3.1.1. Industry Level Analysis

Input-output based models typically provide results that are broken down by economic activities or industries (also sometimes denoted as sectors). Even if the analyzed policies aim at influencing the energy e fficiency of some specific household appliances, produced by some specific industries, FIDELIO simulates the indirect impacts that these policies would also have on other industries. These impacts can be caused, for example, by an indirect e ffect of regulations—such as the reduction of electricity consumption, or by changes in the quantity of intermediate inputs necessary to produce the appliances, or by changes in the households' bundle of goods and services consumed.

Table 2 shows the absolute and relative variations in the EU value added, broken down by industry. The left hand side of Table 2 shows industries with value added increases, while the right hand side shows industries that are worse o ff. In both sides, the industries are ranked based on their share over the total variation in value added, in decreasing order.


**Table 2.** Value added variation in the European Union (EU) by industry.

Even when the total value added decreases, it does not shrink in all industries. The value added of the household appliances producer industry (electrical equipment) increases by 90 million euros. However, the positive impact in other industries is even greater. In fact, 60% of the value added growth takes place in the accommodation and food services (360 million euros), retail trade (343 million euros), food and beverages (253 million euros), and other services (290 million euros), including activities, such as repairing services, art, entertainment, and recreation services, among others.

A possible reason why these sectors are increasing their production and, consequently, their value added, can be found in the way consumers' choices are modelled in FIDELIO. Households increase their demand of these products mainly due to savings made in electricity consumption. In fact, 50% of the value added reduction takes place in the electricity production industry (and corresponds to around two-billion euros). However, this decrease only represents 0.69% of the value added of the electricity industry.

Regarding employment, the results present a positive e ffect in the EU economy, in contrast to the value added decrease. The reason lies in the fact that the industries that show an increase in production, value added, and employment are more labor intensive than the industries that are worse o ff. Table 3 shows the absolute and relative variations in employment at the EU level, broken down by industry (with the same structure as Table 2).



The total positive impact on employment (ca. 72,000 jobs) in some sectors more than compensates the negative impact (ca. 48,000 jobs) in others. The positive impacts mainly come from the agricultural sector, accommodation and food services, retail trade, and other services. On the negative side, the electricity industry is the one that su ffers most in terms of employment (25% of the total impact), although much less than in terms of value added (50% of the total impact). Other industries that show a decrease in employment are, for example, construction, mining and quarrying, and forestry and logging.

3.1.2. Country-Level Analysis

In addition to the analysis at the industry level, in this section we analyze how the impact is distributed among the different EU countries. Figure 2 shows the absolute variation in value added and employment by country.

**Figure 2.** Impact at a country level: (**a**) Variation in value added (million euros); and, (**b**) Variation in employment (thousand jobs).

All EU countries would see their total value added reduced, except Hungary and Italy. However, these reductions would represent very small values in relative terms with respect to their total national levels, with most of them being close to zero. The maximum value is −0.05% for Lithuania, Latvia and Slovakia.

In absolute terms, the countries absorbing most of the value added decrease are Germany, Spain, France, United Kingdom, and Poland. For these countries, between 31% and 54% of the value added decrease occurs in the electricity industry. However, this just corresponds to a 1% value added of the electricity industry in France, Poland, Spain, and United Kingdom. Other industries contributing to the overall value added decrease are the mining sector and the construction sector.

Although not representing relevant variations in absolute terms, there are other industries that show higher value added decreases, between 1% and 3%—the relatively most affected sectors, these are the manufacture of transport equipment in Cyprus (1%); the electricity industry in Denmark (1.1%), Lithuania (1.3%), Slovakia (1.3%), and Greece (1.6%); the forestry and logging industry in Greece (3%), Romania (1.9%), Lithuania (1.1%), Slovenia (1.1%), and Italy (1%); and, the refined oil products industry in Slovenia (1.3%).

The positive impact in Italy and Hungary is driven by industries, such as accommodation, repairing, retail trade, agriculture, and manufacture of food products.

The employment effects are positive in most of the countries. The three countries showing the biggest employment increase are Germany (ca. 6100 jobs), Italy (ca. 8600 jobs), and Romania (ca. 8300 jobs). In Germany and Italy, the industries that mostly drive the employment increase are accommodation, retail trade, agriculture, and manufacture of food products. For Romania, 70% of the employment increase is in the agricultural sector, followed by the manufacture of food products and the manufacture of textiles.

For some countries, such Estonia, France, Lithuania, Latvia, the Netherlands, Slovenia, and Slovakia, employment (slightly) decreases around less than 1000 jobs in all cases. The exception is United Kingdom, where the employment decrease was around 1300 jobs.
