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Indicator Fact Sheet
Assessment made on 01 Apr 2007
Historically, economic growth has led to increased energy consumption, thus putting increased pressure on the environment. The indicator identifies to what extent there is a decoupling between energy consumption and economic growth.
Total energy consumption in the EU-25 grew at an annual rate of just over 0.8 % over the period from 1990 to 2004, while Gross Domestic Product (GDP) grew at an average annual rate of 2.1 % during the same period. As a result, total energy intensity in the EU-25 fell at an average rate of -1.2 % per year (a total decrease of -16 % between 1990 and 2004). Despite this relative decoupling, total energy consumption has increased by 12.0 % overall in the period 1990-2004. Energy intensity declined over 1990-2000 (and continuously during 1996-2000) but has remained broadly stable since then.
The reduction of total energy intensity has been influenced both by improvements in energy efficiency and structural changes within the economy. The latter included a shift from industry towards services, which are typically less energy intensive, a shift within the industrial sector from energy intensive industries towards higher value added, less energy intensive industries1, and one-off changes in some Member States (e.g. most new Member States as well as Luxembourg and Germany). Furthermore, improvements in the efficiency of power generation (see EN19) as well as in intensity in some end-use sectors contributed to the reduced overall energy intensity. On the level of end-use sectors, trends in final energy consumption intensity suggest that there have been substantial improvements in the industry and services sectors over the period 1990-2004 (see EN21 for more details). In contrast, the transport and households sectors show only limited decoupling of energy consumption from economic and population growth respectively. The stagnating trend since 2000 was primarily due to a slowing in the rate of GDP growth from this point, compared to a continued growth in overall energy consumption.
There are significant differences in total energy intensity within the EU-25 Member States, with the highest intensities in Estonia, Finland and Slovakia and the lowest in Ireland, Italy and Denmark (when compared at Purchasing Power Standards). Total energy intensity in the new EU-10 Member States is on average still around 1.4 times higher than in the pre-2004 EU-15 Member States, despite a converging trend: the average annual decrease since 1990 is -3.4 % in the new EU Member countries, while it was -1.0 % in the pre-2004 EU-15 Member States.
Energy intensity is a measure of total energy consumption in relation to economic activity. Total energy consumption by fuel (see relevant core set indicator) is needed in addition for understanding the resulting pressures on the environment, since these pressures are very different for the various fuels and the use of renewable energy sources, with relatively low environmental pressures, in total energy consumption varies widely across EU countries. Therefore, comparing energy intensities across countries has to be put in the wider context of the fuel mix used in the production of the energy needs of a country.
All EU-25 Member States with the exception of Portugal, Italy, and Austria experienced a decrease in total energy intensity between 1995 and 20042. The largest decrease occurred in the new Member States, in particular in Latvia, Estonia, Poland, and Lithuania which improved their total energy consumption intensity by more than 4 % annually over that period. The opening up of their economies, changes in ownership structures (through increasing privatisation), and rises in the price of raw materials and energy also increased the priority for efficiency in industry. The removal of energy subsidies in order to lower state budget costs and improve the economics of national energy utilities has been a major factor in price increases. However, many industries have been unable to survive in internationally competitive markets and, as a result, their production has decreased dramatically. In the pre-2004 EU-15 Member States the shift towards less energy intensive industry and high value added services continues to be observed. In particular, Ireland, the U.K., Sweden and Denmark improved their total energy consumption intensity considerably between 1995 and 2004 (by more than 2% annually). In Ireland, rapid economic growth and a booming service sector has been the primary cause, whereas in the U.K. changes have been driven by reductions across manufacturing sectors combined with an increased service sector.
PRIMES projections for the energy sector suggest that total energy consumption intensity could continue to decline, decreasing to roughly one third of its 2000 value by year 2030 (European Commission 2006). A Low Carbon Energy Pathway scenario projection, which assumes a CO2 permit price of up to EUR 65/tCO2, shows a slightly higher rate of improvement (EEA 2005). Both of these projections indicate a somewhat faster decrease than has been seen in recent years and are based on an expectation that the trend towards economic growth in sectors representing low energy intensity goods and services will continue, that the increase in demand for transportation will slow and that further efforts will be made to improve energy efficiency. These results do not imply that total energy consumption will fall in absolute terms. The PRIMES scenario projects it to rise by almost 15 % between 2000 and 2030.
For references, please go to https://www.eea.europa.eu/data-and-maps/indicators/en17-total-energy-intensity or scan the QR code.
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