Over the past twenty years, energy consumption in the European Union has steadily declined, and since 2020 economic growth has effectively been decoupled from energy consumption. However, achieving the EU’s climate and energy targets requires faster action, better implementation of energy efficiency projects, and stricter monitoring of needs and results.

The new report by the European Investment Bank (EIB) examines investments in energy efficiency by businesses in the EU and the support they need to increase such investments. Using data from the EIB Investment Survey, the report explores how European companies respond to energy challenges and the impact of these challenges on their businesses. Launched in 2016, the Investment Survey collects data from approximately 12,000 EU firms and 800 US firms.

Key Findings:

• Concern over energy costs drives corporate investments in energy efficiency. The share of EU companies citing energy costs as a major barrier to investment has been steadily increasing in recent years and will be just under 50% in 2024.

• Large companies lead in energy efficiency investments. About 60% of large firms are expected to invest in energy efficiency in 2024, compared with 40% of small and medium-sized enterprises (SMEs). Smaller firms invest less, even though they spend a larger share of their turnover on energy and are more vulnerable to energy shocks.

• Targeted support can stimulate investment. Policy interventions – in the form of grants and loans on favorable terms – increase the likelihood that companies will invest in energy efficiency by 15–19 percentage points.

Businesses, especially small ones, still face barriers to investing in energy efficiency, such as lack of financing, difficulties in finding skilled staff, and uncertainty about the future. Policy support can help through tailored financing, consulting services to facilitate project implementation, and simplified energy audits that identify the investments with the greatest impact.

The EIB has also announced €17.5 billion in support for improving energy efficiency in small and medium-sized European enterprises.

• The initiative aims to stimulate energy savings in more than 350,000 companies over the next three years, nearly doubling the EIB Group’s financing in this area.

• The EIB Group is also partnering with the non-profit foundation Solar Impulse to promote energy efficiency as a service.