|Title||External Costs in the European Copper Value Chain. A Comparison of Copper Primary Production and Recycling|
|Year of Publication||2008|
|Academic Department||MAS Management Technology and Economics MTEC/BWI|
|Number of Pages||110|
|Thesis Type||Masters Thesis|
|Keywords||Copper, copper value chain, pollution, recycling, secondary copper|
Besides having beneficial effects to society, copper production also induces unwanted side effects. Emissions of pollutants into air, water and soil can seriously impact human health, ecosystems, crops and infrastructures. As a consequence, additional 'external' costs incur for the society, which are not compensated through copper sales by the producers and thus are not reflected by the copper price.
This study aims to evaluate external costs in the copper value chain and to compare in particular the primary and the secondary copper production in Europe. The present level of external costs is estimated based on the contemporary European copper cycle and current production technology. Future external costs are estimated for the year 2020, each in an optimistic and pessimistic scenario, where distinguished technology development paths are evaluated.
In this study, 29 copper smelters and refineries located in Europe were considered. The copper production in the most important trading partner countries for refined or intermediate copper products was also taken into account. The underlying methodology for modelling and estimating external costs associated with environmental pollution is based on the impact pathway approach. Since air pollution contributes to more than 98% of the total environmental impacts in the entire copper production chain, emissions to water and soil were neglected. Annual emissions to air in the copper production were determined based on a Life Cycle Assessment (LCA) inventory database for each production facility. The stack emissions from the European production facilities were translated into spatially resolved ambient concentration increments by atmospheric dispersion modelling. Considering spatially dependent receptor data such as population density and agricultural land, the damages or physical impacts from increased ambient concentration levels of various pollutants were determined and monetarised by applying dose-response relationships. According to the calculations, in 2005 the average specific external costs of the copper consumed in Europe amount to €978 per ton. In order to internalize the external costs incurred in the copper value chain due to air pollution, the average annual market price for copper in the year 2005 of €2’963 per ton should therefore have been 33% higher. However, since specific external costs differ significantly between regions as well as primary copper production generates clearly higher impacts than secondary production; a differentiated allocation procedure for cost internalisation would be essential, and presumably highly challenging.
The evaluation of distinguished technology development paths showed that the total external costs could be substantially reduced (30 - 50%) by consequently implementing environmentally sound technologies, in particular in the European trading partner countries. However, the scenario analyses also indicate that increasing demand could compensate technological improvements and overall external cost could remain on a constant level or could even increase.