Energy Efficiency Policies around the World: Review and Evaluation

2.4 Industry

Since 1980, the general trend in industry in Europe, OECD Asia & Pacific, North America, China and India is a decrease in the energy required per unit of value added (industrial intensity) (Figure 2.16).

For Europe, and North America, this reduction in industrial energy intensity slowed since 2000 and was even reversed for OECD Asia & Pacific. The CIS and the Middle East experienced an increase in the energy intensity of industry until 2000.

In the other regions, the energy intensity remained almost stable, implying an energy consumption growth in industry in line with the level of activity. The energy intensity levels of OECD Asia & Pacific, Europe and China are converging; India and North America are also getting close to these levels.

In countries that have experienced an increasing role of energy intensive sub-sectors of industry (e.g. steel, cement), for example the Netherlands, Slovakia or to a lesser extent UK, the actual improvement in energy productivity, as measured by the energy intensity at constant structure, appears to be greater than that due to the decrease in the intensity of manufacturing (Figure 2.17) .

In most other EU countries, especially in Scandinavian and Baltic countries e.g. Sweden, Finland, Denmark, Lithuania, Estonia, and Latvia or in Hungary, France, Germany, Poland and the Czech Republic, the shift in industrial structure has moved in the other direction, towards less energy intensive industries (e.g. electronic goods, light chemicals) . In such cases, part of the decrease in energy intensity of manufacturing is due to structural changes. In other words, the intensity decrease overstates the actual improvement in energy productivity. In Poland, Hungary, Finland or France for example, about one third of the decrease in energy intensity since the mid nineties was due to changes in the structure of the manufacturing industry (Figure 2.17).

In energy intensive industries, the general trend points toward a reduction in the energy consumption per tonne of output, as observed for steel (Figure 2.18). Given the importance of steel in the energy balance of industry, this trend partly explains the overall improvement in energy productivity outlined above. There is a convergence in the most developed countries, whereas, in other countries, the situation is more diverse, due to differences in production processes and products.  Europe and North America have the lowest average specific consumption (0.32 toe/t of crude steel). In the CIS, this specific consumption is twice higher and emerging countries about 60-70% higher, but the progress is generally greater in these countries.

The rapid reduction in the energy consumption per tonne of steel is the result of two factors: energy efficiency improvements and an increasing share of electric steel production, the least energy intensive process compared to the oxygen blast furnace.  At world level, 34% of the steel was produced through the electric process in 2005, up from 28% in 1990. In some countries, negotiated agreements between industry associations and the government on targets for energy efficiency improvements explain part of the results achieved.

Consommation unitaire par tonne d'acier en fonction de la part des procédés

To really compare countries' energy efficiency performance in steel production, it is necessary to account for the differences in the process.  Countries with 100% production from electricity will have, all other things being equal, much lower specific energy consumption than countries with a large proportion of steel produced with the energy intensive oxygen process. 

Figure 2.19 indicates for a selection of countries the average consumption per tonne of steel in relation to the share of the electric process. 

Only groups of countries with a similar process mix can be compared: for instance, South Africa, India, Korea and Taiwan, with Korea turning out to have the best performance, or China, Russia and Australia, with Australia with the lowest specific consumption. The graph also displays the best practice (red line): the distance of each country to this best practice gives an estimate of the potential of energy efficiency improvement that can be achieved with the existing process mix. An additional potential of reduction in the specific consumption could be achieved by increasing the share of the electric process.