Understanding the Competitiveness Implications of Future Phases of EU ETS on the Industrial Sectors
Open accessAbstract
In making key decisions for the future phases of the European Union Emissions Trading Scheme (EU ETS), policy makers need to fully understand the competitiveness implications of these decisions on industrial sectors. In this paper, we conduct an empirical analysis of cost pass-through ability of producers of selected products within the sectors refineries, glass, chemicals and ceramics of the UK economy. Our results provide new insights into the debate on the ability of pass-through of costs generated by the EU ETS. They suggest that some of the sectors analysed have the ability to pass-through a portion of their carbon costs to the consumers: The UK sectors are not capable to completely pass-through their costs into output prices, with the exception of UK ceramic goods.
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Empirical studies of the refining industry show PTRs of about 100%, i.e. full cost pass-through.
“Empirical studies of the refining industry show PTRs of about 100%, i.e. full cost pass-through (Alexeeva-Talebi, Citation2011; De Bruyn, Markowska, de Jong, & Bles, Citation2010; Oberndorfer et al., Citation2010).”
From Why does emissions trading under the EU Emissions Trading System (ETS) not affect firms' competitiveness? Empirical findings from the literature (2019) · cites this paper as Oberndorfer et al., 2010
PTRs are 50% for ammonium nitrate and 100% for low density polyethylene.
“Oberndorfer et al. (Citation2010) find PTRs of 50% (ammonium nitrate) and 100% (low density polyethylene), using data from the UK, and wider European data when available.”
From Why does emissions trading under the EU Emissions Trading System (ETS) not affect firms' competitiveness? Empirical findings from the literature (2019) · cites this paper as Oberndorfer et al., 2010
PTRs for the UK glass industry are 0% (container glass) and 20-25% (hollow glass).
“Oberndorfer et al. (Citation2010) find PTRs for the UK glass industry to be 0% (container glass) and 20–25% (hollow glass).”
From Why does emissions trading under the EU Emissions Trading System (ETS) not affect firms' competitiveness? Empirical findings from the literature (2019) · cites this paper as Oberndorfer et al., 2010
PTR is up to 40% for ceramic bricks and higher than 100% for ceramic goods.
“Furthermore, the PTR is up to 40% for ceramic bricks and higher than 100% for ceramic goods (ibid.).”
From Why does emissions trading under the EU Emissions Trading System (ETS) not affect firms' competitiveness? Empirical findings from the literature (2019) · cites this paper as Oberndorfer et al., 2010
Cites
CO <sub>2</sub> cost pass-through and windfall profits in the power sector
Sijm, J., Neuhoff, K., & Chen, Y. (2006) · Climate Policy · doi:10.1080/14693062.2006.9685588 · Cited by 576 · see citing works
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Joltreau, E., & Sommerfeld, K. (2019) · Climate Policy · doi:10.1080/14693062.2018.1502145 · Cited by 183 · see citing works
“Oberndorfer et al. (2010) find PTRs of 50% (ammonium nitrate) and 100% (low density polyethylene), using data from the UK, and wider European data when available.”
BackgroundMethodSato, M., Neuhoff, K., Graichen, V., Schumacher, K., & Matthes, F. (2015) · Environmental and Resource Economics · doi:10.1007/s10640-014-9759-y · Cited by 51 · see citing works
Impacts of Carbon Prices on Indicators of Competitiveness: A Review of Empirical Findings
(2015) · OECD Environment Working Papers · doi:10.1787/5js37p21grzq-en · Cited by 41 · see citing works
- Authors
- Oberndorfer, U., Alexeeva-Talebi, V., & Löschel, A.
- Affiliations
- Centre for European Economic Research (DE)
- University of Münster (DE)
- Corresponding author
- Oberndorfer, Ulrich
- ORCID
- Löschel, Andreas
- Venue
- SSRN Electronic Journal
- Publisher
- Elsevier BV
- Published
- 2010
- ISSN
- 1556-5068 (ISSN-L)
- OpenAlex
- W1528154212
- Cited by
- 21
- References
- 1
- Citations by year
- 2025: 1 · 2023: 2 · 2021: 1 · 2020: 1 · 2019: 1 · 2018: 1 · 2017: 1 · 2016: 1 · 2015: 1 · 2014: 4 · 2013: 6
- Type
- posted content
- Language
- en
- Open access
- green
- doi.org
- Locations
- SSRN Electronic Journal (acceptedVersion)
- MADOC (University of Mannheim) (acceptedVersion)
- RePEc: Research Papers in Economics (submittedVersion)
- MADOC (University of Mannheim) (submittedVersion)
- Econstor (Econstor) (submittedVersion)
- Topics
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Climate Change Policy and Economics
- Social Sciences › Law › EU Law and Policy Analysis
- Social Sciences › Economics, Econometrics and Finance › Economics and Econometrics › Merger and Competition Analysis
- Keywords
- EU Emissions Trading System, carbon pricing, competitiveness, cost pass-through, manufacturing industry, UK economy, oil refinery, glass industry, chemical industry, ceramic industry, output prices, carbon emission cost
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