Industry accounts for around 20% of global oil demand. Two-thirds of industrial oil demand is used as feedstock in the chemicals industry. There are options that can bring down oil demand in industry, and some flexibility on which oil products are used as petrochemical feedstocks.

Description: The majority of petrochemical production capacity in Asia and the European Union can technically switch between different oil products – such as LPG, naphtha, ethane or gasoil – as a feedstock without requiring equipment modifications. Prioritising the processing of oil feedstocks that are more available could help release pressure on the others. Meanwhile, industrial oil-consuming facilities can save additional fuel in the short-term through maintenance checks and optimising how equipment is operated. Measures vary by site but typically include shutting down equipment when not in use, reducing temperature and pressure setpoints to only what is necessary, fixing leaks and maintenance issues, and improving scheduling so processes run more efficiently.

Impact: The degree of flexibility in petrochemical production and the level of stocks varies largely across regions. Most of the flexible chemical facilities are concentrated in Asia and Europe. With quick maintenance checks, individual industrial facilities can often reduce overall oil use in their processes by up to 5% in the short-term.

How governments can enable this: Governments can encourage industrial facilities to replace LPG with other oil products to prioritise LPG for essential uses. They can set up incentives to compensate for the change in production mix occurred by the change of oil product feedstock. Governments can also provide guidance, and sector-specific benchmarks to help facilities make quick savings. A walk-through of a facility with operational staff, combined with the use of energy management information systems, is often the first step to identify these opportunities.

Policy examples: There is experience dating back to the 1970s on how to encourage urgent energy savings in industry. Japan promoted quick energy management, such as cleaning, measuring, and minor repairs, while the United Kingdom recommended operational improvements, maintenance and monitoring. Meanwhile, the United States created Industrial Assessment Centers to help manufacturers cut back on energy costs through free energy audits. More recently, in 2022, the European Union’s REPowerEU Plan pushed to accelerate the adoption of efficiency measures in industry.