Tracking Industrial Energy Efficiency and CO2 Emissions

From the International Energy Agency (IEA)

Paris, 25 June 2007

New Comprehensive Overview of World Industrial Energy Efficiency and CO2 Intensity
“Manufacturing industries in OECD countries have made great progress in energy efficiency during
the last 25 years, but important opportunities to reduce emissions remain,” said Claude Mandil,
Executive Director of the Paris-based International Energy Agency (IEA), today at the launch of a
new publication that contributes to the G8 “Plan of Action for Climate Change, Clean Energy and
Sustainable development”. Tracking Industrial Energy Efficiency and CO2 Emissions shows that
efficiencies differ widely between countries producing similar products and using similar processes,
which is a clear indication of the potential for further efficiency gains. This finding is of global
significance as manufacturing industry accounts for 36% of world CO2 emissions.

“Good information and analyses of trends in energy and emissions “ or indicators — are vital”, Claude
Mandil said. This study elaborates a set of powerful new indicators that look at energy use per unit of
physical product. This approach has been developed in close collaboration with industry experts.
Much of the efficiency differences that have been identified can be attributed to the age of plants.
New plants tend to be more efficient than older ones. As a consequence, the most efficient industries
can in some cases be found in emerging economies where production is expanding. For example, the
most efficient aluminium smelters are in Africa, and Brazil is among the most efficient cement
producers. Similarly, some of the most efficient steel plants can be found in China. Industrial energy
efficiency is consistently high in certain IEA member countries such as Japan, which has had active
efficiency policies for decades.

Another notable finding is that China accounts for four fifths of the growth in industrial production
and CO2 emissions during the past 25 years. China is now the single largest industrial producer of a
wide range of energy intensive industrial commodities such as aluminium, ammonia, cement and
steel. The rapid growth of production in less efficient developing countries has limited the average
efficiency gains worldwide. “Improving industrial energy efficiency is an approach that can help
developing countries in their economic growth and contribute to a significant global greenhouse gas
reduction”, noted Claude Mandil.

We know a lot about the efficiency of specific industrial processes, but much less about the overall
energy efficiency of conventional factory systems and product life cycles. This includes motor and
steam systems, combined heat and power generation and the efficiency of materials and resource use.
The analysis identifies even greater potential for energy savings in these areas. This offers important
additional opportunities for decision makers to reduce the energy and CO2 footprint.

The study suggests a technical efficiency improvement potential of 18-26% for the whole
manufacturing industry, if process improvement options and systems options are taken into account.
As this estimate does not consider the potential role of new technologies, the impact could be much
larger. “The potential is so large that more efforts are warranted, in order to achieve deep CO2
emission reductions, reduce fossil fuel dependence and increase industrial competitiveness”,
concluded Claude Mandil.

About the Author:

Lou Ann Hammond is the CEO of Carlist and Driving the Nation. She is the co-host of Real Wheels Washington Post carchat every Friday morning and is the Automotive, energy correspondent for The John Batchelor Show and a Contributor to Automotive Electronics magazine headquartered in Korea. Hammond is a member of the North American Car and Truck of the Year (NACTOY), Women's World Car of the Year (WWCOTY), and the Concept Car of the Year.

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