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More and more countries are recognising the many benefits of energy efficiency standards and labelling (EES&L) programmes to effectively reduce energy bills, drive product innovation, create jobs and reduce CO2 emissions cost. EES&L programmes for appliances and equipment now operate in more than 120 countries around the world and provide the cornerstone of most national energy efficiency and climate change mitigation programmes.

In the nine countries for which data were available, EES&L programmes reduced the annual electricity consumption by around 1 580 TWh in 2018. This is a similar order of magnitude as the total electricity generation of wind and solar energy in those countries in 2018.

Proportion of national electricity consumption reduction from standards and labelling programmes in selected countries

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Annual avoided electricity consumption from standards and labelling programmes in selected countries

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The EES&L programmes that have been operating the longest, such as those in the United States (US) and the European Union, are estimated to deliver annual reductions of around 15% of total current electricity consumption. This percentage increases each year as more of the older, less-efficient stock is replaced with equipment that meets new higher efficiency standards.

If a similar 15% improvement had been achieved by all countries,
a reduction of current electricity consumption in the order of 3 500 TWh
per year could have been achieved in 2020 – roughly equivalent to cutting China’s current total electricity consumption in half.

EES&Ls also cover gas- and oil-powered water and space heating. Including these end uses in some countries can increase the avoided energy consumption attributable to EES&L programmes by a factor of three. For example, in the European Union, 1 777 TWh or 15.3% of total primary energy consumption was saved in 2020. 

Based on global evidence from countries with EES&L programmes, the average energy efficiency of new major appliances in these countries has increased two to three times the underlying rate of technology improvement. This has resulted in average energy reductions of 10-30% over 15 to 20 years in the stock of most regulated products across all countries. In leading countries with strong regulations and long-running programmes which are regularly updated, the contribution was much higher, with EES&L programmes helping reduce the electricity consumption of many appliances by over 50%.

Annual energy reduction in new-product energy consumption from EES&L programmes

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For countries with the most advanced EES&L programmes, such programmes currently contribute around 7-10% of total energy-related emissions reductions each year. This amounts to around 343 Mt CO2 of avoided emissions in the United States and 311 Mt CO2 in the European Union. 

Annual carbon emissions avoided due to standards and labelling programmes

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EES&L programmes have stimulated economic activity by fostering innovation among manufacturers and creating new job opportunities in wholesale, retail and maintenance. Although challenging to estimate, this has been done for several programmes and economies. For example, in Europe the EES&L programme generates around 1 million direct jobs per year, with one extra job created for every EUR 80 000 spent on more efficient equipment. In the United States, the EES&L programmes generate around 300 000 extra jobs per year. Once the indirect effect of higher consumer spending from lower energy bills and higher disposable income is factored in, the resulting number of jobs created is even more significant. 

Direct employment effects of standards and labelling programmes in the United States and European Union

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This report also highlights the power of EES&L programmes to drive innovation and help bring down product purchase prices at the same time as reducing their energy consumption. For example, while more efficient appliances are sometimes more expensive to buy when they are first introduced, the average purchase price of appliances covered by EES&L programmes declined at a rate of 2-3% per year. This highlights how manufacturers are able to quickly adapt to meet new efficiency standards. As a result, governments typically overestimate the likely cost impact of proposed future MEPS on product purchase prices by a substantial margin, suggesting that more stringent MEPS levels could have been chosen.

Residential changes in appliance prices and energy performance in Australia, 1993-2014

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In all of the EES&L programmes reviewed, cost/benefit studies show that the financial benefits flowing from reduced energy consumption and lower bills outweigh the additional costs from purchasing more efficient equipment and administering the programmes. For example, the US EES&L programme provides net savings of around USD 40 billion per annum to households and businesses, and the average US annual household fuel bill has been cut by USD 320.

Benefit/cost ratio for standards and labelling programmes in selected countries

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This report supports work being delivered through the 26th Conference of the Parties (COP26) in November 2021, where the United Kingdom, as COP President, along with the International Energy Agency aim to co‑ordinate global action to significantly raise the efficiency of four key products sold globally by 2030. The Call to Action is being driven through the Super-efficient Equipment and Appliances Deployment (SEAD) Initiative. SEAD and 4E provide platforms for international collaboration to implement best practices and increase ambition, which are key to extending the benefits identified in this report and making efficient appliances and equipment available to all.

Research and development activities undertaken by 4E help to inform government policies and support the Call to Action put forth by SEAD. Moving toward 2030, 4E will continue to move the needle forward to raising the efficiency of products sold globally by 2030 by working collaboratively with member countries and SEAD in order to help governments meet their net zero CO2 goals.