Industrial Energy Efficiency is a Climate Solution

Staff from MCI Santé Animale, one of the 18 companies that have
participated in energy management training organized by UNIDO´s
Industrial Energy Accelerator in partnership with the Moroccan
government, at work, as the country moves to reduce its reliance on
fossil fuel imports. Credit: UNIDO

By Tareq Emtariah
VIENNA, Dec 13 2019 (IPS)

At a time when the world is battling unprecedented drought,
bushfires, rising sea levels and water shortages, reducing energy
use across industry is one powerful way to fight climate change in
the immediate term.

However, historic slowdowns in energy efficiency progress
persist. As we conclude another Conference of Parties (COP25) on
climate change, and move into a new decade with unprecedented
environmental challenges, governments have to put industrial energy
efficiency back on the agenda before it is too late.

I have worked in the energy sector for nearly 25 years. During
this time, I have witnessed some incredible advances. Yet, now,
when we should be doing everything in our power to reduce the
unnecessary use of fossil fuels, we are instead witnessing a
slowing of progress on energy efficiency, with the
International Energy Agency
reporting last month that progress
on energy efficiency had declined to its slowest rate since this
decade began.

Among the many reasons for this “historic slowdown” is a
lack of national government commitment for the cause, which is
seriously hampering wide-scale change.

Prioritising industrial energy efficiency is one way that
governments can simultaneously ease pressure on the economy,
enhance energy security and the environment in the here and now.
It’s what we at UNIDO refer to as the “invisible

A large-scale shift toward more energy efficient practices in
industry would enable companies to massively reduce their power
bills. In economic terms, industrial energy efficiency can increase
productivity, lower manufacturing costs, and create more jobs.

When it comes to the environment, the widespread adoption of
energy efficiency measures could reduce industrial energy use by
over 25%. This potential is a significant reduction of 8% in the
global energy use and 12.4% reduction in global CO2 emissions.

Tareq Emtariah – Credit: UNIDO

With this in mind, here are five practical steps governments can
take to harness industrial energy efficiency against climate

1. Phasing out fossil fuel subsidies, at least
for those industries which are large enough to afford it.
Analysis commissioned by the IMF
this year found that if fossil
fuels had been priced appropriately, global carbon emissions would
be reduced by 28 per cent and governments revenues would increase
3.8 per cent of GDP. Developed economies and nations such as those
in the United States and European Union should be leading by
example on this issue.

Meanwhile, in major emerging economies like Argentina,
, South Africa, Turkey and Russia fossil fuel
subsidies have historically kept the cost of energy artificially

As a result, there has never really been a major concern for
industries to makes changes. When industries don’t fully
understand the potential of energy efficiency, and energy costs are
bearable, it’s a lot easier for them to become complacent.

One just has to look to Morocco
for inspiration. In 2014 the North African nation ended subsidies
of gasoline and fuel oil and begun to cut diesel subsidies as part
of its drive to repair public finances.

Fast forward to today and Morocco is considered one of the most
progressive countries when it comes to its national energy
commitments and efforts to prioritise industrial energy

2. Breaking down barriers to finance. In
developing economies in particular, investors’ lack of awareness
of the commercial benefits of best practices in energy efficiency
is preventing much needed investment. In countries like Brazil,
‘high-risk’ perceptions surrounding energy efficiency projects
mean that interest rates are often impossibly high for companies
eager to invest in industrial energy efficiency advancements.

The public sector must pinpoint the best ways to design and
implement energy efficiency policies to effectively mobilise
finance and investment. Co-funded blended finance schemes, tax
breaks, financial sector training and project bundling are just
some of the many ways governments can help to simultaneously
incentivise and de-risk investments into industrial energy

Improving the competitiveness of Brazil’s industrial sector,
which contributes to 20 per cent of the country’s GDP, requires
significant investment into energy efficiency. UNIDO’s Industrial
Energy Accelerator undertook three energy efficiency workshops
aiming to change perceptions among investors. Credit: UNIDO

3. Supporting SMEs. Often in emerging
economies, small-to-medium sized enterprises make up the majority
of the industrial sector. However, many of these small businesses
lack the formal qualifications and the collateral needed to access
finance and adhere to newly introduced industrial energy efficiency

for example, where small-to-medium sized enterprises
form the backbone of the national economy, the government is
working to introduce a labour competencies standard for internal
energy auditors that responds specifically to the needs of

4. Making the invisible, visible. Despite
offering so many win-win benefits, industrial energy efficiency is
often referred to as an invisible solution. Energy efficiency
interventions require changing behaviours and they are often

Retrofitting the insulation level of pipes or replacing an old
inefficient boiler is not as appealing as investing into
multimillion-dollar renewable energy projects panels or as
noticeable as saving forests.

However, government leaders can help change this by working with
industry to advocate and discuss the potential of implementing
industrial energy efficiency measures to consumers and other
stakeholders. To facilitate and amplify this conversation, UNIDO
recently launched a dedicated Industrial Energy Accelerator
Linkedin community

5. Joining forces. We cannot solve this
challenge country-by-country, we must work together under a
coordinated and ambitious multilateral framework. At the end of the
day we are calling on competitive multinational companies to
overhaul their production processes, incentivize their global
supply chains and invest in long-term sustainability measures.

In order to enable this, countries must create a level playing
field for businesses to operate within by aligning national
incentives and energy pricing systems.

Government is absolutely critical to the energy efficiency
transition. Even with the willpower of the private sector, without
coordinated government incentives, – such as support for SMEs,
advocacy and effective policy- industrial energy efficiency will be
impossible to achieve on a large scale.

As we conclude another COP and move into a new decade with
unprecedented environmental, social and economic challenges, on
behalf of UNIDO and the Industrial Energy
, I urge all governments worldwide to put industrial
energy efficiency back on the agenda. We have the knowhow, we have
the technology, now is the time for leadership and effective policy
to help us implement the solutions.

UNIDO’s Industrial Energy Accelerator works
on the ground to rally government, business and finance around
solutions for industrial energy efficiency. Next year the programme
will enter phase two of project implementation in the
Accelerator’s first five partner
, and we will begin work in new countries including:
Palestine, Sri Lanka, India, Ukraine and Ghana.

The post
Industrial Energy Efficiency is a Climate Solution
first on Inter Press


Tareq Emtariah is Director of the Department of
Energy at the United Nations Industrial Development Organization

The post
Industrial Energy Efficiency is a Climate Solution
first on Inter Press

Source: FS – All – Ecology – News
Industrial Energy Efficiency is a Climate Solution