EU ETS carbon costs across steam cracker feedstocks
EU ETS compliance is playing an increasing role in European steam cracking economics, with carbon exposure varying sharply by feedstock choice. Argus modelling puts these differences into context by showing how ETS costs flow through to ethylene production costs when cracking ethane, LPG or naphtha.
Written by Dhanish Kalayarasu, Chemicals Consultant, and Alan Williamson, Olefins Consultant, our latest insight paper explores how operating choices influence carbon exposure, and why ETS dynamics now form part of feedstock‑level decision‑making for producers and investors alike. This is reflected most clearly in feedstock‑level differences across European crackers, including:
- Carbon exposure across ethane, propane, butane and naphtha cracking
- The balance between free allocations and actual emissions in Europe
- How recent ETS price increases feed into ethylene production costs
- The role and limits of gas feedstock flexibility in reducing carbon intensity
Further details are available from Argus experts and through the Argus Olefins Margins service, which provides monthly analysis of steam cracker and ethylene and propylene margins for the US, Western Europe, the Middle East, Northeast Asia, and Southeast Asia.