In the course of the ongoing efforts to reduce greenhouse gas emissions of German industries, two effects turn out to be substantial drivers for a decarbonisation. While dematerialisation refers to the reduction of input materials within the production processes, transmaterialisation is characterized by using alternative materials. In order to advance these two effects in the long-term, adequate political instruments have to be applied on the part of the legislation, whereby the focus especially is on energy-intensive industries as the aluminum or iron and steel industry. Concerning economic issues, it has to be assured that products manufactured in Germany remain competitive considering their production costs since otherwise there is a risk of production offshoring and carbon leakage.

To consider both, the ecological as well as the economic aspects of the aluminum, iron and steel industry in an integrated way and based on a long-term perspective, a simulation model is being developed, which is characterised by three aggregation levels (see figure).

On the lowest level (level 1), the decisions of individual plants and consumers, which react to the legal and economic framework conditions, will be simulated. In turn, these decisions affect the German national economy (level 2), which for its part is embedded in international material and energy flows (level 3). This simulation environment allows for passing information top-down as well as bottom-up. The structure also serves for the consideration of indirect effects as e.g. advancing the lightweight construction in automobile production by the usage of aluminum results in emission savings through less fuel consumption. At the same time the integration of the international environment enables the estimation of the availability of primary (ore, bauxite) and secondary (metal scrap) raw materials.

This provides the framework in which various political instruments for the decarbonisation of German industries can be evaluated based on scenarios.