Are European Union countries efficient or inefficient in energy use?

Abstract

Energy efficiency is one of the most effective methods of fighting climate change, achieving supply security and succeeding in resource effectiveness. For this reason, European Union (EU) countries follow mutual energy policies related to energy efficiency, with directives of the European Commission. This study used the Malmquist Total Factor Productivity Index to determine the extent to which 28 EU countries used energy efficiently in the output (GDP) production process in the period of 2005-2017. The results of the analysis indicated that the energy efficiency of EU-28 countries increased by an average of 1.1% for the period under review, and that the increases in efficiency varied between countries. Also, energy efficiency decreased only in Poland throughout the studied period. Although the Union has a common energy policy, it is thought that there are two main reasons for the energy efficiency differences in the member countries of the Union. The first of these is the energy structures of the countries, while the second is the energy policies of the countries that are shaped by their own internal dynamics.