EU Renewable Energy Research Articles

Lignocellulosic Ethanol in a Greenhouse Gas Emission Reduction Obligation System—A Case Study of Swedish Sawdust Based-Ethanol Production

A greenhouse gas (GHG) emission reduction obligation system has been implemented in the Swedish road transport sector to promote the use of biofuels. For transportation fuel suppliers to fulfil this obligation, the volume of biofuel required decreases with decreasing life cycle GHG emission for the biofuel, linking lower GHG emission to higher economic value. The aim of this study was to investigate how the economic competitiveness of a Swedish emerging lignocellulosic-based ethanol production system would be influenced by the reduction obligation. The life cycle GHG emission for sawdust-based ethanol was calculated by applying the method advocated in the EU Renewable Energy Directive (RED II). The saving in GHG emissions, compared with fossil liquid transportation fuels, was 93% for a potential commercial production system in southern Sweden. This, in turn, will increase the competitiveness of sawdust-based ethanol compared to the mainly crop-based ethanol currently used in the Swedish biofuel system, which has an average GHG emission saving of 68%, and will allow for an almost 40% higher price of sawdust-based ethanol, compared to the current price of ethanol at point of import. In a future developed, large-scale market of advanced ethanol, today’s GHG emission reduction obligation system in Sweden seems to afford sufficient economic advantage to make lignocellulosic ethanol economically viable. However, in a short-term perspective, emerging lignocellulosic-based ethanol production systems are burdened with economic risks and therefore need additional economic incentives to make a market introduction possible.

Contested energy transition? Europeanization and authority turns in EU renewable energy policy

ABSTRACTIn a context of multiple crises, the European Union’s climate and energy policies have become highly politicized and contested. Based on a comparative study of renewable energy policies in ten EU member states, and adopting a circular view of policy change and Europeanization to account for overlapping sovereignty claims between the national and the European level, this article unravels the authority debates over successive rounds of negotiation, adoption, and implementation along three EU directives. Following an exploratory process-tracing method, we investigate how policymaking authority originally delegated to the EU becomes contested by the member states and how these authority conflicts are managed. We find that the Europeanization of renewable energy policy is accompanied by an issue-specific renegotiation of authority between the EU and its member states which, in times of crises, can trigger instances of de-Europeanization and even a partial weakening of European integration in this policy domain.

Reactive power provision using distribution grid resources: flexibility hub use case

With the energy transition at sight and the EU renewable energy source integration ambition, the EU-SysFlex project aims at defining a set of advancements in the electric system that drives us towards that direction. With the increasing decentralisation and granularity of the generation facilities, local generation will gain a determinant role in the provision of future local and global systems services. This study presents an overview of a framework for a local market for reactive power control that will be implemented and demonstrated under a real scenario in a Portuguese demo site. The demonstration includes a set of capacitor banks of the distribution system operator (DSO) and two wind farms of a wind power generation operator. This local reactive power market consists of a close to real-time continuous intraday local market managed by the DSO, with 15 min delivery time to increase temporal granularity, and with 7 h delivery horizons with complex bids to allow more flexible assets operation. Market agents can also correct future previously scheduled positions by participating themselves as sellers or buyers of capacitive or inductive reactive power, providing a more flexible framework.

Engaging men and women in energy production in Norway and the United Kingdom: The significance of social practices and gender relations

To achieve an energy transition favouring renewable energy in the face of climate change, several countries in the EU region have pursued different economic incentives to encourage citizens to invest in household solar systems. This enables citizens to become ‘prosumers’ who produce electricity for their own consumption and sell excess produced electricity to the central grid supply. Influencing people's energy consumption in this way can potentially reach EU's renewable energy targets, as prosumers add to the stock of renewable energy nationally. Through in-depth interviews with men and women from 28 households in Norway and the United Kingdom, this article explores the process of becoming a prosumer and the energy practices in prosuming households. Drawing on theories of social practice and domestication, the article pays particular attention to how the phases of appropriation, objectification, incorporation and conversion of household solar systems are gendered in the sense that women and men have different economic, social and cultural capital, and to how this influences their interaction with technology in the transition from consumers to prosumers. Viewing prosuming through the gender lens reveals how policies need to be designed to promote new practices that are attractive for a more diverse group than today's standard subsidies and feed-in tariffs if the aim is to increase the number of residential prosumers and transition to a more sustainable and equitable low-carbon energy system.

Recognition and Obligation: EU and South Africa Renewable Energy Development Cooperation

Justice is a contested concept with complex conceptual frameworks premising a particular approach. This paper defends an approach to justice based on the concept of ‘recognition’, one of the three founding principles of the GLOBUS project. The argument is that ‘recognition’ creates mutual obligations and is not just a discursive acceptance of another. Upon this framework, the other two principles of justice, nondomination and impartiality, are integrated into a conceptual framework to analyse European Union/South African obligations regarding clean energy. This is not a distributive justice argument. It is an argument premised on recognising that developed countries, in this case those in the European Union, have contributed more to climate change than developing countries, in this case South Africa. However, a distributive obligation follows from struggles for recognition. The consequences of climate change are experienced asymmetrically, with developing countries both being more affected and having fewer resources to adapt to and mitigate it. Developed countries consequently have an obligation to contribute significantly to developing countries’ adaptation and mitigation programmes. In this way, a just transition away from fossil fuels in developing countries is possible. At the same time, ‘obligation’ gives content to the abstract principles of ‘non-domination’ and ‘impartiality’.

Jerusalem Artichoke (Helianthus tuberosus L.): A Versatile and Sustainable Crop for Renewable Energy Production in Europe

Recently, biofuels have become a strategic focus to reduce vehicle emissions and increase sustainability of the transport sector. However, the sustainability of biofuels production has been questioned owing to its implications for future land footprint. In this respect, the EU Commission has very recently classified as low indirect land-use change (ILUC)–risk biofuels those obtained by crops grown on marginal lands and with low external inputs. Only few crops can reach high yields under both of these conditions across Europe. From this point of view, Jerusalem artichoke (Helianthus tuberosus L.) is certainly a species worthy of remark since it has all the attributes to accomplish the aims of the updated EU Renewable Energy Directive (RED II). Starting from physiological aspects, the present review examines and summarizes literature on the ecology, genetic resources, agronomic practices and sustainability of this species. The goal is to point out the recent advances of research in Jerusalem artichoke (JA) potential as alternative biofuel feedstock and to identify what is still needed to better characterize its environmental benefits and agronomic performance.

Toward “hardened” accountability? Analyzing the European Union's hybrid transnational governance in timber and biofuel supply chains

AbstractThe voluntary/mandatory divide is a constant feature of scholarly debates on corporate accountability for sustainability in global supply chains. A widely held assumption is that the addition of state authority to private transnational governance in global supply chains will “harden” accountability and, thus, promote more sustainable production. The state's ability to set legally binding requirements is expected to coerce companies into complying. The hybridization of private and state authority is seen to strengthen good practice in private authority. This empirical study questions these assumptions based on an analysis of two hybrid governance arrangements for sustainability in global supply chains: the EU's Timber Regulation (EUTR) and Renewable Energy Directive (RED). The results demonstrate that both EUTR and EU‐RED yield sector wide efforts of compliance and to this extent can be seen as enhancing accountability in the sense of answerability. At the same time, we find that the policies in both cases are not more demanding, nor enforced strictly, the latter putting into question their potential to coerce companies. Further, a “hardening” of accountability is at least obscured as both EUTR and EU‐RED have stripped private authority they employ in their hybrid transnational governance from the need to establish legitimacy with a broader audience. This makes legal compliance and cost‐effectiveness the core factor for companies’ efforts to demonstrate compliance. Our findings hence question whether the EUTR and EU‐RED have led to “hardened” accountability compared to private transnational governance, and ask for an empirical, more nuanced understanding of what there is to gain or lose from hybridizing private and state authority in transnational governance.

Investigation and Evaluation of Primary Energy from Wind Turbines for a Nearly Zero Energy Building (nZEB)

In order to fulfill the European Energy Performance of Buildings Directive (EPBD) requirements regarding the reduction of energy consumption in buildings, great attention is paid to primary energy consumption. Wind energy is considered a type of primary energy. The analysis of the literature has revealed that wind energy is evaluated by different methods. Therefore, the aim of this article is to calculate the effect of the parameters of wind sources and wind speed on the primary energy factor of wind turbines. In order to achieve this aim, the primary energy factor of investigated 100 wind turbines and 11 wind farms operating in Lithuania was calculated. The results of the investigation show that the difference in the non-renewable primary energy factors between wind turbines with regard to their capacity is 35%. In addition, primary energy factor (PEF) values depend on geographic location and climate conditions. This paper provides a recommendation that the EU energy efficiency and renewable energy directives and regulations of all EU member states should use the same or, at least, a very similar methodology for the calculation of the primary energy factors of renewable and non-renewable energy sources.

Potentials and challenges in lignocellulosic biofuel production technology

Since the Kyoto protocol, the EU renewable energy policy has been the driving force in research and development of the production and use of biofuels. Therefore, the utilization of biofuels and the scientific research to widen the scope of their commercialization are being increasingly promoted. In this context, we present here an overview of the technological developments that have occurred in the production of different biofuels and their resources with a focus on the lignocellulosic biomass and biofuels derived from it. In the recent years, many technologies have evolved enabling the production of different liquid biofuels from lignocellulosic biomass. Bioethanol production using microbial fermentation, and production of bio-oil using fast pyrolysis process of biomass are some of the most widely researched and promising technologies. The first production plants based on these techniques are already operational. Bioethanol production from lignocellulosic biomass promises a good fuel yield under laboratory scale. However, there are several challenges that need to be tackled before the production process can be commercialized. We provide here an overview of the various possibilities that can be exploited for biofuel production and make recommendations for increasing the production efficiency with a view to improving the overall yield and lowering the production costs.

The EU Emissions Trading System and Renewable Energy Policies: Friends or Foes in the European Policy Mix?

The EU’s energy transition has advanced rapidly over the last decade, with important implications for the policy landscape. Scholars have characterized the Emissions Trading System (ETS) and the Renewable Energy Directive as the most important policies for reducing greenhouse gas emissions in the electricity sector. However, since the early 2010s, non-governmental and industrial actors have debated whether renewable energy (RE) support and targets are compatible with the ETS. This article systematically assesses the policy preferences of five groups of non-governmental actors with respect to the role of the ETS versus RE policies in three policy processes. For most groups, preferences remain stable across the policy processes. In the electricity industry group, preferences vary from one policy process to another. During the ETS-reform, this group of actors argues that the ETS should be the main climate policy, whereas, in the Clean Energy Package-process, almost half of the utilities endorse continued RE support. This represents a shift in their line of reasoning and policy position: from asserting that RE policies ‘destroy’ the ETS, towards a position which recognizes the value of having both the ETS and RE policies as complementary instruments in the policy mix. The findings point to increasing support for RE policies, which is important for policy makers and scholars involved in designing and implementing the EU’s decarbonization policies.

The Rise of Community Energy from Grassroots to Mainstream: The Role of Law and Policy

Abstract In recent years, national and subnational law-makers and policy-makers have increasingly adopted measures to stimulate decentralised renewable energy generation, turning local and rural communities into prominent actors in the energy transition. The recast of the EU Renewable Energy Directive follows this trend, prompting all EU Member States to adopt measures to spearhead community energy. Yet to date, only a handful of ‘pioneer’ EU Member States—most saliently Denmark, Germany and the UK—have accrued significant experience with the mainstreaming of community energy. This article reflects on the role of law and policy in turning grassroots community action into a mainstream means for renewable energy generation. It unpacks the regulatory questions underlying the notion of community energy embedded in the Renewables Directive, looking at how these have been addressed in pioneer Member States. This analysis aims to deliver greater understanding of community energy, to highlight gaps in our knowledge of it, and ultimately to identify an agenda for further scholarly enquiry.

European Union non-tariff barriers to imports of African biofuels

ABSTRACTThe introduction of EU mandates for biofuel use in the transport sector initially led to high expectations that African countries would benefit from biofuel exports to the EU. This market opportunity has not been realised, however, due to regulatory requirements for the production of biofuels that act as non-tariff barriers to the acceptance of African biofuels in the EU. This benefits producers of biofuel crops and processors in the EU by providing economic protection. In particular, the EU import regime fails to acknowledge the challenges faced by African (or other) developing countries in satisfying the requirements.Using a computable general equilibrium model for Malawi, we quantify the foregone potential benefits from biofuel production for exports to the EU arising from non-tariff barriers (NTBs) embedded in the sustainability criteria. Our results show that sugarcane-ethanol production under smallholder outgrower regimes would lead to both economic growth outcomes and rural development, whereas jatropha-biodiesel fails to increase rural incomes due to low profitability. While there is widespread agreement on the latter today, our study is the first to explore the failure of jatropha in Malawi in an economy-wide framework. The ethanol results, however, also hold if land clearing is forbidden, thereby preserving biodiversity as stipulated under the sustainability criteria in the EU Renewable Energy Directive. The EU NTBs embedded in the Renewable Energy Directive thus play a much larger role for countries in Sub-Sahara Africa than simply inhibiting investment opportunities and should be refashioned to lower the entry costs for developing countries.

How to include cooling in the EU Renewable Energy Directive? Strategies and policy implications

The EU Renewable Energy Directive (RES-Directive) establishes a policy framework for the promotion of renewable energy in the EU. Under the framework of the RES-Directive, EU Member States have adopted national renewable energy action plans including sectorial targets for electricity, heating and cooling, and transport. While the RES-Directive outlines the methodology for calculating the renewable energy shares for electricity, heating and transport, it does not offer any indications on how to account for renewable cooling. Due to the lacking methodological guidelines, Member States can currently not report renewable cooling and cooling does therefore not play a role for target achievement. At the same time, the energy demand for cooling is growing rapidly and the inclusion of renewable cooling can potentially have a large impact on the renewable energy shares that Member States report. Based on an overview of available cooling technologies, this article explores various strategies for including cooling in the RES-Directive and investigates the impact on target achievement. We find that the potential impact of including cooling is considerable and conclude that ambitious minimum efficiency requirements are needed in order to maintain the ambition of the RES-Directive and to stimulate the development of policies to support low-carbon cooling technologies.

The European Energy Policy for 2020–2030
 RED II: what future for vegetable oil as a source of bioenergy?

The support for vegetable oils biodiesel is defined by the Renewable Energy Directive (RED). After three years of negotiations, RED II (recast of the 2010–2020 RED I) has been adopted and published in December 2018. RED II sets the framework for the EU renewable energy policy for 2021–2030. Although RED II gives a priority to advanced biofuels and electricity in transport with specific targets and multipliers. For crop-based biofuels as vegetable oil biodiesel, RED II offers the possibility to preserve the current investments by giving the Member States the possibility to cap their consumption at the national 2020 consumption level (plus 1%) with maximum of 7%. With the idea to cut the link of crop-based biofuels with deforestation, a change of approach on the ILUC issue is introduced by RED II with the definition of “high ILUC-risk feedstocks with a significant expansion on land with high carbon stocks”. The high ILUC-risk feedstocks will be capped in each Member State at the 2019 level until 2023, and then progressively eliminated by 2030. An exemption from these constraints is provided for to low ILUC-risk feedstocks not linked to deforestation – direct or indirect – and identified by a certification granted to additional feedstocks produced either through productivity improvements or from cultivation on abandoned or degraded land. An Implementing Act will further detail by 2021 the conditions of the low ILUC-risk certification. In a Delegated Act published in March 2019, the EU Commission classified the palm oil as the sole high ILUC-risk feedstock with more than 40% expansion on high carbon stock land (vs. 8% for soybean) on the base of the current available data. Nevertheless, there is a certain uncertainty on the final use of palm oil in bioenergy, as the details of the certification of low ILUC-risk feedstocks are unknown before the publication of the Implementing Act (2021), and as the Delegated Act himself will be reviewed in 2021 and 2023.

Increased integration between innovative ocean energy and the EU habitats, species and water protection rules through Maritime Spatial Planning

This article investigates whether Maritime Spatial Planning (MSP) –which promotes the integrated planning and management of seas and oceans– can play a role in creating increased integration between the EU's renewable energy policy and the potentially conflicting rules on the protection of habitats, species and water. The article focuses on innovative ocean energy (tidal stream, wave and salinity gradient energy). It can be said that there is a possible lack of integration between the Renewable Energy Directive and the EU rules on the protection of habitats, species and water: the Habitats Directive, the Birds Directive, the Water Framework Directive and the Marine Strategy Framework Directive. The role that MSP could play in solving this is assessed with regard to the following two legal issues that reflect the said lack of integration: 1) while there are derogation clauses, there is no obligation for Member States to apply these clauses and to undertake a balancing act between ocean energy, on the one hand, and the protection of habitats, species and water, on the other; 2) even if these clauses are applied, it remains unclear how much weight Member States should attach to ocean energy under a subsequent balancing act. The concept of Maritime Spatial Planning in theory is very suitable for guaranteeing that the interests of both renewable energy policy and environmental policy are duly taken into account in licensing procedures and management measures. The contribution that MSP can make towards increased integration is, however, strongly dependent on the way MSP is interpreted on the Member State level. This is illustrated by a discussion of the differences in the current MSP approaches in Scotland and the Netherlands. This article concludes that Maritime Spatial Planning may –if certain conditions are fulfilled– be a suitable way to create a necessity to balance the EU's habitats, species and water protection rules with (ocean) renewable energy projects, on different levels of governance. Nevertheless, it also concludes that MSP alone cannot guarantee a balancing act that represents the goals of the Renewable Energy Directive and those of the aforementioned environmental directives in an equal manner. This article proposes to link MSP to detailed renewable energy plans per Member State in order to solve this issue.

Addressing multiple externalities from electricity generation: a case for EU renewable energy policy beyond 2020?

Subsidies to electricity generation from renewable energy sources (RES-E) implemented next to an emissions trading scheme (ETS) are frequently criticised for producing no additional benefit in terms of mitigating climate change and increasing the costs of emissions abatement. We re-assess the performance of this policy mix in a setting in which electricity generation produces multiple externalities (beyond climate change) and in which these externalities cannot be addressed by first-best policies. Using an analytical partial equilibrium model, we show that the optimal composition of the policy mix depends on the market interactions between the multiple externalities. We complement this analysis by a quantitative policy assessment, combining a top-down, global macro-economic model and a bottom-up, global electricity sector model. The quantitative analysis suggests that RES-E subsidies may be effective in partly reducing externalities from fossil fuel combustion (by crowding out gas- and oil-fired generation) and in mitigating radiation hazards (by crowding out nuclear generation). However, RES-E subsidies are not necessarily suited to address externalities related to the extraction and transportation of fossil fuels or risks of sudden supply interruptions for imported fuels. With respect to these latter externalities, tightening the ETS cap may be a more effective, but politically less feasible approach.

Hydrotreatment of straw bio-oil from ablative fast pyrolysis to produce suitable refinery intermediates

To meet the expected requirements of the proposed EU Renewable Energy Directive for the next decade (RED II), it is necessary to increase the availability of second-generation biofuels. One promising way of doing this involves using ablative fast pyrolysis units to transform an agricultural by-product, for example straw, into bio-oil. To obtain straw bio-oil suitable for processing in a typical refinery, we optimized the key parameters of its hydrotreatment. For the upgrading, a continuous flow reactor with a fixed bed of a commercial sulphide NiMo/Al2O3 catalyst was used. The reaction temperature and pressure were tested at 240–360 °C and 2–8 MPa, respectively. The reaction off-gas was analysed by GC-FID/TCD. A detailed physicochemical analysis of the products was carried out. Under most conditions tested, the product was separated into an aqueous and an organic phase. For the best products, >85% of the feed energy content remained in the organic phase and a significant decrease in viscosity and acidity was achieved. The product prepared at 360 °C and 8 MPa was the only one completely miscible with straight-run gas oil and, thus, appears to be the most suitable for co-processing in a refinery.

How is biodiversity protection influencing the potential for bioenergy feedstock production on grasslands?

AbstractSustainable feedstock supply is a critical issue for the bioenergy sector. One concern is that feedstock production will impact biodiversity. We analyze how this concern is addressed in assessments of biomass supply potentials and in selected governance systems in the EU and Brazil, including the EU Renewable Energy Directive (RED), the EU Common Agricultural Policy (CAP), and the Brazilian Forest Act. The analysis focuses on grasslands and includes estimates of the amount of grassland area (and corresponding biomass production volume) that would be excluded from cultivation in specific biodiversity protection scenarios. The reviewed assessments used a variety of approaches to identify and exclude biodiverse grasslands as unavailable for bioenergy. Because exclusion was integrated with other nature protection considerations, quantification of excluded grassland areas was often not possible. The RED complements and strengthens the CAP in terms of biodiversity protection. Following the RED, an estimated 39%–48% (about 9–11 Mha) and 15%–54% (about 10–38 Mha) of natural and non‐natural grassland, respectively, may be considered highly biodiverse in EU‐28. The estimated biomass production potential on these areas corresponds to some 1–3 and 1.5–10 EJ/year for natural and non‐natural grassland, respectively (depending on area availability and management intensity). However, the RED lacks clear definitions and guidance, creating uncertainty about its influence on grassland availability for bioenergy feedstock production. For Brazil, an estimated 16%–77% (about 16–76 Mha) and 1%–32% (about 7–24 Mha) of natural and non‐natural grassland, respectively, may be considered highly biodiverse. In Brazil, ecological–economic zoning was found potentially important for grassland protection. Further clarification of grassland definitions and delineation in regulations will facilitate a better understanding of the prospects for bioenergy feedstock production on grasslands, and the impacts of bioenergy deployment on biodiversity.

Low-ILUC Biofuel Production in Marginal Areas: Can Existing EU Policies Support Biochar Deployment in EU MED Arid Lands under Desertification?

Arid lands in EU MED areas are increasing in extension year by year, as it is well documented by many studies of International Institutions (as EC-JRC, EEA, etc). EU MED farmers face the dramatic effects of extended drought conditions, that combined with extreme phenomena as floodings or thunderstorms make economic profitability of agriculture very low or even negative. This is associated with a clearly increasing abandonment rate of agricultural land in EU. The most EU critical areas are located in Spain, but also Greece, Italy and Portugal, as well as in the non-EU Southern rim of the MED basin. Biochar could represent an effective approach to fight desertification, together with other agronomic practices which can vary depending on the specific location or crops. Biochar can be cheaply produced from residual biomass through processes such as slow pyrolysis or hydrothermal carbonization, and its combination with compost obtained from the Organic Fraction of Municipal Solid Waste (OFMSW) or digestate from anaerobic digestion can offer both a short and a medium-to-long term effect in dryland agriculture. These lands, that otherwise would inevitably leave the active utilisation in conventional agriculture, would be suitable for energy crop cultivation, as drought resistant oil crop, well meeting the latest indications in the EC REDII proposal.Through biochar (and derived product) application, the loss of Utilised Agricultural Land in EU MED drylands can be prevented. From the policy side, it thus makes sense to investigate if existing policies are sufficient to facilitate the wide market deployment of biochar, or if new instruments are needed. Our analysis demonstrates that currently operational EU policies, could be well used to implement biochar related actions in arid lands. However, most often these measures are not transferred into concrete programmes at regional level, especially in the agricultural sector. In fact, EU and Member States already have quite a large number of instruments that can directly or indirectly support actions targeted to increase the resilience of these arid lands to Climate Change, generating a significant impact on the environmental and socio-economic situation. Policy should support initiatives that can provide clear evidences, be cost- and environmentally-effective, and adapted to local conditions. The present work investigated EU/MS policies that could potentially support the improvement of soil resilience to climate change in EU MED region, by enabling widespread diffusion of biochar.The EU legislative elements that were considered are the EU agricultural policy, the EU Carbon sequestration& storage policy (seen in the framework of the COP21 agreement and its core goals), and the EU renewable energy policy, even if others would also apply. We considered sunflower cultivation in dry land of Central area (Tuscany) of Italy. Results showed that marginal land could be seen as an opportunity to produce low-ILUC biofuels (as mentioned in the EC REDII proposed Directive), without conflicting with food production or generating negative effects on GHG emissions. The Long-term storage of C in the soil through biochar would perfectly match with the Climate strategy defined at International level (Paris COP21 and following). Soil, after ocean, is the second most abundant C sink: Paris-COP21 called for C-negative actions (and not just C-neutral ones). In this respect, the proposed approach would perfectly match with EU (ETS) and International (COP21) policy for the coming decades.

The interaction of climate and trade policy

This article studies climate policies and trade policies focusing on their interactions. It presents an applied general equilibrium model which combines the theoretical foundations of an Eaton–Kortum (EK) model of international trade with the comprehensiveness of a global multi-region, multi-sector Computable General Equilibrium (CGE) model of production and consumption. The EK model features endogenous Ricardian productivity gains and non-tariff trade costs. Countries and sectors can be disaggregated, e.g. representing federal states and technology-specific power generation. The model calibration introduces a log-multiplicative structural estimation approach based on a gravity model with market clearing conditions to simultaneously estimate the EK model’s trade elasticity, productivities and iceberg trade costs at the subnational sectoral level. Based on these estimates, policy simulations are carried out, in which the effect of climate and trade policy on CO2 emissions is decomposed into a scale, composition, technique and substitution effect. The policy simulations suggest that the removal of tariffs creates smaller welfare gains than a comparable reduction of non-tariff barriers but also a slightly smaller increase in European and global CO2 emissions, mainly via substitution and composition effects. The effects significantly differ between national and subnational model regions. Lower trade costs reduce the negative welfare effects of the European Emissions Trading System (EU ETS) for some of its members by lowering emissions. EU renewable energy support slightly reduces European and global emissions but also welfare compared to the EU ETS alone.