Industry-Level Emission Trading in the EU
33
A.1 Zero Profit Conditions
1. Production of goods except for fossil fuels:
∏=Pir - Σ θiirpYjr -θKTle
j $EG
θEPE1 -σkle + (1 -θE■)( ()I ∣>∣- + (1 -θkl)Pk-kl
1
FI-Ckle
-0
i £ FF
2. Production of fossil fuels:
∏r=pir -
. , . √ __
⅛ ' + (1-θQ ) θLFplr
V
1
-' c ^p^
+(Cpkr +∑θ P -0
j rιr 1)
i ∈FF
3. Energy aggregate (except for electricity sector):

Λ ELE A1 cele Z1 n ELEx
- ↑θir P{Y,ELE,r} + (1 - θir )
1-c^,^,i
cCAA^A coa ,z1 cCAA
θir P{Y,COA,r} + (1 - θir

1
1-C ELE 1-c ELE
1-Ccoa
> = 0
3. Energy aggregate for electricity sector:

π
j∈{ GAS, OIL, COA}
Aβjir
PYAjr
4. Armington aggregate:
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