The rate of improvement in global primary energy intensity—the global proxy for improvements in energy efficiency—has slowed in recent years. Global energy intensity improvements stepped up in the early part of this decade, but the 1.5% improvement in energy intensity of the global economy in 2019 lies well below the initial SDG 7.3 annual target of 2.6%1. The recent slowdown was the result of weaker energy efficiency policy in many major economies, as well as strong demand growth in more energy-intensive economies. Current and planned policies modelled in the Stated Policies Scenario are projected to improve average energy intensity by 2.2% per year to 2030.

The rate of global primary energy intensity improvement - defined as the percentage decrease in the ratio of global total energy supply per unit of gross domestic product (GDP) - is the indicator used to track progress on global energy efficiency2. The original target was an annual reduction of 2.6% until 2030 although the world has fallen short of this goal, especially in the most recent years. While early estimates for 2020 point to a substantial decrease in intensity improvement as a result of the Covid-19 crisis, the outlook for 2021 suggests a return to the average rate of improvement during the previous decade. However, this would be well below the 3.2% pace required this decade to achieve SDG targets and the more than 4% pace needed to be on track to reach net-zero emissions by 2050.

Mandatory policies, such as codes and standards, including minimum energy performance standards, fuel-economy standards, building energy codes and industry targets, continue to form the basis of energy efficiency policy. However, these measures are being complemented by fiscal and financial incentives, such as tax relief on building renovations and electric vehicle purchases, public financing and the use of market-based instruments. Technological change and advances in energy management in the industrial and buildings sectors are also delivering efficiency improvements.

In the Stated Policies Scenario, intensity improvements accelerate in most regions. The fastest progress observed in emerging and developing economies is in developing Asia, where energy intensity improves at an annual rate of 3.4% between 2020 and 2030. A number of significant recent energy efficiency policies are expected to improve energy intensity, including NDCs announced at the COP26. As a result, overall global energy intensity in the Stated Policies Scenario is expected to decrease by 2.2% per year on average from 2020 to 2030. This is much faster than the rate in recent years (1.3% between 2015 and 2020), but nonetheless falls short of the over 4% annual improvement now required to meet the SDG 7.3 target for 2030.

The Net Zero Emissions by 2050 Scenario charts a path to meeting the objectives of SDG 7, even exceeding the energy intensity objectives set out in target 7.3. In this scenario, the global rate of energy intensity improvement accelerates to over 4% from 2020 to 2030. This rate is much higher than what is targeted in SDG 7.3, which requires 2.6% improvement in the next decade, but is necessary if the world is to follow the narrow, but plausible pathway in the NZE. Much of the potential for energy intensity improvement in this scenario comes from the switch to electric vehicles for transport, improvements in efficiency across industrial sectors and stringent building energy codes for both new and existing buildings, including the electrification of space heating in buildings.