Assessing the impact of energy efficiency on the EU energy consumption by using an index decomposition analysis in 2010-2021

To track and understand the progress towards 2030 energy efficiency targets, this report examines the determinants of changes in primary and final energy consumption at EU27 and Member States levels over the period 2010 to 2021. Energy consumption trends are driven by several factors beyond energy efficiency improvements, which can have a profound effect in the aggregate energy use, irrespective of the impact of energy efficiency policies and measures. To understand the latest energy consumption trends in the EU, the Logarithmic-Mean Divisia Index (LMDI) method, a widely used Index Decomposition Analysis (IDA) method, was applied to study both aggregated and sectoral energy consumption changes at EU and Member States levels over the examined period and quantify the impact of factors such as economic activity, demography, productivity, lifestyle and weather changes. The results suggest that there have been important energy efficiency gains during the studied period, without which the progress achieved towards 2030 EU energy efficiency targets would have been difficult to attain. However, the results have been considerably influenced by both the exceptional year 2020, characterised by the global COVID-19 pandemic and the rebound effect occurred in 2021. With the aim to investigate the impact of COVID-19 pandemic on energy consumption, an analysis at European, country and sectoral level has been carried out. The analysis showed that the stringency index (an indicator expressing the stringency of the lockdown measures) affected the electricity consumption at Member State level, while among the different sectors, transport was the most affected one by the pandemics, while on the other hand, the residential sector was not significantly affected.