3.5.5.3 Latin America

In Latin American countries, industry consumes about 30% of final energy use. Energy intensity has increased, partly because of a deterioration of the energy efficiency in the heavy industries. Substantial energy efficiency improvement potentials are reported, see Table 3.22.

As an example it is useful to give some information on industrial electricity use in Brazil. Industry accounts for 48% of electricity consumption in Brazil, about half of this is for electric motors. Geller et al. (1998) report low-cost saving possibilities of 8%–15%. The use of energy-efficient motors is more costly (typically 40% more investment than conventional), but still simple payback times range from 1 to 7 years. Such motors could save about 3% of industrial electricity use. In addition, variable speed controls may save 4% of industrial electricity use (Moreira and Moreira, 1998).

Table 3.22: Potential energy savings in energy intensive industries in Latin America. The table shows the percentage reduction of average specific energy consumption that can be achieved with additional investments (Pichs, 1998).
	Short term/ small investments	Long term/ medium size investments
Steel	5 - 7	5 – 13
Aluminium	2 - 4	10 – 15
Oil	7 - 12	15 – 25
Fertilizer	2 - 5	20 – 25
Glass	10 - 12	15 – 20
Construction	10 - 15	15 – 20
Cement	10 - 20	10 – 30
Pulp and paper	10 - 15	10 – 16
Food	8 - 18	12 – 85
Textile	12 - 15	15 – 17

3.5.5.4 USA and Canada

The manufacturing industry is responsible for one-third of total USA energy use and for nearly half of total Canadian energy use. A set of studies is available regarding possible developments of carbon dioxide emissions in this sector. A comparison of three of these studies was presented by Ruth et al. (1999); see Table 3.23. All three studies do not present a technical or economic potential, but take into account incomplete penetration of available technologies. The outcomes in the policy case for the USA range from a 2% carbon dioxide emission growth to a strong decline. The two studies for the USA rely on the same model, but differ in the extent to which technologies are implemented. Furthermore, there are differences in assumed structural development and the treatment of combined generation of heat and power.

For the USA a series of studies have determined the static potentials for three energy-intensive sectors. A study of the iron and steel industry concludes that steel plants are relatively old. A total of 48 cost-effective measures were identified that can reduce carbon dioxide emissions per tonne of steel from this sector by 19% (Worrell et al., 1999). For the cement industry a cost-effective potential of 5% excluding blending (30 technologies) and 11% including blending was calculated (Martin et al., 1999). For the pulp and paper industry the cost-effective potential is 14% (16% including paper recycling) and the technical potential 25% (37% including recycling) (Martin et al., 2000).

For the important Canadian pulp and paper industry for 2010 (compared to 1990) a technical potential for reduction of specific energy consumption of 38% was found; the cost-effective potential is 9% (Jaccard, 1996). All these cost-effective potentials are calculated from the business perspective (e.g., for the USA a pay-back criterion of 3 years is used).

Table 3.23: Change in carbon emissions from the industrial sector, 1990 to 2010, base and policy cases. Source: Ruth et al. (1999)
		USA – I (Interlaboratory Working Group, 1997)	USA – II (Bernow et al., 1997)	ERG (Bailie et al., 1998)
Base case, 2010 emissions relative to 1990	Fuel	+20%	+20%	+25%
	Electricity	+28%	+24%	+50%
	Total	+22%	+23%	+29%
Policy case, 2010 emissions relative to 1990
	Fuel	+7%	-13%	+7%
	Electricity	-6%	-54%	+28%
	Total	+2%	-28%	+11%

3.5.5.5 Africa

Typically the industry in Africa is characterized by slow replacement of equipment like motors, boilers, and industrial furnaces. Small and medium enterprises are the most affected as a result of limited financial resources and skills. Greenhouse gas emission mitigation opportunities identified in past national studies in Southern Africa (UNEP/Southern Centre, 1993; CEEZ, 1999; Zhou, 1999) are centred on retrofitting boilers and motors, cogeneration using waste process heat, and introduction of high efficiency motors on replacement. The costs for implementing these measures are in the range of negative to low per tonne of carbon.

3.5.5.6 Western Europe

Industry in Western Europe is relatively efficient, as was shown in Figure 3.13. For some countries results of detailed studies into the technical and economic potential for energy efficiency are shown in Table 3.24. These studies show that the economic potential for energy efficiency improvement typically ranges from 1.4%–2.7% per year, whereas the technical potential may be up to 2.2%–3.5% per year¹⁷.

Assessment of total potential for energy efficiency improvement

The previous overview gives results for a range of studies carried out for a variety of countries. It should be noted that the studies differ in starting points, methods of analysis, and completeness of the analysis. Some studies give technical or economic potentials, others take into account implementation rates in an accelerated policy context.

Nevertheless, it may be concluded that in all world regions substantial potentials for energy efficiency improvement exist. This is also the case for regions like Western Europe and Japan that – according to Figure 3.13 – were already fairly efficient. For the other regions energy efficiency improvement potentials generally are higher, although both detailed sector studies and comprehensive overviews are lacking for most countries.

In order to make an estimate of the worldwide potential of enhanced energy efficiency improvement a number of assumptions are made. It is assumed growth of industrial production in physical terms to be 0.9% per annum in the OECD region; 1.0% per annum in economies in transition; 3.6% per annum in the Asian developing countries; 3.9% per annum in the rest of the world. Autonomous energy efficiency improvement is assumed to lead to a reduction of specific energy use by 0.5%–1.0% per year (assumption for the average: 0.75%). The total is equivalent to the outcomes in terms of CO₂ emissions in the SRES-B2 scenario. For calculating the potential of industrial energy efficiency improvement, it is assumed that from the year 2000 the enhanced energy efficiency improvement is 1.5%–2.0% per year in the OECD countries (average); and 2%–2.5% per year in the other world regions. Starting from the energy use and emission figures quoted in section 3.5.2, a potential of 300–500MtC is calculated for the year 2010 and 700–900MtC for the year 2020. These figures are consistent with earlier estimates, e.g. WEC, 1995a).

Table 3.24: Energy efficiency improvement potential in terms of reduction of aggregate specific energy consumption compared to frozen efficiency. In the figures for Germany combined generation of heat and power is not included, in the Netherlands it is included. (see Blok et al., 1995).
	Germany (BMBF, 1995; Jochem and Bradke, 1996) (discount rate 4%)	The Netherlands (De Beer et al., 1996) (discount rate 10%)	United Kingdom (discount rates vary by sector)
Technical potential	1995/2005: 20%	1990/2000: heavy industry: 25% light industry: 40%	1990/2010 high-temperature industries: 45% low-temperature industries: 32% horizontal technologies (excluding CHP): 15% (ETSU, 1994)
	1995/2020: 25%
Economic potential	1995/2005: 7%.to 13% 1995/2020: 16% to 20%	1990/2000: heavy industry: 20% light industry: 30%	1990/2000 all industry 24% of CO2 (ETSU, 1996)

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