Global performance in energy efficiency—measured by the rate of change in primary energy intensity—improved by an expected 1.8% in 2025, up from around 1% in 2024, according to a new report by the International Energy Agency (IEA). The agency’s Energy Efficiency 2025 report notes that although global performance is improving, it’s not advancing fast enough to meet the 4% annual improvement target set at COP28, the United Nations climate change conference in 2023, in which nearly 200 governments agreed to work together double the global average annual rate of energy efficiency improvements by 2030.
Here’s what that means for U.S. building owners and facility managers—and the role buildings play in getting progress on track.
Where U.S. Buildings Are Falling Behind
The report noted four trends that are holding back progress in energy efficiency. All four affect buildings in North America.
1. Industry progress on energy intensity has slowed. Around two-thirds of global final energy demand growth since 2019 has been concentrated in industry, according to the report. At the same time, progress on energy intensity by industry has slowed down. The average annual rate of industrial energy intensity improvement fell to under 0.5% since 2019, compared to almost 2% in the previous decade, while energy demand has accelerated. “This global shift towards more intensive energy use in industry is offsetting gains made in other sectors and is weighing down overall efficiency progress,” the report noted.
2. Energy efficiency standards aren’t keeping up. Many appliances on the market today are only half as efficient as the best available models, according to the report. Technologies have become more efficient, but energy efficiency standards are not progressing at a similar pace. For example, the efficiency of lightbulbs has doubled in the last 15 years, but minimum performance standards have only gone up by 30%, the report explained.
3. Cooling-related electricity demand is rising. More people across the globe have access to air conditioners, which is causing electricity demand to rise. Weather patterns have also resulted in more worldwide demand for cooling during warm seasons. The increased demand has been met—but it’s met with equipment that’s not as efficient as it could be. The report notes that “if every air conditioner bought since 2019 had been the most efficient available, the world could have avoided electricity demand growth equivalent to the demand growth from data centers over the same period.”
4. Renewable supply isn’t rising as fast as electricity demand is growing. Electricity demand has grown two to three times faster than overall energy demand since 2019, the report said. But renewable energy supply isn’t adequate to meet these demands, forcing utilities to rely on inefficient generation sources, such as fossil fuel generation, to meet the demand.
Implications for Buildings
Much of the report discusses areas for improvement in other countries, but there are several takeaways for U.S. building owners and operators.
1. There has been efficiency progress in new and existing buildings globally, but there is still room for improvement. China, the United States, and the European Union account for around half of global energy demand in buildings. In the U.S., energy use in buildings today is similar to 2010 levels, while in the EU, building energy demand declined by 20% over the last 15 years.
2. Energy efficiency retrofits are a good investment. Energy-related retrofits provide long-term benefits, especially as gas and electricity prices remained elevated in many major economies compared to five years ago, the report said. Rising energy prices increase the potential benefits of retrofits.
3. Digital optimization can deliver big savings. Complex commercial buildings stand to benefit the most from what the report calls digital optimization—using advanced sensors and controls, communication, fault detection, and automation. When applied on its own to existing facilities, this type of optimization can deliver energy savings between 5-40%, the report said.
4. Sustainable technologies are becoming the more affordable option. More efficient technologies can have a higher price tag, according to the report, but as many facility managers already know, the whole-life cost benefits of using less energy can outweigh those of less efficient models. One of those benefits is making energy costs more predictable. A 2025 IEA survey on industrial competitiveness revealed that a majority of responding firms cited energy efficiency as their primary defense against energy price volatility.
