The Impact on Industry and Competitiveness
Chapter 10: Technological Trends and Industrial Organization in the European Fertilizer Industry
15435_EnvironReg/Chap 10 30/5/02 2:52 pm Page 3 10. Technological trends and industrial organization in the European fertilizer industry INTRODUCTION This chapter examines how environmental regulation has influenced technological change, corporate strategies and the competitiveness of the fertilizer industry in Europe.1 The fertilizer industry is a mature, pollutionintensive process industry. Major innovations have been introduced in the past and the current allocation of investment on research and innovation is limited. The market shares of advanced countries and especially those of European Union member states in this sector have been declining in the last 20 years. The manufacturing of some products and downstream processing of many raw materials have been transferred to developing countries. A closer look, however, reveals some additional interesting trends that will bring the environmental dimension into the picture. First, the European fertilizer industry went through a significant restructuring process and the remaining firms have managed to retain their position in the European and international market in some areas of final products. Second, final products are being produced by different production processes and that implies different structures of input requirements and value-added shares. The production of nitrogen fertilizers, for example, is an energy-intensive manufacturing process that depends on the supply of natural gas while the production of phosphate fertilizers uses phosphate rock imported from developing countries, incurring high transport costs. Third, the final product of the industry is an input to agriculture. That makes the environmental implications of fertilizer production much wider, compared to other sectors, and...
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