The principal business of an industrial facility is production, not energy efficiency.  This is the underlying reason why market forces alone will not achieve industrial energy efficiency on a global basis, “price signals” notwithstanding.  High energy prices or constrained energy supply will motivate industrial facilities to try to secure the amount of energy required for operations at the lowest possible price.  But price alone will not build awareness within the corporate culture of the industrial firm of the potential for energy savings, maintenance savings, and production benefits that can be realized from the systematic pursuit of industrial energy efficiency.  It is this lack of awareness and the corresponding failure to manage energy use with the same attention that is routinely afforded production quality, waste reduction, and labor costs that is at the root of the opportunity.

Companies that have made the shift in organizational culture required to effectively manage energy report many benefits in cost savings, productivity, and operational efficiency.  Results reported and documented by multi-national companies with company-level target-setting programs and energy management programs are impressive. Dow Chemical set a target to reduce energy intensity (btu/lb product) from 1994-2005 by 20% and actually achieved 22% ($4B in savings); their energy intensity reduction goal for 2005 to 2015 is 25%. 3M Corporation has reduced its corporate energy consumption by 30% since 2000 through its global energy management program.  DuPont has achieved $2B in energy savings since 1990 as part of a corporate goal to achieve a 65% reduction in GHG emissions below 1990 levels by 2020. Toyota North American Energy Management Organization has reduced energy use per unit by 23% since 2002 while company-wide energy-saving efforts have saved $9.2 million in North America since 1999.

Industrial energy efficiency is dependent on operational practices, which change in response to variations in production volumes and product types. Because industrial production is so closely linked to economic growth and prosperity, energy efficiency policy is accompanied by some inherent, although entirely manageable, risk. The key to effective industrial energy efficiency policy is consistency, transparency, engagement of industry in program design and implementation, and, most importantly, allowance for flexibility of industry response. When these criteria are met, industry has shown that it can exceed expectations as a source of reductions in energy use and corresponding GHG emissions, while continuing to prosper and grow.

This paper presents a portfolio of policy options under the organizing structure of the Industrial Standards Framework that meet these criteria. The Industrial Standards Framework proposes a link between International Organization for Standardization (ISO) 9000/14000 quality and environmental management systems and industrial energy efficiency. The Industrial Standards Framework includes:
·        target-setting agreements,
·        an energy management standard,
·        system optimization training and tools,
·        capacity building to create system optimization experts, now and in the future,
·        a System Optimization Library to document and sustain energy efficiency gains, and
·        tax incentives and recognition.

The purpose of the Framework is to introduce a standardized and transparent methodology into industrial energy efficiency projects and practices including: system optimization, process improvements, waste heat recovery and the installation of on-site power generation.  The Framework builds on existing knowledge of “best practices” using commercially-available technologies and well-tested engineering principles.  This paper presents numerous examples of successful implementation of elements of the Framework in both developed and developing countries. 

Assessments of cost-effective efficiency improvement opportunities in energy-intensive industries in the United States, such as steel, cement, and paper manufacturing, found cost-effective savings of 16% to 18% (Martin et al., 1999, 2000a; Worrell, et al., 2001); even greater savings can often be realized in developing countries where old, inefficient technologies have continued to be used to meet growing material demands (Price et al., 1999; Price et al., 2002; Schumacher and Sathaye, 1999; WEC, 2004).

Within industry, systems that support industrial processes can be found to varying degrees in virtually all industrial sectors, regardless of their energy intensity.  These industrial systems, which include compressed air, pumping, and fan systems (referred to collectively as motor systems), steam systems, and process heating systems are integral to the operation of industrial facilities, providing essential conversion of energy into energized fluids or heat required for production processes.  Motor and steam systems account for 15% and 38%, respectively, of global final manufacturing energy use, or approximately 46 EJ/year (IEA 2007). Optimizing industrial systems has a cost-effective improvement potential of 20% or more for motor systems and 10% or more for steam and process heating systems (DOE 2004a).

System optimization offers a way for companies to quickly realize cost, productivity, and operational benefits that can provide the reinforcement needed for management to proceed with the organizational changes required to fully integrate energy efficiency into daily operational practices. Capacity-building training creates a cadre of highly skilled system optimization experts that can provide the necessary technical assistance for industrial facilities to identify and develop energy efficiency improvement projects. A “train the trainer” approach can quickly create greater awareness of the opportunities for energy efficiency, thus addressing a principal barrier.  This capacity can continue to provide benefits to industry for many years.  After more than a decade of capacity-building, experts trained by the US DOE continue to identify millions of dollars in system optimisation improvement opportunities year after year.  In 2005 alone, the Save Energy Now initiative documented 55 PJ in energy savings in the first 200 plant assessments, or $475 million in cost savings. Many of the recommended improvements had paybacks of less than 2 years.

Taken together, the elements of the Industrial Standards Framework comprise an effective industrial policy package that combines energy reduction targets, energy efficiency standards, system optimization training, and documenting for sustainability. As described in this paper, there are well-documented opportunities for cost-effective energy reduction on the order of 18-20% or more, while reducing industry’s CO2 emissions by 20-33% (IEA, 2007).  The time to take action so that industrial energy efficiency becomes “business as usual” is now.