Columnists: Rod Janssen, Independent consultant

Published on: 19 Jun 2020

Showcasing the need to improve energy performance of industry

In January 2020, the European Commission presented its European Green Deal investment Plan tol mobilise EU funding and create an enabling framework to facilitate and stimulate the public and private investments needed for the transition to a climate-neutral, green, competitive and inclusive economy. The plan expects to mobilise at least €1 trillion of sustainable investments over the next decade.

In March 2020, the Commission further developed the Green Deal by proposing a draft EU Climate Law that proposes a legally binding target of net zero greenhouse gas emissions by 2050.

In March 2020, the Commission also published its industrial strategy. There will be “comprehensive measures to modernise and decarbonise energy-intensive industries, support sustainable and smart mobility industries, to promote energy efficiency, strengthen current carbon leakage tools and secure a sufficient and constant supply of low-carbon energy at competitive prices.” The strategy includes a dedicated strategy for small and medium-sized enterprises (SMEs) aims to reduce red tape and help Europe's numerous SMEs to do business across the single market and beyond, access financing and help lead the way on the digital and green transitions.

What this means for the industrial sector is that the level of energy efficiency improvements needs to scale up. Furthermore, to ramp up those improvements, significantly more funding is needed from both the public and private sectors. These need to support other initiatives such as mandatory energy audits for large enterprises, support for SMEs and the promotion of energy management systems such as ISO 50001.

Recently the International Energy Agency published its World Energy Investment 2020 shows that investment in the industrial sector has not changed over the past six years, even though there have been initiatives at national and international levels to encourage more energy efficiency investments and to increase awareness.

Yet, in another IEA report, its annual Energy Efficiency 2019 the avoided expenditure on energy because of energy efficiency improvements is significant for industry and growing (see page 46 of the report). This means real benefits. If we see those benefits in reduced costs, why isn’t more being done? And there are other important reasons for industry to invest in energy efficiency improvements as part of the push for greater decarbonisation.

We know what needs to be done

Large industry in Europe has been required to undertake regular mandatory audits as required by the 2012 EU Energy Efficiency Directive. Now two audits should have been undertaken. Those audits provide evidence of what can and should be undertaken in companies to improve their energy performance. Yet, we are not seeing significant new investment.

It is more complicated for SMEs because the level of awareness and their technical capacity are more limited. Here, we need project developers, mainly ESCOs, to play a key role. Projects such as the Investor Confidence Project, TrustEE and eQuad have been working with those intermediates to step up their role.

eceee is organising Industrial Efficiency 2020 as a virtual event on September 14-17 since we are not sure when we will be able to meet together at one venue. The conference will explore current and emerging trends in industry, such as new business models, digitalisation, industry 4.0, the circular economy and resource efficiency, and discuss the significance of these trends for delivering decarbonisation. You can register here. Hopefully we will see you there.

There is more going on to promote industrial energy efficiency in Europe. The Energy Efficiency Financial Institutions Group (EEFIG) is just now setting up a Working Group on Industry and I will be the team lead. This working group would assess the industrial practices dealing with energy efficiency, will identify and assess the main obstacles and drivers for improving energy efficiency in industry, will identify best practices, and will provide recommendations to DG ENERGY on what tools and policy instruments are likely to be most effective for increasing the energy efficiency investments in industry. The Working Group will be addressing various aspects of energy efficiency within energy-intensive industries and industrial SMEs and non-energy-intensive industries.

Now is the time

Both the eceee and EEFIG initiatives are important in order to share experiences and build momentum in creating awareness, improve competitiveness and achieving important impact. Hopefully they will also be able to provide evidence and recommendations to further develop industrial energy efficiency policies in Europe.

We can accelerate actions to help support the economic recovery after the COVID-19 pandemic. We can accelerate actions to meet our Paris climate obligations. Be part of the solution!

The views expressed in this column are those of the columnist and do not necessarily reflect the views of eceee or any of its members.

Other columns by Rod Janssen