Transforming Energy Demand: White Paper January 2024

In collaboration
with PwC
Transforming
Energy Demand
WHITE PAPER
JANUARY 2024
Images: Getty Images
Contents
Foreword 3
Executive summary 4
1 Why transforming energy demand matters 5
2 The three energy demand levers 11
3 Business solutions – overall approach 13
4 Business solutions – selected interventions for change 15

in buildings, industry and transport
4.1 Industry 16
4.2 Buildings 24
4.3
Transport 29
5 Government leadership 33
Conclusion 37
Appendix 38
A1 Modelling methodology 38
Contributors 40
Endnotes 44
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Transforming Energy Demand 2

January 2024 Transforming Energy Demand
Foreword
Ana Botin Bob Moritz Olivier Schwab

Executive Chairman, Global Chair, PwC; Member, Managing Director,
The Santander Group; International Business Council World Economic Forum
Chair, International
Business Council
As the global energy system undergoes a rapid cost‑efficient 31% reduction of demand, shared
transformation, leaders across all sectors need to across all economic sectors. These gains are
collaborate to accelerate an energy transition that deliverable now, at attractive returns, needing no new
creates positive outcomes for people, society and technology. Such concerted action would unlock
the planet. The private sector can play a leading growth and productivity while getting the world
role in driving this transformation. back on track to meet the targets sets by the Paris
Agreement. At the same time, it would support
That is why a year ago, the International Business delivery of the pledge by over 120 countries at
Council (IBC), a group that together represents 3% COP28 to double the global average annual rate of
of global energy use, decided to focus on energy energy efficiency improvement.
demand. This is an under-addressed area that
will allow us to increase economic output, while These findings should be exciting for all leaders,
reducing greenhouse gas emissions (GHG) and in growth and mature markets alike, and we thank
driving up global access to energy. all the IBC members for their support in driving
this work. Our ambition is to get the world to act
Our research shows that there are many tangible as much on energy demand as supply its efforts
actions that all businesses can take today to act on to reach net zero. We hope this paper will inspire
energy demand. The potential of this demand‑side many other businesses and governments to join
action is extraordinary, offering a short-term, this effort. There is no time to lose.

Executive summary
Actions on energy demand can be taken by
all companies now, are profitable and can
accelerate progress towards climate goals.
The value of action on energy demand is economic output. Affordability is also clear, with
compelling: a possible 31% reduction in energy interventions potentially fully paid back globally
intensity and up to $2 trillion in annual savings within a decade, driving estimated annual savings
if measures were to be taken by 2030 (see in the range of $2 trillion.
Appendix, A1: Methodology). Reducing energy
intensity – energy used per unit of gross domestic Three levers can deliver this change. First,
product (GDP) – would boost growth by enabling “energy savings”– operational improvement
previously wasted or over-utilized energy to be interventions funded through operating expenditure
redirected to more productive activities. It would also (OpEx). Results are typically immediate but often
help companies save cash and maintain competitive overlooked as they require coordinating many
advantage while reducing emissions. This paper interventions across an organization and constant
outlines the value of actions on energy demand from energy cost improvement. “Energy efficiency” pools
the private and public sectors and how to deliver measures under direct company control that require
them. Actions are doable today, at attractive returns capital expenditure (CapEx). Together, savings and
with existing technology, and so it is believed this efficiencies offer businesses the lower-hanging fruit
establishes a compelling case to act as much on and at least half of the improvements in energy
energy demand as supply in the journey to net zero. intensity that this research has identified. The final
lever is “value chain collaboration”, where working
Finding a way to reduce or even reverse directly with suppliers and business partners offers
the pace of energy demand growth while company agency over energy impact, reducing cost
supporting economic output is critical. By and getting ahead of the race to net zero.
2050, the world’s population will grow by two
billion, and GDP is forecast to double. Emerging Each sector needs a “roadmap” to guide
markets and developing economies need company and government action. Company
abundant and low-cost energy to enable growth and national energy transition plans are needed
and meet development goals. Simultaneously, to capture the benefits of managing energy
the world is targeting supply decarbonization. consumption while integrating supply-side actions.
Acting on demand and supply simultaneously Businesses across the energy demand and
is the best way to achieve these changes. supply spectrum will need to work together with
government to develop these plans and increase
Acting on energy consumption is doable, awareness of the routes and results available to
affordable and profitable. This research shows address barriers to action.
that all companies and countries can use existing
levers to reduce energy intensity. Across buildings, Developing these plans is the essential next step
industry and transport (BIT), International Business in raising awareness and getting behind action
Council (IBC) examples illustrate that these actions, on energy demand. At COP28, over 120 countries
where supported by appropriate public policy, pledged to double the pace of energy efficiency
can enable the world to reduce its energy needs improvement. The IBC can be a leading private
by approximately a third while freeing further sector group to support countries in their ambition.

1 Why transforming
energy demand matters
Actions on energy demand can reduce
energy consumption by up to 31%,
saving up to $2 trillion per annum.
What if a business could reduce its annual on reducing greenhouse gas (GHG) emissions
operating costs by 10% within three years? and delivering greater resilience in operations.
What would be the implications for a company’s
stock price if it could increase margins on a These are not trick questions, but are based on real
sustained basis by 200-300 basis points? All while examples from IBC members. The answer lies at
simultaneously building both measurable progress the root of this study: transforming energy demand.
FIGURE 1 The energy triangle
Sustainability and climate change
Enablers:
Policy, finance,
collaboration
technology,
digitalization and
workforce
Energy
Geopolitics
transition Timeframe
Supply Delivery Demand

Renewable Transmission Industry
Nuclear Pipelines Urban and
Fossil fuels Infrastructure buildings
Transport
Just and Energy

affordability security and
resilience
Economies
Source: World Economic Forum, Fostering Effective Energy Transition, 2023.

Note: The triangle represents the energy trilemma – the imperative of delivering a just energy transition while ensuring affordability, security and sustainability.

To date, there The problem approximately 60% of current demand. These
has been too markets need a clear range of routes to economic
heavy a reliance The energy transition creates immense and growing growth, which include abundant access to affordable
on governments tensions between the imperatives of security, clean energy.3 If the future level of energy demand is
and the energy affordability and sustainability (see Figure 1). not met by adequate supply, it could lead to higher
prices and obstacles to growth and competitiveness.
industry, not the
Security
wider economy, to
Sustainability
deliver net zero. On energy security, the first challenge is to
simultaneously maintain a secure and stable The third challenge, sustainability, is to meet this
supply of energy amid an increasingly volatile growth in energy demand in a way that keeps the
geopolitical situation, all while transforming today’s world on track to meet the 2050 Paris Agreement.
hydrocarbon-dominated supply. In 2021-22, Europe Even with an assumed three-fold growth in
grappled with energy shortages and prices that renewable energy, scenarios forecast a significant
have threatened the industrial base and forced shortfall in clean energy supply by 2050 (see Figure
governments to procure their oil and gas from the 3), which could be met with more fossil fuel-based
flows normally destined to other emerging markets energy. This is as, if not more, true in EMDE, due to
and developing economies (EMDE),1 which in the lack of adequate renewable supply chains.
turn had to resort to higher coal consumption and
overall face higher energy prices. To date, the majority of debate and action has been
focused on governments and energy companies
Affordability driving changes in energy supply. This has resulted
in remarkable changes in the energy system, with
The second challenge, affordability, is to ensure rapid increases in emissions-free and decentralised
that energy is economic not just for businesses electricity generation. However, the trajectory of
but for society in general. While forecasts differ on the energy transition remains off-track compared
the level of energy demand in 2050 (see Figure 2), to climate and development goals, hindered by
the expected doubling of global gross domestic issues such as slow permitting and poor access to
product (GDP) and the addition of two billion people finance. Therefore, while action on energy supply
will intensify pressure on energy supply systems,2 remains crucial, it will be difficult for it to be the
particularly in EMDE, which are responsible for answer alone.
FIGURE 2 Forecast demand growth to 2050
Percentage growth in total energy consumption across differing global scenarios (sample)
%, base year to 2050
33%
21%
14% 14%
9% 8% 8%
-3%
-22%
Shell
Schneider TotalEnergies BP “New
“Archipelago”
XOM “Global Electric “New “Momentum” Equinor momentum” IEA “STEPS” IEA “Net
(base year
outlook” (base Normal” (base (base year “Walls” (base (base year (base year IEA “APS” Zero” (base
2019)
year 2021) year 2018) 2021) year 2020) 2019) 2022) (base 2022) year 2022)
Current policies Further action
Sources: International Energy Agency (IEA), Net Zero Roadmap: A Global Pathway to Keep the 1.5C Goal in Reach, 2023; Shell, The Energy Security Scenarios,
2019; ExxonMobil, ExxonMobil Global Outlook, 2023; Schneider Electric, Back to 2050: 1.5°C is more feasible than we think, 2021; Equinor, 2023 Energy
Perspectives, 2023; bp, bp Energy Outlook 2023 Edition, 2023; IEA, World Energy Outlook 2023, 2023; TotalEnergies, TotalEnergies Energy Outlook 2022, 2022.

FIGURE 3 Shortfall in renewable energy supply vs demand from commercial sources
Global commercial* total final consumption and renewable energy supply and IEA stated policies
(STEPS) scenario, exajoules (EJ), 2022-2050
75% 42%
Supply shortfall Supply shortfall
392
304
227
75
2022 2050
Commercial energy demand Renewable energy supply
*All energy demand from commercial buildings, industry and transport, excluding residential buildings and road transport.
Sources: IEA, World Energy Outlook 2023, 2023.
The solution: action on energy consumption alongside supply
It is, therefore, vital to address energy demand using less energy to create the same (or greater)
alongside supply, reducing the energy intensity of output. This in turn will reduce emissions intensity
current activity and future growth. Demand-side (the volume of emissions created in manufacturing
action is an area where the business and social a product or providing a service) due to energy-
cases for demand-side action overlap closely. Such related emissions being reduced. Measures to
action can increase productivity, while unlocking tackle energy consumption are also beneficial
access to energy and economic growth. This is done across all markets, as delivering higher output with
by reallocating previously wasted or unnecessarily- lower energy use is a universal good. However,
used energy to new consumers and/or new uses. benefits will vary in importance between markets.
After all, the cheapest form of energy is energy that For example, in developed economies, lower
is not used. There’s also a clear opportunity cost – energy intensity helps to enhance competitiveness
any delay in action will force increased energy through lower total energy cost while attenuating
spending and continued missing of climate goals. environmental risks. In EMDE, taking action to
manage energy demand as well as focusing on
The great news is that transforming energy demand the supply can improve access to secure energy,
is doable and affordable now. All companies, improving the ability to attract investment while
regardless of sector, can tap into existing, affordable offering the opportunity to avoid low-efficiency
technologies to reduce energy intensity – that is, legacy systems seen in developed economies.

Size of the energy demand prize
This study breaks global energy demand into across these areas that would reduce overall
“BITs” – buildings, industry and transport. Together, energy intensity by around 31% relative to current
these account for 94% of global demand.4 levels (see Figure 4), with further, harder-to-deliver
Achievable5 interventions have been identified interventions increasing this to 42% (see Figure 6).
FIGURE 4 Short-term reduction potential of energy demand actions (achievable scenario only)
1 Potential energy intensity 2 2022 global energy 3 Potential energy intensity reduction
reduction by vertical (achievable*) demand by vertical for the whole economy (achievable*)
442 EJ 31%
6%
38% Other 4%
Other
26%
Transport
5%
Transport
29%
21% 30% 12%

Buildings Buildings
38%
Industry 11%
Industry
Industry Buildings Transport 2022 demand
– In (1), individual interventions by vertical are identified (e.g. installing more efficient electric motors), and their potential impact on vertical-wide
energy intensity is summed.
– To gain the overall impact of these changes on global demand, these are then scaled by the proportion of energy demand that each vertical
represents (2). In addition, an average intensity reduction is applied to sectors not considered in depth (defined as “other”)
– This results in (3), the potential combined impact of individual interventions on global energy intensity.
*Achievable is defined as interventions that are currently technologically available at scale with associated data available on their energy intensity impact;
**Percentage does not total 31% due to rounding.
Sources: IEA, World Energy Outlook 2023, 2023.
To understand how these interventions would affect This was achieved by first modelling energy
the world over time, this report considers what demand in 2030 if no energy intensity improvement
would occur if these interventions were globally were made between 2022 and 2030 (“no efficiency”
enacted by 2030 (see Appendix, A1: Methodology). scenario, see Figure 5).

FIGURE 5 Forecast of “no efficiency” scenario, 2030
EJ, 2022-2030, global

+30%
131
574
442
2022 energy consumption Impact of making no energy efficiency progress 2030 “no efficiency” scenario
2022 energy demand: Total energy consumed, 2022 Impact of making no energy efficiency progress
2030 “no efficiency” scenario: Forecast 2030 energy demand if no further efficiency gains are made
Source: IEA, World Energy Outlook 2023, 2023.
If applied to the “no efficiency” scenario in 2030, these are ahead of the target set by the Sustainable
interventions would allow output to be maintained with Development Goals (SDGs), the International Energy
less energy, resulting in a reduction in energy intensity Agency (IEA) and the International Renewable Energy
around 19% below the levels forecast if current Agency (IRENA) of doubling the current rate to over
policies are enacted (see Figure 6). On an annual 4% to reach net zero. As a result, if delivered, these
basis, this would correspond to an improvement interventions would put the world ahead of the
in energy intensity of 4.6% per annum. Such gains targets in the Paris Agreements.
FIGURE 6 Impact of proposed interventions on global energy demand, 20306
EJ, 2030, global

-31% -42%
Impact of achievable
interventions vs “no efficiency” Impact of
-19% ambition
interventions vs
“no efficiency”
574
482
406 393
331
“No efficiency” 2023 “current 2030 net-zero 2030 achievable 2030 ambition
scenario policies” scenario scenario energy demand* energy demand
Forecast energy demand in 2030 if historical rate of energy efficiency improvement is maintained
Net zero scenario forecast in 2030 Forecast energy demand if all achievable and all ambition interventions are put in place by 2030
Forecast energy demand if all achievable interventions are put in place by 2030
* Achievable” scenario represents difficult steps to implement that will reduce energy intensity, but that are based on
technologies that are available at scale today, making them technically achievable. “Ambition” scenario represents the impact
of all achievable interventions alongside some less proven, more difficult to scale interventions.

Even with the energy numbers being so compelling, cumulative cost of energy efficiency interventions
these interventions would have to be affordable. by 2030 to reach net zero at $14 trillion,7 this
Again, acting on energy demand offers good news, study suggests that, of this, up to $8 trillion is
suggesting a clear range of routes which come repaid during the period, with further annual
at a fraction of the long-term capital expenditure savings of up to $2 trillion per annum at current
needed to switch energy supply away from prices, depending on how energy pricing varies in
fossil fuel. While a recent report by IRENA puts the response to intensity reduction (see Figure 7).
FIGURE 7 Impact of energy demand-side levers on global energy demand

and illustrative associated cost impacts, 2022-30
Global energy demand forecast scenarios and associated cost reductions

EJ, global
490 Current policies scenario2
19%
480
$0.9 trillion additional spend1 Combined $2 trillion
470 and approximately 3,000 savings vs forecast
additional power stations if spend under
460 current policies are enacted with current policies
no further action on demand
450
440 2022 demand
430
Global energy consumption (EJ)
$1.1 trillion in energy

420 savings1 compared to
410 2022 demand
400
390 Achievable energy demand
380
370
360 $2.5 trillion in energy savings1

compared to 2022 demand
350
340
330 Ambition energy demand
10
0
2022 2030
Notes: 1 Assumes current average price per joule to stay constant. This is illustrative and to quantify the theoretical
size of the price based on current spending. Actual figure would vary depending on response of energy prices to
reduction in demand, and changes in overall energy systems and their fuel mixes.; 2 IEA STEPS scenario
Source: IEA STEPS scenario
While supply-side interventions remain crucial, In developing these conclusions, a global survey
interventions on energy consumption are was conducted, which involved contributions from
effectively self-funding during the period, can be the 120 members of the World Economic Forum’s
paid back within the decade and embed long-term International Business Council (IBC), a group of
efficiency – all while shifting the world’s ability to multinational companies representing about 3% of
deliver the Paris Agreement. global energy demand from their direct operations.
The survey aimed to understand the current role that
To help organizations pursue this prize, this report companies are playing in the energy transition, what
identifies the opportunities and the barriers to is preventing further action and how these issues can
adoption, highlighting the levers that will help be overcome. In addition, member interviews were
companies reduce intensity, and developing conducted to identify examples of replicable energy
suggested routes to follow to deliver these changes. consumption-focused measures. The results of these
Most of these interventions can be deployed now, interactions are captures in the recommendations
driving significant improvements in less than a year. throughout the remainder of this report.

2 The three energy
demand levers
There are three existing, deliverable levers
to reduce energy intensity, but these face
challenges that limit uptake.
FIGURE 8 Three levers energy demand levers
Median energy
Lever Description Case study
intensity impact
Lower
Energy Interventions to save energy by Around – AI-driven software to control existing
10%
complexity/
changing a company’s ongoing HVAC systems
shorter
payback
saving core behaviours and activities, – Reduces HVAC energy intensity by
primarily OpEx funded with 20-25%, payback of less than 1 year
1 short-term payback
Energy Using less energy to perform Around – Retrofitting buildings using smart
30%
the same task, typically funded products, lighting, improved HVAC
efficiency1 by CapEx with medium-term – Reduced energy required for
2 payback by investing in core non-industrial sector operations by 27%
business processes – Payback less than 15 years2
Value chain Scalable, replicable partnerships Around – Swedish sulphuric acid plant
45%
with adjacent supply chains to supplying energy to urban district
collaboration achieve energy and emissions heating
3 intensity improvements through – Reduced city’s heating energy
Higher demand substitution, demand intensity by 25%
complexity/ consolidation and flexible
longer – Less than 1-year payback
payback demand response
Note: Impact defined as percentage decrease in energy intensity of a given process – e.g. fitting LED lights can reduce energy
intensity of lighting demand by 75% – not the percentage decrease in a company’s overall energy intensity
1 While energy efficiency is a widely used and understood term, here it is defined in the sense of a particular intervention type
(i.e. CapEx-led ways to use less energy to perform the same task). It therefore is different from “energy intensity” and common
use of “energy efficiency” in this context. 2 This example is from Aramco’s Lead by Example programme. See online case
studies: https://initiatives.weforum.org/energy-and-industry-transition-intelligence/transforming-energy-demand
Levers 1 and 2 offer immediate value. Savings and levers with a culture of continuous improvement.
efficiency interventions can deliver a reduction in While each individual action may be small, they can
process intensity of up to 90% with no need to compound to drive major changes in intensity over
replace changes with innovation in technology, time (see case study 1).
regulation or external funding. Electrification is a key
vector for this, often driving lower energy intensity The third lever, collaboration, shows how companies
in existing processes purely through inherent lower can create new value pools and revenue streams
levels of wastage compared to combustion-based by collaborating with adjacent supply chains and
alternatives. Progress can be driven even further the public sector. This must be done in concert
through a focus on repeated application of these with energy suppliers and with a long-term view to

ensure future-proof change. Rather than waiting for and grid “wheeling” to create utility-scale solar
the energy supply-side to fix itself, companies from farms. With local bank support and mining firm
all sectors can become active participants in the guarantees, they achieved rapid grid-scale power
energy transition. deployment in 18 months, faster than seen in most
other countries and a significant achievement given
An example of this lever is energy demand the country’s unstable coal-based energy supply.
consolidation – where companies and/or other
parties collaborate (e.g. in an industrial cluster) to Collaboration can also enable flexible demand
drive changes in energy intensity, such as through response – where companies collaborate with their
district heating (see Figure 8), or longer-term power provider and government to adapt operations
through the design of circular business models. based on demand and price signals. This includes
Businesses can also collaborate to achieve supply reducing operations at peak times and installing
substitution – using their energy demand, in energy generation or battery storage to enable flexible
concert with financiers, energy companies and energy usage. While demand response predominantly
government, to change their energy and emissions improves emissions intensity (as fossil fuels are
intensity. In South Africa, African Rainbow Minerals commonly used at times of high demand), it can
and other mining companies partnered with also improve the grid’s efficiency and effectiveness.8
renewable developers, using offtake contracts
The challenges: growing awareness and

developing an enabling policy environment
While the economic and business case is clear, by many different actors within an organization.
42%
there are three significant barriers: Since most interventions – changing light
bulbs in one location, installing new motors
1. Low awareness in another – are small, it is hard to get people
of boards discuss Through the interviews, a notable lack of excited about them, and even harder to take
energy intensity vs awareness was identified among businesses control and deliver change. Many companies
82% for carbon about how to change their energy use, particularly lack a single person or department responsible
intensity outside energy-intense industries. This focuses for energy costs, with the survey finding 29% of
on an inability to build and execute measures companies having no single department owner.
to address energy consumption, and a lack of
clarity on the impact these interventions can have 2. Difficulty in achieving appropriate payback
both on their energy bill, the transition and wider Of surveyed members, 38% said that solutions
resilience. Energy use is simultaneously not a for reducing energy/emissions intensity offered
top strategic priority and a difficult number to insufficiently attractive returns. The issues stem
get a firm handle on: while 82% of companies from extended payback periods. To take one
discuss emissions intensity at the board level, example, building retrofits, which can be very
only 42% of companies do so for energy intensity. valuable, pay back in less than 8 years, whereas
businesses typically have planning cycles of 3-5
Discussions with business leaders reflect a years. Developing financing from businesses or
perception that the energy system is outside their financiers that is designed around the savings
control and is the responsibility of governments from energy intensity reductions and their
and the energy sector to solve. In total, 94% of associated longer returns period, rather than
surveyed IBC organizations said they had a good revenue growth.
understanding of their own energy use but only
53% understood the energy use of their supply 3. Lack of supportive policy environment
chains – where energy consumption is often a Businesses repeatedly highlighted the barriers
far larger part of the company’s extended energy that policy and regulation pose to further action
and climate impact. This can be driven by a lack on energy intensity, among them: a lack of
of tech-enabled monitoring and reporting, as well supportive regulation (47% of respondents),
as limited partnerships and data sharing within clarity (47%) and insufficient incentives (38%).
supply chains. To address these challenges, governments
need to develop policies and regulations that
Energy use is widely dispersed – the sum of a create incentives for, and alignment on, reducing
huge number of different activities, managed energy and emissions intensity.

3 Business solutions –
overall approach
All businesses can take three steps to
reduce their energy intensity for their
direct and indirect operations.
1. Assess energy use across the buildings, geographic context, with businesses in EMDE
industry and transport (BITs) portfolio: and fast-growing markets more likely to focus
Break down use across BITs, both directly within on measures to minimize the energy intensity
the company and in its value chain. Businesses of growth, rather than retrofitting to improve
can then consider the specific interventions current operations.
set out in the chapter 4 (alongside methods
used in the case studies in this document and 2. Understand company’s role in the energy
online) to identify levers for change. These system: The second step for every company
will vary by industry. For example, financial is to identify its role in the energy system
companies can provide innovative financing (see Figure 9). While opportunities exist for
solutions to energy intensity improvement meaningful impact across all energy system
projects. Product manufacturers can find ways roles, positioning determines the current level
to reduce lifetime product energy consumption. of focus and the appropriate and most impactful
It is necessary to tailor these solutions based on actions that the business can take.
FIGURE 9 Energy system roles
Energy Supplier High Low

Archetypes Enabler
supplier and user energy user energy user
Company with Companies that are

Companies that Companies that
energy intensive neither suppliers,
Provider of energy to both supply energy, can enable the
Description activity; considers nor use large
other businesses and use large energy reduction
energy costs in amounts of energy
amount of energy of other firms
operations in operations
Current energy
awareness
H H M H L M
Renewable energy Provision of

Work across value Reduction in energy
Potential energy supplier, work with Focus on demand technology, finance
chain to enable use, share best
transition role customers on consolidation or other assistance,
energy transition practice with others
intensity reduction e.g. consulting
Savings
Highest
impact
Efficiency
demand
levers
Collaboration
Steel Fast-moving Professional and

Example Energy companies Chemicals consumer goods financial services
Oil and gas Climate and measurement
industries Energy generators Concrete Retail
technologies
Mining Consumer technology Demand response

3. Institute a programme of change all departments, as well as incorporating costs into
Finally, businesses should consider how to market mechanisms. These plans should interrelate
effectively execute change based around an between public and private levels, with multiple
energy transition plan. Such plans designed by paths to achieve the overall goal depending
both governments and businesses can aim to on context. These should be distinct from, but
double energy efficiency – identifying and capturing integrated into, wider net-zero transition plans.
demand-side benefits, and to triple renewable
capacity – integrating actions alongside the Based on case studies from businesses affiliated
supply side by 2030. Detailed actions for each with the Forum, five areas have been identified
key sector of the economy should be integrated, to focus on to create a systematized approach
linking targets and implementation roadmaps to developing and executing these plans (see
across national and local levels of government in Figure 10).
FIGURE 10 Execution approach
Strategize Centralize Finance Collaborate Measure

– Develop an energy – Create a centralized – Determine funding – Approach government – Build digital ongoing
transition plan across team with an mechanisms and supply chain measurement of impact
direct and indirect energy energy-intensity participants early and benchmark
mandate and funding – Identify financiers early internally/with peers
– Using accurate, digitized who are willing to – Use this to
measurement – This may take the collaborate on complex build supporting – Link this to
form of a chief demand financing infrastructure executive and
– Include overarching energy officer for change centralized team
demand targets linked reporting to the – Promote solutions incentives
to global goals (e.g. chief executive that share savings – Identify customers
doubling the rate of officer/chief from interventions and suppliers that – Collaborate
energy efficiency finance officer can underwrite cross-company to
improvement) interventions (e.g. expand coverage of
via offtake contracts) measurement to
– Create business cases adjacent supply chains,
for action to prioritize – Engage staff for enabling wider change
ideas and then upskills
– Align ambition, to power delivery
accountability and
incentives at all
organization levels
Concrete governance practices are key to drive responsible for driving these changes can act as
change, particularly for actions in adjacent supply a focal point to identify the capability, funding and
chains. Because the impact of these measures governance changes needed in order to drive
can be harder to measure, changing mindsets and widespread change. This approach has particularly
aligning governance structures and incentives can high potential given the barriers around awareness
help to ensure these wider actions that will benefit and the dispersed solution set, though current
businesses long term. Having a chief energy officer uptake is low.

4 Business solutions –
selected interventions
for change in buildings,
industry and transport
Interventions for change are available across
all sectors but require concerted private-public
collaboration to overcome uptake barriers.
Interventions have been prioritized by their economic and supply chains that will make technically-
sector within BIT and by their impact on total achievable changes on energy demand deliverable.
global energy use. Combined, these illustrate These collaborations can catalyse action in areas
possible routes available for change and methods that would be insoluble for any stakeholder alone.
to overcome barriers to action. The focus is on
currently-available interventions, while acknowledging Further upsides can be realized through future
technological improvements and removing legacy technological developments, especially in artificial
systems will be needed longer-term. Delivering intelligence (AI) that offers myriad opportunities
change will require collaborations between all private to reduce energy intensity across all verticals, as
and public stakeholders to align available infrastructure outlined below.
BOX 1 AI and energy intensity – example
AI comes in many forms and is continuing to route, using AI to plan this based on current traffic
develop. Crucially, however, certain modalities are conditions, topography and speed limits. This is
already available today that work at scale, delivering estimated to have avoided more than 2.4 million
profitable changes to energy intensity for companies tonnes of CO2 equivalent (MtCO2e) of emissions
and consumers. This currently focuses on energy since October 2021, while saving the corresponding
savings – OpEx-based optimization of existing amount of energy with no loss in output.
processes in order to reduce energy consumption.
Similar technology can be applied at a company
This is typically done through the use of real-time level for fleet routing management to reduce
data to better predict environmental conditions and overall fuel costs and energy intensity while
then to change systems in response. Google has maintaining successful routing and delivery. For
multiple examples of this in transport alone. For further information on this and the wider impact
example, Google Maps now includes an option in of AI on the energy transition, see the report
several countries to select the most fuel-efficient Accelerating Climate Action with AI.

FIGURE 11 Coverage of industry verticals and sectors within this report
Global total final consumption by industry vertical and sector (EJ, 2022)
Increasing coverage detail
Vertical Sector Intervention Illustrative
areas examples*
442 442
Other 6% 6%
2%
Transport 2% Other transport
2% Marine Freight
Aviation
25% Electric vehicles
18% Road
Passenger
1%
Other buildings
Buildings
9% Commercial End-of-life
31% Exisiting buildings Retrofitting

21% Residential
New buildings
Industry
13% Other industry
Light industry
4% Cement Extractive
38% 5% Chemicals Iron and steel
Chemicals
8% Steel and iron
Mining and
Iron and steel
8% extractive
By sector By sub-sector
Included Excluded
* These examples represent those that are covered in more detail later in the report. They do not cover all attractive example interventions - e.g. in
Transport, in addition to electric vehicles, there are clear opportunities to reduce energy intensity by moving to higher efficiency combustion engine vehicles
4.1 Industry
The opportunity
Industry is defined, in this report, as the vertical Interventions have been identified that can reduce
encompassing the production of commercial energy intensity of individual industrial processes by
products, including “heavy” industry (steel, cement, up to 90% (e.g. introducing high-efficiency electric
chemicals, aluminium, extractive) and light industry (all motors). If implemented widely, these could drive
others). This sector accounts for around 38% of global a reduction of the vertical energy intensity of 29%
energy demand and 21% of GHG emissions.9 To compared to current levels, reducing overall global
illustrate the relative energy consumption, examples energy demand by 11%. This requires action from
from chemicals, extractive industries, food and all companies, as all have industrial components to
beverage, and pharmaceuticals are provided, along their value chains.
with a more detailed example for steel manufacturing.

FIGURE 12 Energy impact of individual interventions in industry
Various time periods, geographies

95%
90%
85%
80%
75%
70%
65%
60%
62%
55%
50%
45%
40%
35%
30%
28%
25%
20%
15% 17%
10%
5%
0%
Savings Efficiency Collaboration
Note: Data represents the impact of individual interventions on a subset of energy use (e.g. the impact of staff training on machine
energy intensity), not the impact on industrial energy demand or global energy demand as a whole. Blue datapoints represent the
median impact of individual interventions. Datapoints used come from a combination of IBC member case studies and wider research.

FIGURE 13 Demand interventions in industry
Demand interventions in industry
1 Energy saving 2 Energy efficiency 3 Value chain

collaboration
– Intelligent process design, e.g. using – Switching motors to electric and – Recycling inputs for manufacturing
AI to optimize factory line design MEPS for electric motors – Sourcing green raw materials
– Staff training and awareness raising to – Upgrade heating, ventilation and – Demand consolidation to purchase clean
reduce wasted materials and energy air conditioning (HVAC) equipment energy and renewable fuels
consumption – Electrification of heat sources for – Industrial clustering cross-industry to share
– Capture and reuse manufacturing waste low heat processes (less than 180 infrastructure and energy intensity initiatives
within production lines degrees centigrade) – Business-to-business partnerships to improve
– Use of combined heat and power product energy intensity during its use
systems (CHPs) – Energy hub enablement and integrated
– Heat recovery and reuse energy solutions
– Use of power factor correction systems
in low power factor machinery, such as
motors, heating systems and lighting
– LED lighting
These sectors are often termed “hard to abate” Longer term, there are opportunities to drive the
due to their high energy use and introduction of development of more energy-efficient products
new, efficient technologies, such as direct reduced through innovation. An example is a partnership
iron (DRI) steel, effectively requiring a knock-down between a chemical company and an environmental
and rebuild. In this context, the cost of energy services company that initiated a design to facilitate
demand-side interventions can be prohibitive for the recycling of electric vehicle (EV) battery metals
industries amortizing installed capacity over 25-40 in Europe, thus securing a local supply source for
years. Importantly, the first two levers – savings critical materials. Additionally, the impact of AI is
and efficiency – could deliver significant reduction likely to continue to grow, with existing use cases
in energy consumption now without a full rebuild. including its deployment to allow for predictive
Too many public policy initiatives focus on “big maintenance of industrial machinery. This can
ticket” transformative changes overlooking these, increase uptime, remove unnecessary scheduled
still impressive, potential gains. This lower-hanging interventions and extend machinery lifetime.
fruit should be as important a focus for players
and policy-makers as the dream of a fully modern
infrastructure if Paris goals are to be realistic.
Industry examples
1. Heavy industry to a 15% cost reduction. However, consideration of
29 % ensuring a just energy transition must be given here,

Mining and extractive with care given to the human impact of automation.
Extractive industries (mining, oil and gas)
potential reduction constitute around 8% of global energy use. Within oil and gas, where processes are typically
in industry energy asset-heavy, energy efficiency is also the major
intensity
Within mining, approximately 93% of energy is lever for change. For example, improvements
used for extraction, intra-mine movement and in drilling technology can improve overall drilling
crushing, all of which are equipment focused. Major time and production rates: a major oil and gas
interventions, therefore, focus on energy efficiency – company collaborated with an oil and gas service
specifically digital optimization of plant operations, company to deploy a closed-loop automated
and automation and electrification of transport. An wired drill string, which provided real-time drilling
automated truck network has the potential to save data. This innovation resulted in an 82% reduction
15-20% of transport energy demand, through the in the overall drilling time per well. By leveraging
optimization of routing, uptime and throttle input. real-time data, they were able to extract more
On a per-truck basis in 2018, a multi-national hydrocarbons in a given area, thereby increasing
mining company’s autonomous trucks operated overall production while reducing the energy
700 hours more than human-driven trucks and led intensity of the operation.10

Chemicals Facing significant margin pressure due to the
The chemicals sector constitutes approximately global energy crisis, an American pharmaceuticals
10% of global energy demand and is crucial to the company13 installed a combined heat and power
energy transition due to its rapid growth (around 4% plant (CHP) at one site, using the heat generated
per annum),11 driven by need for its end products to drive manufacturing processes. This drove a
(e.g. ammonia and methanol). 37% reduction in primary energy consumption
while reducing emissions. If replicated across
Feedstocks, which account for about half of energy the sector, such efforts could reduce energy
use, are often difficult to replace due to the precision consumption by up to 20%.
of chemical synthesis processes. However, in steam
cracking, the single most energy-consuming process Food and beverages (F&B)
in chemicals (about 8% of sector energy),12 intensity Energy intensity improvement in F&B has lagged
can be reduced through switching to non-steam historically, with food manufacturing achieving
catalytic methods. For example, Dow’s UNIFINITY only a 6% decrease from 2000-2020.14 For one
technology, reduces energy use by around 20% American beverage company, cold drink equipment
compared to incumbent catalytic methods and can is the largest contribution to their system’s carbon
be retrofitted to existing steam crackers. footprint. Working with bottlers and suppliers, the
company created a machine consuming 10%
2. Light industry less energy overall than an average machine.
Additionally, it used power for cooling at night when
Pharmaceuticals electricity demand is lower, increasing the efficiency
In the pharmaceutical industry, which consumed of grid use and limiting the need for more-flexible
approximately $1 billion of energy in 2021, the higher emission intensity energy sources.
primary mode of direct energy consumption is
heating, ventilation and air conditioning (HVAC)
(around 65% of demand).
Collaborations to overcome barriers to action:
Collaboration While actions exist that can be taken in all sectors, to drive change. Creating cross-industry groups
between they are not being implemented at scale due to to share learnings and best practices on energy
stakeholders is industry-specific barriers. These vary between light intensity – e.g. information on process heat
key to identifying and heavy industries due to the differing levels of interventions and anonymous databases on
novel funding energy use (see below). Yet, all can be reduced energy intensity for benchmarking purposes. Close
through collaboration with adjacent supply chains. cooperation between energy service providers and
and repayment
end users could also create energy-as-a-service
methods.
High-levelized costs of production associated models with providers actively optimizing end users’
with low margins make transformative changes energy intensity.
complex within heavy industries and expensive
within light industries compared to their rather low In the longer term, technical barriers should also
energy use. Collaboration between stakeholders be addressed to reduce the energy intensity of
is key to identifying novel funding and repayment energetically and thermally intense processes.
methods, increasing the attractiveness of equipment Others are encouraged to take similar approaches
replacement, such as extended repayment periods to the ones taken here in order to drive this
and sharing benefits. technical progress.
Lack of sufficient creditworthiness and collateral In EMDE, this vertical is key, as 54% of steel and
make access to financing complex for industrial 58% of methanol is produced in China, and 45% of
small- and medium-sized enterprises (SMEs). iron ore is mined in China, India, Brazil and South
This can be addressed by banks and insurance Africa. However, access to reliable energy sources or
companies collaborating with SMEs to co-design lack of grid capacity to support vertical electrification
energy intensity-oriented green financial products15 have proved challenging. To drive change, key
matching risk profile with required funding. industry players can co-form offtake agreements
with both developers and government to encourage
Limited awareness towards energy intensity clean-energy development. Industrial sites colocation
measures, particularly within light industries, aggregating demand to develop microgrid solutions
and fragmented supply chains limit the ability can also be a key lever in more remote areas.

Detailed sector-specific example: steel energy intensity
The opportunity
Metal manufacturing is responsible for 8% of global hard-to-abate sector, economically

energy demand and 7% of global emissions. Iron and technologically viable interventions that are
accounts for 93% of mined metals by tonnage, of currently available can deliver an energy reduction
which 95% is used in steel production.16,17 In this of up to 22% (see Figure 14).
FIGURE 14 Impact of interventions on steel sector energy demand
Energy intensity impact of interventions

2022, all geographies, EJ
35
26
2022 demand Savings Efficiency Collaboration Achievable

energy demand
Note: Wider collaborations to drive change are more challenging but can drive further impact.
Energy demand interventions
Alongside vertical-wide actions (e.g. staff training, – Implementing energy management

LED lighting), steel-specific interventions can upgrade systems (EnMS)
and optimize existing machinery across all operators.
This is driven by the diverse ages and types of – Switch to coke dry quenching from wet
manufacturing technology in use in current systems: quenching, to recover heat and reduce
energy intensity
Energy savings:
Value chain collaboration:
– Blast furnace energy and input optimization
– Increase the proportion of scrap metal use in
Energy efficiency: electric arc furnace (EAF) steel production
– Upgrading outdated blast furnaces with plug-in – Increased proportion of steel produced
cost-effective efficiency solutions, including by DRI-EAF
waste heat recovery, digital optimization,
furnace efficiency upgrades

Long-term development of improved technologies steel technologies by the First Mover’s Coalition
should also be pursued. Indeed, a similar initiative, while wider, long-term demand-side
collaborative approach focusing on demand signals interventions can be found in the Mission Possible
has already successfully been developed for future Pathways Making Net Zero Steel Possible report.
Collaborations actions led by private sector to overcome barriers
Variability of demand: End users committing to existing plant at end-of-life and will lead to a
low-intensity steel purchasing through guaranteed 95% reduction in emissions per unit of steel.
contracts. A German steel company’s planned plant
in Sweden was made possible through supply- Limited supply of scrap metal both
chain partnerships, securing consistent supply of in quality and quantity: All sector stakeholders
sustainable iron ore, a 2.3 terawatt-hour (TWh) e.g. operator, recyclers, together with construction
per year power purchase agreement (PPA) with companies and governments can provide kickback
a major energy company, and offtake contracts contracts for end-users providing steel, or volume-
with customers guaranteeing around €1.5 billion based discounts on future steel based on
in demand. The plan was initiated to replace an scrap steel recovered.

CASE STUDY 1
Path to sustainable energy efficiency

Mahindra: India’s largest auto manufacturer by product volume
Tags
Region India
Energy transition plan Business case
Sector Industry
Energy diagnostic Energy intensity tracking & monitoring
Focus Energy efficiency
Case study background Task

Mahindra has publicly pledged to double energy productivity Drive operational efficiency improvements to support goals
by 2030 (2009 baseline) and to net zero by 2040
Actions
1 2 3 4 Deploy strategies:
Define goals: Establish baseline: Identify Gaps: A. Small-scale projects: B. Larger high-
– Enhance – Analysed – Assessed – Switched off lights impact projects:
energy existing energy areas where when not in use – Integrated hybrid solar
efficiency and consumption energy- – Transitioned to HVAC systems
consumption and carbon saving energy-efficient LEDs. – Compressor heat recovery
across emissions. opportunities
– Implemented – Energy efficient equipment
Mahindra’s – Identified exist.
process changes such as brushless direct
operations areas with high (e.g. DC motors for current fans and electronically
energy use higher efficiency) commutated blowers
Blockers and unlockers Results

Energy efficiency increase Auto Farm
Blocker Unlocker from a 2009 baseline
Highlighting the financial
Upfront equipment 95%
benefits, with typical
investment costs 87%
payback of 1-3 years
Concerns about plant Gaining top-level 70%

shutdowns and impacts executive commitments
60% 58% 61%
on quality to energy intensity 55%
Absence of effective 45%

Reporting energy
regulations and limited
efficiency progress
impact of carbon pricing
2020 2021 2022 2023

Implications
GHG mitigation (FY2023) >11,000 tCO2e
Attractive business cases exist for sustainable
technology investment Energy conserved (FY2023) >80,000 gigajoules
Significant improvement can be driven through Efficiency increase 95% in 2023 from a 2009 baseline
widespread incremental changes (automotive division)
Investment (FY2023) >INR 80 million

New facilities can use efficient technologies
to ensure low intensity from day one Cost savings (FY2023) >INR 100 million
Source: IBC member interviews

CASE STUDY 2
Partnership for cogeneration transformation

Aramco: majority state-owned energy company (listed)
Tags
Region Saudi Arabia
Energy intensity measurement and reporting
Sector Industry
Energy transition plan Business case
Focus Value chain collaboration; energy efficiency

– Aramco has a strong existing focus on energy intensity through Increase the efficiency and reliability
its corporate energy policy. of the company’s industrial energy
– Historically, Aramco had been purchasing power from the National supply to support energy policy goals.
Power grid, which had a standard grid energy efficiency.
Actions
1 2 3 4 5
Holistic energy Strategy development Partner identification Installation of cogeneration Ongoing optimization
analysis – Developed a – Identified joint (cogen) units – Installed digitized monitoring
– Conducted comprehensive venture and third- – Installed 17 cogeneration for all cogen units
holistic master energy party partners to facilities for reliable, high- – Developed optimization solutions,
energy plan to deliver optimize current efficiency energy generation. including CHP software
analysis to on the corporate and future power – Upgraded power – Applied CHP software to 45
understand energy policy. project needs. blocks for internal energy cogen units across 17 facilities.
current – This included – This ensured better self-sufficiency in power
energy use. – This maximized efficient cogen
the installation asset management. and heat.
unit operation by aligning output
of combined heat
to current and planned need,
and power plants
avoiding excess steam generation.
(cogeneration units).

Blocker Unlocker Corporate energy intensity
Extensive data analysis prior to installation 1

Cogeneration units -23%
Ongoing digital performance monitoring
are highly complex,
risking energy waste Creation of custom software to optimize
operations
148 BTU/BOE2
Ability to use wasted natural gas from
High cost of operations as a fuel 113 BTU/BOE
installation and Design of commercially-driven business model
potential downtime that enables efficient wheeling of excess
during installation power to facilities without cogeneration
assets, generating revenue
Implications
2011 2022
Energy intensity projects should be examined
for revenue as well as cost opportunities Achieved a total high-efficiency power output of 5.3 GW
and exported surplus power to the national grid.
Partnerships and clustering can help to deliver
change where there is an insufficient business CO2 emissions3 7 million tonnes/year reduction
case to drive action alone (e.g. via joint ventures) Notes: 1 Total energy intensity has steadily reduced, driven by
both the cogeneration programme and several other energy
Digitization offers the opportunity to further management programmes 2 British thermal unit/barrel of oil equivalent
continually optimize CapEx-led solutions 3 CO2 emissions reduction driven solely by cogeneration programme

4.2 Buildings
The opportunity
This sector represents about 30% of global and equipment installed in them (around
energy demand and approximately one-third of 20%).18,19,20 Interventions have been identified
global GHG emissions. This energy is used in that could reduce building energy intensity
construction, heating and cooling (around 50%), approximately by 38%, reducing overall global
lighting (around 20%), and operating appliances energy demand by 12%.
FIGURE 15 Energy impact of individual interventions in buildings
75%
70%
65%
60%
55%
50%
45% 46% 46%
40%
35% 34%
30%
25%
20%
15%
10%
5%
0%
Notes: Data represents the impact of individual interventions on a subset of energy use (e.g. the impact of LED lights on lighting energy
intensity), not the impact on buildings energy demand or global energy demand as a whole. Blue datapoints represent the median
impact of individual interventions. Datapoints used come from a combination of IBC member case studies and wider research.

FIGURE 16 Energy demand interventions in buildings
Demand interventions in buildings
Value chain
1 Energy saving 2 Energy efficiency 3
collaboration
– Adjusting room temperatures closer – Whole building retrofit (including roof, – District heating and cooling systems
to external conditions walls and windows) – Enhanced circularity (including on-site
– Closing under-used space – Digitalization of building energy production and storage solutions)
– Turning off unused assets (e.g. lights, management systems and greener material use
equipment) – Installation of efficient HVAC equipment – Changes to building design
– Electrification of heat – District energy management systems
– LED lighting – Demand response programmes
– Replacement of old equipment
(e.g. computers)
While energy savings are applicable in all buildings, Cooperation between the public and private sector
energy efficiency and collaborations can be classified is key both to fund retrofit programmes and to
into interventions that improve energy intensity of secure green building uptake, including integrating
existing buildings (retrofitting), new buildings (green green and distributed energy systems. For example,
buildings) and removal of old buildings (end-of-life). real estate developers in Brazil have engaged in
retrofit projects such as energy-efficient lighting
In EMDE, there should be far more focus on and integration of smart building systems for
building codes as most population growth is commercial office buildings to meet the increasing
expected there and mainly in cities. Two thirds of demand for modern and sustainable workspaces.
the required new buildings are in countries that
currently lack building energy codes.21

Detailed sector-specific example: building retrofitting
Context
Retrofitting is the key intervention available to by 2050 already exist.22 Moreover, energy used
drive meaningful impact, quickly. This is because, for building occupation represents about 70% of
globally, 75% of buildings that will be standing building’s energy consumption.23
Size of the prize
FIGURE 17 Impact of interventions on existing buildings energy demand
29
50
15
129
99
79
64
2022 energy Impact of making 2030 Impact of 2030 Impact of ambition 2030 ambition
consumption no energy “no efficiency” achievable achievable energy interventions energy demand
efficiency progress scenario interventions demand
This potential will continue to grow as AI solutions Energy demand interventions

become more develop and prevalent. An example
of an already existing energy savings intervention Retrofitting is a disaggregated set of interventions.
using AI is in HVAC, where installation of AI- Most are CapEx-led energy efficiency types,
driven HVAC management software for existing based on installation of higher efficiency systems,
equipment can lead to reductions in HVAC energy equipment and building materials (see case study 3
use of up to 25%. for examples).
Beyond reducing energy intensity, retrofitting has New business models are emerging based on more
the potential to provide broader socioeconomic distributed energy sources, particularly for district
benefits such as reducing staff sickness by 20%, heating and cooling. For instance, the City of Paris’
improving employee productivity (up to $7,500 per district cooling network, operated by Fraîcheur de
person per year) and the creation of 3.2 million Paris, plans to cut CO2 emissions by up to 50%
new jobs per year.24,25 Additionally, asset values with forecasted sales of €2.4 billion over the 20-year
of retrofitted buildings increase by approximately concession contract period.
15%, allowing for rental premiums.
Wider value chain cooperation is required to retrofit
buildings at scale and turn them into key actors of
the energy system.

Collaborations to overcome barriers to action
Cashflows and financing: Designing customized bundle interventions and improve agency, thus
green leasing and financing products that enable increasing the transfer of risks for retrofitting to
easy payback at lower costs would support uptake: insurance companies.
– Launch of zero-interest energy efficiency – Energy savings insurance can enable business
programmes with customers paying the loan models for SMEs with limited balance sheets and
through energy bills with a maximum payback limited ability to provide guarantees, even though
period of five years for insulation.26 the quality of their project work may be high.28
– Support the growth of the energy-as-a-service Develop a local retrofit network to upskill
model with no upfront cost and sharing of workers and secure critical material:
energy benefits between the payor and the
supplier and co-investment models between – Cooperate at local levels with cities,
dwellers and tenants.27 universities and technical schools to ensure
a pool of skilled resources.
– Lack of agency and desegregation are other key
barriers. Creating clusters between insurance – Cooperate with local industrial clusters to create
companies, property owners and retrofitters to critical material supply availability and circularity
create risk insurance will allow businesses to (including recycling).
BOX 2 Green buildings
Designing lower-intensity buildings is a key part The major barriers to the uptake of green
of the energy transition, as cities are expected to buildings are increased cost (around 15% or
grow around 50% by 2050. This will be particularly more for residential and 3-5% for commercial30,31)
significant in EMDE, where 80% of the growth in compared to traditional buildings, as well as
buildings is expected. Key aspects of green building limited awareness of the principles or benefits.
design include the use of lower-intensity materials, Companies can address this challenge by
high levels of insulation to allow for passive heating, securing guaranteed energy demand offtakes from
design to align buildings for maximum natural corporate buyers, including by considering the
light absorption, as well as electrified heating and total cost of ownership rather than the initial cost
cooling. Combined, these can additionally reduce only. Widespread change would also likely require
building running costs by approximately 40%.29 government intervention in standards and building
codes (see government leadership section)

CASE STUDY 3
Singapore headquarter retrofitting

Schneider Electric: global building technologies company
focused on digital automation and energy management
Tags
Region Singapore
Energy intensity measurement & reporting
Sector Buildings
Energy management system Government engagement
Focus Energy efficiency

In 2017/18, Schneider Electric acquired an existing, – Transform the office into a sustainable facility
25-year-old, multi-tenant building to be its new East – Demonstrate retrofitting expertise and savings
Asia and Japan headquarters.
– Support the company’s climate goals
Actions
1 2 3 4 5
Assess existing Evaluate new site: Liaise with existing Install low-energy Ongoing optimization:
footprint: – Evaluated the tenants: intensity equipment: – Deployed digital twin
– Assessed current energy footprint – Worked with building – Installed smart for energy modelling
energy use across four of the new site, tenants to understand HVAC, LEDs, with occupancy and
sites and concluded – Identified energy use LED lighting operations data
a consolidation would major areas of – Designed customized systems – Integrated real-time
align with corporate energy loss and energy solutions – Implemented weather forecasts into
energy goals expenditure for existing tenants, onsite solar the building management
– Selected a single site – Decided on aligned through generation and system for improved
in Kallang Pulse measures to a single building storage for 100% energy efficiency and
implement management system renewable energy performance

Electricity consumption decrease from 2018-2020
Blocker Unlocker
Existing inefficient -45%
Deploying various digital solutions
buildings pose structural
to overcome and adapt limitations
challenges
Diverse tenant needs Software-managed system balances

create varying energy energy use in building enabling the different
demand challenges entities to balance out their energy use
Engagement with tenants

to understand needs
Variable engagement
in energy intensity from
Policy support from Singaporean
tenants
government to increase attractiveness
(grants, information, certification)
Implications
Potential to reduce energy intensity in buildings
regardless of size and age
Digitizing buildings enables flexible retrofitting 2018 2020

for multi-tenant properties
Electricity consumption Reduced 45%
Government engagement can help overcome
financial barriers and raise awareness Water savings per year 3,700m3

4.3 Transport
The opportunity
Transport constitutes the movement of goods and energy consumption, respectively.33 Interventions
people (excluding off-road industrial vehicles). have been identified that could reduce the energy
It represents 26% of global energy demand and intensity of processes by up to 90%. If widely
21% of GHG emissions.32 This study focuses on applied, they would reduce energy intensity of
sector-specific examples in road transport and transportation by 21%, resulting in a 5% reduction
aviation, representing 76% and 10% of transport in overall global energy demand.
FIGURE 18 Energy impact of individual interventions in transport

90%
85%
80%
75%
70%
65%
60%
55%
50%
45%
40% 38%
35% 33%
30%
25%
20%
15% 14%
10%
5%
0%
Note: Data represents the impact of individual interventions on a subset of energy use (e.g. the impact of moving from business class to
economy class travel), not the impact on transport energy demand or global energy demand as a whole. Blue datapoints represent the
median impact of individual interventions. Datapoints used come from a combination of IBC member case studies and wider research.

FIGURE 19 Energy demand interventions in transport
Demand interventions in transport
Value chain
1 Energy saving 2 Energy efficiency 3
collaboration
– Modal shifting away from higher – Switch to smaller vehicles or reduce – Electrification of transport
energy intensity forms of travel and vehicle weight – Switching to renewable fuels, including SAF
use of public transport – Switch to newer, more efficient vehicles
– More efficient driving – Optimised routing planning and automation
– Traffic management
Technically and economically viable interventions In total, 94% of the projected growth in transport
are available that can reduce energy intensity of energy use occurs in EMDE. However, the lack of
individual transport activities today. Applicability reliable grid capacity makes vehicle (mainly two and
varies, with savings and efficiency broadly available three wheelers) electrification complex and inhibits
globally, whereas fuel switching will only be possible cost parity for low-intensity transport options.
where supporting infrastructure exists (e.g. grid To encourage electrification uptake, collaboration
capacity for EVs). However, these interventions between all stakeholders is key to support grid
can have a significant impact while the bigger, expansion, green energy supply and adequate
“gamechanger” interventions are being developed public transport. Businesses can take the lead
(e.g. electric aeroplanes). on transition of systems by switching their own
fleets, as is being done by some taxi companies.
This similarly applies to applications of AI, which Companies can also capture low-hanging
has already been used to optimize use of freight opportunities to improve intensity by moving to
capacity in road transport, reducing empty space more efficient vehicles and alternative fuels
in trucks by combining loads and owners. This
reduces the number of trucks needed overall in the In Kenya, a start-up is electrifying bikes through the
network, and so energy intensity of transport. This gradual rollout of battery-swapping stations. The start-
type of solution can be deployed now while new up is paying around a third of the price for new electric
AI applications are developed longer term to drive bikes, while customers pay a daily subscription for
more transformative change. the outstanding balance and access to battery-swap
stations. Profits for motorbike and scooter drivers are
around $6-11 a day since joining the scheme.

Detailed sector-specific example: EV rollout
The opportunity
It took Norway over 20 years to reach the point where While this is a significant opportunity, it should
most cars sold were electric, and the proportion now be noted that electrification is still nascent for
tops 80%.34 Electric cars are now cheaper (around heavy vehicles, which make up around 38%
33% price decrease 2010-19),35 more available, and of emissions;38 freight accounts for 78% of
have better ranges (2.7 times average increase from heavy vehicles. Additionally, the viability of
2010-2136) than ever before. As a result, EV rollout is electrification is currently lower in the Global South
occurring faster than ever.Electrification drives both due to grid capacity. Companies in all countries can
lower emissions and efficiency, as EVs can be up to act now though, reducing energy intensity through
approximately 50% more efficient than ICE vehicles,37 using more efficient vehicles, and emissions intensity
with the impact on emissions being amplified if input through alternative fuels.
electricity is low- or no-carbon. Full electrification
could lead to a reduction in global transport energy
demand by up to 22%.
Collaborations to overcome barriers to action (passenger vehicles)
EVs can Infrastructure and charge point availability are Charge point operators can work with real
be up to key barriers. Only markets with large and flexible estate owners, energy companies, finance and
approximately grid capacity, ideally with renewable energy supply, governments to accelerate charge point rollout
50% more are well suited to rollout. Permitting and grid by identifying attractive locations with existing
efficient than connections for charge points are often complex, parking space for further rollout (e.g. supermarkets,
resulting in slow rollout. workplaces, hotels) and offer installation with shared
ICE vehicles.
revenue models.
Energy companies, finance and government can
improve the ease of grid connections by targeting Affordability is another challenge. To encourage
planning and development of grid energy capacity fleet adoption and overcome concerns about
and flexibility, including through distributed energy affordability, car manufacturers and other
generation and storage solutions. They can lobby stakeholders can run informational campaigns
for simplified and prioritized planning processes on the relative benefits of EVs and options
for grid connections. They can also provide private available. Co-investment from fleet owners,
capital and labour to support grid connection government and manufacturers to subsidize
creation. Financing and energy companies can the uptake of vehicles through reducing upfront
create products to accelerate charge point rollout costs or total cost of ownership.
both at homes and in commercial locations.
BOX 3 Aviation
Aviation is a fast-growing area of energy use, with for governments and industries to collaborate
passenger travel forecast to grow at approximately on identifying solutions to address this issue and
4% per annum,39 driven by population expansion improve the financial case for more efficient flight.
and increased global wealth.
Sustainable aviation fuels (SAF) present an
Without a viable alternative to jet fuel, actors across opportunity to abate the remaining energy use,
the value chain can work to drive change through using existing infrastructure and reducing upfront
energy savings and energy efficiency measures. This investments to drive change. The main limitation
can include changes to travel policy to encourage of SAF is supply of input feedstock from waste
the use of less energy-intensive options, like rail. This sources increased cost compared to standard
can be complemented by using carbon footprint jet fuel. Offtake agreements can help to create
travel budgets and compensation metrics, including new demand, enabling the SAF market to scale.
data in booking platforms and educating employees Businesses such as Boston Consulting Group
to drive behavioural change (see case study 3). (BCG) have committed to replacing 5% of its
conventional jet fuel with SAF by 2030 and have
Manufacturers and airlines can prioritize weight signed offtake deals with airlines, fuel producers
reduction and replacement of older aircraft with and coalitions such as the Sustainable Aviation
more efficient, modern models. There is potential Buyers Alliance.

CASE STUDY 4
Modal shifting via employee incentives

Kearney: Global management consultancy
Tags
Region Global
Behavioural change Informed decision-making
Sector Transport
Senior leadership buy-in
Focus Energy savings

Kearney is the first global consulting firm with SBTi-approved Reduce air travel, to support achieve a 30% absolute reduction
near- and long-term net-zero emissions reduction targets in scope 3 business travel emissions by 2030, in line with SBTi
near-term targets
Actions
1 2 3 4
Baselining: Build guiding policies: Develop effective initiatives: Track, monitor and grow:
– Established – Global travel policy Global level: Local level: – Ongoing tracking
the baseline – Varied this locally – Implemented air – Country- and reporting to
level of based on available travel dashboards specific policies drive transparency
business travel infrastructure at office level and initiatives – Reviewed policies
travel – Promoted hybrid to promote with employees
– Pushed
activity and remote sustainable travel
communication – Planning for an internal
across working (e.g. carpooling
on policy changes carbon price in 2024
the firm between
and reasoning
employees).

Flights per employee
Blocker Unlocker
Lack of real-time third-party Developed an in-house -50%

carbon calculators carbon tracking solution
Implemented employee
Employee engagement levels
feedback mechanisms
Collaborated with suppliers

for IT integration
Employed a targeted
communications strategy
with transparency
Working with teams in
Strong on-site working mindset
hybrid formats
Implications
Continuous monitoring and progress tracking
2019 2022
helps make informed decisions
Double-digit business growth while
Demonstrates impact of low-cost changes reducing flights per employee by 50%
without restricting growth
Source: IBC member interviews

5 Government leadership
Governments can drive change through
energy transition plans, public-private
collaboration, and sector-specific
regulation, incentivization and information.
Governments have already begun to increase focus of taxes and subsidies and increase the focus
on energy demand, with ore than 120 countries on the enabling environment, targeting individual
pledging to double the average annual rate of sectors or even specific initiatives within sectors.
energy efficiency improvement. To be effective, There are number of high-level and specific actions
policy-makers need to build on the traditional tools that all governments can take to drive the transition.
Energy intensity policy recommendations
Formulate an energy transition plan
The majority of countries have set net-zero targets while largely ignoring measures to better manage
or committed to doubling the global energy energy consumption. It is therefore recommended
efficiency annual rate of improvement. However, that all governments produce energy transition
they are not routinely supported by a detailed plans that focus as much on energy demand as
delivery plan, let alone a detailed energy transition energy supply. The necessary characteristics to
plan. The existing plans are typically long-dated include are set out in Figure 20.
(2040 or beyond) and focus on the source of energy
FIGURE 20 Main demand-lens characteristics and actions to integrate in an energy transition plan
Energy transition planning
Lead Inform Regulate Incentivize
Convey a clear ambition and Focus on improving Provide clear guidelines on Set both positive and negative
path for energy intensity awareness among performance and support incentives for action, including:
– Define ambitious targets society via: permissible activities that – Carbon and energy taxes
overall and per sector linked – Transparent, public promote lower energy – Tax relief on energy efficiency
to broader global goals (e.g. data tracking intensity through:
investments
doubling the rate of energy – Public benchmarks of – Mandated, funded – Certification schemes for
efficiency improvement). expected performance energy audits best practice.
– Prioritize achieving change by industry. – Inclusion of energy intensity
in own operations into green certification
– Identify areas to reduce programmes
energy intensity and, where – Liberalize energy markets
this is not possible, focus on to allow captive generation,
reducing carbon intensity energy wheeling and
– Create a centralized dynamic pricing
delivery/coordination team – Simplify permitting processes
composed of both public for supporting infrastructure
and private actors with (e.g. grid and supply
executive assessment and development)
decision-making rights. – Upskill workforce for delivery.

EMDE and developed economies
Challenges and opportunities related to that only 0.4% of the installed lighting base were
implementing energy transition plans vary widely efficient LEDs. Uptake was prevented by the high
across geographies. The political and economic cost of LED bulbs, even though they use 75% less
cost of implementation will also vary significantly energy and lasting around 25 times longer than
depending on the specific energy supply and incandescent bulbs. The government overcame
demand situation of each economy. this barrier in four ways:
In developed economies with large, diverse – Created a tender for large-scale LED
sources of upstream energy and dense, integrated bulb procurement
transmission grids, it makes sense that the push
to decarbonize focuses largely on adding large- – Signed offtake value chain agreements with state
scale renewables to the current grid. At the same governments and utilities to distribute bulbs
time, there are clear inherent benefits to pursuing
energy intensity reduction. This is because, by – Provided two payment options: upfront and
reducing energy intensity, output can increase for on-bill repayments through electricity bills
the same or lower amounts of energy. This limits
total energy costs, supporting profitability and – Built swap schemes for rural households where
maintaining competitiveness. one LED bulb could be swapped for a working
incandescent bulb.
In contrast, in EMDE markets with more limited
energy sources and limited grid in terms of Creating economies of scale for LED bulbs lowered
scale and connectivity, combining economic upfront costs per bulb to as low as $0.8. This drove
growth alongside measures to manage energy the uptake of more than 1.15 billion LED light bulbs
consumption and secure supply is critical. There is by 2020, resulting in annual savings of over $2.5
an urgent need for the public sector to shape and billion and around 47 billion kilowatt hours (kWh).40
drive local, highly adapted energy transition plans.
This is an example of the opportunity that EMDE
An example of successful EMDE policy planning have: to “leapfrog” from higher- to lower-intensity
is India’s UJALA programme. In 2015, India technologies, avoiding the incremental retrofit changes
recognized significant levels of wasted energy that developed economies had to pursue over time.
and cost in domestic lighting, which represented This applies across each of the BIT verticals:
27% of domestic energy due in part to the fact
FIGURE 21 Variations in public sector actions’ applicability in EMDE
Industry Buildings Transport

Examples of public sector actions Examples of public sector actions Examples of public sector actions
– Increase grid reach to promote – Launch awareness campaigns – Enable electrification of two- and
electrification of heating, smelting (standards and regulations) three-wheelers, enabled by distributed
and extraction – Design and enforce building energy solutions
– Introduce MEPS for electric motors codes (MEPS) and launch large – Enforce minimum fuel standards
across sectors retrofit programmes (starting with for vehicles
– Disseminate information and public buildings) – Improve public transport provision
regulations regarding EnMS use – Invest in grid capacity for to enable modal switching
modular/micro-grid solutions
and standardize permitting
– Support workforce upskilling
Case study
From 2015-2017, the Mexican government undertook the CONUEE programme to promote EnMS among SMEs.
This involved the dissemination of information and training of workers on EnMS. The outcomes of these
initiatives were annual energy savings of 57.7 gigawatt hours (GWh), 14.8 kilotonnes (kt) of CO2 reduction in
emissions, $5 million saved in energy costs, and improvements in product quality and overall productivity.
Source: Asia Pacific Energy Research Centre, Compendium of Energy Efficiency Policies in APEC, 2017.

Inform, regulate and incentivize
at a sector-specific level
Within each vertical, governments can take sector to overcome barriers to action. Figures 22,
action to use and encourage the levers presented 23 and 24 represent a non-exhaustive selection
in this paper and can collaborate with the private for further discussion.
FIGURE 22 Identified actions for “industry” to integrate the energy consumption-lens

of energy transition planning
Industry
Inform Regulate Incentivize
Collaboration Standalone actions Standalone actions

– Launch industry information campaigns on – Mandate procurement of lower-energy – Build in tax relief on investments into
available technology and best practice to materials and products in government energy efficiency – e.g. faster
drive behavioural change. procurement processes – e.g. through equipment amortization.
– Introduce energy intensity labelling for carbon contracts for difference.
machinery and processes. – Introduce minimum energy performance Collaboration
– Create public benchmarks of expected standards (MEPS) across industries. – Provide funding for scrap steel
energy intensity levels by industry to – Provide energy audits. recovery, including from government’s
highlight underperformance, increase – Introduce non-energy benefits to policy own products.
awareness and drive action. business cases. – Provide funding and structures for
– Promote the uptake of energy manage- collaboration between industry players.
ment systems (EnMS), energy measure-
ment and management frameworks
(e.g. ISO 50001).
Collaboration
– Legislate to increase barriers to higher-in-
tensity steel purchasing for companies
Example of public sector action: industry
Economies such as the EU, the US, Canada (IE) standards. This switch contributed to an
and Japan have introduced minimum energy approximate 20% reduction in energy consumption
performance standards (MEPS) for industrial electric in the Japanese manufacturing sector between
motors. These require that all motors are switched 2000 and 2012.41
to IE3 or higher in the international efficiency

FIGURE 23 Identified actions for “buildings” to integrate in a demand-lens energy transition plan
Buildings

– Launch public awareness campaigns. – Create minimum efficiency building codes – Allocate programmes and dedicated funding
– Mandate digital public tools to track for houses and commercial buildings that for widespread retrofitting interventions and
energy consumption. increase over time. electrification.
– Publish information on building – Legislate to require green building design
performance and standards. across new builds to align with a Collaboration
zero-carbon world. – Provide support for the creation and provision
– Shorten administrative procedures, of green mortgages to fund retrofitting.
including permitting. – Invest in local energy communities to
– Legislate to require scrap steel to be generate jobs and economic growth, as well
provided from any building at end-of-life. as in critical material and recycling hubs.
Example of public sector action: buildings
In 2010 the California Public Utility Commission42 purchase for water heat pumps and EV charging
launched a zero-interest financing programme to infrastructure. Customers pay the loans (ranging
fund energy efficiency investment and assist non- from $5,000 to $4 million) through monthly
residential energy customers to retrofit buildings. instalments on their energy bills with a maximum
Since August 2023, the programme also supports payback period of five years.
FIGURE 24 Identified actions for “transport” to integrate in a demand-lens energy transition plan
Transport

– Set government travel policies to support – Reduce average vehicle size/weight – Invest in public transport, including
lower intensity transport use. allowances. expanding existing cities to allow for
modal shifting.
Collaboration – Invest in optimized route planning for all
– Implement policies and incentives that local and national fleet vehicles.
support the uptake of zero- and
low-emission vehicles (such as EVs).
– Set mandatory low-emissions zones
in cities.
– Review planning legislation to ensure
charging points have a priority focus.
– Review grid infrastructure planning to
ensure sufficient electrical capacity and
connection points for EVs.
– Use of demand-based signals for
phase-out of higher emission vehicles,
timed in collaboration with private actors.
Example of public sector action: transport
The shift from internal combustion engines (ICE) to the gradual phasing out of the tax deductibility for
EVs in Belgium – now around 50% of the new vehicles ICE by 2028 in favour of EVs (which maintain 100%
market – was accelerated through the use of tax deductibility) as well as providing 200% tax deductibility
incentives for company cars. The programme included for charge points in the first years for uptake.43

Conclusion
Transforming energy demand needs to be as much – Examine energy costs and the opportunities
a focus of global effort as transforming energy to drive change.
supply to accelerate the energy transition and
deliver commercial benefit. To realize the promise of – Commit to energy intensity targets (e.g. doubling
such efforts, businesses should: the rate of energy intensity improvement).
– Baseline energy use, ensure direct central – Engage with policy-makers to develop detailed
accountability and develop a programme to policy frameworks and energy transition plans,
increase efficiency across the three levels. in particular, to remove current blockers to
action (e.g. access to financing).
– Embed this exercise and target setting into a
full energy transition plan covering self-help and The IBC will continue to explore ways in which the
collaboration with the supply chain. energy demand agenda can be progressed, moving
into a second phase of the project in 2024.

Appendix
A1 Modelling methodology
Modelling aim I. For example, for the intervention of

passenger vehicle electrification, impact =
reduction of energy vs internal combustion
– Quantify the potential impact (size of the prize) engines (ICE) vehicles, applicability =
that energy intensity interventions can have if proportion of road transport relevant to
implemented over a theoretical timescale. (i.e. light vehicles) and penetration =
expected proportion of vehicles electrified.
Approach
1. Identify the impact of an individual intervention 2. Calculate the combined impact of identified
on a vertical’s energy consumption. interventions on global energy intensity
a. Selection of sectors for detailed investigation a. Selection of interventions to include in

achievable and ambition cases
i. Analysis was structured around
three verticals: buildings, industry and i. Two modelling cases were defined:
transport (BIT), totalling 94% of global
energy demand. I. “Achievable” where we had a high
confidence that the intervention was
ii. Sectors within these were chosen for deliverable and where there was good
detailed analysis based on sector energy impact data availability.
consumption, sector carbon emissions and
relevance to International Business Council II. “Ambition”, which adds further
(IBC) members. interventions on top of those in the
‘achievable’ case that are more difficult
iii. Final sectors selected: aviation, road to deliver or where potential penetration
transport, commercial buildings, residential rates were less certain.
buildings, mining and extractive, steel and
iron, chemicals, and other industry. ii. Interventions were then sorted between
these two cases, with any interventions
b. Identification of interventions and their impact that overlapped removed.
i. Demand-side interventions that reduce b. Determination of total “achievable” and

energy intensity were identified in each “ambition” impact by vertical
sector (e.g. energy management systems)
that have been proven to have an impact i. The scaled impacts of each intervention
in existing case studies. determined in 1c were summed for each
vertical to give an overall impact on energy
ii. Their impact on a subcategory of demand intensity by vertical.
was determined based on examples from
IBC members and wider desktop research, c. Scaling of impact by vertical to total economy
with identified reductions in energy intensity
reaching as high as 90%. i. Energy intensity reduction was multiplied
by the share of energy demand that each
c. Scaling of intervention impact to vertical level BIT represents in 2022 to give an overall
reduction of global energy intensity for both
i. Impacts were scaled to represent the the achievable and ambition cases.
total potential impact of an intervention on
an entire vertical. ii. An average intensity reduction is applied
to sectors not considered in depth (defined
ii. This was done by multiplying the impact as other)
identified in 1b together with the intervention’s
applicability (i.e. the relevant portion of a I. Average impact was calculated as a
vertical’s energy use) and the penetration (i.e. weighted average impact from other
an estimate of the feasible level of adoption interventions in a vertical, or across
that an intervention could reach). verticals for the 6% of demand not in BIT.

average price per exajoule (EJ) to stay
3. Examine the impact of this reduced energy
the same over the period.
intensity on energy demand scenarios
a. Creation of “no efficiency” scenario c. The energy output of a power station
was modelled based on available desktop
i. To understand the impact of these reductions research data.
in intensity over time, there needed to be
understanding of what total energy demand i. The energy output of a power station is
would be in the future if no improvements based on the average energy output of
were made in global energy intensity. a coal power station.
I. Forecasts of energy demand based d. The absolute change in energy identified in

on historical trends in energy intensity (or 3b was then divided by this figure to give an
existing policies) could not be used in order illustrative level of new power stations avoided.
to avoid overlap with identified interventions.
ii. A “no efficiency” scenario for energy

demand in 2030 was calculated by Limitations
removing energy intensity improvements
from the International Energy Agency’s – The aim of this modelling was to illustrate the
stated policies scenario (IEA STEPS) (i.e. potential energy demand reduction through
current policies) scenario. demand-side intervention, rather than being
a detailed industry analysis.
I. 2030 was selected to illustrate what
could happen if the interventions were – Not all sectors are modelled in detail – sectors
implemented by this point, rather than were selected based on energy demand,
suggesting that all interventions definitively carbon emissions and IBC member presence.
can be delivered by this point.
– Within sectors, selected interventions are
b. Application of intervention impacts to 2030
covered in depth, where impact and applicability
“no efficiency” scenario
can be confidently quantified, and the impact of
i. Energy intensity reductions calculated interventions does not overlap with others.
in 2c were multiplied by forecast 2030
energy demand from 3a. – Impacts are based on a variety of sources,
including the IEA and company websites, in
ii. This was then subtracted from current addition to primary research. Impacts for the
demand and expected demand growth wider economy are modelled to be achieved in
under current policies (IEA STEPS) to identify line with these case studies.
the absolute energy demand change under
“achievable” and “ambition” scenarios. – Intervention impacts assume no technological
improvements between now and 2030.
c. Modelling of 2022-30 energy demand in This may be conservative based on historic
“achievable” and “ambition” conditions improvements, so actual reductions in energy
intensity could be greater.
i. Growth in demand was modelled
linearly from current demand to illustrate
– A penetration value (i.e. scaling of the impact
potential overall progression in energy
of intervention based on expected feasibility)
demand to 2030 if identified interventions
is applied to all interventions based on our
were to be implemented.
understanding of possible rollout by 2030 e.g.
ii. This assumes a linear rate of improvement. assuming the proportion of steel production that
will switch to scrap-electric arc furnace method.
– Where sectors are not covered in detail, an

4. Estimate the impact of this reduction assumed impact is used based on the average
on energy spending and need for energy impact from sectors covered in detail within the
generation capacity vertical (industry, buildings or transport). For
the proportion of energy demand not covered
a. The cost per unit of energy in 2022
by the three verticals, a weighted average
was calculated based on IEA spend and
impact is applied.
energy demand data.
b. This was multiplied by the absolute change – The “no efficiency” scenario in 2030 is based
in energy identified in 3b to give an illustrative on the IEA STEPS scenario and the
level of energy saved. assumptions underpinning it with energy
intensity improvement removed. Subsequent
i. Cost per unit energy based on current achievable and ambition models implicitly
spend on energy divided by current energy rely on the STEPS scenario’s population and
demand. This therefore assumes the economic growth assumptions.

Contributors
World Economic Forum PwC
Roberto Bocca John Butterworth

Head, Centre for Energy and Materials Senior Manager, Project Manager
Ramya Krishnaswamy Catriona Campbell

Head, InstitutionalCommunities Senior Associate
Gabriele Liotta Maëlle Gomez

Lead, Public Policy, StrategicInitiatives, Senior Manager, World Economic Forum Fellow
Institutional Communities
Penny Maloney
Espen Mehlum Associate
Head, Energy Transition Intelligenceand
Regional Acceleration Nii Ahele Nunoo
Manager, World Economic Forum Fellow
Biggie Tangane
Specialist, Strategic Initiatives and Robert Turner
Institutional Communities Partner, Project Lead
Charles Whitehouse
Senior Associate
Acknowledgements
Companies engaged with as part of Dell Technologies

evidence gathering: Dow
Enel
Overall International Business Eni
Council (IBC) member EY
organizations engagement GIC

HEINEKEN
ABB
Honeywell
Accenture
Hubert Burda Media
African Rainbow Minerals
Infosys
Agility
Ingka Group
Allianz Kearney
Aramco Lippo Group
Bain & Company Mahindra Group
Banco Santander ManpowerGroup
Bank of America Merck Group
BASF MUFG
BBVA Nomura Holdings
Boston Consulting Group (BCG) Occidental Petroleum
bp Olayan Financing Company
Chevron Palo Alto Networks
Cisco Systems PwC

Repsol Peter Herweck
Chief Executive Officer, Schneider Electric
Royal Philips
S&P Global Masayuki Hyodo
Salesforce Representative Director, President and
Chief Executive Officer, Sumitomo Corporation
SAP
Schneider Electric Josu Jon Imaz
Chief Executive Officer, Repsol
Siemens
Standard Chartered Bank Ilham Kadri
Chief Executive Officer and Chairman
Sumitomo Corporation
of the Executive Committee, Syensqo
Sumitomo Mitsui Financial Group (SMFG)
Suntory Holdings Manny Maceda
Chief Executive Officer, Bain and Company
Swiss Reinsurance Company
Syensqo Bob Moritz
Global Chair, PwC
TD Bank Group
Tencent Holdings Patrice Motsepe
The Coca-Cola Company Founder and Executive Chairman,
African Rainbow Minerals
TotalEnergies
Unilever Douglas L. Peterson
President and Chief Executive Officer,
Vattenfall S&P Global
Yara International
Patrick Pouyanné
Note: Overall engagement includes one-to- Chairman of the Board and Chief Executive Officer,
one senior leader consultations, workshop TotalEnergies
attendance, chief executive officer survey
responses, detailed demand survey responses Christoph Schweizer
and in-person conversation. Chief Executive Officer, BCG
Anish Shah
This report was prepared by the IBC chaired by Managing Director and Chief Executive Officer,
Banco Santander, the World Economic Forum Mahindra Group
and PwC, who functioned as knowledge partners
to the initiative. This initiative was led by: Bill Winters
Group Chief Executive, Standard Chartered Bank
Ana Botin
Executive Chairman, The Santander Group;
Chair, International Business Council A number of senior leaders provided expertise
on this initiative, including:
Bob Moritz
Global Chair, PwC; Elvira Calvo Adiego
Sustainability Business Transformation Head, BBVA
Olivier Schwab
Managing Director, World Economic Forum Fahad Al-Dhubaib
Senior Vice-President, Strategy and Market
Analysis, Aramco
A chief executive officer and chair-level advisory
group provided strategic guidance on this initiative. Lucas Aranguena
Members included: Global Head, Green Finance, Banco Santander
Ana Botin Kenta Ashida

Executive Chairman, The Santander Group; Head, Climate Change Advocacy, Corporate
Chair, International Business Council Sustainability Department, SMFG
Claudio Descalzi James Baird

Chief Executive Officer, Eni Associate Partner, Bain & Company

Olivier Blum John Murton
Executive Vice-President, Energy Management Senior Sustainability Adviser,
and Member of the Executive Committee, Standard Chartered Bank
Schneider Electric
Sushant Palakurthi Rao
Arne Cartridge Managing Director, Global External Relations, Agility
Special Adviser, Strategy and Business
Development, Yara International Saugata Saha
President, S&P Global Commodity Insights,
Luis Cabra S&P Global
Executive Managing Director, Energy Transition,
Technology and Institutional Affairs, Repsol Rob Schwiers
Chief Economist, Chevron Corporation
Lucas Chaumontet
Managing Director and Partner, BCG Daniela Sellmann
Global Vice-President and Head, Energy
Philippe Chauveau and Utilities Industries, SAP
Head, Climate Strategy, Syensqo
Takayuki Sumita
Brian Dames Managing Executive Officer, Assistant Chief
Chief Executive Officer, African Rainbow Sustainability Officer, Sumitomo Corporation
Energy and Power
Masayuki Takanashi
Ashiss Dash Group Chief Sustainability Officer, SMFG
Executive Vice-President and Global Head Services,
Utilities, Resources and Energy, Infosys Ankit Todi
Lead, Group Sustainability Strategy
Suzanne DiBianca and Partnerships, Mahindra Group
Chief Impact Officer, Salesforce
Robert Turner
Rosanna Fusco Partner, PwC
Head, Climate Change Strategy and Positioning, Eni
Daniel Womack
Christophe Girardot Global Lead, Climate and Carbon Policy, Dow
Vice-President, OneB2B Solutions,
Transport and Logistics, TotalEnergies
The work could not have been achieved without
Ruth Harper the support and cooperation provided by many
Chief Marketing and Sustainability Officer, government bodies, organizations and companies
ManpowerGroup worldwide, notably the International Energy Agency
(IEA), GFANZ, the European Commission and the
Tomohiro Ishikawa World Economic Forum’s First Movers Coalition.
Chief Regulatory Engagement Officer, MUFG
This report was prepared by a project team of
Shigeaki Kazama members from the World Economic Forum, PwC
Executive Officer; Deputy Chief Sustainability Officer, and Banco Santander. Members additional to the
Suntory Holdings report contributors include:
Alicia Lenze
Vice-President, Global Head, Sustainability PwC
Marketing, SAP
Neil Loader Jon Chadwick

Vice-President, Carbon Ambition, Strategy Partner, Global Energy Transition Lead
and Sustainability, bp
Emma Cox
Robert Metzke Partner, Global Climate Leader
Chief of Staff, Innovation and Strategy;
Head, Sustainability, Royal Philips Yoann Derriennic
Partner, Capital Projects and Infrastructure Lead,
Judy Mossier PwC France
Governmental Affairs Adviser, UBS
Jeroen van Hoof
Simon Mulcahy Partner, Global Energy,
President, Sustainability, TIME Utilities & Resources Leader

William Jackson-Moore Authors
Partner, Global ESG Lead
Reid Morrison Daniel Gross

Partner, Global Energy Advisory Leader and Global Global Editorial Director, PwC
ESG Leader for Energy, Utilities and Resources
Matthew Yeomans
Nyarai Pfende Freelance Writer
Senior Manager
Andrea Plasschaert Production

Director, Global Corporate Affairs
and Communications
Laurence Denmark
Creative Director, Studio Miko
Banco Santander
Sophie Ebbage
Designer, Studio Miko
George Bridges
Senior Adviser to Ana Botin Martha Howlett
Editor, Studio Miko
Peter Greiff
Director, Corporate Affairs
Theo Leonard
Director, Institutional Affairs
Barbarra Navarro
Head, Research, Public Policy
and Institutional Relations

Endnotes
1. International Monetary Fund, The Rising Resilience of Emerging Market and Developing Economies, 2012.
2. United Nations (UN), 2022 Revision of World Population Prospects, 2022, https://population.un.org/wpp/?_gl=1*1ck7fl0*_
ga*MTI2MzI2ODM1My4xNjk4MTUzNTEy*_ga_TK9BQL5X7Z*MTY5ODE1NzYwOC4yLjEuMTY5ODE1Nzc3NS4wLjAuMA.
3. International Energy Agency (IEA), Net Zero Roadmap: A Global Pathway to Keep the 1.5C Goal in Reach, 2023,
https://iea.blob.core.windows.net/assets/13dab083-08c3-4dfd-a887-42a3ebe533bc/NetZeroRoadmap_AGlobalPathwa
ytoKeepthe1.5CGoalinReach-2023Update.pdf.
4. IEA, World Energy Outlook 2023, 2023, https://iea.blob.core.windows.net/assets/26ca51d0-4a42-4649-a7c0-
552d75ddf9b2/WorldEnergyOutlook2023.pdf.
5. Achievable is defined as interventions that are currently technologically available at scale with associated data available
on their energy intensity impact.
6. Demand intervention scenarios are non-exhaustive and illustrative. Not all of these measures are likely to be achieved
to the extent modelled between now and 2030, however, the impact of each measure within the modelling is in line with
those seen in existing case studies. As a result, the total quantum of the change is an accurate illustration of the total
“size of the prize” on energy demand from the interventions that have been modelled.
7. COP28, Global Renewables Alliance, IRENA, Tripling renewable power and doubling energy efficiency by 2030, 2023,
https://mc-cd8320d4-36a1-40ac-83cc-3389-cdn-endpoint.azureedge.net/-/media/Files/IRENA/Agency/Publication/2023/
Oct/COP28_IRENA_GRA_Tripling_renewables_doubling_efficiency_2023.pdf?rev=7824ef3346f64e7daa784f3440e30d27
8. Wohlfarth, K., E. Worrell and W. Eichhammer, “Energy efficiency and demand response – two sides of the same coin?”,
Energy Policy, vol. 137, no. 111070, 2020.
9. IEA, World Energy Outlook 2023, 2023.
10. Hennessy, Leon, “Using wired drill pipe to drive down well cost”, Offshore Engineer, 2016,
https://www.oedigital.com/news/448701-using-wired-drill-pipe-to-drive-down-well-cost.
11. Ibid.
12. “INTEGRATED MODEL GUIDED PROCESS OPTIMIZATION OF STEAM CRACKING FURNACES”, European Commission,
30 November 2020, https://cordis.europa.eu/article/id/430156-cracking-steam-cracking-technology-with-eco-friendly-furnaces.
13. “Combined Heat and Power (CHP) Partnership”, United States Environmental Protection Agency (EPA), n.d.,
https://www.epa.gov/chp/chp-benefits.
14. IEA, Energy Efficiency 2022, 2022, https://iea.blob.core.windows.net/assets/7741739e-8e7f-4afa-a77f-49dadd51cb52/
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In collaboration

1 Why transforming energy demand matters 5

2 The three energy demand levers 11

3 Business solutions – overall approach 13

4 Business solutions – selected interventions for change 15

© 2024 World Economic Forum. All rights

Transforming Energy Demand 2

Ana Botin Bob Moritz Olivier Schwab

Transforming Energy Demand 3

Transforming Energy Demand 4

FIGURE 1 The energy triangle

Sustainability and climate change

Supply Delivery Demand

Just and Energy

Source: World Economic Forum, Fostering Effective Energy Transition, 2023.

Transforming Energy Demand 5

FIGURE 2 Forecast demand growth to 2050

Current policies Further action

Transforming Energy Demand 6

Supply shortfall Supply shortfall

Commercial energy demand Renewable energy supply

The solution: action on energy consumption alongside supply

Transforming Energy Demand 7

21% 30% 12%

Industry Buildings Transport 2022 demand

Transforming Energy Demand 8

EJ, 2022-2030, global

Source: IEA, World Energy Outlook 2023, 2023.

FIGURE 6 Impact of proposed interventions on global energy demand, 20306

EJ, 2030, global

Transforming Energy Demand 9

FIGURE 7 Impact of energy demand-side levers on global energy demand

Global energy demand forecast scenarios and associated cost reductions

440 2022 demand

$1.1 trillion in energy

390 Achievable energy demand

360 $2.5 trillion in energy savings1

330 Ambition energy demand

Transforming Energy Demand 10

FIGURE 8 Three levers energy demand levers

Transforming Energy Demand 11

The challenges: growing awareness and

Transforming Energy Demand 12

FIGURE 9 Energy system roles

Energy Supplier High Low

Company with Companies that are

Renewable energy Provision of

Steel Fast-moving Professional and

Transforming Energy Demand 13

FIGURE 10 Execution approach

Strategize Centralize Finance Collaborate Measure

Transforming Energy Demand 14

BOX 1 AI and energy intensity – example

Transforming Energy Demand 15

31% Exisiting buildings Retrofitting

Transforming Energy Demand 16

Various time periods, geographies

Transforming Energy Demand 17

Demand interventions in industry