Energy-intensive Companies Research Articles

Financial expenditure, financial friction, and coal consumption for energy efficient environment: Role of financial inclusion

This research investigates the crucial role that adaptability and ongoing evaluation have in implementing sustainable energy and economic development strategies in China. It emphasises the need for collaboration between enterprises, governmental organisations, and academic institutions in order to achieve these goals. The study also discusses how financial inclusion impacts economic growth and stability and how energy-intensive companies might use the Logarithmic Mean Divisia Index (LMDI) approach to evaluate energy decomposition. The findings indicate that different provinces in China’s high energy-intensive (EI) economic sectors have different degrees of energy efficiency, with certain regions possibly having inefficiencies. The research underscores the need for targeted strategies to address these inefficiencies and disseminate efficacious approaches in new settings. The research also offers useful data that may be used to promote sustainable energy consumption and economic growth, with implications for policy-making and strategic initiatives. In summary, this paper presents specific policy recommendations and highlights the need for ongoing evaluation and collaboration to support China’s sustainable energy initiatives and economic growth.

Evaluation of Energy Performance Indicators and Energy Saving Opportunities for the Italian Rubber Manufacturing Industry

The objective of this work is the energy characterisation and evaluation of the energy efficiency potential of the rubber manufacturing industry in Italy, exploiting the detailed data included in energy audits by large and energy-intensive companies. This sector is divided into two sub-activities: the manufacture of rubber products and the production of tyres. Existing studies are focused mainly on tyre production, and there is a lack of quantitative evaluation of energy indicators that can provide guidance for improving process efficiency. In this work, updated global and specific energy performance indicators (EnPIs) related to the production process and to the auxiliary and general services are defined and evaluated. At the same time, targeted actions and interventions to improve the energy efficiency of the sector are analysed, showing the role of different intervention areas and their cost-effectiveness. The analysis is based on 100 Italian mandatory energy audits of the sector collected according to Art.8 EU Directive 27/2012. The applied methodology made it possible to calculate specific energy performance indicators by considering the overall and sub-process energy consumption of different production sites. Based on a detailed database containing real data from recent energy audits, this study provides an up-to-date and reliable benchmark for the rubber industry sector. In addition, the analysis of energy audits allows the identification of the most effective energy efficiency interventions for the rubber industry in terms of cost-effectiveness and payback time.

The role of outward foreign direct investment as a filter for high energy intensity economies in the European Union

This study examines the effects of outward foreign direct investment (FDI) on energy intensity among the member countries of the European Union between 2000 and 2021. This relationship is deemed important in elucidating whether there is a process of filtering out energy-intensive companies where the use of FDI is employed to lead out production and improve energy intensity in the source country of the investment. To estimate this relationship, we employ feasible generalized least squares (FGLS) and panel corrected standard error (PCSE) for robustness purposes. Additionally, we complement our results with an estimation of the Granger causality relationships between our variables. Our findings reveal a highly significant trend wherein outward FDI from European Union countries tends to reduce energy intensity, thereby enhancing the productivity of the source countries of the investment. Conversely, only the technological productivity ratio exhibits a unidirectional causal relationship with energy intensity, while GDP per capita and natural resource rents serve as causes of energy intensity and vice versa. From this study, some policy recommendations can be derived whereby the European Union can continue to incentivize this filtering process to ensure better technological advancement in its production system, thereby improving the efficiency of the European industrial fabric.

Financial expenditure, financial friction, and coal consumption for energy efficient environment: Role of financial inclusion

This research investigates the crucial role that adaptability and ongoing evaluation have in implementing sustainable energy and economic development strategies in China. It emphasises the need for collaboration between enterprises, governmental organisations, and academic institutions in order to achieve these goals. The study also discusses how financial inclusion impacts economic growth and stability and how energy-intensive companies might use the Logarithmic Mean Divisia Index (LMDI) approach to evaluate energy decomposition. The findings indicate that different provinces in China’s high energy-intensive (EI) economic sectors have different degrees of energy efficiency, with certain regions possibly having inefficiencies. The research underscores the need for targeted strategies to address these inefficiencies and disseminate efficacious approaches in new settings. The research also offers useful data that may be used to promote sustainable energy consumption and economic growth, with implications for policy-making and strategic initiatives. In summary, this paper presents specific policy recommendations and highlights the need for ongoing evaluation and collaboration to support China’s sustainable energy initiatives and economic growth.

The effect of carbon emission policy on financial performance of target companies in China

Carbon emission policy aims to restrict carbon emissions from energy-intensive companies. It encourages target companies to take green innovation but brings fulfillment pressure. Policy prospects for a low-carbon economy are widely discussed in current studies while insufficient attention has been paid to the effect of the policy on the operating activities of target companies. Using the data of Chinese A-share listed companies from 2007 to 2020, this paper explores the effect of carbon emission policy on the financial performance of target companies. The main empirical results prove the significant positive effect of the policy on the financial performance of target companies and reject the interference of earnings management and survivor bias. Further analysis indicates that target companies significantly reduce the selling, general and administrative (SG&A) expenses and non-operating expenses. The trade of carbon quotas between target companies is allowed and it is regarded as non-operating activity. Results of non-operating revenues and expenses prove that target companies tend to actively reduce carbon emissions but the action does not exceed the policy expectation. The increasing efficiency of asset utilization represents that target companies have taken relevant measures to deal with overcapacity. This paper confirms the positive policy responses of target companies. Policy implications are proposed from the perspective of coverage expansion and market incentive mechanisms to realize the full potential of target companies for carbon emission reduction.

Climate-Related Stress-Testing and Net-Zero Valuation: A Case Study for Selected Energy-Intensive Companies

Climate-Related Stress-Testing and Net-Zero Valuation: A Case Study for Selected Energy-Intensive Companies

Economic policy uncertainty and firm performance: Evidence from the energy-intensive industry in China

As a result of high energy consumption and pollution from energy-intensive industries, the Chinese government has implemented a series of policies. A comprehensive assessment of these policies is necessary to guide the green transformation and upgrading of the industry, however, little research has been conducted on this issue. This article takes China's economic policy uncertainty (EPU) Index as a comprehensive and continuous policy shock and investigates the impact of EPU on the financial performance of energy-intensive firms. Based on 289 listed energy-intensive companies from 2003 to 2018, we find that EPU negatively affects the financial performance of firms, and the negative effect is robust after replacing the dependent variable and endogenous discussion. Further, the negative impacts are more pronounced for midwestern, non-SOE firms, as well as ferrous metal and chemical product manufacturers. Moreover, our results indicate that the negative impact of EPU on performance is mitigated for firms with high cash holdings and low debt ratios.

Is the effect of oil price shock asymmetric on the Indian stock market? Firm-level evidence from energy-intensive companies

PurposeThis paper aims to examine the asymmetric impact of the oil price increase and decrease on stock returns at the firm level.Design/methodology/approachTo ascertain the impact oil price can exert on the stock price at the firm level, this study uses panel structural vector auto regression with various linear and nonlinear measures of oil price shock on a data set, containing 1,168 firms listed in Indian stock markets. This study also considers stock index returns, Fama-French factors and inflation as control variables.FindingsThis paper finds evidence that at firm level, net oil price increase and decrease have an asymmetric impact on stock returns. Other oil price shock measures, namely, shock because of oil price increase and decrease, do not show any sign of asymmetric impact on stock returns.Originality/valueThe comparison of firm-level return on its response towards oil price fluctuation can give valuable insights into a firm’s features.

Fairness and the support of redistributive environmental policies

Exemptions from costly policy measures are frequently applied to alleviate financial burdens on specific market participants. Using a stated-choice experiment with around 6000 German household heads, we test how exemptions for low-income households and energy-intensive companies influence the political feasibility of additional cost for the promotion of renewable energies. We find that the policy support is substantially higher when low-income households are exempt rather than the industry. Introducing exemptions for low-income households on top of existing exemptions for the industry increases the acceptability of the policy. We show that the support for exemptions as one example of distributional policy design is associated with individual behavioral measures like inequality aversion and fairness perceptions.

How Do German Manufacturers React to the Increasing Societal Pressure for Decarbonisation?

From the perspective of manufacturing companies, the political, media and economic discourse on decarbonisation in the recent years manifests itself as an increasing social expectation of action. In Germany, in particular, this discourse is also being driven forward by powerful companies, respectively sectors, most notably the automotive industry. Against this background, the present paper examines how German manufacturing companies react to rising societal pressure and emerging policies. It examines which measures the companies have taken or plan to take to reduce their carbon footprint, which aspirations are associated with this and the structural characteristics (company size, energy intensity, and sector) by which these are influenced. A mix methods approach is applied, utilising data gathered from approx. 900 companies in context of the Energy Efficiency Index of German Industry (EEI), along with media research focusing on the announced decarbonisation plans and initiatives. We demonstrate that one-size-serves-all approaches are not suitable to decarbonise industry, as the situation and ambitions differ considerably depending on size, energy intensity and sector. Even though the levels of ambition and urgency are high, micro and energy intensive companies, in particular, are challenged. The present research uncovers a series of questions that call for attention to materialise the ambitions and address the challenges outlined.

Searching for carbon leaks in multinational companies

Does a unilateral climate change policy cause companies to shift the location of production, thereby creating carbon leakage? In this paper, we analyze the effect of the European Union Emissions Trading System (EU ETS) on the geographic distribution of carbon emissions by multinational companies. The empirical evidence is based on unique data for the period 2007–2014 from the Carbon Disclosure Project, which tracks the emissions of multinational businesses by geographic region within each company. Because they already operate from multiple locations, multinational firms should be the most prone to carbon leakage. Our data includes the regional emissions of 1,122 companies, of which 261 are subject to EU ETS regulation. We find no evidence that the EU ETS has led to a displacement of carbon emissions from Europe toward the rest of the world, including to countries with lax climate policies and within energy-intensive companies. A large number of robustness checks confirm this finding. Overall, the paper suggests that modest differences in carbon prices between countries do not induce carbon leakage.

Implementation of Energy Management in the Industrial Sectors

Global climate change, scarce energy resources and the increase in energy consumption make action urgently necessary. For everyday life, suggestions and legal regulations have been cre-ated to deal with the scarcity of resources and sustainability. In industry, guidelines and laws regulate the handling of resources such as electrical energy. Controlled energy policy and "voluntary" reduction of energy demand, especially in energy-intensive companies, play a de-cisive role and offer the approach for a possible resolution of this tension through the applica-tion of an energy management system. In order to achieve the goal of efficient energy man-agement, a constant individual review of the systems have to take place, for example with the help of the Plan-Do-Check-Act cycle at short intervals, in order to offer continuous. This pa-per examines whether the implementation of measures through standards, directives and regu-lations is sufficient to achieve the timely energy policy goals. Furthermore, it needs to be clari-fied whether energy management itself needs to be more in focus.

Does Carbon Risk Matter? Evidence of Carbon Premium in EU Energy-Intensive Companies

In this paper we have assessed the impact of the European Union’s Emissions Trading Scheme (EU ETS) on the level of the carbon premium. The aim of the study is to determine whether there is a stable carbon premium in energy-intensive sectors. Unlike other studies, our research sample included not only companies in the energy sector, but also entities classified as energy-intensive. In the research, we used our own criterion for allocating companies to a clean and dirty portfolio, which made it possible to make the estimation of the carbon premium more resistant to changes in the rules for allocation of emission allowances. We detected a positive, statistically significant carbon premium in the years 2003–2012 and a negative one in the years 2013–2015, but we did not detect a statistically significant carbon premium in the period 2016–2019. This means that there are no grounds for concluding that there is a stable, positive carbon premium for energy-intensive companies subject to the EU ETS over time. We have also noticed that a significant problem in studying the impact of the EU ETS on the carbon premium is the use of static portfolios of clean and dirty companies

Simulation-based evaluation of an energy oriented production planning system

Energy intensive companies are trying to adopt their production to volatility of the energy market in Germany because of the increasing amount of renewable energies. Therefore, established production planning processes must be changed to adapt their energy consumption according to the volatility of energy prices using energy flexibility potentials. The energy oriented production planning system supports the company by scheduling their production system cost efficient. The attainable benefit depends on the planned time period which is optimized and the uncertainties during the operation mode. Therefore this paper introduces a method to evaluate an energy oriented production planning system focusing on the optimization parameters and the optimized planning period.

An Approach to Calculate Electricity Costs for the German Industry for a System Efficient Design by Combining Energy Efficiency and Demand Response

This study analyses the German electricity price mechanism and laws used for the calculation of electricity costs. The goal is to find which price components and regulatory to relief energy-intensive companies are affected by energy efficiency and/or by demand response measures in a German company. Therefore the price mechanism and laws were used in a newly self-developed open source tool to easily and quickly calculate electricity costs. Grid charges increase significantly if the power consumption is increased. Even short peaks in the load profile may prevent individual grid charges for a company, i.e. an increase in electricity costs for companies. This price mechanism makes a flexible power consumption economically unappealing.

Evolutionary game analysis of cooperation between natural resource- and energy-intensive companies in reverse logistics operations

Reverse logistics (RL) plays a significant role in circular economic development, especially in natural resource- and energy-intensive industries (NREI) as a long-term strategy to make a breakthrough in their development. In this study, we construct an evolutionary game theoretical model to investigate the cooperation between NREI companies that adopt one of two reverse logistics operating strategies: self-operation or joint venture. We derive the evolutionary stable strategy of the game through a replicator dynamic system. Simulation experiments are also conducted to validate the theoretical results, to show the evolution, and to analyze the sensitivities to parameters, based on the data of the steel industry that we collected from China. Among many other outcomes, our results show that self-operation is more likely to succeed in operating the current reverse logistics system. The methodologies and results are useful in supporting NREI's reverse logistics decisions. The practical applications of the study can be extended to other NREI sectors when the way of RL implementation is to be decided.

Suitability of OPC UA for distributed energy monitoring

Abstract According to ISO 50001, energy management systems have become widespread in the manufacturing industry. Especially for most large, energy-intensive companies, an energy management system has become an indispensable component of cost planning and sustainability strategy. Energy monitoring is used for continuously evaluating energy flows. Networked and distributed monitoring in industrial production environments is becoming increasingly common with cyber-physical systems (CPS) and can take advantage of them. Considering this, the OPC Unified Architecture (OPC UA) framework plays a decisive role, as it networks all factory components and creates a standard for interoperability between the components. In a literature review context, this paper examines the flexible OPC UA standard, particularly concerning its applicability to energy monitoring. The research question concerns which OPC UA aspects are of relevance for an energy management system. To reduce the technical resources, a subset of the complete standard tailored to the specific task can also be available in the components. Here, we investigate the requirements an energy-related CPS has to fulfill and extract the standard’s relevant components and characteristics from the OPC UA framework based on these requirements. Using the information model of OPC UA, an energy sensor becomes a CPS. We demonstrate this process in a prototypical implementation.

Effects of monetary investment, payback time and firm characteristics on electricity saving in energy-intensive industry

Our study looked at the extent to which firm characteristics such as total firm capital affect electricity saving in energy-intensive industry in Sweden from 2007 to 2015. Specifically, the most influential variables for systematic variation in electricity saving in the energy-intensive companies participating in Sweden’s voluntary programme for improving energy efficiency in energy-intensive industry (the PFE) were studied by analysing monetary investment, payback time and firm characteristics. Monetary investment and payback time influenced electricity savings during the PFE more than firm characteristics, with monetary investment being most influential. Nevertheless, the total systematic variation in firm characteristics may account for ∼16% of the systematic variation in electricity saving, where ∼74% (32 of 43) of the studied firm characteristics seemed to merit further investigation and where ∼49% (21 of 43) of firm characteristics appeared most influential. The most influential firm characteristics were total firm capital, stock turnover ratio, machinery, short-term liabilities per turnover ratio and goodwill. The overall results showed that firm characteristics can influence a firm’s energy-saving activities and indicated a tendency for more energy savings in companies that were financially weaker or had done less work to improve energy efficiency prior to the PFE.

Implementation of energy efficiency measures in compressed air systems: barriers, drivers and non-energy benefits

Increased global competition and resource scarcity drives industrial companies to cut costs. Energy can be a significant component of such cuts, particularly for energy-intensive companies. Improving energy efficiency in industry is complex, as it pertains to various energy-using processes that are heavily intertwined. One such process is the compressed air system (CAS), which is used in most industrial companies worldwide. Since energy efficiency improvement measures for various types of energy-using processes differ, technology-specific measures might encounter different barriers to and drivers for energy efficiency. The same applies to the non-energy benefits (NEBs) related to energy efficiency improvement measures; since measures vary between various energy-using processes, the perceived NEBs might be different as well. The aim of this paper is to study the barriers to, drivers for and NEBs of CAS energy efficiency improvement measures from the perspectives of three actors. Carried out as an interview study combined with a questionnaire, the paper merges the perspectives of users, audit experts and suppliers of CASs. The results showed that the major barriers are related to the investment, or are of an organisational character, and that organisational and economic factors seemed to be important for making positive decisions on energy efficiency investments and measures in CASs. Major NEBs for CASs include productivity gains and the avoidance of capital expenditures. The results of this study also address the importance of having a comprehensive approach to recognise additional effects of energy efficiency improvements in CASs.

Does environmental information disclosure affect the performance of energy-intensive firms’ borrowing ability? Evidence from China

In recent years, a growing strand of China’s listed companies chose to disclose environmental information, which may potentially affect their financial performance then further influence its performance of financial supports. To quantitatively investigate the impact of enterprise’s environmental information disclosure on the ability of firms’ borrowing in China, this paper divides the measurements of information disclosure into five categories and evaluates firms’ performance in capital market through its availability of a loan and the cost of capital. In total, 97 listed energy-intensive companies in China are selected and their data covering the period of 2000–2014 are utilized for empirical study. The empirical results indicate that enterprise’s environmental information disclosure appears to have a significantly positive effect on the loan size available, while the cost of capital is less sensitive to environmental information disclosure. The empirical evidence also suggests that, among the five aspects of information disclosure measurements, the future plan and monetary information are the most influential factors of the cost of capital.