The government should create an appropriate environment for efficiency improvements and their diffusion in industries. Moreover, a wider range of policy options is available if industries are more cooperative in diffusing their technology innovation.

Decoupling degrees of China's economic growth from three-perspective carbon emissions

Responsible for 28% of global carbon emissions (since 2012), China's actions to carbon emission mitigation are critical to achieving the net-zero ambition globally. Since aggressive actions on emission mitigation always involving the risk of economic losses, it is vital to examining the trade-off between mitigation policies and economic development. Here, we examined the extent to which the economic growth is decoupled from three-perspective emissions, i.e., production-, consumption- and income-based emissions. Results showed that 90%, 73% and 80% of Chinese provinces have achieved decoupling of GDP from production-, consumption- and income-based emissions during 2012–2017. We also investigated and compared dominant drivers (economic structure, emission intensity, per capita GDP, and population size) of emission changes among four types of provinces. Emission intensity was identified as the most important driver in terms of emission mitigation, while per capita GDP and population were the major ones adversely affecting emission mitigation. We put forward different mitigation suggestions for these provinces. Provinces, achieving three-perspective decoupling, should sustain technological improvement of key industrial enterprises. Downstream provinces that are still coupled from consumption-based emissions should adjust their consumption structure and consuming less emission-intensive products from upstream sectors. Upstream provinces, still coupled from income-based emissions, should adjust their allocation behaviors, e.g., distributing their primary or intermediate goods and services to low-carbon producers. Government should also adjust the rates of taxes and subsidies on products, and the rates of loans to the upstream producers. Provinces, still coupled from three-perspective emissions, should invest more in cleaner production technologies and promote applications to emission-intensive industries.

Separation of reaction products from ex-situ mineral carbonation and utilization as a substitute in cement, paper, and rubber applications

Ex-situ mineral carbonation, a CCU process, is one possible approach for the decarbonisation of emission-intensive industry with hard-to-abate process emissions like the cement industry. The chemical reaction ensures long-term binding of carbon dioxide in minerals with the effect of storing otherwise emitted CO2 long term. As a major hurdle for CCU processes is often their economic viability, to create incentives for the usage of this process, these carbonated mineral products must become marketable. A separation approach for the reaction products of this process and possible utilization paths are presented. The separation results in three different fractions, each enriched in either the reaction products amorphous silica or magnesium/calcium silicate or unreacted peridotite. The fractions enriched with reaction products are tested as supplementary cementitious material in cement or as a filler in rubber and paper. The application tests show promising results, comparable or even better than the conventional product. Additionally, based on the laboratory explorations, we present initial economic and environmental investigations showing potential carbon footprint reductions of up to 27% for blended cement with a total global reduction potential of 681 MtCO2e/a. Also, potential carbon footprint reductions of 52% can be achieved by using carbonation products as fillers in rubber and 197% in paper, respectively. While the costs for the utilization of carbonated minerals have been calculated to be higher than for the conventional products, CO2 emission certificates could ensure the same price for cement and even lower costs for the substitution of fillers in paper and rubber.

Assessing the Suitability of Co2 Reduction Technologies for Emission Intensive Industries – A Nordic Case Study

Assessing the Suitability of Co2 Reduction Technologies for Emission Intensive Industries – A Nordic Case Study

Assessing the feasibility of archetypal transition pathways towards carbon neutrality – A comparative analysis of European industries

Analyses of the future for manufacturing and heavy industries in a climate constrained world many times focus on technological innovations in the early stages of the value chain, assuming few significant changes are plausible, wanted, or necessary throughout the rest of the value chain. Complex questions about competing interests, different ways of organising resource management, production, consumption, and integrating value chains are thus closed down to ones about efficiencies, pay-back times, and primary processing technologies. In this analysis, we move beyond this to identify archetypal pathways that span across value chains in four emissions intensive industries: plastics, steel, pulp and paper, and meat and dairy. The pathways as presented in the present paper were inductively identified in a multi-stage process throughout a four-year European research project. The identified archetypal pathways are i) production and end-use optimisation, ii) electrification with CCU, iii) CCS, iv) circular material flows, and v) diversification of bio-feedstock use.The pathways are at different stages of maturity and furthermore their maturity vary across sectors. The pathways show that decarbonisation is likely to force value chains to cross over traditional boundaries. This implies that an integrated industrial and climate policy must handle both sectoral specificities and commonalities for decarbonised industrial development.

An industrial policy framework for transforming energy and emissions intensive industries towards zero emissions

ABSTRACT The target of zero emissions sets a new standard for industry and industrial policy. Industrial policy in the twenty-first century must aim to achieve zero emissions in the energy and emissions intensive industries. Sectors such as steel, cement, and chemicals have so far largely been sheltered from the effects of climate policy. A major shift is needed, from contemporary industrial policy that mainly protects industry to policy strategies that transform the industry. For this purpose, we draw on a wide range of literatures including engineering, economics, policy, governance, and innovation studies to propose a comprehensive industrial policy framework. The policy framework relies on six pillars: directionality, knowledge creation and innovation, creating and reshaping markets, building capacity for governance and change, international coherence, and sensitivity to socio-economic implications of phase-outs. Complementary solutions relying on technological, organizational, and behavioural change must be pursued in parallel and throughout whole value chains. Current policy is limited to supporting mainly some options, e.g. energy efficiency and recycling, with some regions also adopting carbon pricing, although most often exempting the energy and emissions intensive industries. An extended range of options, such as demand management, materials efficiency, and electrification, must also be pursued to reach zero emissions. New policy research and evaluation approaches are needed to support and assess progress as these industries have hitherto largely been overlooked in domestic climate policy as well as international negotiations. Key policy insights Energy and emission intensive industries can no longer be complacent about the necessity of zero greenhouse gas (GHG) emissions. Zero emissions require profound technology and organizational changes across whole material value chains, from primary production to reduced demand, recycling and end-of-life of metals, cement, plastics, and other materials. New climate and industrial policies are necessary to transform basic materials industries, which are so far relatively sheltered from climate mitigation. It is important to complement technology R&D with the reshaping of markets and strengthened governance capacities in this emerging policy domain. Industrial transformation can be expected to take centre stage in future international climate policy and negotiations.

The role of energy policy on the decoupling processes in the European Union countries

The study offers thorough analysis of the impact of the European Union (EU) energy policy on decoupling greenhouse gas (GHG) emissions from economic growth between 1996 and 2017. Two types of GHG measurements, production-based accounting (PBA) and consumption-based accounting (CBA), are used to account for the possible outsourcing with the Tapio framework. Five factors taken from the Log-Mean Divisia Index are considered in order to determine the main contributors of emission mitigation.The results demonstrate decoupling GHG emissions from economic growth in almost all countries, regardless of the type of GHG measurements. However, in the case of production-based emissions, the decoupling occurs faster. After 2005, when the EU launches its energy policy, the decoupling speeds up. LMDI results indicate that the improvements in energy intensity and the energy structure are the most significant drivers of GHG emissions reduction. There are differences between the reduction of the two types of GHG emissions and its determinants in old and new EU countries.In almost all EU countries the decoupling is linked to the EU energy policy but the reduction of GHG emissions partly comes at the expense of outsourcing, i.e. the relocation of emission-intensive industries to countries outside the EU.