In order to achieve sustainable development and meet their green growth objectives, governments need to facilitate the efficient use of natural resources. In many countries, the agro-food sector is a significant consumer of fossil fuel-based energy. Therefore, improving the energy-use efficiency of the agro-food chain should be a key priority and a core element of green growth strategies.

Almost all activities in the food system depend on some form of energy, which is currently mainly provided by fossil fuels. The need to use scarce natural resources efficiently, reduce greenhouse gas emissions, minimise energy costs and foster the competitiveness of the agro-food sector highlights the importance of the energy efficiency issue: using less energy to provide the same level of output and services. Improving the energy-use efficiency of the agro-food chain is a key priority in several OECD countries and a core element of green growth strategies.

Energy is crucial for economic growth and a critical component in the ability of the agro-food sector to improve productivity, competitiveness and sustainability. Improving the efficiency of energy use – using less energy to provide the same level of output and service – is an important tool that policy makers can use to ensure a number of positive outcomes that can deliver several government priorities, from economic growth to greenhouse gas reduction to energy security and food security. To set the scene this Chapter discusses the increasing demands for energy throughout the food chain. The synergy and overlapping policy goals between energy efficiency, food waste and GHG emissions mitigation agendas are noted, and conceptual and methodological issues involved in measuring energy use and efficiency are highlighted.

Energy, as a production input, is an essential element affecting the profitability and competitiveness of the agricultural sector. In addition, agriculture might become an important potential source of renewable energy and thus provide significant economic opportunities for farmers and the rural economy, as well as improving the environment. This Chapter focuses on the issue of energy use and efficiency in agriculture. It presents some empirical evidence on the current situation and trends in energy consumption and energy efficiency for the agricultural sector. It also discusses the efficiency gain potential associated with different product categories (e.g. arable crops, horticulture, meats and dairy) and a number of options to improve energy efficiency on-farm are considered.

Drawing on existing information which is readily available for OECD and some non-OECD countries, this chapter reviews the current state of knowledge with respect to energy use and efficiency beyond the farm – food processing, food retailing restaurants and catering. Key drivers and trends in the energy use and efficiency are highlighted, along with opportunities for and constraints upon improved efficiencies.

While agro-food chain businesses – e.g. farms, food processors, retailers, distributors – vary substantially in terms of their scale, capital availability, operations and technology used, all generally tend to rely on energy for machine operations, lighting, heating, ventilation and air conditioning (HVAC), water and waste management. This Chapter first discusses the role of consumers in improving energy use and efficiency of the food chain. It then considers a sample of energy efficiency measures which are generally applicable to all stages of the food chain – both relatively low-cost operational changes and more substantial measures which require further investment. It looks beyond energy conservation measures, to include waste and water reduction and waste-to-energy investments as potential “win-win” means to reduce food chain fossil fuel consumption and waste, in addition to GHG emissions.

Notwithstanding progress, substantial potential for improving energy efficiency exists across the food chain. The existence of multiple barriers – policy, structural, behavioural and funding – discourages the private sector, including farmers, from making the best economic decisions. This chapter discusses these barriers and examines policies which could improve the energy efficiency of the food chain. Selected examples of country initiatives are also presented. Policies that seek to improve energy efficiency must also consider the synergies and trade-offs with policies addressing such issues as productivity, water use, and health and food safety.