The Composition and Drivers of Energy Prices and Costs in Energy-Intensive Industries: The Case of Ceramics, Glass and Chemicals. CEPS Special Report No. 85, 27 March 2014

In May 2013, the European Commission received a mandate from the European Council to “to present an analysis of the composition and drivers of energy prices and costs in Member States, with a particular focus on the impact on households, SMEs and energy intensive industries, and looking more widely at the EU's competitiveness vis-à-vis its global economic counterparts”. Following such mandate and in view of the preparation by the Commission of a Communication and a Staff Working Document, DG Enterprise and Industry commissioned CEPS to carry out a set of studies aimed at providing well-grounded evidence about the evolution and composition of energy prices and costs at plant level within individual industry sectors. A team of CEPS researchers conducted the research, led by Christian Egenhofer and Lorna Schrefler. Vasileios Rizos served as Project Coordinator. Other CEPS researchers contributing to the project included: Fabio Genoese, Andrea Renda, Andrei Marcu, Julian Wieczorkiewicz, Susanna Roth, Federico Infelise, Giacomo Luchetta, Lorenzo Colantoni, Wijnand Stoefs, Jacopo Timini and Felice Simonelli. In addition to an introductory report entitled “About the Study and Cross-Sectoral Analysis”, CEPS prepared five sectoral case studies: two on ceramics (wall and floor tiles and bricks and roof tiles), two on chemicals (ammonia and chlorine) and one on flat glass. Each of these six studies has been consolidated in this single volume for free downloading on the CEPS website. The specific objective was to complement information already available at macro level with a bottom-up perspective on the operating conditions that industry stakeholders need to deal with, in terms of energy prices and costs. The approach chosen was based on case studies for a selected set (sub-)sectors amongst energy-intensive industries. A standard questionnaire was circulated and respondents were sampled according to specified criteria. Data and information collected were finally presented in a structured format in order to guarantee comparability of results between the different (sub-)sectors analysed. The complete set of files can also be downloaded from the European Commission’s website: http://ec.europa.eu/enterprise/newsroom/cf/itemdetail.cfm?item_id=7238&lang=en&title=Study-on-composition-and-drivers-of-energy-prices-and-costs-in-energy-intnsive-industries The results of the studies were presented at a CEPS Conference held on February 26th along with additional evidence from other similar studies. The presentations can be downloaded at: http://www.ceps.eu/event/level-and-drivers-eu-energy-prices-energy-inten...

Will improved access to capital dampen the need for more agricultural land? A CGE analysis of agricultural capital markets and world-wide biofuel policies. Factor Markets Working Paper No. 48, May 2013

This paper analyses the consequences of enhanced biofuel production in regions and countries of the world that have announced plans to implement or expand on biofuel policies. The analysis considers biofuel policies implemented as binding blending targets for transportation fuels. The chosen quantitative modelling approach is two-fold: it combines the analysis of biofuel policies in a multi-sectoral economic model (MAGNET) with systematic variation of the functioning of capital and labour markets. This paper adds to existing research by considering biofuel policies in the EU, the US and various other countries with considerable agricultural production and trade, such as Brazil, India and China. Moreover, the application multi-sectoral modelling system with different assumptions on the mobility of factor markets allows for the observation of changes in economic indicators under different conditions of how factor markets work. Systematic variation of factor mobility indicates that the ‘burden’ of global biofuel policies is not equally distributed across different factors within agricultural production. Agricultural land, as the pre-dominant and sector-specific factor, is, regardless of different degrees of inter-sectoral or intra-sectoral factor mobility, the most important factor limiting the expansion of agricultural production. More capital and higher employment in agriculture will ease the pressure on additional land use – but only partly. To expand agricultural production at global scale requires both land and mobile factors adapted to increase total factor productivity in agriculture in the most efficient way.