The Heterogeneous Impact of Coal Prices on the Location of Cleaner and Dirtier Steel Plants

Francois Cohen and Giulia Valacchi
Authors registered in the RePEc Author Service: Francois Cohen

The Energy Journal, 2022, vol. Volume 43, issue Number 2

Abstract: Climate policy will predominantly affect industries that primarily rely on fossil fuels, such as steelmaking. Within these industries, exposure may be different by country according to the energy-intensity of national plants. We estimate the effect of coal prices on steel plant location worldwide and production preferences for BOF, a polluting technology, and EAF, a greener one. A 1% increase in national coal prices reduces BOF installed capacity by around 0.37%, while it has no statistically significant impact on EAF capacity. We simulate the implementation of a stringent European carbon market with no border adjustment and find a non-negligible shift in steel production outside Europe, with a concomitant impact on the technologies employed to produce steel. If applied worldwide, the same policy would primarily affect production in Asia, which relies on BOF and currently benefits from lower coal prices than those expected to emerge in the future.

JEL-codes: F0 (search for similar items in EconPapers)
Date: 2022
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.iaee.org/en/publications/ejarticle.aspx?id=3803 (text/html)
Access to full text is restricted to IAEE members and subscribers.

Related works:
Journal Article: The Heterogeneous Impact of Coal Prices on the Location of Cleaner and Dirtier Steel Plants (2022)
Working Paper: The Heterogeneous Impact of Coal Prices on the Location of Cleaner and Dirtier Steel Plants (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aen:journl:ej43-2-cohen

Ordering information: This journal article can be ordered from
http://www.iaee.org/en/publications/ejsearch.aspx

Access Statistics for this article

More articles in The Energy Journal from International Association for Energy Economics Contact information at EDIRC.
Bibliographic data for series maintained by David Williams ().