1. Calculation of Raw material Equivalents (RME) for EU-27
in the context of the “Eurostat Impact Project”
Eurostat MFA Task Force
Luxemburg, October 2009
Karl Schoer, SSG

2. Eurostat Impact Project
“Conceptual framework for measuring the environmental
impact of the use of Natural Resources and Products” Conducted January 2009 to December 2010 by
ifeu - Institut für Energie- und Umweltforschung, Heidelberg
in cooperation with: Sustainable Solutions Germany – Consultants, Wiesbaden (SSG) Charles University in Prague, Environment Center (CUEC)

3. Eurostat Impact Project

4. Eurostat Impact Project

5. Eurostat Impact Project

6. Calculation of Raw Material Equivalents for EU-27, 2000 and 2005
MIOT
Monetary input-output table
60 X 60
Expansion of IOT
Symmetric monetary and
physical disaggregation
expHIOT
Expanded hybrid IOT
170 X 170
Detailed data
On supply and use of products
from several sources
Internalization
of depreciation
Assignment of depreciation
of fixed capital to
intermediate
consumption
Depreciation
adjusted expHIOT
170 x170
Depreciation matrix
Depreciation of gross fixed
capital by type of product and
type of homogeneous
branch
RME
Imports and final use products
by type of raw
material (60) and type of
product (170) in raw material
equivalents
Leontief
calculation
Assignment of physical
inputs to the economy
to the final use
products
Environmental
extension
Physical input vectors

7. Calculation of Raw Material Equivalents for EU-27, 2000 and 2005
MIOT
Monetary input-output table
60 X 60
Expansion of IOT
Symmetric monetary and
physical disaggregation
expHIOT
Expanded hybrid IOT
170 X 170
Detailed data
On supply and use of products
from several sources
Internalization
of depreciation
Assignment of depreciation
of fixed capital to
intermediate
consumption
Depreciation
adjusted expHIOT
170 x170
Depreciation matrix
Depreciation of gross fixed
capital by type of product and
type of homogeneous
branch
RME
Imports and final use products
by type of raw
material (60) and type of
product (170) in raw material
equivalents
Leontief
calculation
Assignment of physical
inputs to the economy
to the final use
products
Environmental
extension
Physical input vectors

8. Monetary input-output table (MIOT)
Compilation of a monetary IOT (60 product groups x
60 homogeneous branches) for EU-27:
Aggregation of the individual national IOTs
Deduction of intra-trade flows between EU countries
Closing of data gaps by estimates

9. Calculation of Raw Material Equivalents for EU-27, 2000 and 2005
MIOT
Monetary input-output table
60 X 60
Expansion of IOT
Symmetric monetary and
physical disaggregation
expHIOT
Expanded hybrid IOT
170 X 170
Detailed data
On supply and use of products
from several sources
Internalization
of depreciation
Assignment of depreciation
of fixed capital to
intermediate
consumption
Depreciation
adjusted expHIOT
170 x170
Depreciation matrix
Depreciation of gross fixed
capital by type of product and
type of homogeneous
branch
RME
Imports and final use products
by type of raw
material (60) and type of
product (170) in raw material
equivalents
Leontief
calculation
Assignment of physical
inputs to the economy
to the final use
products
Environmental
extension
Physical input vectors

11. Compilation of the expanded hybrid IOT for EU-27
Use of energy products
In physical units (Energy balance)
expHIOT
170 products x (170
branches
+ final uses)
Use of products for agric.
(Agricultural statistic)
MIOT
60 products
x (60 branches
+ final uses)
Use of metal products
In physical units (Different sources)
production and enterprise statistics)
170 products (Eexternal trade,
Total uses, exports
Input coefficients of
German expHIOT
(input per unit output)
170 products x (170 branches
+ final uses)
Output 170 branches (Production
and enterprise statistics)

12. Limitations of expHIOT
ONLY ENVIRONMENTAL ANALYSIS: The 170 x170 expHIOT was
designed (by using several assumptions and simplifications)
for the purpose of improving the results of specific environmental
analysis compared to 60 x 60 MIOT
NO MULTI-PURPOSE USE: The quality is not generally sufficient
for multi-purpose use

13. Calculation of Raw Material Equivalents for EU-27, 2000 and 2005
MIOT
Monetary input-output table
60 X 60
Expansion of IOT
Symmetric monetary and
physical disaggregation
expHIOT
Expanded hybrid IOT
170 X 170
Detailed data
On supply and use of products
from several sources
Internalization
of depreciation
Assignment of depreciation
of fixed capital to
intermediate
consumption
Depreciation
adjusted expHIOT
170 x170
Depreciation matrix
Depreciation of gross fixed
capital by type of product and
type of homogeneous
branch
RME
Imports and final use products
by type of raw
material (60) and type of
product (170) in raw material
equivalents
Leontief
calculation
Assignment of physical
inputs to the economy
to the final use
products
Environmental
extension
Physical input vectors

14. + - = = Internalization of consumption of fixed capital
Intermediate consumption
170 products x 170 branches
Grossed
fixed capital
formation
170 products
Investors matrix
Gross fixed capital formation
170 products x 170 branches + -
Depreciation of grossed
fixed capital
170 products x 170 branches
(investors matrix)
Depreciation
of grossed
fixed capital
170 products
Depreciation
of gross fixed capital
170 branches = =
Intermediate consumption
Including capital
consumption
170 products x 170 branches
Net
fixed capital
formation
170 products

15. Calculation of Raw Material Equivalents for EU-27, 2000 and 2005
MIOT
Monetary input-output table
60 X 60
Expansion of IOT
Symmetric monetary and
physical disaggregation
expHIOT
Expanded hybrid IOT
170 X 170
Detailed data
On supply and use of products
from several sources
Internalization
of depreciation
Assignment of depreciation
of fixed capital to
intermediate
consumption
Depreciation
adjusted expHIOT
170 x170
Depreciation matrix
Depreciation of gross fixed
capital by type of product and
type of homogeneous
branch
RME
Imports and final use products
by type of raw
material (60) and type of
product (170) in raw material
equivalents
Leontief
calculation
Assignment of physical
inputs to the economy
to the final use
products
Environmental
extension
Physical input vectors

16. Calculation of RME by the Leontief approach
expHIOT
Technology matrix
170 product groups x
170 branches
Final
uses
170
product
groups
Leontief
approach
(assignment of raw
material inputs to final
use products)
and calculation of
Imports in raw
material
Equivalents
(RME)
Final
uses
and
imports
in RME
60 raw
material
groups
Imports
170 branches
Environmental extension
Raw material inputs to the
economy in tons
60 raw material groups x
170 branches

17. Mixed IOT-LCA approach
ESTIMATION OF EMBODIED IMPORTS: The calculation of embodied imports follows a
mixed approach, which is a combination between Standard Leontief IOT approach and
LCA (life cycle assessment)
IOT-APPROACH: assumes that the imported products are produced with the
same technology and product mix than the domestic production.
STRENGTH: The IOT approach is a top-down approach. Utilization of
complete and comprehensive statistical information which is fully
harmonized with the National Accounting System.
WEAKNESS: Not all imported products are represented in a sufficient
manner by the respective domestic production processes
LCA-APPROACH: The LCA-approach utilizes life cycle inventories, e.g. Ecoinvent.
STRENGTH: the LCA-approach is a bottom-up approach which can use
much more specific information on type of product and country of origin.
WEAKNESS: for making estimates for complex products (i.e. products
beyond extraction and primary processing of raw materials) the approach
can only use data for selected production processes (e.g. manufacturing
of computers) as a representative for a whole product group (electronic
products)
SOLUTION: The LCA-approach is used for selected products (“LCA-products”) which
are considered not to be sufficiently represented by domestic production processes. The
IOT-approach is used for all other products

18. Calculation of Raw Material Equivalents for EU-27, 2000 and 2005
MIOT
Monetary input-output table
60 X 60
Expansion of IOT
Symmetric monetary and
physical disaggregation
expHIOT
Expanded hybrid IOT
170 X 170
Detailed data
On supply and use of products
from several sources
Internalization
of depreciation
Assignment of depreciation
of fixed capital to
intermediate
consumption
Depreciation
adjusted expHIOT
170 x170
Depreciation matrix
Depreciation of gross fixed
capital by type of product and
type of homogeneous
branch
RME
Imports and final use products
by type of raw
material (60) and type of
product (170) in raw material
equivalents
Leontief
calculation
Assignment of physical
inputs to the economy
to the final use
products
Environmental
extension
Physical input vectors

19. Environmental extension Physical input vectors
The physical input vectors denote the physical inputs into the
economy by raw material groups and homogeneous branches
Two types of physical input vectors are used:
DOMESTIC EXTRACTION of raw materials in tons
IMPORTS OF „LCA-PRODUCTS“ in tons raw material
equivalents (RME)

20. Environmental extension
Domestic extraction
170 homogeneous branches
Each raw material enters the economy by the respective
extraction branch
Domestic extraction of raw materials
raw materials
About 60
PRINCIPAL DATA SOURCE is domestic extraction of EW-MFA
SUPPLEMENTS: The EW-MFA list of raw materials was supplemented by:
More detailed list of metals
Introduction of metal scrap as separate raw material category
Introduction of renewable energy carriers as an additional
raw material category (measured in tons of oil equivalents (TOE))

21. Environmental extension
LCA-products
170 homogeneous branches
The different raw material equivalents for each product
enter the economy by the respective production branch
Imports of „LCA-products“ in raw material equivalents (RME)
raw materials
About 60
LCA-PRODUCTS are products which are (in terms of RME) not sufficiently
represented by domestic production processes.
Technically LCA-products are treated like domestic extraction.
The following products where regarded as LCA products:
Raw vegetable materials used in textiles (fibers)
Petroleum and natural gas
All metal ores including uranium and thorium
All basic metal products (excluding iron and casting services)
SOURCE: The amount of embodied raw materials (by type raw material) per
unit of LCA products are estimated by life cycle inventories (e.g.Ecoinvent).

22. Calculation of Raw Material Equivalents for EU-27, 2000 and 2005
MIOT
Monetary input-output table
60 X 60
Expansion of IOT
Symmetric monetary and
physical disaggregation
expHIOT
Expanded hybrid IOT
170 X 170
Detailed data
On supply and use of products
from several sources
Internalization
of depreciation
Assignment of depreciation
of fixed capital to
intermediate
consumption
Depreciation
adjusted expHIOT
170 x170
Depreciation matrix
Depreciation of gross fixed
capital by type of product and
type of homogeneous
branch
RME
Imports and final use products
by type of raw
material (60) and type of
product (170) in raw material
equivalents
Leontief
calculation
Assignment of physical
inputs to the economy
to the final use
products
Environmental
extension
Physical input vectors

24. Applications of RME The scope of RME approach:
ADJUSTMENT OF THE ORIGINAL VALUES OF PHYSICAL
IMPORTS AN EXPORTS:
However, the scope is not limited to simply adjusting the physical
import and export flows by embodied flows in order to calculate
economy wide IMPRME, EXPRME, DMIRME and DMCRME indicators
DETAILED DATA CUBE: The detailed RME data cube with the
dimensions raw material groups (60), product groups (170) as
well as final use categories (consumption, capital formation,
exports) and imports has the capability for a wide range of analyses

25. The RME data cube The data cube can be used for:
INDIVIDUAL RAW MATERIALS: Analysis of direct and embodied
raw material flows at the level of individual groups of raw material
(imports, exports, domestic use) final use categories
FINAL USE CATEGORIES: Analysis of raw materials embodied in final
use products by type of product
ECONOMIC DRIVING FORCES AND ENVIRONMENTAL PRESSURES:
Analysis of the link between the economic production and
consumption activities (economic driving forces) and the use
of raw materials (environmental pressures) down to the level
of individual product and raw material groups (e.g. decomposition
IOT analysis, econometric modeling)
ENVIRONMENTAL PRESSURES AND ENVIRONMENTAL IMPACTS:
Physical framework for estimating the environmental impact of
raw material use by the EIR indicator (link between environmental
pressures and environmental impacts) at the economy wide as well
as at a rather disaggregated level

26. Outlook UPDATING AND REGIONALIZATION BY A SIMPLIFIED APPROACH:
The detailed EU-27 coefficient matrix (embodied raw materials per unit
of products) for an individual year could be utilized in a
simplified approach without complete expHIOT for updating and
regionalizing the results for RME
(to be elaborated)