Unlocking energy efficiency investments by small firms and mid-caps

Abstract

Energy consumption in the European Union has steadily declined over the last twenty years, and since 2020 economic growth has been effectively decoupled from energy use. However, reaching the European climate and energy targets requires faster action, better implementation of energy efficiency projects and stronger monitoring of needs and results. This new report looks at energy efficiency investments by EU firms and the support they need to increase that investment. Using data from the EIB Investment Survey, the report explores how European businesses are responding to energy challenges and the impact those challenges are having on their business. Begun in 2016, the Investment Survey and collects data from about 12 000 EU firms and 800 US firms. Some key findings: Concerns for energy costs are driving firm investments in energy efficiency. The share of EU firms citing energy costs as a major barrier to investment has increased steadily in recent years and hovered just under 50% in 2024. Large firms lead in energy efficiency investments. About 60% of large firms invested in energy efficiency in 2024, compared to 40% of small and medium-size firms. Smaller firms invest less despite spending more of their turnover on energy and being more vulnerable to energy shocks. Targeted support can boost investment. Policy intervention – in the form of grants and loans at favourable conditions – increases the likelihood that firms will invest in energy efficiency by 15-19 percentage points. EU firms, particularly small ones, still face obstacles to investing in energy efficiency, such as a lack of finance, difficulty finding people with the right skills and uncertainty over the future. Policy support can help, such as tailored financing, advisory services that can help companies implement projects and simplified energy audits that identify the biggest-impact investments.