Total final consumption in 2024 was over 450 EJ and has grown by around 25 EJ since 2019. Industry accounts for the largest share of this demand, at nearly 40%. Industry saw the strongest growth since 2019, contributing two-thirds of the total increase in global energy demand. The industrial sector can be divided into energy-intensive industries, responsible for three-quarters of total industrial demand, and less intensive industries, which are responsible for the remainder.

In energy-intensive industries, energy is largely used in processes that require high-temperature heat, generally above 500°C. Efficiency improvements, particularly in the short term, come from improved material efficiency, technical efficiency and process optimisation. However, as the sector is characterised by long-life assets, policies targeting these industries are often part of wider long-term decarbonisation efforts rather than energy efficiency alone.

In less energy-intensive industries, there are many economically feasible and readily available technologies and methods to improve efficiency in the short term. Efficiency improvements come, for example, from more efficient motors, which account for a large part of the sector’s electricity consumption. Furthermore, a large part of energy demand is used for heat production, and much of this required heat falls within low-temperature ranges (up to 200°C), which could be electrified with existing technologies, such as heat pumps.

Upgrading motor systems is a key area to promote industrial efficiency. Countries can implement more stringent standards for new motors and equipment, such as fans, pumps and compressors. Additionally, promoting the use of variable-speed drives, through regulations and targeted incentives, can further increase savings in variable-load applications.

Electrifying low-temperature heat using heat pumps is another important lever to accelerate efficiency progress, particularly in less intensive industries, due to its large share in energy use. Governments can accelerate heat pump deployment by offering grants or tax breaks for their installation, introducing standards for industrial heat technologies and expanding access to dynamic electricity pricing to incentivise their use during low-demand hours.

Material efficiency, such as through optimising design, light weighting, increasing scrap use in metals production, and enhanced recycling, is particularly important for efficiency progress in energy intensive industries. Other comprehensive policies can accelerate and enable efficiency improvements across end uses, such as the use of energy audits and energy management systems. Similarly, energy efficiency networks can improve peer-to-peer learning to enhance energy efficiency in a cost-effective way. Last, digitalisation-enabled AI, based on data collection and analysis throughout the production process, can help production operations or detect inefficiencies.