Considerations for calculation of Eurostat MFA Task Force Regionalization of RME Considerations for calculation of regionalized RME Eurostat MFA Task Force Luxemburg, 3-4 May 20129 Karl Schoer, SSG

Simple coefficient approach vs. country specific IOT matrix Regionalization of RME Simple coefficient approach vs. country specific IOT matrix Simple coefficient approach The EU level RME calculations provide RME coefficients for imported and exported products by 166 product groups. Country level RME for imports and exports could estimated by multiplying those EU level RME coefficients with the corresponding country level import and exports figures. Imports: That approach is likely to be appropriate for the import side (import coefficients for extra trade imports and export coefficients for intra trade imports) Exports: That approach is not likely to work well for the export side (and for final domestic uses). EU level Export coefficients represent EU production relationships, but not the country specific conditions. Solution: Estimation of exports by a country specific IOT matrix (mixed Leontief / LCA approach): - Approach based on full expHIOT166 at member country level - Approaches based on 60x60 IOT matrices at member country level

Estimating REM of exports with full country level expHIOT166 Regionalization of RME Estimating REM of exports with full country level expHIOT166 For that purpose the EU-level automated calculation procedure for establishing expHIOT166 could be applied at country level , by replacing all individual EU input data of the calculation system by the corresponding country data. Advantages: Detailed results for individual raw material categories and individual product groups (economic and ecological link) which are coherent with the EU level results Disadvantages: - Approach is rather resource and data demanding. - Data availability may be less favourable than at EU-level where many data gaps have been closed by estimates of EU statisticians.

Options for 60x60 IOT matrices to be investigated Regionalization of RME Options for 60x60 IOT matrices to be investigated Option1: monetary IOT 60x60 Option 2: hybrid IOT 60x60 MIOT60 is converted by a simplified approach into a hybrid IOT (HIOT60). Physical use structures are introduced for forestry products, fishery products, other minerals and all energy carriers Option 3: Simplified German approach Further disaggregation: the HIOT60 of option 2 is supplemented by a number of material flow tables which further subdivide product groups of the 60x60 IOT (e.g. aluminium ores and basic aluminium metal). Material specific HIOT60s are estimated by replacing the general use structure of one or more aggregated product group by the use structures of a specific product / material. (e.g. metal ores is replaced by aluminium ores) 17 specific IOT matrices for metals and 5 for other minerals where established for the purpose of conducting this option.

Approach for empirical testing Regionalization of RME Approach for empirical testing Options 1 to 3 are calculated and tested with EU level data. The results of the options are compared to the results of the full project approach (expHIOT166 with mixed Leontief / LCA approach)

Regionalization of RME

Regionalization of RME Conclusions It was out of scope of the RME project to develop a complete approach for estimating regionalized results for RME at the level of member countries. Preliminary conclusion: Option 3 (and with some reservations also option 2) could to be regarded as feasible in terms of resource requirement and as a viable in terms of accuracy at the level of aggregated raw material categories. Further investigations are necessary in order to arrive at a well-founded method for regionalization. It should be explored whether options 2 or 3 are also workable under country specific conditions. One possible approach in that direction could be to repeat those calculations for a pilot country. For that purpose the full project approach with the elements expHIOT166 and ENVEXT166 had to be established in order to calculate the required reference figures. Feasibility of country level expHIOT166 approach should be tested Further approaches , like the “German approach” and multi-regional approaches and more could be considered