TWN Info Service on Climate Change (Apr17/05)
20 April 2017
Third World Network

Potential for emissions reductions through energy efficiency is big – Technology Committee told

Kuala Lumpur, 20 Apr (Hilary Chiew) – Dubbed the world’s first fuel, the potential of energy efficiency (EE) is big in terms of emissions reduction but the right ingredients are needed to scale it up, participants at a thematic dialogue on EE during the 14th meeting of the Technology Executive Committee (TEC14) were told.

In addition, they heard that according to the findings of the background technical paper commissioned by the TEC taskforce on mitigation, US$35bil of annual EE investment in energy-intensive sectors by 2020 is needed to achieve the international climate goal (of keeping temperature rise well below 2°C).

The one-day event held on the second day of TEC14 (28-31 April 2017 in Bonn, Germany) was in response to the decision adopted in Paris in 2015 (decision 1/CP.21 paragraph 109 [c]).

[Paragraph 109(c) pertains to the existing technical examination process (TEP) on mitigation reads – “Requesting the Technology Executive Committee and the Climate Technology Centre and Network in accordance with their respective mandates:
(i) To engage in the technical expert meetings (TEM) and enhance their efforts to facilitate and support Parties in scaling up the implementation of policies, practices and actions identified during this process;
(ii) To provide regular update during the TEM on the progress made in facilitating the implementation of policies, practices and actions previously identified during this process;
(iii) To include information on their activities under this process in their joint annual report to the Conference of the Parties;”]

The TEC is to take forward the outcomes of the TEP, taking into account the policy options, and identify gaps and replicable best practices or enabling policy conditions. At TEC13, members agreed to continue its work in the areas of identified gaps, namely industrial EE and material substitution in carbon-intensive sectors, including financing, training and co-benefit aspects of these sectors. It further requested the taskforce on mitigation to prepare a technical paper and to hold a thematic dialogue at its first meeting in 2017.

TEC members are invited to consider key findings from the dialogue and agree on its further work in this area.

The overarching goals of addressing this area of work are: inform and improve awareness among policy and decision-makers to scale up implementation of EE policies in carbon-intensive sectors; identify and support the development and transfer of innovative technologies, partnerships and programmes with the potential to maximise the impacts of industrial EE measures.

Presentations and discussions were carried out in three sessions:

• Setting the scene - current state of play, issues and fundamentals of industrial EE;
• Sharing experiences and lessons learned – Enablers and challenges from innovative business models;
• Promoting and upscaling industrial EE – Meeting the demand of a low-carbon future

Participants also discussed, in break-out groups, the potential role the TEC can play to enhance the development and transfer of technologies for EE in industries and to identify relevant policy work and recommendation areas for the TEC, in accordance with its functions, to bring added-value to this sector.

Representing theInternational Partnership for Energy Efficiency Cooperation (IPEEC) Benoit Lebot said as response to climate change is local and EE efforts are very local, national policies are key to the implementation but there is also room for international collaboration.

He said EE and renewables have equivalent greenhouse gas (GHG) reduction potential and the role of national governments lies in ensuring stability of regulations as a key driver for the demand of and supply of EE investments.

Elaborating the International Energy Agency’s 2016 World Energy Outlook report, Lebot said the ‘New Policies Scenario’ which included all the Nationally Determined Contributions (NDCs) from the Paris Agreement still leaves a significant amount of efficiency potential untapped.

“Two-thirds of the profitable investments to improve EE in the industry, transport, power and building sectors remain untapped in the period to 2035. While EE policies are introduced in more countries and sectors (from 13% in 2005 to 26% in 2014 and projected to reach 38% by 2040) and continue to slow energy demand growth, more can be done,” he added.

Mikael Henzler of Adelphi Consult, in presenting the technical paper said it provides a synthesis of EE measures and material substitution potential in industry, and policy options to increase their adoption.

He said the objective of the paper is:

• To present state-of-the-art EE measures and material substitution options and their current level of implementation;
• To provide country examples from different regions and international initiatives and overall lessons learned; and
• To identify barriers to EE implementation and propose suitable policy options to address them.

He explained that efficiency encompasses all changes that result in a reduction of inputs used for a given service or level of activity. The reduction in the input consumption is not necessarily associated to technical changes, since it can also result from a better organisation and management or improved economic efficiency in the sector (eg overall gains of productivity) added Henzler.

Henzler said EE is essential to meet the Sustainable Development Goals where achievement of at least 8 of the 17 goals can be supported by increasing EE (in industry) and material substitution.

He stressed further that industrial emission reductions can be achieved via implementation of EE measures which include those in cross-cutting technologies (steam, motor drives, pumping systems, compressed air systems, heating and cooling systems), sector-specific processes (chemical, iron and steel, cement, pulp and paper, non-ferrous metal and food), energy generation from industrial by-products, and energy management system.

Emission reductions in the field of material substitution can be found in fuel and production materials substitution as well as material recovery, he added.

“In recent years, large companies made significant progress in increasing EE, whereas small-and-medium size enterprises (SMEs) face a number of difficulties due to limited resources. Global energy-intensity improved in 2015 despite lower energy prices – 2.5% in emerging and developing countries and 2% in industrialised countries,” he said, stressing that even higher improvements are needed to reach the 2°C target (of limiting temperature rise).

He also said that to do so, EE investments in energy-intensive industries must increase whereby investments of US$35bil annually would be needed in energy-intensive sectors by 2020 to reach international climate goal. The amount would represent a 84% increase of the US$19bil out of the US$39bil investments in industrial EE in 2015.

He further said that financing is a main hurdle for SMEs in implementing EE especially in developing countries with high up-front investment costs versus limited access to financial resources.

He pointed out that training is a main need for enhancing EE and co-benefits generated by EE initiatives such as environmental benefits and air quality improvements, energy supply security, and employment creation will increase acceptance of EE policies.

“In achieving EE improvements, the most successful countries are those that have set specific targets and designed adequate policies including those that address barriers,” he stressed.

On the last day of the meeting, mitigation taskforce memberIan Lloyd (United States) reported on the outcome of the dialogue.

He said the dialogue identified the needs and challenges, including the lack of awareness related to the potential of industrial EE, innovative policies, financing and capacity-building, to meet the demand of a low carbon future.

The TEC, in accordance with its function, could provide added value in this sector by reaching out and raising awareness to identified stakeholders, highlighting the potential benefits and potential for upscaling through various means and formulating policy recommendations to address the needs and challenges identified.

Building on its previous work (TEP policy analysis, technical papers, thematic dialogues), the TEC could develop a TEC Brief or similar product, which emphasizes the needs for enhanced capacity-building, training and information transfer; highlighting success stories and lessons learned from efficient technologies in industrial EE; highlighting the potential of EE for SMEs especially in developing countries; and rephrasing the narrative of EE for its co-benefits potentials.

Based on the ‘TEC Brief’, the TEC could further issue special executive summaries to convey messages to tailored target groups and issue key messages to the UNFCCC’s 23rd Conference of the Parties (Nov 2017).

Lloyd added that the Climate Technology Centre and Network (CTCN) could play a key role in supporting countries to formulate policies, build capacity and identify opportunities for industrial EE and that the CTCN could also use its network members to connect with industry communities.

He also said the TEC could highlight financing issues in industrial EE to the operating entities of the Financial Mechanism.

He also further noted that the results of the thematic dialogue would be conveyed to the first meeting of the Paris Committee on Capacity Building (PCCB) as well as conveying the outcomes by providing inputs to the Technical Expert Meeting on Mitigation that will be held alongside the inter-session of the UNFCCC in May this year.