Global energy intensity – a measure of how efficiently the global economy uses energy – improved by just over 2% in 2022. That needs to double to 4% annually to 2030 to meet global efficiency targets, explains Brian Motherway at the IEA. If achieved, by 2030 one unit of energy used will generate 40% more economic output than today. That’s huge, and shows why few other policy areas offer such widespread benefits. More than half of the 150 countries analysed by the IEA hit a 4% improvement at least three times in the last decade. So we are tantalisingly close. Five G20 countries – China, France, Indonesia, Japan and the UK – have in recent years managed to sustain an average of 4% or more over a five-year period. The IEA’s Energy Efficiency Policy Toolkit can guide governments to take the necessary steps, says Motherway. We know what to do, and have the technologies in the key areas like air conditioners, lighting, building codes, car fuel economy, electric motors and heavy industry. Now is the time for the right policies, support and incentives to be put in place.
Governments at COP28 should build on this year’s momentum and commit to doubling energy efficiency improvements
The updated Net Zero Roadmap from the International Energy Agency (IEA) shows that while the path to limiting global warming to 1.5 °C has narrowed, it is still achievable – if governments build on strong growth in clean energy technologies such as solar PV and electric vehicles with even greater ambition. However, the next few years are critical. Without decisive action this decade, the window will close, and the world will be locked into even more dangerous impacts from climate change.
With the United Nations Climate Change Conference (COP28) in Dubai just weeks away, the IEA has identified actions that are essential to ensure the 1.5 °C goal stays within reach. This includes a tripling of renewable energy capacity by 2030 and an orderly decline in the use of fossil fuels. Also crucial is doubling the rate of energy efficiency progress this decade.
Many political leaders have already shown support for a target to double efficiency. In June, 46 governments agreed to work together towards this goal in the Versailles Statement released at the IEA’s 8th Annual Global Conference on Energy Efficiency. Prioritising “two and three” – doubling energy efficiency progress and tripling renewable capacity by 2030 – was also discussed at this year’s G7 and G20 meetings. European Commission President Ursula von der Leyen has proposed “an initiative to work towards global targets for energy efficiency and renewable energy,” noting they could be developed by COP28 “together with organisations like the IEA.”
The key now is to ensure energy efficiency stays high on the agenda, building consensus towards stronger global commitments and action.
Doubling energy efficiency improvements means stronger policies and actions that improve people’s lives
The IEA’s Net Zero Roadmap shows what must happen by 2030 if governments are serious about achieving net zero emissions by mid-century and limiting global warming to 1.5 °C. The goals of doubling energy efficiency progress and tripling renewable capacity, alongside a 75% cut in energy sector methane emissions and a massive ramp-up in the electrification of heating and transport, would together account for 80% of emissions reductions needed this decade to meet the 2050 target.
During the global energy crisis that followed Russia’s invasion of Ukraine, energy efficiency gained fresh recognition as a mechanism to simultaneously address energy security, energy affordability and climate change. Measures to promote energy efficiency and incentives for efficient technology were a strong part of the policy and legislative response. In fact, IEA analysis shows that new or strengthened efficiency measures were introduced in countries representing over 70% of the global economy. As a result, the world has seen record investment in energy efficiency, while consumer interest in reducing energy use is higher than ever.
Due to these measures, global energy intensity – a measure of how efficiently the global economy uses energy – improved by just over 2% in 2022. This means that a unit of energy consumed in 2022 generated 2% more economic output than it did in 2021. At more than twice the improvement rate of the previous four years, this was a welcome step.
However, doubling energy efficiency progress going forward means increasing this rate of improvement twofold, to just over 4% on average every year between now and 2030. This would mean that in 2030, one unit of energy used will generate 40% more economic output.
Few other policy areas offer such widespread benefits
The potential payoff is enormous. Achieving this target would lead to energy savings in 2030 equivalent to all the oil that the global road transport sector consumed in 2022. Key actions to double efficiency progress – namely improvement in the technical efficiency of buildings and equipment, material efficiency, behavioural changes, and greater electrification – reduce emissions by more than 7 Gt in 2030 in the IEA’s net zero scenario, accounting for nearly half of all reductions achieved that year.
Wasting less energy also results in a smaller energy system that requires less physical infrastructure. Doubling would therefore provide substantial cost savings to industry and governments. Consumers also reap the benefits of improved efficiency, including healthier, more comfortable homes and workplaces, lower energy bills and more breathable air. Moreover, doubling would result in the creation of over 3 million jobs, with more workers needed to help retrofit buildings and install energy-saving technologies.
Doubling progress is difficult – but it can be done
Doubling efficiency progress is a challenge that requires a global step change in ambition. But many governments have set a precedent. In fact, of 150 countries analysed by the IEA, almost all (91%) improved their energy intensity by 4% or more at least one year in the past ten. More than half (52%) did so at least three times. The challenging task ahead for governments, however, is to meet this benchmark consistently for almost a decade. Five G20 countries – China, France, Indonesia, Japan and the United Kingdom – have in recent years managed to sustain an average of 4% or more over a five-year period.
We know what to do. We have the technologies
The good news is we know which policies are needed to make this objective a reality. And in most sectors, the required technologies are already on the market.
Take air conditioners. The IEA’s net zero pathway shows that by 2030, all air conditioners sold globally need to be highly efficient. This is vital to offset growing demand for cooling, which is increasing electricity needs. Yet new IEA data shows there are already a range of qualifying products accessible to consumers in markets where demand is set to grow rapidly, such as Southeast Asia and Latin America. With the right package of policies, the average efficiency of these products can increase while the cost of buying and using them decreases.
The right policies for doubling already exist in many countries
Critically, the policies to deliver energy efficiency improvements have been implemented in many countries – they just need to be applied more widely. For example, governments would achieve doubling if they adopted policies that matched:
- Lighting standards in South Africa
- Building codes in Türkiye
- Air conditioner regulations in China
- Car fuel economy standards in the United States
- Electric motor regulations in the European Union
- Policies for heavy industry in India
All of these are examples of high-ambition policies that exist today. If every country implemented and properly enforced a package of such policies, covering all key sectors, then they would achieve the global doubling target.
Better information for consumers and strong financial incentives should also be included. For example, many countries have made great progress on energy efficiency by offering grants for retrofit projects, which can drive renovation rates towards what is needed by 2030 when combined with strong building codes and “one-stop shops” that help consumers with multiple home efficiency improvements.
Growing urgency means governments must focus on implementation
With the IEA’s Net Zero Roadmap and Energy Efficiency Policy Toolkit as a guide, the steps for governments to achieve the doubling target are clear. But the issue is not whether the technologies or policies exist – it’s how to get there quickly enough. There are 74 months left to 2030. Every year of slow progress means more effort is needed down the line.
Action is made more urgent by the length of time it can take to reap the full benefits of policies. For example, new Minimum Energy Performance Standards (MEPS) for appliances can quickly take the least-efficient products off the market, but it may be several years before the average efficiency of all the products installed in homes and businesses improves.
IEA analysis shows that governments can create early momentum by focusing on areas in which policy foundations are already in place. For example, existing tax credits or grants to incentivise the adoption of residential heat pumps can be swiftly scaled up using the same application processes and rules. Similarly, it is much easier to build on existing systems for energy efficiency standards for homes, appliances or vehicles than to start from scratch. Many countries have standards in place that are outdated or set well below what is considered best practice. Improving these would provide a quick win.
Doubling the rate of energy efficiency improvements between now and 2030 is critical to put the global community on track for net zero by 2050. This target is ambitious. But it is also achievable – and vital to keep alive the possibility of meeting the 1.5 °C target. Ahead of COP28, it must be a priority.
Brian Motherway is Head of Energy Efficiency and Inclusive Transitions Office at the IEA