Energy and environmental efficiency evaluation based on a novel data envelopment analysis: An application in petrochemical industries

Abstract Petrochemical industry is a high energy consumption and heavy pollution industry. Therefore, energy and environmental efficiency evaluation becomes extremely important to achieve sustainable development of the petrochemical industry. This paper proposes a novel DEA model to estimate the energy and environmental efficiency of the petrochemical industry thoroughly. The proposed method introduces the efficiency variable to each energy input and undesirable output and uses environmental performance index (EPI) to represent the overall performance of different decision making units (DMUs). Moreover, the scores of efficiency variables reflect the environmental performance of energy inputs and undesirable outputs, and the larger score represents the greater performance of the DMUs. Meanwhile, the EPI synthesizes the environmental efficiency value of energy inputs and undesirable outputs to help us grasp the energy and environmental comprehensive performance of DMUs, which also contributes to measure the potential of energy saving and emission reduction of petrochemical industry simultaneously. Finally, the proposed model is applied to the energy and environmental efficiency analysis of different ethylene plants under different scales. The experimental results demonstrate the validity of the proposed model and reveal some implications for improving energy efficiency and carbon dioxide emissions reduction of ethylene plants in the petrochemical industry.