Journal Article

FZJ-2022-05235

http://join2-wiki.gsi.de/foswiki/pub/Main/Artwork/join2_logo100x88.png Hydrogen-based steel production and global climate protection: An empirical analysis of the potential role of a European cross border adjustment mechanism

Rübbelke, D. (Corresponding author) ; Vögele, S.FZJ* ; Grajewski, M. ; Zobel, L.

2022
Elsevier Science Amsterdam [u.a.]

This record in other databases:  

Please use a persistent id in citations: http://hdl.handle.net/2128/33004  doi:10.1016/j.jclepro.2022.135040

Abstract: The European Union’s aim to become climate neutral by 2050 necessitates ambitious efforts to reduce carbon emissions. Large reductions can be particularly attained in energy intensive sectors like iron and steel. In order to prevent the relocation of such industries outside the EU in the course of tightening environmental regulations, the establishment of a climate club jointly with other large emitters and alternatively the unilateral implementation of an international cross-border carbon tax mechanism are proposed. Our article focuses on the latter option choosing the steel sector as an example. In particular, we investigate the financial conditions under which a European cross border mechanism is capable to protect hydrogen-based steel production routes employed in Europe against more polluting competition from abroad. By using a floor price model, we assess the competitiveness of different steel production routes in selected countries. We evaluate the climate friendliness of steel production on the basis of specific GHG emissions. In addition, we utilize an input-output price model. It enables us to assess impacts of rising cost of steel production on commodities that use steel as intermediates. Our results raise the concern that a cross-border tax mechanism will not suffice to bring about competitiveness of hydrogen-based steel production in Europe because the cost tends to remain higher than the cost of steel production in e.g. China. Steel is a classic example for a good used mainly as intermediate for other products. Therefore, a cross-border tax mechanism for steel will increase the price of products produced in the EU that require steel as an input. This can in turn adversely affect competitiveness of these sectors. Hence , the effects of higher steel costs on European exports should be born in mind and could require the cross-border adjustment mechanism to also subsidize exports.

---

Contributing Institute(s):

1. Systemforschung und Technologische Entwicklung (IEK-STE)

Research Program(s):

1. 1112 - Societally Feasible Transformation Pathways (POF4-111) (POF4-111)

Appears in the scientific report 2022

---

Database coverage:
; ; ; Clarivate Analytics Master Journal List ; Current Contents - Agriculture, Biology and Environmental Sciences ; Current Contents - Engineering, Computing and Technology ; Ebsco Academic Search ; Essential Science Indicators ; Nationallizenz ; SCOPUS ; Science Citation Index Expanded ; Web of Science Core Collection

---