Energy e ciency
Energy e ciency
Energy e ciency
Energy e ciency
Energy e ciency
Energy e ciency
Emissions management
Emissions management
Emissions management
Emissions management
Emissions management
Emissions management
Water management
Water management
Water management
Water management
Water management
Water management
Waste management
Waste management
Waste management
Waste management
Waste management
Waste management
Raw materials / feedstock
Raw materials / feedstock Site A Ammonia
Site C Fine chemical Raw materials / feedstock
Site D Pulp & paper Raw materials / feedstock
Raw materials / feedstock
Raw materials / feedstock
Site B Oil re ning
Site E Iron & steel
Site F Cement
Figure 3 Opportunities to create efficiencies between different sites that can lead to energy efficiency and/or reduced emissions
clustering and sharing arrangements if they are efficient and ultimately help the relevant firms compete more effectively in their own markets. However, it is typically prudent (and in most cases relatively easy) to avoid the most problematic types of arrangements, which often act as red flags for regulators. Avoiding antitrust issues Let us consider the context of some of the putative types of sharing that might be most likely to drive the biggest synergies within an industrial cluster: Raw materials/feedstock, such as natural gas, ethylene, nitrogen, oxygen, chlorine, hydrogen Waste management, such as process sludge, spent chemicals, spent catalysts, other materials Water management, such as raw water supply, wastewater treatment Emissions management, such as CO2, NOx, and SOx Energy efficiency, such as power, steam, fuel, compressed air. Other non-production sharing activities might occur in logistics areas, such as the common use of transportation facilities, like water jetties, and road and rail loading. Furthermore, health, safety, and security arrangements might also be shared, along with permit-to-work maintenance co-ordination. With these types of potential collaboration, key guidelines that would substantially reduce antitrust regulatory risks would include:
Horizontal competitors should not agree on prices or engage in market allocation. If engaging in an energy or material exchange, instead reference independent benchmarks for relevant market-related prices, such as link prices to local exchanges, hubs, or markets. For example, multiple firms exchanging energy (steam, heat, electricity) at various points (and in many directions) or exchanging (potentially green) energy in a daily or annual cycle within a larger cluster might use a common, arms- length benchmark for these exchanges (such as a local and relevant market-related price) rather than risk the antitrust scrutiny that might arise from a position in which two rivals (such as two refineries) agree on some artificially inflated value for such transactions, even within the cluster. Especially where horizontal competitors are concerned, firms should be careful not to exchange information that could be used to co-ordinate their competitive behaviour (such as to soften competition in markets where they sell similar products). Sharing information with the entire cluster on the availability to supply (or trade in) certain common waste products or excess energy is likely to be far less sensitive than sharing detailed information on the intended customers and prices for scarce products sold by only a few rivals. Vertically related firms could avoid exclusive arrangements where possible, in particular where one or both of the related firms is in a
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