IEA: Energy efficiency progress has slowed – ceenergynews

Global Progress on Energy Efficiency and Sustainable Development Goals: An Analysis of the IEA 2025 Report

Executive Summary: Misalignment with SDG 7 and COP28 Targets

An analysis of the International Energy Agency’s (IEA) 2025 Energy Efficiency Report indicates that global progress remains insufficient to meet the targets established at COP28. These targets are fundamental to achieving Sustainable Development Goal 7 (Affordable and Clean Energy), specifically Target 7.3, which calls for doubling the global rate of improvement in energy efficiency by 2030. The agreed-upon goal requires a 4% annual improvement, yet progress has been critically slow.

• The average annual rate of energy intensity improvement since 2019 has been only 1.3%.
• This rate is substantially below the long-term average of 2% per year recorded between 2010 and 2019.
• The 2025 projection of 1.8% improvement, while an increase, still falls significantly short of the 4% target necessary for SDG 7.3.

Regional Performance and Projections

Progress towards energy efficiency goals is uneven across major economies. While some regions are projected to make significant strides, others are lagging, highlighting a fragmented global effort.

• China: Expected to exceed 3% improvement in 2025.
• India: Projected to achieve over 4% improvement in 2025.
• United States & European Union: Progress is anticipated to fall below 1% in 2025.

Key Impediments to Progress on Sustainable Development Goals

The report identifies four primary trends that are hindering the achievement of global energy and climate objectives.

1. Slowing Industrial Improvements: The industrial sector has accounted for two-thirds of global final energy demand growth since 2019. However, the rate of industrial energy intensity improvement has fallen to below 0.5% per year. This trend directly challenges SDG 9 (Industry, Innovation, and Infrastructure) by slowing the transition to more sustainable and resource-efficient industrial processes.
2. Policies Lagging Behind Technological Development: A significant gap exists between the efficiency of the best available technologies and the minimum performance standards mandated by policy. This policy lag obstructs progress on SDG 12 (Responsible Consumption and Production) by failing to incentivize the market uptake of the most efficient products, such as lighting and appliances.
3. Rising Demand for Inefficient Cooling: The demand for space cooling, particularly in emerging economies, has grown by over 4% annually since 2000. Much of this demand is met with inefficient equipment, placing immense pressure on energy systems and undermining efforts related to SDG 11 (Sustainable Cities and Communities) and SDG 7. The use of inefficient air conditioners negates potential energy savings equivalent to the entire electricity demand growth from data centres.
4. Electricity Demand Growth Exceeding Renewable Supply: Rapid growth in electricity demand has, in some regions, necessitated the use of less efficient fossil fuel generation. This reliance on carbon-intensive energy sources directly conflicts with SDG 13 (Climate Action) and complicates the primary energy intensity improvements required for SDG 7.

Investment Trends and Economic Context

Despite implementation challenges, the economic commitment to energy efficiency is growing, indicating its increasing importance for SDG 8 (Decent Work and Economic Growth).

• Global investments in energy efficiency are projected to reach nearly 800 billion dollars in 2025, a 6% increase from 2024.
• Employment in the energy efficiency sector has expanded, reflecting its growing economic contribution.
• However, progress is hampered by budgetary constraints leading to reduced public support schemes and a significant rise in material costs, with construction prices in the EU increasing by over 20% since 2021.

Conclusion and Policy Recommendations

The IEA report concludes that current trajectories are insufficient to meet established international goals. To realign with the objectives of the Paris Agreement and the 2030 Agenda for Sustainable Development, a significant acceleration in energy efficiency improvements is required. This can only be achieved by raising the ambition of government policies and closing critical implementation gaps to advance SDG 7, SDG 13, and related global targets.

Which SDGs are addressed or connected to the issues highlighted in the article?

Explanation

The article’s central theme of energy efficiency, its challenges, and its role in meeting climate goals directly connects to several Sustainable Development Goals. The discussion revolves around energy consumption patterns, industrial processes, climate policy, and technological adoption, which are core components of the following SDGs:

• SDG 7: Affordable and Clean Energy: The entire article is a commentary on the progress, or lack thereof, in global energy efficiency, which is a primary focus of this goal.
• SDG 9: Industry, Innovation and Infrastructure: The report specifically highlights the “slowing industrial improvements” and the need to address energy intensity in the industrial sector, linking directly to the goal of making industries more sustainable and efficient.
• SDG 12: Responsible Consumption and Production: The article points to inefficiencies in consumption patterns, such as the use of less-efficient appliances like air conditioners and the lag in policy standards for consumer goods, which are key concerns of SDG 12.
• SDG 13: Climate Action: The article is framed around the failure to meet the COP28 targets, which are global commitments to combat climate change. Improving energy efficiency is presented as a critical climate action measure.

What specific targets under those SDGs can be identified based on the article’s content?

Explanation

The article provides specific data and context that align directly with several official SDG targets. These targets are either explicitly mentioned or strongly implied by the issues discussed.

• Target 7.3: “By 2030, double the global rate of improvement in energy efficiency.” This target is explicitly referenced in the article, which states that according to COP28 agreements, “the global average annual rate of energy efficiency improvements should have doubled by 2030.” It further quantifies this by mentioning the target of a “4 per cent annual improvement.”
• Target 9.4: “By 2030, upgrade infrastructure and retrofit industries to make them sustainable, with increased resource-use efficiency…” The article’s section on “Slowing industrial improvements” directly addresses this target by noting that the “average annual rate of industrial energy intensity improvement has fallen below 0.5 per cent,” indicating a failure to improve resource-use efficiency in industry.
• Target 13.2: “Integrate climate change measures into national policies, strategies and planning.” The article discusses the gap between technological potential and policy, stating that “energy efficiency standards have not kept pace” with technology. The IEA’s recommendation to “raise the ambition of existing government policies” is a direct call to better integrate climate measures (like efficiency standards) into national policy.
• Target 7.2: “By 2030, increase substantially the share of renewable energy in the global energy mix.” This target is implicitly addressed when the article notes that “Electricity demand growth exceeds renewable supply,” leading to “greater use of less efficient fossil fuel generation.” This highlights a significant challenge in achieving a higher share of renewables.

Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

Explanation

Yes, the article mentions several quantitative and qualitative indicators that are used to measure progress, performance, and challenges related to the identified targets.

• Rate of improvement in energy intensity: This is the primary indicator used throughout the article to measure progress towards Target 7.3. Specific values are provided, such as the current average of “1.3 per cent per year since 2019” against the target of “4 per cent annual improvement.”
• Rate of industrial energy intensity improvement: This is a sector-specific indicator for Target 9.4. The article states this rate has “fallen below 0.5 per cent,” providing a clear metric of the slowdown in industrial efficiency.
• Investment in energy efficiency: The article mentions that “Global investments in energy efficiency are expected to reach almost 800 billion dollars in 2025.” This serves as a financial indicator of the resources being allocated to achieve efficiency goals.
• Gap between best-available technology and minimum performance standards: This is an indicator of policy effectiveness. The article provides a concrete example: “the efficiency of best-in-class lightbulbs has doubled in the past 15 years, while minimum performance standards have increased by only 30 per cent.”
• Growth in energy demand for specific end-uses: The article points to “energy for space cooling” as the “fastest growth of any end-use in buildings, growing over 4 per cent per year,” which is an indicator of a key challenge area.
• Employment in the energy efficiency sector: The growth in jobs is mentioned as a positive socio-economic indicator of the sector’s increasing importance.

SDGs, Targets and Indicators

Source: ceenergynews.com