Technical report

Industrial energy efficiency and material substitution in carbon-intensive sectors

Including financing, training, and co-benefits aspects of this sector

8 Apr 2017

Energy is needed in industry for a number of technologies and processes, including cross- cutting technologies such as steam, motors, compressed air, pumps, heating and cooling, as well as specific processes in energy-intensive sectors (Chemicals, Iron and Steel, Cement, Pulp and Paper, Non-Ferrous Metals, and Food). Greenhouse gas emission reductions in industry can be achieved in different ways. One option is to reduce the energy consumption of processes and technologies by implementing specific EE measures and state-of-the-art energy management systems, or by generating energy reusing industrial by-products. Besides investing in energy efficiency measures, CO2 emissions can also be reduced substantially through increased material efficiency. This includes various options such as fuel substitution as well as the substitution and reuse of production materials.

Despite the great energy and cost saving potential, there are a number of barriers that often impede the implementation of EE measures. They include particularly the lack of financing and the lack of awareness, technical knowledge and personnel resources. In order to overcome these barriers and to support the adoption of EE measures, there are different policy options. They can be classified as economic instruments, information and education, institutional creation and strategic planning, regulatory instruments, research, development and deployment, and voluntary approaches.

This paper finds that international organizations that are active in the field of EE in industry tend to be focused on the introduction of energy management systems and accompanying training measures and are mostly motivated by competitiveness improvements and environmental benefits that come along with gains in energy efficiency.

On a national level, financing instruments, institutional creation and strategic planning seem to play a more important role. Besides energy and cost saving considerations, many countries highlight the target of creating employment and securing energy supply in the country.

However, from the case studies it becomes clear that generally a mixture of different and aligned policy instruments is used, embedded in an overall long-term EE strategy and a regulatory framework. This is identified as key to successful EE policies in industry. Moreover, policy makers should consider the relevant barriers as well as targeted co- benefits when designing policies. Both influence the selection of policy options, as different policies are suited for different needs. For example, the lack of financial resources can be addressed through financial or fiscal incentives; lack of awareness or knowledge can be addressed through information campaigns, labelling schemes, access to guidance, tools and resources, and training measures, whereas a lack of motivation or low priority of EE should rather be tackled with a mix of demonstration of business value and mandatory instruments, such as minimum performance standards, or audit and monitoring obligations. Voluntary approaches can complement an effective bunch of policies.

Other recommendations include continuing to use policies that have proven successful, such as the promotion of energy management systems or financial support, to exploit locally available energy and resources, including industrial by-products, to involve technology and knowledge transfer to developing countries, and to coordinate national and regional policies.

Publication Details
Publication Place: 
Bonn, Germany
License Type: 
All Rights Reserved
Published year only: 
Subject Areas