Industry-mix effects at different levels of sectoral disaggregation: a decomposition of inter-country differences in energy costs

This article develops a decomposition of inter-country differences of unit energy costs (UEC) of the manufacturing sector. UEC are decomposed into a structural (industry-mix) component and an autonomous component that captures all other effects like, e.g., differences in energy efficiency and energy prices. Based on NACE 3-digit level data from Eurostat’s Structural Business Statistics the industry-mix component can be quantified on different levels of sectoral disaggregation. The results show that not only industry-mix effects on the conventional (typically NACE 2-digit) but also those measurable at higher levels of disaggregation are relevant for comparison of energy costs across countries.