Trinomics has conducted a study on the role of climate policies on the competitiveness position of four industrial sectors in the Netherlands: the chemical industry, the steel sector, the cement sector and the refinery sector. While production in regions outside the EU is growing and energy prices and resource security are pressing issues for all sectors, the potential impacts of strict climate policy differ considerably between the four.
The Ministry of Infrastructure and the Environment of the Netherlands has asked Trinomics to examine the impact of climate policy on competitiveness of four industrial sectors in the Netherlands. We have examined the economic importance of oil refinery, chemistry, and the steel and cement sector, plus the role of climate policy on the competitiveness of the sectors. The results differ substantially amongst the sectors. Chemistry is the most important sector for the Dutch economy in terms of employment and added value, followed by oil refinery and the steel sector. The contribution of the cement sector to the Dutch economy is by far the smallest. At the same time, the consequences of strict climate policies could be the largest for cement. Strict climate policies on the other hand seem to play a relatively small role for refinery and specialty chemicals. Steel and basic chemistry would be affected, but the consequences are seen to be limited.
The impact of climate policy should be seen in light of other competitiveness issues and a broader geographical scale. The Dutch and the European industries are very dependent on resource and fossil fuel imports, and are challenged by rising energy and resource prices. In the last decade, competition with other regions has grown fiercer, which has made resource security issues more pressing. Industrial activity in Asia has expanded rapidly. The Middle East is setting up more refineries and the United States has seen a massive drop in energy prices since the extraction of shale gas. In this light, the four sectors in the Netherlands have some strategic advantages compared to competitors within Europe. Chemistry and oil refinery are strategically positioned and make use of highly integrated clusters. Cement makes use of a production process that is less energy and CO2 intensive and steel is actively involved to improve efficiency. Strict climate policy could become an extra burden to these industries, but it could also function as an additional motive to improve the competitiveness of the industry on the longer term.
The report (in Dutch) can be downloaded in the link below.