Few business strategies offer the kind of dual positive return that energy efficiency does: lower operational costs and a smaller environmental footprint. And yet, despite the powerful business case and international bodies like the International Energy Agency (IEA) consistently urging action – most recently at its 10th Annual Conference on Energy Efficiency – scaling up optimised energy use is still at a jog rather than a sprint.  

A recent study from the Energy Efficiency Movement (EEM) examined the reasons behind this slow uptake. The study found that efficiency isn’t being ignored, it just keeps tripping over its own feet. Financial constraints, outdated infrastructure, missing skills and half-baked strategies create a complex web of challenges that continue to hinder progress. And while there may not be a magic fix, there is a clear path forward, one that’s rooted in both operational strategy and technological transformation.  

The wallet says no 

Financial investment was cited by world industrial leaders as the number one barrier to achieving their energy efficiency goals, and it’s not hard to see why. Some 43% of organisations identified financial concerns as their primary obstacle. And while 68% said their energy efficiency budget is increasing, over eight in 10 industrial players still feel it’s not enough to meet their targets.  

While many energy-efficient technologies deliver strong returns over time, they often come with a substantial price tag up front. Small and medium-sized enterprises (SMEs), in particular, struggle to justify the cost, or to access financing in the first place. Companies that have only recently begun their efficiency journey are also feeling the heat. These are the businesses which often lack the internal frameworks to evaluate long-term returns or the ability to handle risk with confidence. Volatile energy prices add even more hesitancy, especially where funding decisions are tied to short-term performance.  

That disconnect between rising ambition and constrained funds means businesses are being asked to accelerate towards net zero with one foot on the brake. To see real progress, businesses could consider alternative financing models – such as ‘equipment-as-a-service’ (rental) offerings – that allow manufacturers to adopt advanced, connected technologies without breaking the bank.   

Old kit, new tricks 

Infrastructure challenges were identified as another major barrier – specifically, a stubborn gap between today’s technology and yesterday’s industrial systems. Many industrial sites were never built with energy efficiency in mind, and integrating new infrastructure without disrupting production can feel like swapping the engine of a moving car: tricky, expensive and not for the faint-hearted.   

Some 42% of respondents reported difficulties modernising facilities, particularly when retrofitting equipment in environments that are either data-rich or not yet fully digital. These hurdles are often magnified by a lack of in-house expertise or stretched teams, making companies hesitant to hold up operations or take on unfamiliar technology. On top of that, uncertainty around whether new systems will play nicely with existing ones continues to slow adoption.   

Needless to say, companies that are already using connected sensors, AI-based monitoring tools or energy management platforms tend to face fewer challenges when retrofitting advanced systems.   

But Rome wasn’t built in a day. It’s not about flicking a switch and making changes overnight, it’s about laying out a clear rollout plan – pilot upgrades, validate return on investment and scale from there.  

Some 42% of respondents reported difficulties modernising facilities, particularly when retrofitting equipment in environments that are either data-rich or not yet fully digital. These hurdles are often magnified by a lack of in-house expertise or stretched teams.

Missing the people part 

Achieving meaningful energy efficiency outcomes is impossible with an empty toolkit, and right now, organisations are facing a shortage of know-how. Almost half of the respondents reported difficulties in finding or training staff with the right skills, with approximately the same number saying that workforce limitations were directly delaying adoption of new technologies. The missing link spans a broad range of expertise, from energy audits and monitoring to data analysis and project management.  

Building capability doesn’t mean starting from scratch. Leading organisations are embedding energy efficiency goals into broader training programmes, bringing in external partners to plug gaps and creating space for peer learning across teams. This is not simply a workforce development issue – it’s a strategic priority.  

The bigger picture 

The barriers identified in our report aren’t just bumps in the road, they’re entirely fixable pain-points. And that matters more than ever in the context of renewed global momentum, as seen at the recent IEA conference in Brussels. Here, 50 governments reaffirmed their commitment to doubling the annual rate of efficiency improvements by 2030, with a strong focus on digitalisation, supply chain upgrades and robust energy management systems.   

The private sector didn’t stay still either. On the eve of the conference, the chief executives of 18 international companies, including ABB and Alfa Laval, made a major commitment under the lead of the Energy Efficiency Movement to advance energy efficiency as an enabler for industrial productivity, competitiveness and emissions reductions.  

Energy efficiency has always been the quiet giant of decarbonisation, and the case for action is clear. But now the race is on, and the prize is more than just a lighter energy bill. It’s future-proofed operations, leaner processes, skilled teams and a real competitive edge.  

Getting there is no longer about convincing organisations of the ‘why’. It’s all about enabling the ‘how’.  

The views and opinions expressed in this article are strictly those of the author only and are not necessarily given or endorsed by or on behalf of the Energy Institute.  

• Further reading: ‘Unlocking Europe’s energy future – energy efficiency can’t wait’. Alongside the use of renewables, the potential contribution of improving energy efficiency – an established and well-proven practice – is still under-appreciated. Particularly for Europe’s industrial sites, the scope for cutting emissions is enormous, writes Erich Labuda, Division President with ABB Motion Services. 
• Why is investing in energy efficiency key to meeting climate goals?