Analysis of energy efficiency development in the German and Colombian food industries

Using data at the three-digit level of aggregation, the study compares energy efficiency across sectors of the food industry for the period 1998-2005. Energy efficiency is analysed using the energy intensity indicator as well as a decomposition analysis. To determine the factors that have influenced energy efficiency performance. The results showed that both countries´ food industries improved energy efficiency. During the period of study, energy consumption in the German food industry increased by an average of 1.3% per year and the energy intensity decreased 7%, whereas the Colombian food industry decreased its energy consumption by an average of 1.9% per the year and the energy intensity decreased 11%. However, Colombian food industry needs 2.2 times more energy than German food industry to produce a unit of gross production. A decomposition analysis indicated that economic and technical factors have played an important role in the energy efficiency performance because increases in economic growth and technology improvements increase the industrial sector´s ability to improve energy efficiency. A second-stage empirical analysis revealsthat capital, material, investments and value added variables had a positive influence on energy efficiency performance in both countries. Energy prices are shown to have a positive influence on energy efficiency in the German food industry, whereas the sizes of enterprises and concentration processes played an important role on energy efficiency performance in the Colombian food industry.