Energy intensity Europe – I wish I had more to offer

Key messages

Between 1990 and 2017, the EU’s energy intensity — i.e. the ratio between its gross inland energy consumption and its gross domestic product (GDP) — decreased by 37 %.
This decrease was continuous throughout the entire period, with an average annual decrease of 1.7 % per year. The 1990-2005 period is characterised by relatively high economic growth and more moderate growth in gross inland energy consumption. In contrast, the 2005-2014 period is characterised by lower economic growth (in some years even negative) and decreasing gross inland energy consumption. However, gross inland consumption of energy started to increase again after 2014, marking a slow-down in energy intensity improvements.
In all member countries of the European Environment Agency (EEA), energy intensity decreased between 2005 and 2017. The largest decreases were observed in Malta (-4.9 %), Ireland (-4.5 %) and in central and eastern European countries (notably Romania, Slovakia, and Lithuania) because of changes in their economic structure.

Has there been absolute decoupling of economic growth from energy consumption in Europe?

Trends in energy intensity, gross domestic product and gross inland energy consumption

Energy intensity, annual average change, relative energy intensity and gross inland energy consumption

Energy intensity in the EU

Between 1990 and 2017, a relative decoupling of gross inland energy consumption from economic growth occurred in the EU: while gross inland energy consumption in 2017 was at the same level as in 1990 (see also ENER 026), GDP (measured in 2010 constant prices) grew by 1.7 % per year, on average. As a consequence, energy intensity in the EU fell by 37 % (1.7 % per year) during this period (see Figure 1).
- Between 1990 and 2005, energy consumption grew more slowly than GDP. After peaking in 2005/2006, gross inland energy consumption decreased until 2014. Since then however, gross inland energy consumption in the EU has increased again, albeit less steeply than economic growth.
- Between 2005 and 2017, energy intensity decreased by an average of 2.0 % per year: gross inland energy consumption decreased by 9 % (0.8 % per year), while GDP increased by 16 % (1.2 % per year).
- Since 2014, gross inland energy consumption in the EU has increased again, albeit less steeply than economic growth.
- Between 2016 and 2017, energy intensity decreased by 0.9 %: GDP grew more than gross inland energy consumption (2.5 % compared with 1.6 %, respectively).
The improvement in energy intensity was fairly constant in the period 1990-2017. Average per capita gross inland energy consumption in the EU was 3.3 tonnes of oil equivalent (toe) in 2017.
In the EU, the observed reduction in energy intensity was influenced by improvements in energy efficiency — both for final users and for power generation — as well as by the increase in renewable energy in the power mix and structural changes within the economy. The latter included an increase in the contribution of services to GDP and a shift within the industrial sectors from energy intensive industries to less energy intensive industries with a higher value added.

Energy intensity in EEA member countries

Between 1990 and 2017, all countries showed an absolute or relative decoupling of GDP growth from gross inland energy consumption. In the following countries, GDP grew while gross inland energy consumption fell after 2005 (absolute decoupling): Belgium, Bulgaria, Croatia, Czechia, Denmark, Finland, France, Germany, Hungary, Ireland, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and the United Kingdom.
Countries in which GDP grew and gross inland consumption also grew, but more slowly since 2005 (relative decoupling) are: Austria, Cyprus, Estonia, Norway, Poland and Turkey. In Greece and Italy, both GDP and gross inland energy consumption decreased.
In 2017, significant differences in energy intensity were observed between EU Member States. The highest energy intensity was observed in Finland, Estonia and Bulgaria. The lowest energy intensity was observed in Ireland and Malta.
In 2017, the lowest values for gross inland energy consumption per capita were observed in Romania, Malta and Turkey (less than 2 toe per capita), while the highest values (more than 6 toe per capita) were observed in Luxembourg and Finland.

Indicator specification and metadata

Indicator definition

Energy intensity is the ratio between gross inland energy consumption (GIEC) and gross domestic product (GDP), calculated for a calendar year. GIEC is calculated as the sum of the gross inland consumption of the five sources of energy: solid fuels, oil, gas, nuclear and renewable sources. To monitor trends, GDP is in constant prices to avoid the impact of inflation, with a base year of 2010. From 2019, GIEC in this report includes ambient heat used for heat pumps, which was not included in the previous reports.

Units

Gross inland energy consumption is measured in 1 000 tonnes of oil equivalent (ktoe), while GDP is expressed in millions of euros at 2010 market prices. To make comparisons of trends across countries more meaningful, the indicator is presented as an index. For country comparisons, two additional columns are included in the table in Figure 2 to show the current energy intensity in GDP in purchasing power standards for the latest available year, and also the energy intensity in terms of consumption per capita.

Policy context and targets

Context description

The Energy Efficiency Directive 2018/2002 — amending Directives 2012/27/EU, 2009/125/EC and 2010/30/EU, and repealing Directives 2004/8/EC and 2006/32/EC — puts forward a binding EU-wide 32.5 % energy savings target for 2030, following on from the existing 20 % target by 2020. These targets are expressed in primary and/or final energy consumption and are relative to projected levels of primary energy consumption in 2030 of 1 887 Mtoe and final energy consumption of 1 416 Mtoe. A 32.5 % reduction therefore results in 1 273 Mtoe and 956 Mtoe in 2030, respectively.
The Energy Roadmap 2050 for moving to a competitive low-carbon economy in 2050 (COM(2011) 112 final), presents a roadmap for action in line with an 80-95 % reduction in greenhouse gas emissions by 2050.
A Clean Planet for All — A European Strategic long-term vision for prosperous, modern, competitive and climate neutral economy (COM (2018) 773 final), confirms Europe’s commitment to lead in global climate action and presents a vision that can lead to achieving net-zero greenhouse gas emissions by 2050 through a socially-fair transition in a cost-efficient manner.
Going Climate-Neutral by 2050 by the Directorate-General for Climate Action (European Commission), a brochure summarising EU’s strategic long-term vision.
A Framework Strategy for a Resilient Energy Union with a Forward-Looking Climate Change Policy (COM(2015) 080 final), proposed to form an Energy Union where Member States see that they depend on each other to deliver secure energy to their citizens, an Energy Union that speaks with one voice in global affairs.
The Fourth report on the State of the Energy Union (COM(2019) 175 final), showing the progress made on the energy union since the start of the Juncker Commission.
A resource-efficient Europe — flagship initiative of the Europe 2020 Strategy (COM(2011) 21) — presents a strategic framework that should deliver a more sustainable use of natural resources and a shift towards resource-efficient, low-carbon growth in Europe.
The Energy Efficiency Plan 2011 (COM(2011) 109 final), proposes additional measures to achieve the 20 % primary energy savings target by 2020.
The Energy 2020 strategy for competitive, sustainable and secure energy (COM(2010) 639 final) identifies energy efficiency as a key priority.
The EU Action Plan for Energy Efficiency (COM (2006)545 final) aims to boost the cost-effective and efficient use of energy in the EU. One of the priority areas is making power generation and distribution more efficient.

Targets

Directive 2018/2002 on energy efficiency puts forward a binding EU-wide 32.5 % energy savings target for 2030, following on from the existing 20 % target by 2020. These targets are expressed in primary and/or final energy consumption and are relative to projected levels of primary energy consumption in 2030 of 1 887 Mtoe and final energy consumption of 1 416 Mtoe. A 32.5 % reduction therefore results in 1 273 Mtoe and 956 Mtoe in 2030, respectively. Member States are requested to set indicative targets. Member States shall express their contribution in terms of the absolute level of primary energy consumption and final energy consumption in 2020, and in terms of the absolute level of primary energy consumption and final energy consumption in 2030, with an indicative trajectory for that contribution from 2021 onwards.

Methodology

Methodology for indicator calculation

Technical information

Geographical coverage:
The EEA member countries. These are the 28 European Union Member States plus Iceland, Liechtenstein, Norway, Switzerland and Turkey. Iceland, Liechtenstein and Switzerland are not covered or are only partly covered in this indicator due to lack of data for recent years.
Methodology and frequency of data collection:
Data collected annually. Eurostat definitions and concepts for energy statistics http://ec.europa.eu/eurostat/statistics-explained/index.php?title=Energy. Note that Eurostat changed their energy balances in 2019. This changed the energy consumption values compared with previous years. More information on these changes can be found in the Energy Balance Guide 2019 of Eurostat.
Methodology of data manipulation:
Energy intensity is defined as gross inland energy consumption (GIEC) divided by GDP at constant 2010 prices (i.e. to illustrate trends in economic energy intensity) and measures how much energy is required to generate one unit of GDP. Its variation over time reflects the influence of various factors, which include energy efficiency improvements, but also changes in the nature of the economic activity (the ‘economic structure’) or in the structure of the energy mix, changes in lifestyle (more appliances, higher indoor temperature in dwellings, more cars), climatic factors such as colder winters, etc. The coding (used in the Eurostat database and specific components of the indicator) is:

– Numerator: GIC Gross inland consumption (of energy).
– Denominator: B1G GDP in millions of euros, chain-linked volumes, reference year 2010 (GDP in purchasing power standards is used for cross-country comparisons of energy intensity in a particular year; dataset-identifier: B1GM).
Average annual rate of growth calculated using: [(last year/base year) ^ (1/number of years) –1]*100

To compare the situation among countries and make a more realistic comparison, the energy intensity needs to be corrected to take into account differences in the general price levels. For that purpose, GDP has been expressed in purchasing power standards (PPS). This is particularly true for eastern European Member States where the average price level is lower than in the EU-15 countries: after adjustment, the energy intensities of these countries are almost twice as low, on average, as the values measured with exchange rates and are more in line with other EU countries.

Methodology for gap filling

GDP is taken from the European Commission’s AMECO database. Data from the early 1990s are not available for some EU Member States. The EU-28 estimate for the 1990-1992 period (growth rates 1991-1993) has been made by gap-filling these Member States using available GDP figures from the World Bank database. Gap-filling was carried out for the following counties and years: 1990-1992 for Croatia, Estonia and Slovakia; 1990-1991 for Latvia and Lithuania; 1990 for Bulgaria. In addition, 1990 GDP for Germany has been estimated on the basis of the 1991 growth rate in West Germany.

Methodology references

No methodology references available.

Uncertainties

Methodology uncertainty

The intensity of energy consumption is relative to changes in real GDP. Cross-country comparisons of energy intensity based on real GDP are relevant for trends but not for comparing energy intensity levels in specific years and specific countries. This is why the indicator is expressed as an index. In order to compare the energy intensity between countries for a specific year, two additional columns are included that show energy intensity in purchasing power standards (PPS) and energy intensity per capita. PPS are currency conversion rates that convert to a common currency and equalise the purchasing power of different currencies. They are an optimal unit for benchmarking country performance in a particular year. Energy intensity should therefore always be put in the broader context of the actual fuel mix used to generate the energy.

Data sets uncertainty

Strengths and weaknesses (at data level)

Data have been compiled by Eurostat through the annual joint questionnaires, which are shared by Eurostat and the International Energy Agency, following a well-established and harmonised methodology. Methodological information on the annual joint questionnaires and data compilation can be found in Eurostat’s web page for metadata on energy statistics, http://ec.europa.eu/eurostat/statistics-explained/index.php?title=Energy

GDP is the central aggregate of national accounts. Some GDP-figures have been estimated using the procedure described above (Methodology for gap filling). Methodological information related to GDP can be found on Eurostat’s website.

Rationale uncertainty

No uncertainty has been identified

Data sources

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