Energy Efficiency Progress Tracker

This dynamic dashboard enables users to explore historical data, latest market estimates, and scenarios for energy demand, energy efficiency, and electrification progress.

The Energy Efficiency Progress Tracker contains content and links to IEA resources including the IEA’s Energy End Uses and Efficiency Data Explorer, to help users answer the following questions:

• How is the world tracking towards meeting the historic commitment made in Dubai at COP28 to double energy efficiency progress by 2030?
• What policies are available to help double efficiency progress?
• How is investment in efficiency tracking across the end-use sectors?
• What are the financing solutions available to households and businesses to help accelerate efficiency progress? 
  

Energy intensity progress has slowed since 2022 due to faster-than-average growth in energy demand combined with slower-than-average economic growth. In 2023 the world saw a rate of energy intensity progress of just 1% while in 2024 preliminary estimates suggest that a similar result is expected. This means the world is not yet on track to achieve the goal to double progress set at COP28 in Dubai in late 2023. These recent results compare with a 2% energy intensity improvement achieved in 2022 and also across the 2010-2019 period. 

Strong global primary energy demand (TES) growth of around 2% was seen in 2023, with initial estimates suggesting that a similar result is expected in 2024. This occurred even as global economic growth slowed to around 3% each year. This compares with a long-term average TES growth of 1.4% per year between 2010-2019, where economic growth averaged around 3.5% per year. TES grew by 1.2% in 2022, accompanied by 3.5% economic growth.

In STEPS, energy intensity progress remains steady this decade at the rate of 2% per year, with energy demand growth slowing to just under 1% per year from 2023 to 2030. However, if taking into account policy pledges that have been announced but are yet to be implemented, the rate of progress reaches around 3% per year in the APS Scenario.

To realise higher ambitions following COP28, governments will need to take a stronger and more comprehensive approach to energy efficiency. Considerations should include leveraging not only the incremental efficiency gains from new appliances, motors, and buildings – or technical efficiency – but also gains in other areas where a step change in energy efficiency is possible. Progress is needed in other areas, such as electrification, digitalisation, and renewable energy, as well as material efficiency from recycling and moving to clean cooking solutions.

Given slow global energy intensity progress, an increase in the rate of electrification in 2024 has provided a much-needed bright spot. The annual rate of electrification progress – defined as the annual percentage change in the ratio of electricity to total final energy consumption (TFC) - is set to rise by nearly 2% in 2024 as compared with a long-term average of 1% per year last decade from 2010-2019. This has helped lift the global share of electricity in TFC from around 17% in 2010 to 21% in 2024. The NZE Scenario sees the share of electricity in TFC rise to around 30% by 2030.

Strong electricity consumption growth of around 4% in 2024 was not just the result of increasing electrification of end uses but was also driven by hotter weather as more people turned to air conditioners to keep cool. Electricity consumption growth is almost 1% faster than the annual rise seen in even the rapidly electrifying world of the NZE Scenario. 

The IEA World Energy Investment Report 2024 suggests that investments in more efficient buildings, transportation, and industry would need to triple from USD 660 billion today to about USD 1.9 trillion in 2030 to be in line with the NZE Scenario. To meet this level of investment, thousands of different types of energy-saving technologies and assets would need to be deployed. Technical efficiency would need to be improved by replacing old, inefficient equipment across the buildings, transport, and industrial sectors. A wider set of measures would be necessary to cover electrification, renewables, batteries, material efficiency, and clean cooking. Most importantly, financing would need to be scaled up in emerging economies (other than China), where energy demand is rising fastest but currently accounts for less than 10% of current efficiency investment. 

Households are the main investors in energy efficiency, more so than any other clean energy technology, accounting for 60% of all spending. This includes 70% of investments in buildings and half of all spending in the transport sector. In the industrial sector, the corporate sector accounts for around 60% of spending, with governments making up the rest. Between 50-60% of all efficiency investment spending is usually sourced from household savings or business equity, with debt finance making up the remainder. Financing solutions capable of supporting a large number of households are therefore particularly important to scale up investment in buildings and transport.

The mix of priorities varies for different regions and countries. In advanced economies with more mature infrastructure, the focus will be on retrofits of buildings and electrification investments such as electric vehicles and heat pumps. In emerging economies – where a large number of new buildings, appliances, cars, and other equipment are being acquired as standards of living improve – a focus on technical efficiency and implementing minimum energy performance standards can yield very large results. In areas lacking access to clean cooking, such as sub-Saharan Africa, investment in efficient clean cooking needs to be increased.

Households and businesses play a crucial role in accelerating energy efficiency investments by gradually taking on a larger share of efficiency spending. To invest in energy efficiency, households and businesses can use their own equity, sourced from savings or balance sheets, or rely on debt instruments, such as commercial loans. The upfront costs of energy efficiency building renovations, for instance, often exceed households’ ability to pay. Access to low-cost financing, such as green or energy efficiency loans, combined with incentives and grants, is critical to support the uptake of energy efficiency measures. Tailored approaches are needed to provide consumers and businesses with access to affordable finance thus ensuring their participation in fair clean energy transitions.

The following financing solutions have the ability to support energy efficiency investment. 

Focus: Residential buildings and light industry

Credit lines are loan facilities provided by commercial banks that are designed to aggregate many small projects that would otherwise not qualify for commercial finance on their own. By standardising project appraisal and loan processing, they reduce transaction costs. International financial institutions, governments, or bilateral donors would typically offer a long-term loan to a bank or a group of banks to target specific projects that increase energy efficiency. Commercial banks then on-lend the funds, or eventually their own capital, to their customers. They are responsible for marketing, delivery, and monitoring of individual loans.

Examples:

Germany: Under the Federal Subsidy for Efficient Buildings (BEG) policy of the Federal Ministry of Economics and Climate Protection (BMWK), government provides funding to the German Investment Bank (KfW) to offer low-interest loans and grants to homeowners and businesses for energy-efficient renovations and new constructions. The KfW Energy-Efficient Refurbishement Programme includes measures like insulation, energy-efficient windows, and heating systems.

France: The Eco-Loan for Energy Transition (Eco-PTZ) provides interest-free loans to homeowners for energy efficiency improvements. Loans can be obtained from credit institutions, financing businesses, and third-party financing businesses that have signed an agreement with the French government. Eligible projects include insulation, heating system upgrades, and installation of renewable energy systems.

West Balkans: Credit lines from the European Bank of Reconstruction and Development (EBRD) have supported 18 000 households to invest EUR 100 million in energy-saving technologies such as insulation, heat pumps, new windows, or solar panels. The EBRD Green Economy Financing Facility, which operates through a network of 191 local banks across 29 countries, has supported EUR 6.3 billion worth of investment in green technologies.

Argentina: The Energy Efficiency and Reconversion Program was developed by Argentina's Energy Secretariat and Banco de la Nación Argentina (BNA) to support residential energy efficiency projects. It offers favourable loan terms for homeowners looking to invest in energy-saving technologies.

India: The energy efficiency revolving fund uses grants from the Global Environmental Facility to finance efficient motors and air-conditioners, smart meters/grids, and associated business models. The fund is managed by Energy Efficiency Services Limited (EESL) and supported by the Asian Development Bank (ADB).

Malaysia: The Green Technology Financing Scheme (GTFS), supported by the Malaysian government, provides credit lines to local banks to finance energy efficiency projects, including residential improvements. Building developers can access loans for building envelopes and highly efficient equipment, such as motors, chillers, pumps, fans and blowers, cooling towers, transformers, boilers and ballasts, boiler economizers, or air pre-heaters.

China: With support from the International Finance Corporation (IFC) and other international financial institutions, China has developed the China Utility-Based EE Finance Program (CHUEE). This programme provides credit lines to Chinese banks to finance SMEs seeking to implement energy efficiency projects.

Focus: Commercial, municipal, and utility services

Sustainability-linked loans are loan instruments where borrowers enjoy preferential terms depending on sustainability performance objectives. Such loans include predetermined key performance indicators (KPIs) linked to a set of calibrated (annual) sustainability performance targets that the borrower must meet. These targets can relate to reducing carbon emissions or improving energy efficiency. Borrowers are incentivised to achieve targets through potential benefits, such as reduced interest rates or other favourable loan terms. According to Bloomberg NEF 2024, such instruments accounted for USD 1.7 trillion of investment between 2018 and the third quarter of 2024, with just 7% of loans including efficiency as a key metric. Governments can help bolster this instrument by setting transparency standards for their criteria to support environmental integrity.

Examples:

China: A loan worth USD 300 million from the Hongqiao Group aimed to reduce carbon emissions in the aluminium sector. The KPIs focused on reducing greenhouse gas emission intensity that cannot be achieved without energy efficiency improvements. To boost environmental integrity, the Hongqiao Group obtained reviews from Sustainalytics and S&P Global Ratings, two international credit rating agencies. The company is one of the world’s largest aluminium producers with total assets of RMB 200 billion and 40 000 employees.

Brazil: In 2021, the main water and sanitation utility in Rio Grande do Sul state, Corsan, signed a sustainability-linked loan with IFC for USD 57 million. The loan aimed to replace obsolete equipment with energy efficiency pumps and hydrometers and improve energy efficiency throughout its water distribution network. The structure of the sustainability-linked loan serves as an incentive for the company to meet a 35% water loss target by 2024. If the target is met, Corsan would benefit from a reduction in their interest rate, and thus a lower cost of financing.

Europe: GlobalConnect Group operates a high-capacity fibre network covering 150 000 km across Sweden, Norway, Denmark, Germany, and Finland, as well as 20 data centres. In 2022, GlobalConnect Group raised financing from a consortium of banks in the form of a sustainability-linked loan for EUR 1 billion to fund its growth plan. Under the terms of the loan, the interest rate payable is expected to be lowered once GlobalConnect Group meets its sustainability targets. 

Focus: Commercial buildings

Green leasing is a form of lease with dedicated clauses covering a building’s environmental performance and the obligations of tenants and landlords to reduce energy use and waste. Green leases are used in both advanced and emerging economies and have helped reduce energy use in office buildings up to 20%. For building owners, taking a green lease is a way to meet minimum energy efficiency requirements, which may be set by governments.

Examples:

United States: In major markets like New York, San Francisco, and Washington, D.C., green leasing is supported by initiatives such as the Green Lease Leaders program supported by the US Department of Energy. The programme provides guidelines on lease best practices to encourage the uptake of energy efficiency and sustainability measures while aligning with federal and local regulations that promote high-performance buildings.

United Kingdom: Government-issued guidance on the Energy Performance Certificate (EPC) and Minimum Energy Efficiency Standards (MEES) drives the uptake for green leases. These frameworks encourage property owners to adopt green leases that ensure buildings meet sustainability standards.

Australia: Driven by the National Australian Built Environment Rating System (NABERS), Sydney and Melbourne are key markets for green leasing. These cities actively encourage integrating green leasing into property management, focusing on energy efficiency and environmental performance.

Singapore: Singapore has emerged as a leader in green leasing within Asia, supported by government incentives and the Green Mark certification programme, which promotes sustainable building practices.

India: India is seeing a growing interest in green leasing, particularly in major urban centres like Mumbai and Bengaluru. The share of green leases in the office market has risen to 16% as part of the post-pandemic focus on sustainability.

Focus: Commercial and public buildings, heavy industry, municipal, and utility services

Green Social Sustainability (GSS) bonds are a type of fixed-income investment instrument to fund projects reaching positive environmental and social benefits. Green bonds reached an annual issuance volume of USD 600 billion with about 10-20% of those bonds including energy efficiency as a use of proceeds, depending on the sector.

While historically the green bond issuance has been dominated by advanced economies, China is now a leading issuer of green bonds, with issuance exceeding USD 85 billion in 2022. The market in the United States is similar in size to China, with around USD 83.5 billion issued in 2022. Germany issued approximately USD 63.3 billion in green bonds, focusing on energy efficiency and renewable energy projects. The European Commission has designed a voluntary European Green Bond Standard to foster transparency and market best practice.

Examples:

United States: The New York State Housing Finance Agency, a public benefit corporation, issued a USD 307 million sustainability bond to finance mortgage loans for the construction, acquisition, and rehabilitation of several multi-family rental housing projects. The bond’s intended use of proceeds included investments in insulation, windows and doors, heating and cooling equipment, lighting, and appliances designed to meet energy consumption performance targets.

South Africa: In 2017, Cape Town issued its first green bond for USD 83 million, used to fund and refinance a number of green projects in the city including water resilience initiatives, sanitation treatment, procurement of electric buses, and energy efficiency in buildings. For South Africa, green bonds present an opportunity to address a lack in financing options.

Focus: Buildings, industry, and transport

Energy Service Companies (ESCO) provide comprehensive energy-saving solutions to customers, including arranging or securing finance. The primary goal of an ESCO is to help organisations reduce energy consumption and costs, often by improving energy efficiency or utilizing renewable energy sources. By financing the upfront costs of investments being repaid through energy savings, ESCOs make it easier for industrial clients to undertake large-scale energy efficiency improvements without having to incur additional debt.

ESCOs often guarantee energy savings and are used by large institutions, such as schools, hospitals, and government buildings, to help reduce energy costs and improve sustainability. The model has gained popularity because it aligns the incentives of the service provider (the ESCO) with the client's goals of reducing energy costs.

In countries with the right mix of regulatory support and technical skill, the ESCO model has been shown to deliver significant energy efficiency investment. A healthy ESCO market requires policies that incentivise energy efficiency as well as a robust legal system for resolving disputes.

Examples:

Ireland: The Tallaght University Hospital in Dublin worked with an ESCO in 2021 to undertake an energy efficiency retrofit. Improvements included the installation of energy efficiency equipment, a CHP system, replacement of heat pumps, steam boilers autoclaves, lights, and an upgraded Building Energy Management System. The project resulted in almost USD 1 million energy savings a year guaranteed by the EPC contractor.

Belgium: The province of Limburg used the ESCO model to upgrade municipal and provincial buildings. This project worth USD 20 million is expected to achieve a minimum of 30% energy savings per building, with the initial investment repaid through energy savings.

Denmark: Nearly one third of all municipalities have used the ESCO model to increase energy efficiency ins public buildings. While some municipalities focused on inexpensive, short-term payback measures, others opted for an integrated approach involving facade, roof, and window upgrades as well as heating and ventilation measures. Using ESCO services proved effective for small and medium-sized municipalities lacking internal capacity. Moreover, municipal projects involving an ESCO demonstrated a shorter turnaround time, averaging 2.2 years as compared to in-house projects lasting 6.3 years.

Canada: A Super ESCO, the Société de financement et d’accompagnement en performance énergétique (SOFIAC), was launched in 2020 with the support of the government of Quebec. SOFIAC supports businesses and municipalities in reaching energy savings. For instance, IBM’s manufacturing facility in Bromont, Quebec was estimated to save 43 000 gigajoules of energy over several years - equivalent to more than 500 Canadian households’ annual energy consumption - following upgrades to its heating and lighting and the implementation of fuel switching. 

Focus: Residential and commercial buildings, industry

Property Assessed Clean Energy (PACE) programmes enable commercial and residential building owners to access upfront, long-term financing for clean energy building upgrades. The PACE financing model is based on a loan attached to a property instead of to an individual, and is repaid with property taxes and charges. PACE-style programmes vary by market and depend on national legal frameworks. They are used in Australia, Canada, Netherlands, and the United States.