- Only 40% of EU firms have invested in measures to improve energy efficiency.
- Large untapped potential as firms report only a third of their building stock to be of high energy efficiency standards.
- Energy audits can help unlock energy efficiency investments.
The new European Investment Bank (EIB) report, Going Green – Who is investing in energy efficiency, and why it matters, sheds light on firms’ investments in energy efficiency measures and the role of various factors in their decisions. The report is based on the annual EIB Investment Survey (EIBIS) of 12 500 firms in the EU. The results are compared across countries (EU and USA), sectors and firm size classes to identify areas for potential improvement.
The report finds that less than half of EU firms have invested in energy efficiency measures and that this accounts for only a small share of their total investment budget. The surveyed firms also state that, on average, only a third of their building stock satisfies the highest energy efficiency standards, showing a huge potential for further energy efficiency savings. The report further finds that firms’ awareness of energy efficiency benefits is critical for the uptake of energy-saving measures.
“Energy efficiency investment will be crucial for Europe’s green recovery and reaching our climate goals. It holds the combined potential of increasing firms’ competitiveness, enhancing energy security and reducing greenhouse gas emissions. It shows that going green and strong growth can go hand in hand,” said EIB Vice-President Andrew McDowell, responsible for energy. “The report we published today highlights the vast untapped possibilities for energy savings by EU firms and the pressing need to accelerate market uptake for such measures. As the EU’s climate bank, we will continue to provide the advisory and financial support necessary to unlock this potential.”
“We need to avoid that the Covid-19 crisis distorts firms’ incentives to invest in energy efficiency. Our ambitious greenhouse gas emission reduction targets leave no room for complacency. EU firms must become more energy-efficient if they want to stay competitive,” said EIB Chief Economist Debora Revoltella. “For firms to play their part in energy conservation and be equipped to adapt to a changing economy, they need clear energy policy signals. They need a supportive regulatory framework that also pushes for higher energy building performance standards. And they need financing conditions that support timely investment to realise the enormous gains of energy efficiency improvements.”
Energy efficiency investments are a low priority for EU firms
In 2019, only 40% of EU firms took measures to improve energy efficiency. Slovakia displayed the highest percentage of firms investing in energy efficiency (61%), followed by Spain, the Czech Republic, Austria, Slovenia, Portugal and Sweden. Only these seven EU countries show a greater share of firms investing in energy efficiency than in the United States, where 47% of firms have invested in energy efficiency. By contrast, Lithuania, Estonia, Greece, Romania and France were at the other end of the spectrum. As regards their share of total investment in energy efficiency improvements, European firms spent only 10%, whereas this figure was 12% for US firms.
Source: EIB Investment Survey (EIBIS)
The untapped potential of firms’ energy efficiency
In 2019, EU firms reported only 38% of their commercial building stock to be of high or the highest energy efficiency standards. Yet since 2016, firms’ perceptions of the quality of their building stock has deteriorated. This seems to suggest that most of Europe’s existing building stock may not yet meet recently adopted energy performance requirements and that improvement of the stock in line with the new standards is still pending.
Key role of energy audits for energy efficiency investments
The share of firms investing in energy efficiency measures is considerably higher for firms with an energy audit than for those without one. 60% (74% in energy-intensive industries) of EU firms with an energy audit also invested in energy efficiency improvements, indicating that firms’ awareness of energy efficiency benefits is critical for the uptake of energy efficiency measures. Firms without an energy audit appear to invest substantially in areas other than energy efficiency, possibly because they fail to understand the potential direct and indirect benefits of energy-saving technologies.
For further information and interview requests, journalists are invited to contact EIB communications officer Jan Gerrit Wnendt (+352 691 284 340), j.wnendt@eib.org.
Background information:
In 2019, the bank provided €11.7 billion for energy-related projects, of which €4.6 billion were for energy efficiency measures. Read more about the EIB’s climate and environmental ambitions here.
About the EIB Economics Department
The EIB Economics Department provides economic research and studies, as well as unique analysis of investment activities in the EU and beyond, and supports the Bank in its operations and in defining its positioning, strategy and policy. Chief Economist Debora Revoltella heads the Department and its team of 40 economists.
About the EIB Investment Survey (EIBIS)
The EIB Group Survey on Investment and Investment Finance is a unique annual survey of some 13 500 firms. It comprises firms in all EU Member States, as well as a sample of US firms that serves as a benchmark. It collects data on firm characteristics and performance, past investment activities and future plans, sources of finance, financing issues and other challenges that businesses face. Using a stratified sampling methodology, the EIBIS is representative across all EU Member States and the US, as well as across firm size classes (micro to large) and four main sectors. It is designed to build a panel of observations to support time series analysis – observations that can also be linked to firm balance sheet and profit and loss data. The EIBIS was developed and is managed by the Economics Department of the EIB, with Ipsos MORI providing development and implementation support.
For more information see: http://www.eib.org/eibis.