Global progress in energy efficiency — as measured by energy intensity rate of change — is projected to see only a weak improvement of 1% in 2024, according to a recent International Energy Agency’s (IEA) report (pdf). This rate is roughly half the average rate between 2010 and 2019. Despite accelerated efforts in certain countries in response to the energy crisis, overall improvements in energy efficiency have decelerated.

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This is bad news for the global green transition, as an accelerated improvement in energy efficiency could contribute to a reduction of over 70% in projected oil demand and 50% in projected gas demand by 2030, according to the IEA's net-zero emissions scenario by 2050.

But wait, what do we mean by energy efficiency? In short, energy efficiency is about doing more with less. By using technology or even just smart practices, energy efficiency aims to maintain the same desired goal — which could be you driving to work, the food you put in your stomach, you watching television, or endless other examples — but to reduce the amount of energy used in the process. Instead of just focussing on replacing traditional petrochemicals with green energy, having more energy efficient systems — both big and small — helps reduce the amount of watts you need to replace to bring about a carbon neutral economy.

Global public and private spending on energy efficiency is forecast to remain at pretty much the same level, rising only 4% in 2024 to USD 660 bn, which the report largely attributes to a flatlining of this type of investment in some of the world’s most advanced economies.

But it's a different story for efficiency investment in emerging regions — including our own — with the report projecting energy investment in Africa to grow 60% y-o-y, 40% y-o-y in the Middle East, and 20% y-o-y in Central and South America. Despite the jump in investments, these regions still collectively account for only about 5% of global investment, while Europe, North America, and the Asia-Pacific region constitute the lion’s share.

Energy efficiency is a key part of Egypt’s carbon reduction plan, with the Oil Ministry following a plan that it says lowers emissions and offers economic returns. The ministry has implemented around 340 projects aimed at optimizing energy use, resulting in annual savings of USD 135.5 mn and reducing 1.2 mn tons of CO2 emissions a year. Part of the initiative included detailed energy audits in five key energy companies and the training of some 250 engineers.

Energy efficiency centers have helped lead these initiatives, as the ministry established an energy efficiency center in Alexandria — complementing an already existing center in Cairo that develops and oversees energy-saving policies. Along with optimizing energy use, these centers also train employees and contribute to sustainable development and emission reduction. There is also a plan for every local petroleum company to have its own energy efficiency department to further this mission.

Wider EV adoption will be one of the key ways for Egypt to improve energy efficiency in its transport sector, which the government is pursuing with an electric mobility strategy to increase the market share of private EVs to 50% by 2040. A plan was also announced to ban new sales of internal combustion engine vehicles beginning 2040.

It seems that government efforts to promote EV investment and localization have been working, as it seems that every couple of days there’s a new agreement to localize EV production and increase supply. In just the first ten days of this month, we heard news that that Ezz Elarab Group launched a new Volvo EV with plans to open a EV service center and Volvo showroom next year, Alkan Auto will bring another Chinese EV brand to market by February, and National Automotive Company will distribute Chinese Neta Auto EVs by mid-next year.

Private and public manufacturing players have also been looking for ways to increase energy efficiency, often through investing in newer equipment that reduce emissions and save money in the long run. Egypt highlighted efficient motor regulations as one of the main mitigation projects in its updated National Determined Contributions in 2023, and said that it aims to allocate some USD 11.6 bn to efficient motors under industry projects.

In addition to existing building energy efficiency codes, the country is looking for more ways to reduce consumption via its National Smart Cities Strategy. Through smart cities — which the government wants to soon increase to 37 nationwide — the government is planning on upping energy efficiency by having cities that are designed to consume less energy in the first place, both in buildings and on the streets.

Your top green economy stories for the week:

• The Egyptian General Petroleum Corporation will receive a USD 959k grant to reduce methane emissions in the oil sector, under an agreement with the US Trade and Development Agency. The grant will help build a roadmap for the project that will be developed alongside S&P Global.
• The Environment Ministry inaugurated a USD 1.2 mn wastewater treatment plant at Interstate Paper Industries in Sadat city. The facility has a processing capacity of 2.1k cubic meters per day of wastewater. (Statement)

• Engazaat and Contact partner up to support Western Desert farmers: Contact Financial subsidiary Contact Ins. Brokerage and power and water producer Engazaat will work together to insure small farmers and support them in establishing sustainable farming practices in the Al Moghra region of the Western Desert, according to a statement (pdf).
• The Arab Organization for Industrialization’s Atico Wood Industries Factory received an internationally accredited carbon footprint report for applying green economy standards in its industrial production. (Statement)