Assessing the impact of energy efficiency on the EU energy consumption in 2010-2022 : an index decomposition analysis

This report examines the determinants of changes in primary and final energy consumption at EU27 and Member State levels over the period 2010 to 2022 to track and understand the progress towards 2030 energy efficiency targets. 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) approach, a widely used Index Decomposition Analysis (IDA) method, was applied to study both aggregated and sectoral energy consumption changes at EU and Member State levels over the examined period and quantify the impact of factors such as economic activity, demographics, productivity, lifestyle and weather changes. The results suggest that significant 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 attained in recent years should be considered with caution: as they have been significantly influenced by exceptional external factors, such as the COVID-19 pandemic which led to a drop in energy consumption, followed by a rebound effect once the restrictions ceased, and the invasion of Ukraine, which resulted in an increase in energy prices (especially for gas) with strong interventions by the EU and Member States to limit energy consumption. With the aim to investigate the impact of the Russo-Ukrainian war on energy and economic matters, an analysis at the European level has been carried out.