Using logarithmic mean Divisia index to analyze changes in energy use and carbon dioxide emissions in Mexico's iron and steel industry

Using international comparisons and Log mean Divisia index, this paper analyzes energy and CO2 emission trends of Mexico's iron and steel industry during the period 1970-2006, examining CO2 emissions related to energy use and production process. The decomposition analysis is based on the structure/efficiency analysis for international comparisons, considering industrial structure and the best available technology. Results show that for the period 1970-2006, activity drove up primary energy use by 227% instead of the actual 133%, while structure and efficiency effects drove it down by 5% and by 90% respectively. The important improvement in Mexican iron and steel primary energy efficiency reduced the gap between best international practice and actual primary energy consumption from 103% in 1970 to only 15% in 2006. CO2 emissions from fuel consumption and production process increased by 134%, and in addition to structure and efficiency, fuel share effect also drove down emissions by 4.2% in the entire period.