Energy management + energy efficiency
energy efficiency and employment have grown, but higher costs and labour shortages remain as challenges.
Investments in energy efficiency Global energy efficiency-related investment was set to reach almost USD 800 billion in 2025, growing by 6% compared to the previous year and over 70% compared to 2015. However, in some countries, public support schemes have declined amid budgetary constraints, and material costs have risen. For instance, construction prices in the European Union have increased over 20% since 2021. Geographic disparities in investments remain, with two-thirds of end use investment taking place in China, the United States and the European Union, although the fastest growth in the last 10 years happened in India and Southeast Asia. Employment and skills Nearly 18 million people were employed in energy efficiency in 2024 around the world, but the sector continues to face labour and skills shortages. Overall efficiency-related employment increased over 6% from 2023 to 2024. Most efficiency workers are in China, the European Union and the United States, but emerging markets like India have seen a rapid increase in recent years. Other IEA surveys in 2025 highlighted persistent labour shortages and the need to increase efforts to attract and train workers. Efficiency gains and energy policy priorities New IEA analysis shows the impact energy efficiency policies have had on global energy policy priorities. Notably, without efficiency gains since 2010, today’s greenhouse gas emissions would be 20% higher, and energy efficiency remains one of the key drivers to lower emissions in the future. Efficiency actions since 2000 have reduced household energy bills in advanced economies by up to 20%. In 2025, several major economies put in place efficiency policies specifically linked to enhancing energy affordability. Efficiency has also improved competitiveness, with industries today producing 20% more value per unit of energy consumed than in 2000. Efficiency gains have also avoided the need for 20% more fossil fuel imports in IEA countries over the same period. For example, new data shows that efficiency actions accounted for two-thirds of the gas demand savings in European households during the energy crisis, enhancing energy security and strategic independence in the EU. The role of energy efficiency in wider energy policy goals was recognised at the 10th Annual IEA Global Conference on Energy Efficiency in June last year. Participating governments reaffirmed their commitment to stronger energy efficiency action and particularly highlighted its role as a key tool to address energy affordability, quality of life and industrial competitiveness. The IEA further highlights in its Energy Efficiency 2025 report that to accelerate efficiency progress, governments need to raise their ambitions and close policy gaps. Governments implemented over 250 new or updated efficiency-related policies in countries around the world in 2025. These countries represent over 85% of global energy demand, compared to countries accounting for 70% of total energy demand taking efficiency-related policy actions in 2024. The updated targets for energy efficiency in countries’ revised Nationally Determined Contributions shared at COP30 will form the basis for faster progress.
IEA Executive Director Fatih Birol says: “Energy efficiency has the power to enhance people’s lives and livelihoods through greater energy security, more affordable bills, improved economic competitiveness and lower emissions.”
The IEA’s Energy Efficiency 2025 report highlights that energy efficiency improvements in industry have slowed sharply since 2019.
Countries can accelerate efficiency improvements in two ways.
Raise the ambition of existing policies As technology improves, many policies have not been kept up to date, and policy ambition varies widely among countries. In some countries, for instance, a building that meets the local efficiency standard may be using three times as much energy as one in another country with a similar climate. There is significant room to raise the bar and accelerate progress using existing and well-proven policy tools. When policy frameworks are already in place, this represents the fastest and easiest way to accelerate efficiency progress. Close policy gaps There are still many areas where policies are either absent or limited. For example, around half of countries globally still do not have efficiency standards for new buildings, including in regions experiencing rapid growth. Similarly, there are still no mandatory energy performance standards for industrial motors in two-thirds of all countries globally. Identifying and closing specific policy gaps, prioritising where energy use and savings potential are the highest, can help countries accelerate progress. [It is worth noting that on these last examples of policy gaps in many countries around the world, South Africa is progressing at least in terms of establishing energy efficiency standards for some categories of buildings, and in establishing minimum energy performance standards for industrial motors.]
For more information visit: www.iea.org
APRIL 2026 Electricity + Control
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