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Recent progress

Global energy intensity improvements stepped up in the early part of this decade, but the 1.7% improvement in energy intensity of the global economy in 2017 marked the second consecutive year of slowing improvements, and analysis for 2018 shows an even slower improvement at 1.2%. This lies well below the initial SDG 7.3 target to achieve average annual energy intensity improvements of 2.6%. The recent slowdown was the result of weaker energy efficiency policy implementation in many major economies, as well as strong demand growth in more energy-intensive economies. Current and planned policies, modelled in the Stated Policies Scenarios, are projected to achieve an energy intensity improvement of annual average rate of 2.4% to 2030. This represents a doubling of the rate of progress observed in 2018, but remains below the almost 3% rate of improvement required to reach SDG 7.3.


 

Global energy intensity, defined as the ratio of primary energy supply to GDP, is the indicator used to track progress on global energy efficiency. The original target was an annual reduction of 2.6% until 2030 although the world has fallen short of this goal since it was announced, such that the required rate of intensity improvement rose to 2.7% after the improvement of only 1.7% in 2017. The further slowdown in 2018, with an improvement in energy intensity of only 1.2% according to IEA analysis, means that from 2019 to 2030 global energy intensity must improve by 2.9% annually to reach SDG 7.3. Meeting this objective will require an important step up in the implementation and expansion of energy efficiency policies.

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.

Energy intensity measured in terms of primary energy and GDP, 2000-2017

   
 
Outlook for energy intensity

In the Stated Policies Scenario, intensity improvements accelerate relative to recent trends in most regions, with the fastest progress observed in developing economies. In Developing Asia, for example, energy intensity improves at an annual rate of 3.3%. A number of significant energy efficiency policies, which have recently been agreed or are currently under development, are expected to boost energy intensity reduction. These include new policy packages announced by the European Union and China, and plans to strengthen mandatory energy performance regulations in various regions. As a result, overall global energy intensity in the Stated Policies Scenario is expected to decrease by 2.4% per year on average from 2019 to 2030. This is a much faster rate than has been achieved in recent years, but nonetheless falls short of the 2.9% annual improvement required to meet the SDG 7.3 target for 2030.

The Sustainable Development Scenario charts a path to meeting the objectives of SDG 7, even exceeding the energy intensity objectives of target 7.3. In this scenario the global rate of improvement of energy intensity improvement accelerate to well over 3% from 2019 to 2030. 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 building heating.

Energy intensity measured in terms of primary energy and GDP, 2000-2030