Energy Consumption in the EU: The Role of Productivity and Efficiency-Driven Technology

This study investigates how productivity and productivity-intensive technologies affect energy consumption in selected EU countries from 1996 to 2021. Despite technological progress, fossil fuels still dominate, posing environmental and economic concerns. Using the AMG method, results show that multifactor productivity significantly reduces energy use, while productivity-intensive technologies offer smaller but meaningful reductions. In contrast to prior research linking technology to higher energy demand, this study highlights the importance of efficiency-focused innovation. Findings support the EU’s 2030 energy reduction target and suggest policymakers should prioritise productivity-intensive technologies, on-the-job training, and digital tools to decouple growth from energy consumption.