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Market News

 July 04, 2007
Heavy industries could save 25% more energy: IEA

 Paris, France -- Manufacturing industries, such as the cement, chemicals and metals sectors, could improve energy efficiency by more than 25% and reduce greenhouse gas emissions by a third by upgrading plant equipment and improving processes, says the International Energy Agency (IEA).

In Tracking Industrial Energy Efficiency and CO2 Emissions, the IEA notes that manufacturing industries account for 36% of world carbon dioxide emissions. Chemicals, petrochemicals, iron and steel, cement, paper and pulp, along with other minerals and metals, account for more than two thirds of this amount.

Industries in OECD countries have greatly improved their efficiencies during the last 25 years, but opportunities to reduce emissions remain, says the report. Energy efficiencies differ widely between countries producing similar products or using similar processes, which is a clear indication of the potential for further efficiency gains, it adds.

Much of the efficiency differences identified can be attributed to the age of plants. New plants tend to be more efficient than older ones. As a result, the most efficient industries can in some cases be found in emerging economies where new production facilities are being established.

For example, the most efficient aluminium smelters can be found in Africa, and Brazil is home to some of the world's most efficient cement producers. Similarly, some of the most efficient steel plants can be found in China. Industrial energy efficiency is consistently high in countries such as Japan, which has pursued energy efficiency policies for decades.

Another notable finding is that China accounts for four fifths of the growth in industrial production and CO2 emissions during the past 25 years. China is now the single largest industrial producer of a wide range of energy intensive industrial commodities such as aluminium, ammonia, cement and steel. The rapid growth of production in less efficient developing countries has limited the average efficiency gains worldwide.

"Improving industrial energy efficiency is an approach that can help developing countries in their economic growth and contribute to a significant global greenhouse gas reduction", noted IEA Executive Director Claude Mandil.

The IEA suggests that much is known about the efficiency of specific industrial processes, but less about the overall energy efficiency of conventional factory systems and product life cycles. This includes motor and steam systems, combined heat and power generation and the efficiency of materials and resource use. The analysis identifies even greater potential for energy savings in these areas. This offers important additional opportunities for decision makers to reduce the energy and CO2 footprint.

The study suggests a technical efficiency improvement potential of 18-26% for the whole manufacturing industry, if process improvement options and systems options are taken into account. The estimate does not consider the potential role of new technologies, so the impact could be much larger.

"The potential is so large that more efforts are warranted, in order to achieve deep CO2 emission reductions, reduce fossil fuel dependence and increase industrial competitiveness", concluded Mandil.