Energy efficiency delivers a number of environmental benefits. It notably reduces GHG emissions, both direct emissions from fossil fuel combustion or consumption, and indirect emissions reductions from electricity generation.

Energy efficiency has a central role in tackling climate change, a task made all the more urgent by the recent rise in emissions and the limited time to achieve mitigation targets, as outlined by the recent Intergovernmental Panel on Climate Change (IPCC) special report on Global Warming of 1.5^oC. Energy efficiency is one of the key ways the world can meet energy service demand with lower energy use, which is crucial in most of the IPCC GHG emissions pathways limiting global warming to 1.5^oC (IPCC, 2018).

Energy-related GHG emissions increased by 1.4% to over 32.5 gigatonnes of CO₂ equivalent (Gt CO₂-eq) in 2017 – the first increase since 2014, after strong global economic growth led to greater use of emissions-intensive fuels. At the same time, efficiency helped to constrain the recent growth in emissions: had efficiency not improved since 2000, emissions would have been nearly 4 Gt CO₂-eq, or 12%, higher in 2017.

Based on modelling developed as part of Energy Efficiency 2018, if the world was to implement all of the cost-effective energy efficiency measures, based on existing technology1, it would lead to a peak in energy-related GHG emissions before 2020 and by 2040. According to this projection, detailed in our Efficient World Scenario (EWS), energy efficiency could deliver a reduction in annual energy-related emissions of 3.5 Gt CO₂-eq (12%) compared with 2017 levels, delivering over 40% of the abatement required to be in line with the Paris Agreement. Combined with renewable energy and other measures, energy efficiency is therefore indispensable to achieving global climate targets.

Energy-related GHG emissions, with and without efficiency, 2000-17 (left) and in the NPS and EWS, 2000-40 (right)3

One way to mitigate the impact of the growth in the demand for materials on energy demand is to improve material efficiency – delivering the same material service with less overall production of materials. Promoting a higher degree of efficiency in the value chain of production and in the use phase, while making sure that the same service is delivered to the consumer, can take several different forms: reducing the weight of products while delivering the same service (light-weighting); reducing yield losses in the manufacturing process; finding alternative uses for scrap without re-melting; re-using and recycling components; creating longer-lasting product components; and using products more intensely or at a higher capacity.3

Reducing the demand for energy-intensive materials and product recycling lowers energy demand. Producing metals like steel, aluminium and copper from recycled scrap is 60-90% less energy intensive than primary production using metal ores.2

Energy intensity of primary and recycled metal production of steel, aluminium and copper

Promoting higher degrees of energy efficiency and material efficiency are related, as both promote a higher degree of efficiency along the value chain of production. The difference between energy efficiency and material efficiency is the production input. Material efficiency, in most cases, is complementary to energy efficiency, but the two reinforce each other. A car that contains less steel not only avoids the energy associated with excess steel production but also weighs less, leading to increased fuel efficiency during use. On the other hand, trade-offs also exist between energy and material efficiency: for example, extending the lifetime of steel-containing appliances means that the adoption of more efficient devices by consumers will occur later.