Greater efficiency can reduce defects and improve production quality

Energy efficiency improvements often involve tighter control and optimisation of production processes. By improving precision and stability in how equipment operates, firms can reduce variability in output and limit the occurrence of defects. These effects are particularly important in manufacturing sectors where small deviations can affect product quality and increase waste.

For example, an industrial bakery in Switzerland implemented a highly efficient centralised cooling system with CO₂-refrigerant and advanced controls. The system allowed for a more constant controlled temperature and reduced downtime, improving product quality and consistency, all while reducing energy costs and embodied refrigerant emissions.

Similar effects are observed in other manufacturing processes. For instance, at an Irish insulation company, replacing an inefficient moulding machine with a more efficient one, combined with waste heat recovery, led to more stable operations. As a result, defects and waste were reduced, cutting the use of waste compactors on site by 80%.

Recent survey evidence confirms the scale of these effects. Among 1000 manufacturing companies across a wide range of sectors, around two-thirds report at least a medium decrease in defective production following the implementation of energy efficiency measures, and almost half report a high or very high impact.

Global observed decrease in defective production due to energy efficiency measures by sector

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Improved energy performance is associated with better brand image and market positioning

Energy efficiency can shape how firms are perceived in the market. By reducing energy use in visible and measurable ways, more efficient production can signal operational excellence and environmental responsibility, strengthening brand positioning and differentiation. This can generate commercial advantages through customer acquisition, supplier relationships and, in some cases, price premiums.

At the firm level, these effects are often linked to visible improvements in production. For example, Ahascragh Distillery in Ireland installed a heat pump for its distillation processes. While reducing energy costs by around 40%, the project also created a clear point of differentiation as being the first carbon-neutral distillery in the country.

Energy performance can also influence access to supply chains, as companies increasingly set expectations for suppliers to improve efficiency and reduce emissions. Apple requires suppliers to work towards net zero emissions by 2030 and includes energy efficiency performance in their supplier selection. Its Supplier Energy Efficiency Program helps suppliers to achieve that goal and estimates it has reduced the carbon footprint by 2 million tonnes of CO₂-eq in 2025. Similar approaches are emerging across sectors, with companies like Unilever requiring suppliers to meet energy performance standards, effectively making efficiency a condition for doing business.

Consumer evidence reinforces these trends. A recent survey shows that sustainability and energy performance are increasingly factored into purchasing decisions. The share of consumers willing to pay a premium for more sustainable products averages at more than 50%, despite broader affordability pressures in recent years. The effect is strongest in sectors with more direct links to energy use, such as utilities or transport.

Importance of corporate efficiency and sustainability performance for consumers, and willingness to pay a price premium, by sector, 2024

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