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Sustainable and responsible business

Carbon leakage

Attribution of NACE-codes to CITL installations.

In the framework of the carbon leakage assessment the Commission had to identify which installations listed in the CITL registry belong to which sector classified under the NACE-code classification system .

The attached EXCEL data file excel8book - 6 MB [6 MB] includes the result of this exercise carried out by the Commission during 2009.The data file contains information which is explained in more detail in the attached explanatory note pdf - 20 KB [20 KB] .

Additional information on how data were collected and used in the context of the Commission’s Carbon Leakage Assessment leading to the adoption of the Commission Decision on a list of industry sectors and sub-sectors deemed exposed to a significant risk of carbon leakage can be found at the carbon leakage webpage of DG Climate Action of the European Commission.

 

The role of sectoral price elasticities

The notion of "cost past through" is a key issue to assess the potential of European industry to assume higher carbon costs in a world of asymmetric carbon prices without loosing competitiveness to the rest of the world.

This study pdf - 138 KB [138 KB] has looked into the role that price elasticities can play to measure cost past through for selected European NACE-4 sectors. An extensive review pdf - 827 KB [827 KB] of methodologies that can be used to estimate demand-price elasticities was first undertaken.

The outcome of the review has been the development of a general methodology pdf - 605 KB [605 KB] that has been designed to cope with various issues concerning the estimation of these elasticities. The selected methodology was then applied to four NACE 4-digit industries. The four industries are:

• Manufacture of Paper and Paperboard (NACE 2112 Rev.1.1)

• Manufacture of Glues and Gelatines (NACE 2462 Rev. 1.1)

• Manufacture of Ceramics Tiles and Flags (NACE 2630 Rev.1.1)

• Manufacture of Basic Iron and Steel and Ferro-alloys (NACE 2710 Rev.1.1)

Although results should be taken with care due to data limitations, however independently of the reliability of the obtained point estimates, they show that in general that price elasticities are undoubtedly one of the most useful indicators in assessing the impact of an increase in price to an industry. The ability to pass on the cost increases of an industry will depend greatly on these elasticities.

For more information, please see:

• the Climate Change website.

 

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