Shadow Price Signals in the Steel Sector: From Efficiency Gaps to Policy Maps

Giacomo Benini, Erik Enstad, Amare Alemaye Mersha and Luca Rossini

No 376263, FEEM Working Papers from Fondazione Eni Enrico Mattei (FEEM)

Abstract: This study provides the first global, plant-level analysis of technical and environmental efficiency in steel production using data from 143 mills across 50 countries (2019–2023). Using a Stochastic Directional Distance Function, we estimate plants’ distance to the frontier and compute shadow prices of CO2e emissions. Results show efficient electric arc furnace mini-mills, common in North America, face high abatement costs and low inefficiency. Conversely, integrated plants in developing countries are inefficient but can abate cheaply, with Europe in between. Shadow prices remain well below carbon market rates, underscoring the need for tailored climate policies.

Keywords: Climate Change; Environmental Economics and Policy; Sustainability (search for similar items in EconPapers)
Pages: 46
Date: 2025-11-07
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Persistent link: https://EconPapers.repec.org/RePEc:ags:feemwp:376263

DOI: 10.22004/ag.econ.376263

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