International Research Funding for ZEW Project
Dates and NewsZEW and University of Strasbourg Launch Project on Decarbonisation of Energy-Intensive Industries
Under the ANR-DFG Funding Programme for the Humanities and Social Sciences, the German Research Foundation (DFG) and the French Agence Nationale de la Recherche (ANR) are providing around 330,000 euros to support a three-year research project conducted by ZEW Mannheim in cooperation with the University of Strasbourg. The project, “DISIMS – Decarbonizing Industrial Sectors: Innovation, Market Structure, and Public Policies”, examines how climate policy, innovation incentives and market structures interact, and which economic policy measures can help set the course for successful industrial decarbonisation in Europe.
“Europe's ambitious climate targets can only be achieved if we succeed in using new climate-friendly technologies in emission-intensive industries and bringing them to market on a broad scale. Many of these industries are characterised by specific market structures. This is precisely where DISIMS comes in,” says Dr. Oliver Schenker, deputy head of ZEW’s “Environmental and Climate Economics” Research Unit. “Together with our partners in Strasbourg, we aim to provide robust insights into how industrial and climate policy can be designed to stimulate innovation while also safeguarding competitiveness.”
Decarbonising energy-intensive industries
The starting point for the project is examining how Germany and France – countries that differ significantly in terms of their industrial structure and energy systems – can meet the climate goals they have committed to, without weakening their industrial base. As the largest economies in the EU, Germany and France account for around 40 per cent of economic output and around one third of greenhouse gas emissions. If decarbonisation is to be achieved at a European level, both countries need to undertake considerable efforts to curb their emissions.
This is particularly challenging for sectors such as steel and cement: These industries are very emissions-intensive, face international competition and require high investment in new technologies for their decarbonisation. In addition, companies in Europe compete with producers from countries where carbon emissions are less strictly regulated. This can create comparative cost disadvantages, weaken the effectiveness of European climate policy and increase fears of deindustrialisation.
Instruments such as the Carbon Border Adjustment Mechanism (CBAM) or the Net-Zero Industry Act (NZIA) address these tensions. DISIMS aims to contribute to a better understanding of how such regulatory approaches affect innovation incentives and competitive conditions in the industries concerned and which measures are apt to complement and improve them.
