2015年-CEPS欧洲政策研究中心_Assessment_of_Cumulative_Cost_Impact_for_the_Steel_and_the_Aluminium_Industry_239页_4mb

Summary of the Assessment of Cumulative Cost Impact for the Steel and Aluminium Industry

Core Content

This report, conducted by the Centre for European Policy Studies in collaboration with Economisti Associati, evaluates the cumulative cost impact of EU legislation on the European primary and secondary aluminium industry. It compares these costs with those of international competitors and analyzes how regulatory burdens affect the competitiveness and profitability of the EU industry.

Key Findings

• Cumulative Regulatory Costs: The study estimates that cumulative regulatory costs for EU primary aluminium production range from 114 €/tonne to 149 €/tonne, with an intermediate estimate of 132 €/tonne.
• Cost Breakdown:
  • In the intermediate scenario, ETS indirect costs account for 45%, EU energy policies for 41%, and environmental costs for 13%.
  • Subsample 1 (plants using old long-term contracts or self-generation) has lower regulatory costs due to shielding from ETS and transmission costs. In this group, environmental regulation accounts for 72% of total costs, while energy policy compliance is 23%.
  • Subsample 2 (plants procuring electricity on the market) faces higher regulatory costs, with energy policies and ETS being the dominant cost drivers. In the intermediate scenario, energy policies account for 47%, ETS for 45%, and environmental costs for 8%.
• Impact on Profitability:
  • Regulatory costs represented 8% to 10% of total production costs on average from 2002 to 2012.
  • In 2006, regulatory costs were 16% of EBITDA, rising to 40% in 2009 and 2012.
  • In 2006, cumulative costs were 23% of profits, and in 2011, they were 242% of profits, indicating a significant burden on margins.
• Competitiveness Analysis:
  • EU primary aluminium plants are among the most expensive producers globally, with subsample 2 plants being the highest cost.
  • Subsample 1 plants have a significant competitive advantage, with Middle Eastern and Asian producers being more cost-efficient.
  • In 2012, EU regulatory costs accounted for one third of the competitive gap with Middle Eastern producers, and one fifth for subsample 1.

Methodology and Scope

• The study focuses on firms in NACEv2 class 24.42, which includes primary aluminium production, secondary aluminium production, and downstream activities (rolling and extrusion).
• A sample of 11 primary aluminium plants representing 60% of EU27 production in 2012 was used, while 20 secondary plants and 15 downstream plants were also included.
• The analysis is based on three scenarios:
  • Intermediate scenario: Assumes a 0.8 pass-on rate for ETS and average environmental cost attribution.
  • Lower bound scenario: Assumes a 0.6 pass-on rate for ETS and 50% of environmental costs due to EU rules.
  • Upper bound scenario: Assumes a 1.0 pass-on rate for ETS and 80% of environmental costs due to EU rules.

Cost Structures and Competitiveness

• EU primary smelters have very high production costs, with subsample 2 plants being the least competitive.
• Electricity is a crucial input for competitiveness, with subsample 1 plants benefiting from lower electricity prices and shielding from ETS indirect costs.
• EU regulatory costs are a major factor in the industry's challenges, but not the only one. National-level regulations and other factors also play a role.

Limitations and Considerations

• The study only assesses costs, not the benefits of EU legislation, such as proximity to high-value customers or skilled labor availability.
• Third-country producers are not analyzed for their regulatory cost burdens, which may reduce the cost gap in some cases.
• The impact of regulatory costs is amplified during crises, but they also reduce profitability during boom years.

Conclusion

EU legislation significantly affects the cost competitiveness of the primary aluminium industry. While subsample 1 plants benefit from long-term contracts and self-generation, these advantages are expected to diminish as contracts expire. Subsample 2 plants, which are more exposed to market electricity prices and ETS, face a greater burden from regulatory costs, contributing to a competitive disadvantage. The study highlights the importance of electricity costs and regulatory frameworks in shaping the profitability and global competitiveness of the EU aluminium industry.