Global energy efficiency progress is set to improve by 1.8% in 2025, up from around 1% in 2024. Preliminary estimates indicate that several key regions are showing some signs of stronger progress compared to their average since 2019. For example, energy intensity progress in 2025 is estimated to be over 3% in the People’s Republic of China (hereafter “China”) and over 4% in India, well above their averages in the years since 2019. In the United States and the European Union (EU), on the other hand, progress in 2025 is set to fall to under 1% after several years of stronger performance following the energy crisis.

The world remains off track to achieve its COP28 ambition for 2030. In 2023, nearly 200 governments agreed at COP28 in Dubai to work together to collectively double the global average annual rate of energy efficiency improvements by 2030. However, global energy efficiency progress – measured by the rate of change in primary energy intensity – has fallen to 1.3% per year on average since 2019. This is just over half its longer-term average of around 2% per year in the period 2010-2019, and well below the COP28 target of a 4% annual improvement by 2030.

1. Around two-thirds of global final energy demand growth since 2019 has been concentrated in industry, a sector where energy intensity progress has slowed sharply. Industrial energy demand growth has accelerated since 2019, while the average annual rate of industrial energy intensity improvement fell to under 0.5% over that same period, compared to almost 2% last decade. This global shift towards more intensive energy use in industry is offsetting gains made in other sectors and is weighing down overall efficiency progress.

2. Policies have lagged technology progress, leaving significant savings on the table. Many appliances being sold today are often only half as efficient as the best available models. As technologies have become more efficient in recent years, energy efficiency standards have not progressed at the same pace. For example, the efficiency of best-in-class lightbulbs doubled in the last 15 years, while minimum performance standards have only gone up by 30%.

3. Increased access to air conditioners has pushed up cooling-related electricity demand. Higher living standards have allowed more people to afford much-needed cooling technologies such as air conditioners, especially in emerging economies. In fact, energy for space cooling has seen the fastest growth of any end-use in buildings since 2000, growing over 4% per year. However, this increased demand has been met with equipment that is not highly efficient, further straining energy systems at a time of rapid growth. If every air conditioner bought since 2019 had been the most efficient available, the world could have avoided electricity demand growth equivalent to the demand growth from data centres over the same period.

4. Electricity demand growth has outpaced renewable supply leading to an overall increase in less efficient fossil fuel generation. Electricity demand has grown two to three times faster than overall energy demand since 2019. In some regions, this rising demand has led to greater use of inefficient generation sources, placing upward pressure on primary energy demand and slowing energy intensity progress.

Global energy efficiency-related investment is set to reach almost USD 800 billion in 2025, growing by 6% compared to last year and over 70% compared to 2015. However, in some countries, public support schemes have decreased amid budgetary constraints, while material costs have risen too. For instance, construction prices in the European Union have increased over 20% since 2021. Geographic disparities in investments remain too, with two-thirds of end use investment taking place in China, the United States and the European Union, while the fastest growth in the last 10 years happened in India and Southeast Asia.

Nearly 18 million people were employed in energy efficiency in 2024 around the world, but the sector continues to face labour and skills shortages. Overall efficiency-related employment increased over 6% from 2023 to 2024. Most efficiency workers are in China, the European Union and the United States, but emerging markets like India have seen a rapid increase in recent years. Meanwhile, new IEA surveys in 2025 highlight persistent labour shortages and the need to increase efforts to attract and train workers.

New IEA analysis shows the impact energy efficiency policies have had on global energy policy priorities. Notably, without efficiency gains since 2010, today’s greenhouse gas emissions would be 20% higher, and energy efficiency remains one of the key drivers to lower emissions in the future.

Efficiency actions since 2000 have reduced household energy bills in advanced economies by up to 20%. In 2025, several major economies put in place efficiency policies specifically linked to enhancing energy affordability. Efficiency has also improved competitiveness, with industries today producing 20% more value per unit of energy consumed than in 2000.

Efficiency gains have also avoided the need for 20% more fossil fuel imports in IEA countries over the same period. New data shows that efficiency actions accounted for two-thirds of the gas demand savings in European households during the energy crisis, enhancing its security and strategic independence.

This role of energy efficiency in wider energy policy goals was also recognised at the 10th Annual IEA Global Conference on Energy Efficiency in June. Participating governments reaffirmed their commitment to stronger energy efficiency action and particularly highlighted its role as a key tool to address energy affordability, quality of life and industrial competitiveness.

Governments implemented over 250 new or updated efficiency-related policies in countries all around the world in 2025. These countries represent over 85% of global energy demand, compared to countries accounting for 70% of total energy demand taking efficiency-related policy actions in 2024. Ahead of COP30, over 50 countries have also set updated targets for energy efficiency in their Nationally Determined Contributions. These policies form the basis for faster progress, and countries can accelerate efficiency improvements in two ways.

First, governments can move quickly to raise the ambition of existing policies. As technology improves, many policies have not been kept up to date, and policy ambition varies widely among countries. In some countries, for instance, a building that meets the local efficiency standard may in fact be using three times as much energy as one in another country with a similar climate. There is significant room to raise the bar and accelerate progress using existing and well-proven policy tools. When policy frameworks are already in place, this represents the fastest and easiest way to accelerate efficiency progress.

Second, there remain important policy gaps to be filled. There are still many areas where policies are either absent or limited. For example, around half of countries globally still do not have efficiency standards for new buildings, including in regions experiencing rapid growth. Similarly, there are still no mandatory energy performance standards for industrial motors in two-thirds of all countries globally. Identifying and closing specific policy gaps, prioritising where energy use and savings potential are the highest, can help countries accelerate progress.