Measuring distortions in international markets: Below-market energy inputs

Government support for industrial firms can come in many different forms and through a range of channels, varying complexity. A particularly challenging form is energy inputs offered to producers at below-market prices. To improve understanding about the scope scale such support, this report examines an illustrative sample 33 companies their subsidiaries operating energy-intensive industries, namely aluminium smelting, steelmaking, chemicals (including fertilisers), cement. Most subsidies identified appear concern provision natural gas electricity rates, resulting average subsidy USD 0.4-1.3 per million British thermal units 0.02-0.03 kWh, respectively, over period 2010-20. In some cases, estimates indicate that are multiple firms’ costs, suggesting sizable impact on profits margins. The results have important policy implications efforts better discipline WTO elsewhere, notably relation how ensure transparency context where large providers tend be majority owned by governments.