Efficiency Reimagined: The next phase of China’s industrial energy transition 

In 1976, RMI cofounder Amory Lovins introduced the “soft energy path,” centered on energy efficiency, renewable energy, and aligning energy systems with end-use needs. Today, those principles are newly relevant as energy insecurity, price volatility, supply-chain disruption, and AI-driven electricity demand place mounting pressure on energy systems. 

Efficiency is a core lever of the energy transition. Paired with electrification, clean energy, and demand-side management, it can reduce waste, lower costs, and unlock more value from existing infrastructure, often faster and more economically than expanding supply alone. 

China’s industrial energy-efficiency journey to date provides an important case through which to examine this global issue. As one of the world’s major industrial and manufacturing economies, China has spent decades advancing energy conservation, phasing out outdated capacity, improving energy efficiency in key industries, and optimizing its industrial structure. Across multiple energy-intensive sectors, China has built replicable and sustained practices for improving energy efficiency.  

This report reviews the main stages, practical achievements, and underlying logic of China’s industrial energy efficiency development. It analyzes the key shifts from energy conservation and equipment retrofits toward standards-based guidance, system-level improvement, and green supply-chain development. It also looks ahead to the strategic value of industrial energy efficiency in advancing energy security, carbon peaking and carbon neutrality, new industrialization, and the development of green supply chains. 

Continuous improvements have translated targets into measurable results and shifted China’s industrial growth away from high energy inputs toward efficiency. Since 2005, energy consumption per unit of value added among above-designated-size industrial enterprises has fallen from 2.6 to 1 ton of coal equivalent, a cumulative reduction of 61%.