O

Polyethylene Polypropylene PVC

Electricity Emissions I Direct Emissions Feedstock Emissions

Figure 2.6 Carbon cost increase relative to gross added value [15].

industry as there is little ability within the European market to transfer carbon cost associated with chlorine production. Since the demand in Europe will remain whether or not production is local, there is concern that policy measures could lead to leakage where PVC production shifts to countries with no regulations on CO2 emissions [22] .

While carbon cost pass-through from upstream industries remains particularly high relative to added value for low value downstream products such as polyethylene, polypropylene, and PVC, higher value products such as pharmaceuticals and pesticides experience very low cost increases in the range of 0.2% relative to value added under an identical scenario of carbon pricing at 20€ per tonne [15].

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