00:00Progress globally at the moment is not at that level yet
00:03that governments sort of ambitions or envisioned for themselves at this stage
00:08and I think there's a real opportunity to accelerate progress in many cases.
00:19Hello and a very warm welcome to Energy Frontiers.
00:23I'm Rebecca McLaughlin-Easton.
00:26Today we're focusing on energy efficiency,
00:28a key tool in addressing energy affordability,
00:31quality of life and industrial competitiveness.
00:35Efficiency actions over the past 20 years have reduced household energy bills,
00:40greenhouse gas emissions and reliance on fossil fuel imports in some countries.
00:45But significant challenges to that progress lie ahead.
00:49The International Energy Agency joins me from Paris to discuss them.
00:53But first, here's an overview of the IEA's Energy Efficiency Report for 2025.
00:58Global energy efficiency progress is set to improve by 1.8% in 2025,
01:05up from around 1% last year, according to the IEA.
01:09Despite the uptick, the world remains off track to meet the COP28 goal of doubling annual energy efficiency gains by 2030.
01:16Some nations, mainly emerging economies, are showing stronger gains than in previous years,
01:22with energy intensity progress estimated to be more than 3% in China and more than 4% in India.
01:30More mature markets are weaker, with the United States and EU projected to fall below 1%
01:36after several years of stronger performance following the energy crisis.
01:41Some key trends holding back faster progress include industry,
01:45responsible for around two-thirds of global energy demand growth since 2019.
01:51Policy lagging technology progress is another,
01:54as is electricity demand growth outpacing renewable supply.
01:58Global energy efficiency-related investment is set to reach almost $800 billion in 2025,
02:06up 6% year-on-year.
02:08And despite 18 million people employed in energy efficiency last year,
02:13higher costs and labour shortages remain pain points.
02:16Lucas, it's great to see you. Thank you so much for joining me from Paris today.
02:22Thank you very much for having me, and thank you for taking the time to talk about energy efficiency.
02:26Let me start by asking you about your latest report,
02:28which points to energy efficiency having risen by only around 1.8% in 2025.
02:34Which policies or political decisions or even political failures, some might say,
02:38have led us to where we are today? Which is holding back progress?
02:42Yeah, thank you very much for that question. It's an excellent point.
02:45I think what we see actually in 2025 is that there is some positive news.
02:50So 2025 is sort of an uptick in energy efficiency progress globally compared to last year.
02:55However, as we see as well, is that over a sort of longer-term horizon,
03:00the average progress since 2019, the average progress this decade in terms of energy efficiency,
03:05is somewhat lower than the progress we saw previous decades,
03:08around 1.3% on average per year since 2019.
03:12And I think the first thing to mention is industry.
03:16We see that since 2019, two-thirds of global energy demand growth has come from the industrial sector.
03:24At the same time, in that industrial sector, energy efficiency progress there has sort of flatlined
03:30and dropped to around 0.5% per year on average.
03:33So there's a real slowdown in efficiency progress there.
03:36At the same time, we also see that policy has sort of lagged technological progress.
03:43Lukas, you mentioned policy there.
03:45You also touched upon industry.
03:46If we understand that technology is rapidly evolving and there's already much technology in place,
03:52what is the real barrier to efficiency progress?
03:56Is it just a geographical trend?
03:58Is it capital?
03:59Or are we merely waiting for policy to catch up?
04:02First of all, we see a shift of where industry takes place.
04:05There's a shift towards different regions in the world,
04:08but also towards more energy-intensive industry in some cases.
04:12But if we then specifically focus on policy,
04:15we also see there's a little bit less of a policy focus on the industrial sector in many countries.
04:20So of the sort of 250 policy announcements that we've seen in 2025 on energy efficiency,
04:27just over 35 of those were happening specifically in the industrial sectors.
04:31But the good news is that in many cases,
04:33the technologies are available to scale up efficiency progress in the industrial sector,
04:38especially in the sort of less intensive industrial sectors.
04:41There are many opportunities to electrify,
04:43using heat pumps, for example, in processes to electrify industrial heat.
04:48Lukas, is it fair to say that in recent years,
04:50governments have pretty much ignored the IEA's advice when it comes to energy efficiency?
04:54And as we know, your report is referencing,
04:57is emphasizing the need for us to close those policy gaps.
05:00So why do you think it will be different in 2026?
05:04And why should the public have faith that it will be different this time around?
05:07Yeah, it's an excellent question.
05:08I think what we've seen is that two years ago in 2023,
05:12governments around the world came together in Dubai at the climate conference, COP28,
05:17where they set the ambition themselves for 2030 to aim to double global energy efficiency improvements by that year.
05:24And unfortunately, since that year, we've seen progress not double yet.
05:29However, I don't think that means that governments don't still have that ambition.
05:33And I think one interesting thing that we see specifically this year
05:36is that governments have sort of started to recognize the role of energy efficiency,
05:41not just for emission reductions,
05:42but for sort of wider economic and energy policy priorities.
05:46You can think in this case of affordability, for example,
05:49also lowering household energy bills, but also industrial competitiveness,
05:53making sure that businesses are competitive, and lastly, energy security.
05:58And I think Europe, for example, is an excellent example where there are many new policies announced
06:03that sort of take energy efficiency to improve these different aspects of people's lives
06:10and of businesses in Europe.
06:12The best case scenario, as the IEA sees it, is for efficiency gains to more than double annually
06:18to meet global climate and energy goals.
06:20So which single action do you believe would really speed things up the most,
06:25and how soon could it have an impact?
06:27What is very promising is that we see that in many countries,
06:29there are existing policy frameworks in place already.
06:33So if I had to give one recommendation of what countries can do quickly
06:36to accelerate progress in terms of energy efficiency,
06:38is to take those existing policies that they have and raise the ambition on those.
06:44That's often one of the most fast and effective ways to raise efficiency progress,
06:49and that can be done in the building sector, in the industry sector, and in the transport sector.
06:53Lastly, Lucas, the IEA's World Energy Outlook 2025 warns that energy security risks
06:59now come from both fossil fuel markets and critical minerals for clean energy.
07:04Which of these, in your opinion, is more urgent and needing to be prioritised by governments today?
07:09We often joke a little bit, but call energy efficiency the first fuel here at the IEA.
07:14And I think for many of the challenges that governments face at the moment,
07:18whether that's affordability, energy security, like you mentioned, or competitiveness,
07:23energy efficiency can play a role in addressing all of those challenges.
07:26So I think it's important for countries to realise that,
07:29to unlock those benefits and then hopefully accelerate progress.
07:32And there we have to leave our conversation, Lucas.
07:35But thank you so much for joining me from Paris today.
07:37It was great to speak to you.
07:38Thank you very much, Rebecca.
07:39And thank you for Energy Frontier for having me.
07:41It was a pleasure.
07:43Well, that is a wrap of our show.
07:44I very much hope that you enjoyed it.
07:46And for more episodes in the Energy Frontier series, just head to euronews.com.
07:51Thanks again for watching, and I'll see you soon.
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