IEA’s netzero roadmap highlights doubling energy efficiency

The updated Net Zero Roadmap from the International Energy Agency (IEA) underscores the urgency of this objective and highlights the need for governments to triple renewable energy capacity by 2030, gradually reduce fossil fuel usage, and double energy efficiency improvements.

The IEA’s latest report reveals that while the path to achieving the 1.5 °C goal has narrowed, it remains achievable if governments build upon recent advancements in clean energy technologies, such as solar PV and electric vehicles. However, the next few years are pivotal, and without decisive action in this decade, the world will face even more dangerous consequences of climate change.

The momentum for doubling energy efficiency improvements has been building, with 46 governments pledging their commitment to this goal in the Versailles Statement released during the IEA’s 8th Annual Global Conference on Energy Efficiency in June. Discussions surrounding “two and three,” referring to doubling energy efficiency progress and tripling renewable capacity by 2030, have also taken place at the G7 and G20 meetings. European Commission President Ursula von der Leyen has proposed developing global targets for energy efficiency and renewable energy in collaboration with organizations like the IEA ahead of COP28.

The key challenge is to ensure that energy efficiency remains at the forefront of the agenda, fostering consensus and stronger global commitments.

The IEA’s Net Zero Roadmap outlines what must be achieved by 2030 for governments to fulfil their commitment to reaching net-zero emissions by mid-century and keeping global warming below 1.5 °C. Doubling energy efficiency progress and tripling renewable capacity, coupled with a 75% reduction in energy sector methane emissions and a substantial increase in the electrification of heating and transport, would collectively account for 80% of the emissions reductions required in this decade to meet the 2050 target.

Amid the global energy crisis triggered by Russia’s invasion of Ukraine, energy efficiency has gained prominence as a means to simultaneously address energy security, affordability, and climate change. Governments worldwide responded with policies and incentives to promote energy efficiency and efficient technology adoption. The result has been a record level of investment in energy efficiency and heightened consumer interest in reducing energy consumption.

Thanks to these measures, global energy intensity improved by just over 2% in 2022. This signifies that each unit of energy consumed in 2022 generated 2% more economic output than the previous year, marking a significant improvement compared to the preceding four years.

However, doubling energy efficiency progress calls for an average annual improvement rate of just over 4% between now and 2030, effectively generating 40% more economic output per unit of energy used in 2030. Few other policy areas offer such far-reaching benefits.

Achieving the target of doubling energy efficiency progress would lead to energy savings in 2030 equivalent to the total oil consumption of the global road transport sector in 2022. Key actions to double efficiency progress, such as enhancing the technical efficiency of buildings and equipment, optimizing material efficiency, promoting behavioural changes, and increasing electrification, would collectively reduce emissions by more than 7 Gt in 2030 according to the IEA’s net-zero scenario, accounting for nearly half of that year’s emissions reductions.

Moreover, enhancing energy efficiency results in a smaller energy system, which demands less physical infrastructure. This would translate into substantial cost savings for industries and governments. Consumers, too, would reap the benefits through healthier, more comfortable homes and workplaces, reduced energy bills, and improved air quality. The endeavour to double efficiency progress would also create over 3 million jobs, with additional workers required to retrofit buildings and install energy-saving technologies.

Doubling energy efficiency progress represents a formidable challenge that necessitates a global shift in ambition. Nevertheless, many governments have set a precedent in this regard. Of the 150 countries analyzed by the IEA, nearly all (91%) improved their energy intensity by 4% or more at least once in the past decade, with more than half (52%) doing so on at least three occasions. The challenge now lies in sustaining this benchmark consistently for nearly a decade. Notably, five G20 countries, including China, France, Indonesia, Japan, and the United Kingdom, have sustained an average improvement rate of 4% or more over a five-year period in recent years.

Fortunately, the policies required to achieve this objective are well-established, and the necessary technologies are largely available in the market. For instance, the IEA’s net-zero pathway highlights that by 2030, all globally sold air conditioners must be highly efficient to offset the increasing demand for cooling. Encouragingly, new IEA data reveals that qualifying products are already accessible to consumers in markets with rapidly growing demand, such as Southeast Asia and Latin America. With the implementation of the right policies, the efficiency of these products can increase while their cost decreases.

Significantly, the policies needed to drive energy efficiency improvements have already been put in place in many countries, needing only wider adoption. Examples include:

These are high-ambition policies already in existence today. If every country embraced and diligently enforced a comprehensive set of such policies across key sectors, the global doubling target could be met.

Strong financial incentives and improved consumer information should complement these policies. Grants for retrofit projects, combined with robust building codes and one-stop shops to assist consumers with multiple home efficiency improvements, have propelled many countries toward significant progress in energy efficiency.

While the steps for governments to achieve the doubling target are clear, the urgency of the matter cannot be overstated. With only 74 months remaining until 2030, every year of slow progress will necessitate even greater effort in the future. The full benefits of policies may also take several years to materialize, underscoring the importance of swift action.

Governments can initiate early momentum by focusing on areas where policy foundations already exist. For instance, existing tax credits or grants to promote residential heat pump adoption can be quickly expanded using established application processes and rules. Similarly, it is more efficient to build upon existing systems for energy efficiency standards for homes, appliances, or vehicles than to start from scratch. Many countries already have standards in place that can be improved or updated to meet best practices.

Doubling the rate of energy efficiency improvements between now and 2030 is a critical step toward achieving the global goal of net zero by 2050. This objective is ambitious but undeniably attainable, and preserving the possibility of meeting the 1.5 °C target is imperative. As COP28 approaches, doubling energy efficiency progress must be a top priority for global leaders and governments.

Tags: Energy Effficiency, IEA, NetZero