Most industrial greenhouse gas (GHG) emissions come from energy use. By improving energy efficiency, the world can cut energy consumption, lower emissions, and save on costs. It’s a smart and cost-effective first step toward decarbonization and businesses are continuing to pour funds into energy efficiency initiatives and technologies worldwide as the International Energy Agency (IEA) reported.
The IEA’s Energy Efficiency 2024 highlights key trends in energy intensity, demand, prices, and policies. It also offers insights into system-wide themes including investment, which this article will delve into in detail.
Driving Change: What Leads the Energy Revolution?
The report shows that energy efficiency investments could remain resilient in 2024, with total spending projected to reach around $660 billion. This level matches the record set in 2022 and highlights the steady commitment to sustainable energy use. These investments span sectors like transport, buildings, and industry, driven by the need to reduce emissions and enhance energy efficiency amid fluctuating economic conditions.
Since 2019, global energy efficiency investments have surged by 45%, fueled by the energy crisis and significant government spending post-Covid-19. The transport sector has seen the highest growth, with a 77% rise, followed by buildings at 34% and industry at 13%.
However, from 2022 to 2024, the trend shifted. Investments in buildings dropped by 7%, while transport saw a 14% rise, and industry remained steady.
A key driver for the trend is the push for efficient electrification, especially in the electric vehicle (EV) sector across China, Europe, and North America. EV sales, particularly in emerging markets, have supported this trend.
However, as energy prices stabilize and government stimulus wanes, overall global investment has plateaued. Rising inflation and interest rates also pose challenges for financing efficiency upgrades.
Emerging Markets Take the Spotlight in Efficiency Investments
The growth of efficiency-related investments in 2024 is uneven across regions. Emerging markets and developing economies (EMDEs) are expected to lead.
Africa is projected to see a 60% rise, the Middle East 40%, and Central and South America over 20%. China will also witness nearly 10% growth.
Conversely, advanced economies are stabilizing after years of crisis-driven spending. Europe is set for a slight decline, while North America will see a modest 5% increase.
Despite slower growth in these regions, they still account for the bulk of global energy efficiency investments—95% of total spending occurs in Europe, Asia Pacific, and North America, regions responsible for about 75% of global energy demand.
Transport Electrification: A Surge in EV Sales
Globally, the electrification of transport has gained momentum. By 2024, around one in five new cars sold will be electric.
EV sales reached 14 million in 2023, making up 18% of total car sales, and this figure is expected to grow to 17 million in 2024. The bulk of these sales occurred in China, Europe, and North America, which accounted for 95% of global EV sales.
In EMDEs, the focus remains on two- and three-wheelers. These vehicles dominate markets in regions like Southeast Asia and Latin America. China leads in two-wheeler sales, though global sales in this category dropped 18% in 2023 due to supply chain disruptions.
India, however, saw a 40% increase in electric two-wheeler sales and continued growth in three-wheelers, spurred by government initiatives like the Electric Mobility Promotion Scheme.
- RELATED: Is the EV Market’s Momentum Slowing?
According to S&P Global data represented by the chart below, global passenger plug-in EV sales could reach over 33 million units by 2028. That’s almost a 104% increase in EV units sold. China is set to take the biggest growth in sales.
The number of people projected to use EVs for the same period (penetration rate) will also double by 2028 compared to 2024.
Source: S&P Global
Building Smarter: A Post-Crisis Slowdown
Investment in energy-efficient buildings boomed during the energy crisis, driven by technologies like heat pumps. In 2022, heat pump sales peaked, particularly in Europe, where they are central to long-term climate goals.
However, this momentum slowed in 2023 due to high electricity prices and reduced government support. For instance, Italy’s Superbonus program, which heavily subsidized energy-saving renovations, was phased out in 2024. This program alone accounted for more than half of Italy’s building sector investments in 2023.
Meanwhile, heat pump deployment in China has seen modest growth. These trends highlight the critical role of government policies in sustaining investment in building efficiency.
ESCOs and the Power Players Behind the Efficiency Boom
The energy service company (ESCO) market experienced a slight decline in 2023, dropping by 2.2%. Despite this, the market size remains robust at over $35 billion, supported by strong policies in regions like the U.S.
Federal programs, such as the Federal Energy Management Program, have bolstered ESCO activities, which grew by 54% between 2021 and 2023 in the U.S.
China leads the global ESCO market, with investments exceeding $20 billion in 2023, accounting for half the global total. The majority of ESCO investments target the buildings sector, followed by industrial applications and energy storage.
Among the major players in the ESCO market, some of the interesting companies making waves in the sector include:
- Johnson Controls is a global leader in smart building solutions, offering advanced technologies and services to enhance building performance and sustainability. In energy efficiency, Johnson Controls has made significant progress by implementing high-capacity heat pumps and optimizing energy use in various industries. They have contributed to over $6 billion in customer projects worldwide, driving sustainability and reducing carbon footprints.
- Ameresco is a leading cleantech integrator that specializes in energy efficiency, renewable energy, and infrastructure modernization. In 2023, its renewable energy projects and assets helped avoid around 16 million metric tons of CO₂ emissions, contributing to over 110 million metric tons of cumulative carbon reductions since 2010. Ameresco has received numerous awards for its sustainability efforts and continues to drive innovation in clean energy.
- Trane Technologies, through its flagship brand Trane, provides innovative HVAC solutions designed for energy efficiency and sustainability. The company delivers services such as Energy Savings Performance Contracting (ESPC) to optimize energy consumption and reduce operational costs for buildings. Trane emphasizes sustainability, helping clients meet carbon reduction goals through electrification, energy monitoring, and renewable energy integration.
- NORESCO is specializing in energy and infrastructure solutions for government, institutional, and commercial clients. The company has a strong track record in improving energy efficiency, managing over $2.75 billion in federal energy projects. It helps clients achieve sustainability goals through advanced technologies like microgrids, battery storage, and renewable energy systems.
Scaling Up: What’s Needed for 2030?
To meet net-zero targets, energy efficiency investments must triple by 2030, reaching $1.9 trillion annually, per the report. The IEA’s NZE Scenario underscores the importance of a comprehensive strategy tailored to each country’s needs.
In emerging economies, efforts focus on improving building performance and electrifying transport. In sub-Saharan Africa, the transition to clean cooking fuels is a top priority. Advanced economies, meanwhile, focus on retrofitting older infrastructure, deploying heat pumps, and scaling up EV infrastructure.
Ultimately, energy efficiency investment is vital for meeting global climate goals and expanding investment to underrepresented regions will be key to accelerating progress.
The post Energy Efficiency Hits $660 Billion in 2024: The World’s Best Bet for Cutting GHG Emissions appeared first on Carbon Credits.
Nature-based carbon investments deserve consideration when they address a specific business dependency and produce outcomes you can measure. Imagine Moonbucks, a global coffee roaster planning next season’s espresso blend. It is considering natural Grade 4 coffee from Jimma, in southwestern Oromia, Ethiopia. Its sourcing decisions affect the roasting schedule and the cash tied up in coffee purchases. Moonbucks needs to understand which measures could protect that supply, what they would cost and how it would judge the results.
1. Define the sourcing problem before choosing a project
Moonbucks needs a dependable component for its espresso blend. Its procurement team wants continuity of volume and an agreed cup profile. Replacing a shipment at short notice could require new sample approval and changes to the blend, and given the schedules for cultivation, processing, and freight delivery, is practically impossible. Moonbucks needs to get this right, and its initial concern is inconsistent deliveries. It commissions an assessment of the supplying farms and post-harvest chain. The questions cover land condition, harvest availability and whether drying or storage problems are affecting saleable lots.
This distinction changes the investment brief. A tree-planting proposal cannot be assumed to fix drying problems. Better storage cannot restore eroded land. The team must establish which problem exists before selecting the response.
CCC’s guide to finding nature-based solutions in your supply chain explains where to look. Here, the next task is to turn a broad concern into a testable proposal.
2. Develop nature-based carbon investments around the actual supply chain
The assessment would trace Moonbucks’ purchases back through the exporter and supplying producer groups. Which farms supply the contracted lots? Who controls land-management decisions? How long does the buyer expect to maintain the purchasing relationship?
Furthermore, Jimma natural Grade 4 cannot be treated as interchangeable with every Ethiopian coffee. Moonbucks would need to test any substitute against its own blend and quality requirements.
Suppose Moonbucks’ assessment identifies an opportunity to maintain shade trees and restore vegetation along exposed streambanks. The IPCC describes agroforestry as a way to store carbon in vegetation and soil, with potential benefits for erosion control and water quality.1 Moonbucks would need local advice on species, growing conditions and maintenance before deciding how these measures fit its sourcing plan.
The proposal now has a defined sourcing connection and a candidate intervention. The next steps are to test its effect on production, assess carbon eligibility and build the financial case.
3. Compare the proposal with other ways to protect supply
WBCSD’s Nature-based Solutions Blueprint recommends comparing nature-based options with other responses across their benefits and costs.2 For Moonbucks, that means evaluating the landscape proposal alongside drying improvements, storage controls and alternative sourcing arrangements.
The product’s natural-process designation matters. Moonbucks should examine the drying and dry-milling chain alongside land conditions. Its team would check storage practices, contamination risks and incoming-lot quality to see whether problems arise before or after the coffee leaves the farms.
The revised proposal might combine land stewardship with separate post-harvest controls. Each component needs its own purpose and budget. A sustainability label should not obscure which activity is expected to solve which problem.
The project develops as the evidence improves. Its scope should follow the diagnosis rather than preserve the first idea unchanged.
4. Establish what the carbon outcome could count toward
Moonbucks’ sustainability team now tests the proposed carbon case separately from the sourcing case. Is the objective a measurable change in Moonbucks’ value-chain emissions, verified credits for separate voluntary use, or distinct outcomes under carefully defined arrangements?
Scope 3 covers value-chain emissions. A purchasing relationship alone does not prove that a farm intervention can be included in Moonbucks’ inventory. The team needs an applicable accounting method, defensible boundaries and evidence supporting attribution.
SBTi’s FLAG Guidance (forest, land and agriculture), version 1.2, says purchased credits used as offsets cannot meet near-term FLAG or energy and industry targets. Eligible land-based removals are subject to accounting requirements.3 Moonbucks needs to test its proposal against those rules before including an outcome in its targets.
For Moonbucks’ Jimma proposal, maintaining existing trees and establishing new vegetation could involve different carbon questions. Specialists must examine the baseline and additionality, meaning what changes because the project proceeds. They must also assess measurement and the risk that stored carbon is lost. CCC’s MRV and additionality article introduces those tests.
Until that work is complete, Moonbucks should not budget an assumed Scope 3 reduction or credit-sale receipt. Direct emissions reductions remain the priority.
5. Build a financial case that survives weaker assumptions
Moonbucks’ finance team would now build a multi-year budget. UNEP’s State of Finance for Nature 2023 compares current finance with the investment needed to meet climate, biodiversity and land-restoration goals.4 The company would cost its proposed activities, farmer participation and ongoing monitoring. Verification, where required, is a separate expense. Maintenance and responsibility for replacing failed plantings must remain visible after the initial establishment budget ends.
Operational benefits need equally careful treatment. If fewer rejected lots reduce emergency purchasing, count that saving once. Do not add “supply resilience” as another financial benefit when it represents the same avoided cost.
Moonbucks should compare a base case with slower benefits, higher implementation costs and no carbon revenue. It should also distinguish production outcomes from quality and shipment outcomes. A single good harvest would not prove that the landscape intervention caused better delivery performance.
A project can remain worth funding even when its carbon case needs more work. That decision must rest on the operational evidence and the company’s objectives, without unsupported environmental claims.
6. Fund a pilot with a clear expansion decision
Moonbucks’ first approval would fund a bounded pilot, rather than commit the entire sourcing program. Before spending, Moonbucks would agree on participating farms, responsibilities and the evidence needed at review.
Its scorecard could track farmer participation, implementation costs and plant survival, alongside accepted coffee volumes and lot-quality results. Carbon measurements would follow the selected method. Farm-level traceability must connect the intervention to the actual sourcing relationship.
Suppose Moonbucks’ review later finds that storage changes explain most quality improvements, while the land measures need longer observation. Those findings would shape the next decision: expand the proven component, adjust the landscape work or pause further spending. They would not justify crediting all improvements to tree planting.
This gives nature-based carbon investments a practical place in a multi-year strategy. Funding increases as the evidence supports it, and the project can change direction before a larger commitment.
Discuss a sourcing opportunity with CCC
Carbon Credit Capital’s nature-based supply-chain investment service uses its Dual-Value Model to examine supply-chain economics alongside potential sustainability outcomes.
Schedule a consultation to discuss your sourcing exposure and the questions to resolve before allocating capital.
Sources
- Intergovernmental Panel on Climate Change (IPCC), Climate Change 2022: Mitigation of Climate Change, Chapter 7, Agriculture, Forestry and Other Land Uses, section 7.4.3.3 (Agroforestry).
- World Business Council for Sustainable Development (WBCSD), Nature-based Solutions Blueprint, 5 June 2024.
- Science Based Targets initiative (SBTi), Forest, Land and Agriculture Science-Based Target-Setting Guidance, version 1.2, March 2026, section 3.1.4, pp. 37–38.
- United Nations Environment Programme (UNEP), State of Finance for Nature 2023, 2023.
A plastic credit funds the collection of plastic waste in places where no formal system exists to collect it. Each credit represents a measured, independently audited quantity of plastic taken out of the environment or returned to use, tracked on a public registry.
EU carbon credit claims changed on 27 September 2026, the day the Directive (EU) 2024/825 began to apply across the European Union. The change is narrow. It changes how a company can talk about the credits it buys. A product can no longer be called neutral on the strength of compensation alone; however, every specific, evidenced statement about what a company measured, reduced, and funded stays fully available.
