IDEAS home Printed from https://ideas.repec.org/a/eee/enepol/v98y2016icp459-469.html
   My bibliography  Save this article

Paying the full price of steel – Perspectives on the cost of reducing carbon dioxide emissions from the steel industry

Author

Listed:
  • Rootzén, Johan
  • Johnsson, Filip

Abstract

This study examines the impacts felt downstream of carbon pricing and investments made in CO2 abatement within the steel industry. Using the supply of steel to a passenger car as a case study, the effects of a steel price increase on cost structures and price at each step of the supply chain were assessed. Since the prices of emission allowances under the European Union Emissions Trading System fall well below those required to unlock investments in low-CO2 production processes in the integrated steelmaking industry this paper seeks to pave the way for a discussion on complementary policy options. The results of the analysis suggest that passing on the compliance costs of the steel industry would have only marginal impacts on costs and prices for the end-use sectors (e.g., on the production cost or selling price of the passenger car). Under the assumptions made herein, at a carbon price of 100 €/tCO2, the retail price of a mid-sized European passenger car would have to be increased by approximately 100–125 €/car (<0.5%) to cover the projected increases in steel production costs.

Suggested Citation

  • Rootzén, Johan & Johnsson, Filip, 2016. "Paying the full price of steel – Perspectives on the cost of reducing carbon dioxide emissions from the steel industry," Energy Policy, Elsevier, vol. 98(C), pages 459-469.
    • Handle: RePEc:eee:enepol:v:98:y:2016:i:c:p:459-469
    DOI: 10.1016/j.enpol.2016.09.021
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0301421516304876
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.enpol.2016.09.021?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Dahlstrom, Kristina & Ekins, Paul, 2006. "Combining economic and environmental dimensions: Value chain analysis of UK iron and steel flows," Ecological Economics, Elsevier, vol. 58(3), pages 507-519, June.
    2. Skelton, Alexandra C.H. & Allwood, Julian M., 2013. "The incentives for supply chain collaboration to improve material efficiency in the use of steel: An analysis using input output techniques," Ecological Economics, Elsevier, vol. 89(C), pages 33-42.
    3. Lutsey, Nicholas P., 2010. "Review of technical literature and trends related to automobile mass-reduction technology," Institute of Transportation Studies, Working Paper Series qt9t04t94w, Institute of Transportation Studies, UC Davis.
    4. Lutsey, Nicholas, 2010. "Review of Technical Literature and Trends Related to Automobile Mass-Reduction Technology," Institute of Transportation Studies, Working Paper Series qt85p4x0jn, Institute of Transportation Studies, UC Davis.
    5. González Palencia, Juan C. & Araki, Mikiya & Shiga, Seiichi, 2016. "Energy, environmental and economic impact of mini-sized and zero-emission vehicle diffusion on a light-duty vehicle fleet," Applied Energy, Elsevier, vol. 181(C), pages 96-109.
    6. Rootzén, Johan & Johnsson, Filip, 2015. "CO2 emissions abatement in the Nordic carbon-intensive industry – An end-game in sight?," Energy, Elsevier, vol. 80(C), pages 715-730.
    7. Thiel, Christian & Perujo, Adolfo & Mercier, Arnaud, 2010. "Cost and CO2 aspects of future vehicle options in Europe under new energy policy scenarios," Energy Policy, Elsevier, vol. 38(11), pages 7142-7151, November.
    8. Karsten Neuhoff & Andrzej Ancygier & Jean-Pierre Ponssard & Philippe Quirion & Nagore Sabio & Oliver Sartor & Misato Sato & Anne Schopp, 2015. "Modernization and Innovation in the Materials Sector: Lessons from Steel and Cement," DIW Economic Bulletin, DIW Berlin, German Institute for Economic Research, vol. 5(28/29), pages 387-395.
    9. Vogt-Schilb, Adrien & Hallegatte, Stephane & de Gouvello Christophe, 2014. "Long-term mitigation strategies and marginal abatement cost curves : a case study on Brazil," Policy Research Working Paper Series 6808, The World Bank.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Li, Chengzhe & Zhang, Libo & Wang, Qunwei & Zhou, Dequn, 2024. "Towards low-carbon steel: System dynamics simulation of policies impact on green hydrogen steelmaking in China and the European Union," Energy Policy, Elsevier, vol. 188(C).
    2. Peng Chen & Andrew Vivian & Cheng Ye, 2022. "Forecasting carbon futures price: a hybrid method incorporating fuzzy entropy and extreme learning machine," Annals of Operations Research, Springer, vol. 313(1), pages 559-601, June.
    3. Yang, Honghua & Ma, Linwei & Li, Zheng, 2023. "Tracing China's steel use from steel flows in the production system to steel footprints in the consumption system," Renewable and Sustainable Energy Reviews, Elsevier, vol. 172(C).
    4. Kimon Keramidas & Silvana Mima & Adrien Bidaud, 2024. "Opportunities and roadblocks in the decarbonisation of the global steel sector: A demand and production modelling approach," Post-Print hal-04383385, HAL.
    5. Ye, Zhenhong & Yang, Jingye & Shi, Junye & Chen, Jiangping, 2020. "Thermo-economic and environmental analysis of various low-GWP refrigerants in Organic Rankine cycle system," Energy, Elsevier, vol. 199(C).
    6. Nwachukwu, Chinedu Maureen & Wang, Chuan & Wetterlund, Elisabeth, 2021. "Exploring the role of forest biomass in abating fossil CO2 emissions in the iron and steel industry – The case of Sweden," Applied Energy, Elsevier, vol. 288(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Mayyas, Ahmad T. & Qattawi, Ala & Mayyas, Abdel Raouf & Omar, Mohammed A., 2012. "Life cycle assessment-based selection for a sustainable lightweight body-in-white design," Energy, Elsevier, vol. 39(1), pages 412-425.
    2. Giulia Sandrini & Marco Gadola & Daniel Chindamo & Andrea Candela & Paolo Magri, 2023. "Exploring the Impact of Vehicle Lightweighting in Terms of Energy Consumption: Analysis and Simulation," Energies, MDPI, vol. 16(13), pages 1-31, July.
    3. Zhou, Wenbin & Cleaver, Christopher J. & Dunant, Cyrille F. & Allwood, Julian M. & Lin, Jianguo, 2023. "Cost, range anxiety and future electricity supply: A review of how today's technology trends may influence the future uptake of BEVs," Renewable and Sustainable Energy Reviews, Elsevier, vol. 173(C).
    4. Triantafyllopoulos, Georgios & Kontses, Anastasios & Tsokolis, Dimitrios & Ntziachristos, Leonidas & Samaras, Zissis, 2017. "Potential of energy efficiency technologies in reducing vehicle consumption under type approval and real world conditions," Energy, Elsevier, vol. 140(P1), pages 365-373.
    5. Celalettin Yuce & Fatih Karpat & Nurettin Yavuz & Gökhan Sendeniz, 2014. "A Case Study: Designing for Sustainability and Reliability in an Automotive Seat Structure," Sustainability, MDPI, vol. 6(7), pages 1-24, July.
    6. Lewis, Anne Marie & Kelly, Jarod C. & Keoleian, Gregory A., 2014. "Vehicle lightweighting vs. electrification: Life cycle energy and GHG emissions results for diverse powertrain vehicles," Applied Energy, Elsevier, vol. 126(C), pages 13-20.
    7. Mayyas, Ahmad & Qattawi, Ala & Omar, Mohammed & Shan, Dongri, 2012. "Design for sustainability in automotive industry: A comprehensive review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(4), pages 1845-1862.
    8. Kley, Fabian & Lerch, Christian & Dallinger, David, 2011. "New business models for electric cars--A holistic approach," Energy Policy, Elsevier, vol. 39(6), pages 3392-3403, June.
    9. Li, Zhe & Ouyang, Minggao, 2011. "A win-win marginal rent analysis for operator and consumer under battery leasing mode in China electric vehicle market," Energy Policy, Elsevier, vol. 39(6), pages 3222-3237, June.
    10. Varga, Bogdan Ovidiu, 2013. "Electric vehicles, primary energy sources and CO2 emissions: Romanian case study," Energy, Elsevier, vol. 49(C), pages 61-70.
    11. Haugen, Molly J. & Paoli, Leonardo & Cullen, Jonathan & Cebon, David & Boies, Adam M., 2021. "A fork in the road: Which energy pathway offers the greatest energy efficiency and CO2 reduction potential for low-carbon vehicles?," Applied Energy, Elsevier, vol. 283(C).
    12. Zhongqi Deng & Peng Tian, 2020. "Are China's subsidies for electric vehicles effective?," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 41(4), pages 475-489, June.
    13. Nemet, Gregory F. & Zipperer, Vera & Kraus, Martina, 2018. "The valley of death, the technology pork barrel, and public support for large demonstration projects," Energy Policy, Elsevier, vol. 119(C), pages 154-167.
    14. Oskar Lecuyer & Adrien Vogt-Schilb, 2013. "Assessing and ordering investments in polluting fossil-fueled and zero-carbon capital," CIRED Working Papers hal-00850680, HAL.
    15. González Palencia, Juan C. & Furubayashi, Takaaki & Nakata, Toshihiko, 2014. "Techno-economic assessment of lightweight and zero emission vehicles deployment in the passenger car fleet of developing countries," Applied Energy, Elsevier, vol. 123(C), pages 129-142.
    16. Li, Danyang & Chen, Wenying, 2019. "TIMES modeling of the large-scale popularization of electric vehicles under the worldwide prohibition of liquid vehicle sales," Applied Energy, Elsevier, vol. 254(C).
    17. Wu, Geng & Inderbitzin, Alessandro & Bening, Catharina, 2015. "Total cost of ownership of electric vehicles compared to conventional vehicles: A probabilistic analysis and projection across market segments," Energy Policy, Elsevier, vol. 80(C), pages 196-214.
    18. Weixing Liu & Hongtao Yi, 2020. "What Affects the Diffusion of New Energy Vehicles Financial Subsidy Policy? Evidence from Chinese Cities," IJERPH, MDPI, vol. 17(3), pages 1-15, January.
    19. Renaud Coulomb & Oskar Lecuyer & Adrien Vogt-Schilb, 2019. "Optimal Transition from Coal to Gas and Renewable Power Under Capacity Constraints and Adjustment Costs," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 73(2), pages 557-590, June.
    20. Rusich, Andrea & Danielis, Romeo, 2013. "The private and social monetary costs and the energy consumption of a car. An estimate for seven cars with different vehicle technologies on sale in Italy," Working Papers 1301, SIET Società Italiana di Economia dei Trasporti e della Logistica, revised 2013.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:enepol:v:98:y:2016:i:c:p:459-469. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/enpol .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.