Is European Union Environmental Policy Efficient at Promoting a Post-

carbon Industry? The Case of Energy in the European Ceramic Tile

Sector

Daniel Gabaldón-Estevan | Vaasa 18/11/2014Department of Sociology and Social Anthropology, Faculty of Social Sciences, University of Valencia- Valencia (ES) - daniel.gabaldon@uv.es

11th International Conference on Innovation and Management

ICIM 2014

Index 0.

Introduction 1.

Theoretical framework, methods & data 2.

Analyzing the evidence 3.

Conclusions 4.

Discussion 5.

Authors: D. Gabaldón-Estevan, A. Mezquita, S. Ferrer, E. Monfort

Finance: Generalitat Valenciana

ESTIBMEIC Project - GV/2014/049

Debate on the unsustainability of the actual production model of ‘developed countries’ within globalisation:

+ demand of resources (BRIC countries)

+ public awareness of the limited capacity of the environment to assimilate human activity

+ demands for environmental sustainability

= Increasing pressure from environmental regulation (CO2-emission trading scheme, use of BAT, Kyoto Protocol, etc.)

And this is specially so for high energy consuming manufacturing industry subsectors in the EU that are exposed to an international market such as…the ceramic tile industry

Introduction:

The rationale 1.

[…] “all important economic, social, political, organizational, institutional and other factors that influence the development, diffusion and use of innovations” (Edquist, 2004, pp. 182)

Sectoral systemof innovation

Technological systems

(Breschi and Malerba, 1997; Malerba, 2002)

(Carlsson and Stankiewitz, 1995; Huges, 1984; Callon, 1992)

Knowledge Heterogeneity Institutions Learning Interrelations

National systemof innovation

Regional systemof innovation

(Freeman, 1987; Lundvall, 1988, 1992; Nelson, 1993)

(Cooke, 1993 and 2001; Saxenian, 1985; Jaffe et al., 1993)

Evolutionist perspective

(Nelson and Winter, 1977 and 1982)

Functional approach

(Bergek et al., 2008; Jacobsson and Johnson, 2000;

Edquist, 1997)

DistritualInnovation system

(Gabaldon-Estevan et al., 2011)

Theoretical framework:

Evolutionary Economics 2.

Legal and institutional framework

Technological and advanced services provider environment

Productive environment

Scientific environment

Theoretical framework:

Legal and Institutional Framework 2.

Adapted from Fernández et al. (1996)

Cluster

Ceramic Tile Industry

Theoretical framework:

Methods and data 2.

Raw materials

MillingSpray drying

Glazepreparation

Pressing Drying Glazing Firing

Floor tile

Wall tile

Raw materials

MillingSpray drying

Glazepreparation

Pressing Drying Glazing Firing

Floor tile

Wall tile

E = mc2

Environmental policies in the EU

o Directive 2004/8/EC Of The European Parliament And Of The Council of 11 February 2004 on the promotion of cogeneration based on a useful heat demand in the internal energy market

o Directive 2009/29/EC of the European Parliament and of the Council of 23 April 2009 amending Directive 2003/87/EC so as to improve and extend the green house gas emission allowance trading scheme of the Community

o Directive 2010/75/EU of the European Parliament and of the Council of 24 November 2010 on industrial emissions (integrated pollution prevention and control)

o COM(2011) 109 final Communication from the Commission to the European Parliament, the Council, the Economic and Social Committee and the Committee of the Regions of 8 March 2011 – Energy Efficiency Plan 2011

o COM(2011) 112 final. Communication From The Commission To The European Parliament, The Council, The European Economic And Social Committee And The Committee Of The Regions. A Roadmap for moving to a competitive low carbon economy in 2050

o Directive 2012/27/EU of the European Parliament and of the Council of 25 October 2012 on energy efficiency

o COMMISSION DECISION of 24 December 2009 determining, pursuant to Directive 2003/87/EC of the European Parliament and of the Council, a list of sectors and subsectors which are deemed to be exposed to a significant risk of carbon leakage

o COM(2014) 21 final. Communication from the commission to the European parliament, the council, the European economic and social committee and the committee of the regions. Energy prices and costs in Europe.

Analyzing the evidence:

The (European) Ceramic Tile Manufacturing Process (I) 3.a

Raw materials

MillingSpray drying

Glazepreparation

Pressing Drying Glazing Firing

Floor tile

Wall tile

Raw materials

MillingSpray drying

Glazepreparation

Pressing Drying Glazing Firing

Floor tile

Wall tile

Schematic illustration of the single-fired ceramic tile manufacturing process. Source ITC.

Most common ceramic tile manufacturing process in Europe (single-firing)

Analyzing the evidence:

The (European) Ceramic Tile Manufacturing Process (II) 3.a

0

2000

4000

6000

8000

10000

12000

2008 2009 2010 2011 2012

Pro

duct

ion

(Sq.

m M

ill.)

0,0

2,0

4,0

6,0

8,0

10,0

12,0

14,0

16,0

18,0

% o

f E

UR

-27

on w

orld

pro

duct

ion

World EUR-27 % of Eur-27 on world production

Source: Giacomini 2010; and Stock, 2013.

Tile production in EU-27 and in the world 2008-2012

Analyzing the evidence:

The (European) Ceramic Tile Manufacturing Process (III) 3.a

0

50

100

150

200

250

300

350

400

450

500

550

600

650

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

2007

2009

2011

2013

Year

Pro

duct

ion

(mil

es o

f m

2 )

Spain Italy

Sorce: Indagini statistiche sull’industria italiana. Cofindustria Ceramica, 2010

Evolution of ceramic tile production in Spain and Italy 1981-2013

Analyzing the evidence:

European Ceramic Tile Energy Uses and Consumptions (I) 3.b

0

10

20

30

40

50

60

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

2007

2009

2011

2013

Spec

ific

ther

mal

ene

rgy

cons

umpt

ion

(kW

h/m

2 )

Monfort et al., 2014

Evolution of thermal energy consumption in the tile manufacturing process in Spain

Analyzing the evidence:

European Ceramic Tile Energy Uses and Consumptions (II) 3.b

0

2

4

6

8

10

12

14

1985 1990 1995 2000 2005 2010 2012

Spe

cifi

c C

O2

emis

sion

(kg

CO

2/m

2 )Evolution of the specific CO2 emission in Spain

Monfort et al., 2014

o Directive 2004/8/EC Of The European Parliament And Of The Council of 11 February 2004 on the promotion of cogeneration based on a useful heat demand in the internal energy market

o Directive 2009/29/EC of the European Parliament and of the Council of 23 April 2009 amending Directive 2003/87/EC so as to improve and extend the green house gas

emission allowance trading scheme of the Community

o Directive 2010/75/EU of the European Parliament and of the Council of 24 November

2010 on industrial emissions (integrated pollution prevention and control)

o COM(2011) 109 final Communication from the Commission to the European Parliament, the Council, the Economic and Social Committee and the Committee of the Regions of 8 March 2011 – Energy Efficiency Plan 2011

o COM(2011) 112 final. Communication From The Commission To The European Parliament, The Council, The European Economic And Social Committee And The Committee Of The Regions. A Roadmap for moving to a competitive low carbon economy in 2050

o Directive 2012/27/EU of the European Parliament and of the Council of 25 October 2012 on energy efficiency

o COMMISSION DECISION of 24 December 2009 determining, pursuant to Directive 2003/87/EC of the European Parliament and of the Council, a list of sectors and subsectors which are deemed to be exposed to a significant risk of carbon leakage

o COM(2014) 21 final. Communication from the commission to the European parliament, the council, the European economic and social committee and the committee of the regions. Energy prices and costs in Europe.

Environmental policies in the EU Analyzing the evidence:

EU Energy Policy Impact on European Ceramic Tile Sector (I) 3.c

Analyzing the evidence:

EU Energy Policy Impact on European Ceramic Tile Sector (II) 3.c

0

1

2

3

4

5

6

7

8

9

10

01/01/2013 22/03/2013 10/06/2013 29/08/2013 17/11/2013 05/02/2014 26/04/2014 15/07/2014

EU

A p

rice

(€

/t)

http://www.sendeco2.com/

Evolution of the EUA prices

Analyzing the evidence:

EU Energy Policy Impact on European Ceramic Tile Sector (III) 3.c

Energy source 2010 2011 2012 % change 2010-2012

Natural gas price (€/MWh) 25.0 26.2 31.7 26.8

Electricity price ((€/MWh)) 80.8 88.8 97.6 20.8

Average energy prices for the European ceramic tile industry

Source: COM (2014) 21 Final

Conclusions:

The starting point 4.

The European ceramic tile industry has:

•adopted innovative technologies

•implemented energy saving actions to reduce its energy consumption and CO2

emissions

•is using the Best Available Techniques

However, new regulation and environmental policies are requiring greater innovations and is resulting in a risk of relocation of ceramic factories outside the EU, in areas with less strict environmental policies

Conclusions:

The context 4.

The new Emission Trading Scheme Directive has had an impact on almost all European ceramic tile manufacturers, although its overall effect should be to promote research, investment, and other activities directed to reducing CO2 emissions.

ETS Directive does not provide a mid-term fair solution for the companies that have continuously updated their industrial facilities (besides free allowances are reduced every year, and is not sufficient as even the best energy performers may not receive enough allowances).

Therefore the industry risk a loss of competitiveness with external EU manufacturers due to the direct costs of implementing ETS (allowances to buy) and the indirect costs (management system and audits).

Conclusions:

The requirements 4.

In order to meet the demands of reducing CO2 emissions between 83% and 87% by 2050, European companies must begin reducing their CO2 emissions in the medium term but for this another techno-logical revolution will be needed.

For instance, to reduce CO2 emissions by more than 50% decarbonization and cheapening of the electricity production system in Europe will be needed, to allow the use of electric driers and kilns with minimum CO2 emissions. Fuels from biomass or biogas will not reduce emissions enough to meet the 2050 target.

EU policies indirectly affect energy prices that in turn affect competitiveness of energy-intensive industries. Energy costs, which represent around a third of ceramic tile manufacturing costs, is two to four times higher in the EU than in competing countries, therefore policies affecting energy costs will be crucial for the survival of the European industry.

Conclusions:

The challenge 4.

Finally, as the systems perspective predicts, the implementation of breakthrough technologies, including the use of renewable sources of energy, is undoubtedly linked to the institutional and financial support for research activities. Therefore EU research policies will play a central role in the future of energy-intensive industries.

However many European and domestic research programs are focused on advanced materials and new sectors (biomedicine, pharmacy, etc.), with the results that there is an increasing shortage of funds to support the so-called traditional sectors.

Only a more comprehensive research financing scheme that includes research support to the so-called traditional sectors will help ceramic tile and other European industry sectors to continue to lead the transition to a hypocarbon economy.

Monfort, E.; Mezquita, A.; Vaquer, E.; Gabaldón-Estevan, D. (2014) Path-dependency and path-making in the energy system in the Spanish ceramic tile cluster. Boletín de la Sociedad Española de Cerámica y Vidrio 53 (3) 111-120 (in Spanish)Available at: http://boletines.secv.es/upload/2014070792201.201453111.pdf

Gabaldón-Estevan, D.; Criado, E.; Monfort, E. (2014) The Green Factor in European Manufacturing: A case study of the Spanish ceramic tile industry. Journal of Cleaner Production 70, 242-250 (in English)Available at: http://www.sciencedirect.com/science/article/pii/S0959652614001620

Gabaldón-Estevan, D.; Hekkert M.P. (2013) How Does the Innovation System in the Spanish Tile Sector Function? Boletín de la Sociedad Española de Cerámica y Vidrio 52 (3) 151-158 (in English)Available at: http://ceramicayvidrio.revistas.csic.es/index.php/ceramicayvidrio/article/download/1205/1239

Gabaldón-Estevan, D.; Fernández de Lucio, I. and Molina Morales, FX. (2012) Distritual Innovation Systems. ARBOR-Ciencia pensamiento y cultura, 188 (753), pp. 63-73 (in Spanish)Available at: http://arbor.revistas.csic.es/index.php/arbor/article/download/1448/1457

Gabaldón-Estevan, D. (2011) El sistema distritual de innovación cerámico de Castellón. Universitat de València. Servei de Publicacions. (Bilingual) Available at: http://rodrigo.uv.es/bitstream/handle/10550/23431/gabaldon.pdf?sequence=1

Monfort, E., Mezquita, A., Granel, R., Vaquer, E., Escrig, A., Miralles, A., Zaera, V. (2010) Análisis de consumos energéticos y emisiones de dióxido de carbono en la fabricación de baldosas cerámicas. Boletín de la Sociedad Española de Cerámica y Vidrio 49 (4) 303-310 (In Spanish) Available at: http://boletines.secv.es/upload/20100901173134.201049303.pdf

Monfort, E., Garcia-Ten, J., Celades, I., Gomar, S. (2010) Monitoring and possible reduction of HF in stack flue gases from ceramic tiles fired under different conditions. Journal of Fluorine Chemistry 131, 6-12 (in English)Available at: http://www.sciencedirect.com/science/article/pii/S0022113909002607

Tortajada Esparza, E.; Gabaldón-Estevan, D. and Fernández de Lucio I. (2008) La evolución tecnológica del distrito cerámico de Castellón: la contribución de la industria de fritas, colores y esmaltes. Boletín de la Sociedad Española de Cerámica y Vidrio. 47 (2) pp. 57-80 (in Spanish) Available at: http://boletines.secv.es/upload/20080512114901.47[2]57-80.pdf

Epilog:

Some of our references 5.a

Thank you for your attention!!!

Daniel Gabaldón-Estevan | Vaasa 18/11/2014Department of Sociology and Social Anthropology, Faculty of Social Sciences, University of Valencia- Valencia (ES) - daniel.gabaldon@uv.es

https://uv.academia.edu/DanielGabald%C3%B3nEstevan

https://www.researchgate.net/profile/Daniel_Gabaldon-Estevan

https://www.linkedin.com/pub/daniel-gabad%C3%B3n-estevan/23/722/aaa

http://www.slideshare.net/DanielGabaldnEstevan

http://orcid.org/0000-0003-2086-5012

http://www.researcherid.com/rid/B-5195-2011

Epilog:

The end 5.b