The industrial sector contributes to around one-third of the world’s greenhouse gas emissions, which primarily come from burning fossil fuels for energy. At a time when the world is battling an unprecedented global pandemic, drought, bushfires, rising sea levels and water shortages, reducing industrial energy consumption is clearly one powerful way to fight climate change in the immediate term.
A large-scale shift toward more energy efficient practices in industry would also enable companies to massively reduce their power bills. In economic terms, industrial energy efficiency can increase productivity, lower manufacturing costs, and create more jobs. For some countries in Asia and in Sub-Saharan Africa, where energy poverty rates still exceed 50 per cent of the population and have a disproportionate impact on women, industrial energy efficiency can reduce pressure on the grid and improve much needed access to electricity as a result.
However, historic slowdowns in energy efficiency progress persist. Even, when we should be doing everything in our power to reduce the unnecessary use of fossil fuels, the International Energy Agency’s 2019 report highlighted progress on energy efficiency had declined to its slowest rate in 10 years
The Invisible Solution
With so much to gain, why is industrial energy efficiency seemingly so overlooked?
One explanation is that it is largely an invisible solution. It often comes down to changing people’s behaviours and mindsets. And, the interventions are usually technical. Retrofitting the insulation level of pipes, or replacing an old inefficient boiler is not as visible as installing solar powered panels or wind turbines.
There are also many barriers. In some countries, where sophisticated energy efficiency targets and regulations are already in place, a lack of financial incentives and market interventions such as fuel subsidies often stand in the way.
Perhaps, most frustratingly, is the lack of action and awareness around what is essentially a cost-effective win-win solution for everyone involved, especially for companies and industry. Unlike other efforts to mitigate climate change, industrial energy efficiency offers a relatively rapid return on investment. Businesses and industry can slash their power bills, in some cases by up to 30 per cent.
The International Energy Agency calculates that with the right policies, the global economy could double in size by 2040 while still maintaining broadly the same level of energy use as today. Those policies alone would enable the world to achieve more than 40 per cent of the emissions cuts needed to reach international climate goals using cost-effective technologies which are already available.