Data and methods for building a disaggregated EU investment matrix : with an application to the 23 non-power generation and 8 power generation sectors of the JRC-GEM-E3 model

The transition to a net-zero economy will imply significant investments into low carbon technologies. However, macroeconomic models using capital stock investment treatment from GTAP Input-Output data only assumes a generic representation of investment, where all sectors use the same proportion of inputs to build capital stock (plant, equipment and other assets that help in production). This means that general equilibrium effects on upstream sectors producing investments for low carbon technologies may not be fully captured. In this study, we extend the methodology of Tamba et al (2022) to all EU Member States using Eurostat gross fixed capital formation (GFCF) data to build investment matrices with flexible aggregations for non-power generation sectors. In this report, we present investment matrices for all 23 non-power generation sectors of the JRC-GEM-E3 model. In addition, we build investment matrices for 8 power generation sectors using available cost data in the literature. A comparison of the original generic investment vector in the EU and a disaggregated investment matrix for all individual JRC-GEM-E3 sectors confirms that "one size does not fit all". While a generic investment matrix puts more emphasis on construction (43%) and market services (25%), most sectors in our disaggregated investment matrix put more emphasis on "other equipment goods".