Applying ex post index decomposition analysis to final energy consumption for evaluating European energy efficiency policies and targets

This paper aims to unravel the effects of both policies and autonomous developments driving the changes of final energy consumption for the European Union (EU28) and its member states complemented with an in-depth analysis of two EU member states, Germany and Poland, for the period of 2000 to 2015 by the logarithmic mean Divisia index methodology (LMDI). We examine the influences on the changes in final energy consumption for each of the five main demand sectors at aggregated level and at a more detailed level of residential end-uses, transport modes and industrial sub-sectors. With the second level, we provide insights into the effects of policies from a European and national perspective. Our analysis shows that final energy consumption in the EU28 is primarily influenced by an increase in energy efficiency in industry followed by households. For the latter, the energy savings were mainly realised in space heating. The main counteracting drivers were increasing economic activity and the rising demand for higher comfort and social factors, such as a declining household size. Germany shows relatively low energy efficiency improvements in industry, but strong energy efficiency gains in households followed by transport. Poland's transport, however, is responsible for a strong increase in final energy consumption mainly through increased activity, while here the sector industry-despite strong effects of increased activity-in total shows a significant reduction in energy consumption through energy efficiency improvements.