Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/273463 
Year of Publication: 
2023
Series/Report no.: 
ZEW Discussion Papers No. 23-023
Publisher: 
ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung, Mannheim
Abstract: 
Accounting for nearly 8% of global annual carbon dioxide (CO2) emissions, the cement industry is considered difficult to decarbonize. While a sizeable number of abatement levers for Portland cement production are technologically ready for deployment, many are still viewed as prohibitively expensive. Here we develop a generic abatement cost framework for identifying cost-efficient pathways toward substantial emission reductions. We calibrate our model with new industry data in the context of European cement plants that must obtain emission permits under the European Emission Trading System. We find that a price of €81 per ton of CO2, as observed on average in 2022, incentivizes firms to reduce their annual direct emissions by about one-third relative to the status quo. Yet, this willingness to abate emissions increases sharply at a carbon price of €100 per ton. If cement producers were to expect such carbon price levels to persist in the future, they would have incentives to reduce emissions by almost 80% relative to current emission levels.
Subjects: 
marginal abatement cost
carbon emissions
industrial decarbonization
cement production
JEL: 
M1
O33
Q42
Q52
Q54
Q55
Q58
Document Type: 
Working Paper

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