VM stock and policy scenario model

The VM stock and policy scenario model models the technical potential and associated socio-economic impacts for a variety of EU policy options including a baseline (no action) regarding resource efficiency improvement and emission abatement (including for greenhouse gases) for consumer and professional products.  The resulting EU level scenarios typically cover a 1990 to 2050 time horizon.

The main modules in the model are:

• Stock model: It contains the established base cases and sales data and average lifetimes from sources and/or estimates. The sales data will be extrapolated to cover historical years (typically from 1990, but may be earlier) and future years (typically to 2050). From the sales data and the average lifetimes, the stock for all base cases is calculated using a normal distribution of product lifetimes.
• Scenario options and assumptions: It contains the scenario options with the requirements to be analysed and compared with the baseline scenario (no action i.e. Business As Usual (BAU))
• Scenario development: It contains the modelling of each scenario regarding impact on sales, energy, environment, economy and employment. The scenario requirements are in most cases very specific to the products assessed and this module therefore needs to be adapted to these requirements. For each scenario, penetration rates for products placed on the market in the various energy and environmental performance classes are established the impact assessed in the model.
• EcoReport Tool: The EcoReport Tool made available by the European Commission calculates the lifecycle impact (production, distribution, use and end of life) on material use and environmental impact based on the bill of materials (BOM) for one product unit and the total sales. The EcoReport Tool is used for each scenario and the net impact can be calculated as the difference between a policy scenario and the baseline scenario.

The model follows the Methodology for Ecodesign of Energy-related Products (MEErP) for preparatory and review studies in Ecodesign, which includes the data structure from the EcoReport Tool (https://ec.europa.eu/growth/industry/sustainability/ecodesign_en) as well as calculation procedures for the assessment of environmental and socio-economic impacts etc. It takes into account the relevant requirements of the European Commission’s Better Regulation impact assessment guidelines [1]. Generic (default) input parameters on historical and future rates are periodically updated and taken as much as possible from EU-related sources: (a) Eurostat for historical energy rates, conventions on calorific values per fuel, etc. (b) EEA (https://www.eea.europa.eu/ ) for air pollution conversion factors (NOx, SO2, PM, etc.), GWP-100 factors for electricity production (reworked), conversions following UNFCC (c) Using latest PRIMES reference scenario for energy price projections, (d) Energy Efficiency Directive amendment (EU)2018/2002. OJ L 328, 21.12.2018 used for primary energy factor (2.1 instead of 2.5 at transition). 

Product-specific inputs are taken typically from ecodesign and energy labelling preparatory and review studies.  The model is periodically updated following the results of new preparatory, review and IA studies.

For some product groups, model variants exist to handle product-specific analysis needs. Typically these variants contain additions to derive the input required by the main methodology, i.e. to derive average loads or efficiencies from detailed distributions, to correctly manage the shift in sales from less to more efficient base cases, to relate product sales to the stock of buildings and dwellings, to include more complex lifetime-distributions in the stock calculations, to simulate more detailed price-efficiency relationships, to add energy effects of related products, etc.

[1] https://ec.europa.eu/info/sites/info/files/better-regulation-guidelines-impact-assessment.pdf  and https://ec.europa.eu/info/sites/info/files/better-regulation-guidelines-evaluation-fitness-checks.pdf

Generic input parameters include:

• Historical energy prices, typically from Eurostat
• Future energy prices diversified per usage sector (residential, tertiary, industry, other) and type of energy, provided by the Commission
• Electricity to primary energy conversion coefficient (CC=1/PEF)
• Global warming potential for energy sources (GWP-100)
• Rates (EUR/unit) for consumables (water, paper/filters/ detergents/toner/electrodes/etc. as appropriate)
• Average maintenance/repair costs (EUR/year)
• Business-sector-specific parameters: typical revenue-split OEM/industry/ wholesale/ retail/ installer/ VAT, average revenue per direct job.

For each new product analysed, the inputs are given for the EU (currently the EU27-2020) and the period 1990-2050 and adapted to the specific product and policy option analysed:

• Definition of product and product-subtypes (‘Base Cases’)
• Unit sales per base case, EU 1990-2050
• Acquisition costs (in fixed euros, i.e. inflation-corrected for the reference year)
• Service life of the product (average lifetime or lifetime array where needed)
• Unit load, average user demand for product output
• Unit environmental impact (energy efficiency, GHG, NOx, CO, PM emissions) of average new products sold per year over the 1990-2050 period
• Annual unit consumable consumption (e.g. water, paper) and maintenance costs
• Improvement environmental impact and associated costs, given as arrays of values for inter- and extrapolation, at least for baseline, Least Life Cycle Cost (LLCC) and Best Available Technology (BAT) products for the base cases assessed
• Learning curve effect (percentage acquisition cost reduction per year after implementing policy option, up to previous level)
• Penetration rates of environmentally optimised products for each year assessed