The Energy Footprint management methodology
The current document represents the tasks one of the first Project Result “Energy Footprint management methodology” of the SMEnergy project, funded by the Erasmus+ programme, with the aim of developing a methodology for SMEs to measure their Energy Footprint and identify actions to optimise it and improve their energy use. The work presented here is organised according to the proposal. The project is conducted by a consortium of five partners from four European countries: Greece, Portugal, Bulgaria, and Cyprus. All partners have the technical expertise to achieve the project objectives and a wide experience in participating in and managing national and European projects.
The Project Result 1 of the SMEnergy project aims to create a methodological framework for energy footprint management. And the present task (task 1) represents the introduction chapter of that methodology.
This document is a desk research on: energy use/consumption; energy footprint; international standards; energy management; and case studies.
Since SMEs make up over 99% of all businesses and account for approximately 13% of global final energy consumption (Southernwood et al., 2021). Focusing on SMEs, while the environmental impact from an individual company may be low, the overall impact of a sector can be very high considering that the number of enterprises operating in the sector is large. It has been estimated that SMEs account for approximately 64% of the industrial pollution in Europe with the sector variations ranging from 60% to 70%. These figures are in line with SMEs' contribution to production and employment as SMEs employing almost 70% of the European workforce and producing close to 60% of the overall turnover from manufacturing and services (Calogirou, Constantinos, Sørensen et al., 2010). The contribution of SMEs to the energy efficiency improvement targets of the European Union is significant. Key concepts of the project are briefly defined in the following sections.
Southernwood, J. et al. (2021) ‘Energy Efficiency Solutions for Small and Medium-Sized
Enterprises’, p. 19. doi: 10.3390/proceedings2020065019.
Calogirou, Constantinos, Sørensen, S. Y. et al. (2010) SMEs and the environment in the European
Union, European Commission, DG Enterprise and Industry.
All the chain that goes from energy supply (extraction and exploitation of primary energy resources) to energy demand (energy-using units in industry, transport, buildings and other sectors) makes part of the energy system of a country or a region (European Environment Agency, 2015). The transformation of energy from the primary forms to forms that may be used by end-users for the performance of energy services do obligatorily involve a phenomenon designated as energy conversion (Hazen, 2021). Energy conversion represents a passage between different steps of an energy system, which may be classified mainly in (Grubler et al., 2012):
- Primary energy: the form of energy that is found in nature and that it has not still be submitted to any conversion process, and may be of non-renewable (fossil) nature or renewable;
- Secondary energy: the form of energy comprised by energy carriers (resulting from the conversion of primary energy), which are for instance electricity, heat and solid/ liquid/ gaseous fuels;
- Final energy: the form of energy that is distributed to the end-users (for instance, industry, transports and buildings);
- Useful energy: the form of energy that is comprised by energy services (resulting from the conversion of final energy) such as the one that is measured in services such as vehicle mobility, thermal comfort, manufacturing process heat and illumination.
The first step of the analysis of an energy system passes by the analysis of energy consumption. While in the context of SMEs the analysis of interest would be in terms of energy services, it is firstly necessary to understand the energy consumptions levels in the entire world, which may only be performed by analysing primary energy consumption. This analysis serves essentially to understand the resources that are being extracted from nature and the non-renewable/ renewable nature of the whole energy chain. In Figure 1, it is represented the evolution of primary energy consumption in the timeframe of 1965 – 2020.
Figure 1 Energy Consumption in the world in the timeframe of 1965 – 2020 (adapted from (Rodrigue, 2020))
As may be observed, while renewable energy resources use share have been increase in the last years, prominently since the mid-2000’s, the energy dependence of the entire world still relies on the use of fossil fuels. The decrease of the energy dependence on fossil fuels of the entire world (and thus the attainment of energy system decarbonization) and each country may be either performed by the increase of the use of renewable energy resources or the implementation of measures that allow improved energy conversion between each step of the energy system. In Figure 2, the energy use levels in and in-between each step of the world energy system are presented.
Figure 2 Energy use levels in each step of the world energy system from primary to useful energy (adapted from (Grubler et al., 2012))
As may be observed in the figure above, there are considerable energy losses parcels in the lower part of the diagram (which represents energy services, and thus useful energy). The main instrument for the decarbonization of the energy use in SMEs (apart from renewable energy integration) passes by the decrease of these losses, which passes by the implementation of measures that promote a reduced energy footprint, increased energy efficiency and improved energy management.
2.1. Energy Footprint
Energy Footprint is defined by Global Footprint Network as the sum of all areas used to provide non-food and non-feed energy. It is a measure of the area required to absorb CO2 emissions (Footprint, 2002), and thus depends on the sum of total CO2 emissions, in addition to hydropower land, forests for fuelwood, and cropland for fuel crops (Manufacturing Energy and Carbon Footprints (2018 MECS) | Department of Energy, no date).
The energy footprint allows us to better understand the spatial distribution of energy utilization as well as to compare energy consumption within different enterprise sectors. Identified areas of significant energy consumption or energy losses could indicate energy footprint enhancing opportunities by implementing appropriate energy management practices and energy efficiency guidelines, upgrading energy systems, or applying new technological solutions. Therefore, the energy footprint provides a macro-scale benchmark for the evaluation of energy consumption, and prioritization and opportunity analysis (Ewing et al., 2009).
Although energy footprint may not take at all times simple measurements, it highly depends on the measurement equivalent to carbon dioxide (CO2,eq), which is of most common and simple measurement. Each primary energy source is associated with an emission factor, and associating each of these factors to the energy consumption levels of each source it is possible to determine the total CO2,eq emissions (Penman et al., 2006). The promotion of energy efficiency and energy management reduces total GHG emissions, thus the total energy footprint. In Figure 3, it is represented the evolution of CO2,eq emissions in the most representative regions of the world.
Figure 3 Evolution of total CO2,eq emissions in the timeframe of 1960 – 2021 for each one of the most representative regions in the world (adapted from (Hausfather, 2021))
The elaboration of the international standards on energy use and consumption generally starts from the overall aim to decarbonize the energy systems, this is, reduce total CO2,eq emissions. Each policy then establishes its own strategies for such achievement, either passing by actions at the level of increasing energy conversion or either more directly using primary energy source with an associated less CO2,eq emissions levels.
2.2. Energy Efficiency
Energy efficiency is the use of less energy to perform the same task or produce the same result. Energy-efficient buildings use less energy to heat, cool, and run appliances and electronics, and energy-efficient manufacturing facilities use less energy to produce goods.
Energy efficiency is one of the easiest and most cost-effective ways to counteract climate change, reduce the use of fossil fuels, reduce energy costs and improve the competitiveness of businesses. Energy efficiency is also a vital component in achieving net-zero emissions of CO2 through decarbonization (Department of Energy - Energy Efficiency, 2010).
The implementation of energy efficiency improvement measures passes by the increase of the energy conversion between each step of an energy system. For instance, it passes by the decrease of the ratio between total final energy use and total primary energy use (FE/PE ratio), and also the ratio between total useful energy and total final energy use (UE/FE ration). In terms of the FE/PE ratio, typical values for existing conversion technologies include (Domingues, 2021; Silva, 2021):
- Natural gas transportation – Near 99%;
- Electricity transportation – Near 95%;
- Refineries – 95%;
- Gas turbine – up to 40%;
- Combined cycle (Gas turbine and steam turbine) – up to 60%;
- Water turbine – up to 90% (practically achieved);
- Wind turbine – up to 59% (theoretical limit);
- Solar cell – up to 43%;
- Fuel cell – up to 80%;
- Water electrolysis – 50% - 70%;
- Small electric motors – 30% – 60%;
- Medium electric motors – 50% – 90%;
- Large electric motors – 70% – 99.99%.
In terms of the UE/FE ratio, typical values for existing conversion technologies include (Domingues, 2021; Silva, 2021):
- Electrical resistance – Near 100%
- Electrical motor – Near 90%
- Boiler – Near 85%;
- Fluorescent lamp – Near 50%;
- Internal combustion engine – Near 30%;
- Incandescent lamp – Near 5%.
The promotion of energy efficiency may be performed by analysing potential improvements at the level of electricity use, thermal energy use and fuel consumption. At the level of electricity use, improvement measures essentially pass by the associated enhancements of electric motors, such as (Fernandes and Costa, 2016):
- Installation of variable speed devices (VSD's);
- Change of conventional motors to high-efficiency ones;
- Guarantee the maintenance of motors;
- Avoidance of motor oversizing.
In relation to thermal energy use and fuel consumption, improvement measures essentially subsist on the use of waste heat (waste heat recovery) (Castro Oliveira et al., 2020):
- Direct hot air recirculation as combustion air to combustion chambers;
- Installation of heat exchangers (air preheaters and economizers);
- Thermal energy storage (for dynamic supplies and demands).
More complex measures include power generation from waste heat (such as the one achieved by the installation of thermodynamic cycles) (Jouhara et al., 2018) and planning of water system that consider water recirculation as both as freshwater resource and recirculated heat medium (which causes savings in hot utilities to preheat water and cold utilities that cool down water to be discharged into the environment) (Boix et al., 2012).
2.3.International Standards for Energy Use and Consumption
The efficient energy use and consumption in each country of the world is secured by the establishment of several policies, that may range from regulations, directives, and recommendations. In Table 1, several international policies that are set to promote energy efficiency and a low-carbon economy are characterized.
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Plans and operations regarding energy production and energy consumption units, as well as energy distribution and storage are included in “Energy Management”. The main objectives of Energy Management to SMEs are climate protection by optimizing and reducing the consumption of energy, cost savings and resource conservation, without limiting the access to the needed energy for the user. It is connected closely to environmental management, production management, logistics and other established business functions.
The economic dimension is included by the following VDI-Guideline 4602 definition: "Energy management is the proactive, organized and systematic coordination of procurement, conversion, distribution and use of energy to meet the requirements, taking into account environmental and economic objectives". It is a systematic endeavour to optimize energy efficiency for specific political, economic, and environmental objectives through Engineering and Management techniques.
3.1.Energy Management Process
Energy management is the process of tracking and optimizing energy consumption from all business processes (incl. related devices, equipment to conserve usage in the premises where a company/ organization operates).
There are certain steps that a company shall follow to manage its energy consumption and use:
- Collecting and analysing continuous data related to energy consumption.
- Identify optimizations in equipment schedules, set points and flow rates to improve energy efficiency.
- Calculate return on investment. Units of energy saved can be metered and calculated just like units of energy delivered.
- Implement executive Energy optimization solutions.
- Repeat step two to continue optimizing energy efficiency.
3.2. SMEs Statistics on Energy Management
EU SMEs, due to low financial and operational capacity, have less technical human and financial resources. As a result, they have a lot of barriers in their effort to improve their energy efficiency, such as lack of awareness, low capital, difficulty to access financing, doubts around actual saving potential and the lack of technical human resources. There are national schemes trying to provide SMEs with technical resources (e.g., methodologies, best practices, technologies inventories and subsidies). Some of them require mandatory actions (energy analysis) to obtain such subsidies.
Improved energy efficiency is a major measure in climate change mitigation, as well as a crucial component for individual companies, to maintain and improve competitiveness. Energy Services are an often-stated promising means to deliver high improvement impact on energy efficiency. Energy services has mostly been targeted towards the building sector where often measures are similar across many buildings in a building stock, minimizing transaction costs in the procurement phase of an energy service contract. Less attention has been paid towards energy services in the industrial sector and even more so, for industrial SMEs.
On their own, SMEs don’t consume huge amounts of energy. But, taking under consideration that they represent about 99% of the business worldwide, their collective energy demand is a different story. The IEA (International Energy Agency) estimates indicate that around 13% of total global energy demand (that’s 74 exajoules for those keeping track) is consumed by SMEs. About 30% of SME energy demand could be eliminated by cost-effective energy efficiency measures, such as energy management software - that would save more energy than Japan and Korea consume in a year. Energy efficiency can also help the SMEs themselves. Cutting costs and allowing resources to be invested in more productive and profitable activities and make the company more competitive, innovative, and resilient. According to the IEA, “energy efficiency can deliver a wide range of other growth benefits [...] for example by improving productivity and product quality. Energy efficiency in SMEs can also contribute to [...] reducing reliance on energy imports and the need for investments in additional generation capacity, and lowering environmental impacts, such as GHG emissions and local air pollution.”. So, it’s clear that there are thousands of industrial processes, millions of SMEs and countless ways in which energy efficiency projects can be designed and implemented.
The European Commission’s Winter Package and the 2018 review of the EU energy efficiency directive have increased the target energy efficiency improvement to at least 32.5% by 2030. As such, energy audits targeting SMEs could unlock incredible energy savings potential in Europe. Yet, if SMEs implemented energy efficiency measures to their full potential, they could shave more than 20% off their energy bills. And that is something SMEs in Europe and beyond simply can’t afford NOT to do, especially after the economic crisis that seems to follow the after-pandemic era.
4.1. Introduction to Energy Management System
According to UNIDO (United Nations Industrial Development Organization – Charles Arthur, 2021) an energy management system (EnMS) is a framework for energy consumers, including industrial, commercial, and public sector organizations, to manage their energy use. It helps companies identify opportunities to adopt and improve energy-saving technologies, including those that do not necessarily require high capital investment. In most cases, the successful implementation of an EnMS requires specialized expertise and staff training.
According to the International Organization for Standardization (ISO), an energy management system involves developing and implementing an energy policy, setting achievable targets for energy use, and designing action plans to reach them and measure progress. This might include implementing new energy-efficient technologies, reducing energy waste, or improving current processes to cut energy costs.
An energy management system helps organizations better manage their energy use, thus improving productivity. It involves developing and implementing an energy policy, setting achievable targets for energy use, and designing action plans to reach them and measure progress. This might include implementing new energy-efficient technologies, reducing energy waste, or improving current processes to cut energy costs. There is a specific International Standard for Energy Management, namely ISO 50001 that provides organizations with a recognized framework for developing an effective energy management system. Like other ISO management system standards, it follows the “Plan-Do-Check-Act” approach/ process for continual improvement.
4.2. ISO 50001 Overview
ISO 50001 is designed to assist an organization improve its energy performance through making better use of its energy-intensive assets. Improved energy performance can provide rapid benefits for an organization by maximizing its use of energy sources and energy-related assets, reducing both cost and consumption. ISO 50001 is used by any organisation regardless their size all around the world. Its benefits can vary, from reducing the overall environmental impact and the enhancement of reputation up to the organisation’s cost cutting and the improvement of competitiveness. Finally, an organization will gain an increased assurance of legal and internal compliance; identify the variables affecting energy use and consumption and obtain increased understanding of energy use and consumption via communication.
The current standard is based on the management system model of continual improvement that is also used for other well-known standards such as ISO 9001 for Quality Management System or ISO 14001 for Environmental Management System. This makes it easier for organizations to integrate energy management into their overall efforts and thus improving the overall quality and environmental management.
According to www.iso.org the ISO 50001 provides a basic framework of requirements for organizations to:
- Develop a policy for more efficient use of energy
- Fix targets and objectives to meet the policy
- Use data to better understand and make decisions about energy use
- Measure the results
- Review how well the policy works, and
- Continually improve energy management.
The industrial sector is the most important energy consumer relatively to any other end-use economic sector. This is because energy is widely used within an industrial enterprise for the operation of manufacturing equipment, steam production, process heating and cooling, cogeneration applications, lighting, heating, and air conditioning in buildings, etc. Additionally, basic chemical feedstocks contribute to the overall energy consumption of the industrial sector. Specifically, the production of agricultural chemicals is based on natural gas feedstocks, whilst organic chemicals and plastics are manufactured using natural gas liquids and petroleum products(U.S. Energy Information Administration, 2016).
The International Energy Outlook of U.S. Energy Information Administration (U.S. Energy Information Administration, 2016) suggests three distinct types for categorizing the industrial sector, namely, energy-intensive manufacturing, nonenergy-intensive manufacturing, and nonmanufacturing, as shown in Table 2.
Table 2 Major groupings and representative industries of industrial sector, Source: U.S. Energy Information Administration (May 2016)
Food, beverage and tobacco manufacturing
Pulp & paper
Paper manufacturing, printing and related support activities
Inorganic chemicals, organic chemicals (e.g. ethylene propylene), resins and agricultural chemicals; includes chemical feedstocks
Petroleum refineries and cola products manufacturing, including coal and natural gas used as feedstocks
Iron & steel
Iron & steel manufacturing, including coke ovens
Primarily aluminium and other nonferrous metals, such as copper, zinc and tin
Primarily cement and other non-metallic minerals such as glass, lime, gypsum and clay products
Pharmaceuticals (medicinal and botanical), paint and coatings, adhesives, detergents and other miscellaneous chemical products, including chemical feedstocks
All other industrial manufacturing, including metal-based durables (fabircated metal products, machinery, computer and electronic products, transportation equipment and electrical equipment)
Agriculture, forestry, fishing
Agriculture, forestry and fishing
Coal mining, oil and natural gas extraction and mining of metallic and non-metallic minerals
Construction of buildings (residential and commercial), heavy and civil engineering construction, industrial construction and speciality trade contractors.
The classification of manufacturing industries to energy intensive and non-energy intensive is quite useful for the scope of the project. It implicitly identifies the industry sectors that should be prioritized in improving their energy footprint.
The industrial sectors, which are considered to be energy-intensive are: food, pulp and paper, basic chemicals, refining, iron and steel, nonferrous metals (primarily aluminium), and non-metallic minerals (primarily cement). These sectors account for about half of the total energy used by the industrial sector. It should be emphasized that the above industrial sectors considered are in line with the ones identified by the Department for Economic, Scientific and Quality of Life Policies of the European Parliament (Bruyn et al., 2020), which focuses on those industrial sectors that are covered in the EU Emissions Trading System (ETS) and have the highest share of CO2 emissions. Specifically, the European Parliament considers the following industries as energy intensive: Iron and steel sector, refineries, cement, petrochemicals, fertilizer, lime and plaster, paper and pulp, aluminium, inorganic chemicals, and hollow glass.
Bruyn, S. De et al. (2020) Energy-intensive industries: Challenges and opportunities in energy transition. Luxembourg.
It is well known that energy efficiency is not of high priority within SMEs and energy management tools are scarcely applied (Bröckl et al., 2014). Energy efficiency improvement investments in SMEs are quite limited. This is mainly due to the low relevant economic and time resources, as well as the low awareness of the multiple possible potential benefits. Additionally, SME decision-makers consider energy efficiency improvements to have a low priority compared to other investments, while there is a lack of SME staff with the appropriate skills and expertise to monitor and access the energy footprint. In the COVID-19 pandemic period, in particular, where the majority of the SMEs are struggling to survive, adopting energy efficiency measures is not affordable (Southernwood et al., 2021).
In this section, case studies of successful implementation of measures to reduce the energy footprint of SMEs from different sectors are presented. The desk research, which has been carried out by UPRC, has identified a number of relevant case studies related to different SMEs operating in different sectors both from Europe and the rest of the world.
6.1. Chemicals industry sector
SATECMA, a chemical producer with several production lines operates with an environmentally friendly vision for over two decades. At first their strategy was more reactive and was mainly focused on limiting the amount of environmentally dangerous or toxic components in their products. Later, they decided to follow a preventive approach even at the early product design phase. Recently, the company has implemented a number of measures to improve its energy use. More efficient climate control systems were installed, LED lamps in conjunction with better exploitation of natural light strategies were adopted, while a photovoltaic solar energy generation plant was implemented. All of these changes have allowed the company to reduce its energy consumption by 20%. This resulted to not only significant economic savings but also to the organization’s image improvement among customers, public institutions and suppliers (Green Revolution - Medium-sized companies show the way. Lessons from two spanish companies in the chemical industry, no date).
In the process of achieving an ISO 14001 certification, a UK chemicals company managed to decrease its energy consumption by more than 30%. The identification and elimination of leakages helped also to improve the thermal efficiency of its boilers resulting to considerably lower gas and steam bills (Calogirou, Constantinos, Sørensen et al., 2010).
Wacker Chemie AG decided to employ a highly efficient gas and steam turbine power plant in a combined heat and power generation mode. Thermal energy is distributed in the form of steam at different pressure levels. The heat released by the chemical reactions, in various production phases of the company, sometimes exceeds its own thermal energy needs. This energy surplus is utilized to cover the heat requirements of other companies, thus resulting to a lower primary energy consumption in the company’s power plant. The company has initially determined the relevant heat sources and heat sinks at the Burghausen site in Germany. Then, it integrated the heat generation of the central waste gas and residue incineration plants into existing steam networks. It also connected the surplus heat sources with heat sinks via local heating networks. Namely, thermal energy produced at the company’s site covers the thermal energy needs of a public swimming pool, an indoor tennis court and a gymnasium. The implemented changes resulted to significant energy savings. A saving of 421 000 MWh comes from the steam processes, whilst another 44 000 MWh saving comes from facility heating and hot water preparation (Energie - Atlas Bayern - Wärme Verbindet, 2011).
6.2. Food and beverage sector
The world-leading producer of Scotland’s national dish haggis conducted environmental and energy audits in 2008, which helped the company to identify the key cost-saving measures to be implemented. Regarding the energy efficiency measures, more efficient cooking methods were introduced resulting to gas bill reductions of the order of 15% from 2006 to 2008. The company also implemented several other measures such as staff training, installation of technologies to use waste heat of refrigerators, active, schedule-based, control of heating, cooling and lighting, and replacement of the lighting systems with more energy-efficient ones. The adoption of these measures led to the reduction of energy consumption and the associated carbon emissions. Additionally, the company participates in the Bright Green Placements (BEP), a placement program, where a student from an environmental field of study works for eight weeks on a particular environmental management problem, helping the company to achieve some of its main environmental management targets (Calogirou, Constantinos, Sørensen et al., 2010).
A brewery located in the city of Aying, Germany, is using a combined heat and power (CHP) system to cover its energy requirements. The company decided to redesign its CHP system to improve its efficiency. Specifically, the brewing and industrial hot water preparation units, as well as two other heating circuits were connected to the cooling circuit of the CHP system. An insulated tank with a water content of approximately 30000 litters was also installed, in order to store the thermal energy that is readily available and cannot be ‘consumed’ within the production processes. The installed CHP system provides an electrical output of 200 kW and a thermal output of 230 kW. Most of the electricity generated is used directly for the brewery’s energy needs. The excess electricity is fed to the public electricity grid and remunerated. Compared to the heat generation via a gas-fired boiler and a separate electricity supply from the public grid, the CHP system, which was installed, resulted to a reduction of production related CO2 emissions by more than 100 tons per year. The corresponding electricity consumption was also reduced by 20% (Energie - Atlas Bayern - Equitherm spart energie beim bierbrauen, 2018).
Another German brewery, Krones A, has developed an innovative process, called EquiTherm, with which primary energy requirements are reduced, via the recovery of waste heat from the brewing process itself, employing a specifically designed heat exchanger. At the same time, cooling energy and thus electricity are saved, while the fresh water requirements are drastically reduced. The developed system extracts energy from the brewing process itself at a particular point and it feeds it back at another point. As a result, savings of about 30% in thermal energy and 20% in electricity were achieved in the brewhouse (Energie - Atlas Bayern - Equitherm spart energie beim bierbrauen, 2013).
Rager bakery located in the city of Ansbach, Germany, is another example of a small company with less than 10 employees that was motivated by the environmental awareness and the rising energy cost to find creative solutions for potential savings. The company optimized the baking processes and the oven utilization, reduced to the minimum the utilization of refrigerators, improved the insulation of cold rooms, recovered waste heat from the refrigeration system in order to prepare hot water, adopted LED lighting technology, reduced the duration of the dishwasher’s short program from 2.5 to 1.5 minutes and employed a hybrid transportation vehicle. The achieved energy savings resulted to an annual approximate saving of 2500 € (Energie - Atlas Bayern - Bäckerei: Kleine Massnahmen, Grosse Wirkung, 2011).
Regarding another bakery in Germany, it was estimated that it could achieve an annual reduction of about 6.5 % in the total energy bill (≈ 4000 DM) and also lower the energy consumption per kg of processed flour from 1.36 kWh/kg to 1.28 kWh/kg by implementing simple energy management measures, such as appropriately maintaining of bake ovens, introducing LED lighting, improving hot water utilization, improving the insulation of pipes and recalibrating process thermostats (Kannan and Boie, 2003). This particular case study represents a very good example of the non-energy benefits that could be achieved in small enterprises through the implementation of energy-saving measures. It is reasonable to assume that the proposed changes could have the following positive effects: improved product quality and reliability (which could be attributed to better heating conditions of new ovens and to better lighting), increased productivity (due to lower heating time of the ovens) and improved workplace comfort and safety conditions (due to ovens and pipes insulation). Obviously, improved comfort leads to employee’s higher productivity and loyalty. Also, improved work safety conditions reduce the risk of accidents, which in turn leads to a reduction in insurance premiums (Cooremans, 2015).
Cupcakes of Westdale Village, in Canada, is another very small company that looked for ways to increase its efficiency and reduce the operating costs through the improvement of its lighting equipment. The shop took advantage of a program and upgraded its lighting equipment. Improved lighting conditions did not only result to an annual saving of almost $400 in the shop’s electricity bill, but it also made its products more attractive to customers (Lighting Upgrades Helped this Bakery Shine | Save on Energy | Case Study, no date).
6.3. Metal manufacturing industry
In steel re-rolling sub-sector in India, the adoption of new technologies led to significant energy costs savings. Coal demand was reduced by almost 30 kg per tonne of product. Also, the new technologies introduced helped to improve the overall productivity of relevant processes through the reduction of metal losses because of scaling and oxidation. This case of the Indian SME steel rerolling sub-sector indicates the significance of non-energy benefits achieved by the adoption of energy efficient technologies (Crittenden, 2015).
AMB Alloys Ltd is a ferroalloys producer and supplier located in the industrial city of Rustavi, Georgia. The company planned a capital-intensive investment in a new production plant. Nevertheless, the company was looking for a relatively short payback period in order to proceed with the investment for the new plant. AMB Alloys took advantage of a technical and financial support program. The company analysed the expected energy and cost savings, as well as the techno-economic aspects and the associated risks of the investment. The proposal was for an 842,000 € investment that could lead to a reduction of its energy requirements by about 4.3 MWh per year, which is equivalent to an annual saving of 220,000 €. Thus, the repay period of the investment through just the associated reduction in energy consumption is almost four years, a time period which is acceptable and meets the company’s targets. The new facility will also have lower CO2 emissions; namely, 1.7 tons per year lower (UNECE, 2021).
6.4. Construction sector
Lagodekhautogza Ltd is a Georgian construction company which specializes in road construction and the production of asphalt-concrete and cement-concrete. The company had to increase its asphalt-concrete production capabilities in 2020. However, the available production machinery was quite old and could not provide the required production volume. The company was also looking to find a way to decrease its manufacturing cost. The company received a free of charge technical assessment for the project through a government administered technical and financial support program and made an investment of 254,000 €, which was directed to the upgrade of its outdated machinery. The new equipment, with the higher production capabilities, was more energy efficient. The volume of production was increased by 55%. An annual energy saving of 160 MWh (equivalent to 10,000 €) was also achieved (UNECE, 2021).
Asphalt producing company “Mshenebeli 2019” located in Khashuri municipality, Georgia, implemented measures to improve efficiency. They decided to replace a 3000 kW natural gas burner on a rotating furnace with a solid fuel heat generator assembled at the Georgian Technical University. The heat generator uses agricultural waste -grape cake- as a (solid) fuel. The installed heat generator ‘consumes’ 600 kg of grape cake/hour which is equivalent to 300 m3/hour of natural gas. The objective of the company is to be able to substitute natural gas burner (requiring 480 000 m3 of natural gas/year) with the solid biomass fuelled heat generator. The grape cake is waste product of wine making and is currently quite happily provided by the wineries free of charge. The only cost associated with the grape cake, considered as a solid biomass fuel, therefore, refers only to the cost of transporting the grape cake from the wineries to the asphalt production site. The annual expenditure for the transportation of biomass fuel to the production site is about $33 600, while the annual expenditure of the natural gas consumed in the gas burner is about $160 000. The installation of the solid fuel heat generator, which use as a fuel renewable biomass instead of imported natural gas, results to an annual saving of $126 400. The implementation of the project, especially during the COVID pandemic, which is characterized by the increased tariffs for energy carriers, is very important. Apart from the economic savings for the company, one has also to take into account various other aspects, such as jobs preservation and enhanced competitiveness in the market of construction materials (UNECE, 2021).
6.5. Other manufacturing sectors
Elmwood, a company in UK, has an informal environmental policy, according to which the company focuses on investing in new technologies. Despite the relatively high initial capital cost, the adoption of new technologies could quite happily lead to significant saving, by improving process energy efficiency, as well as the utilization of materials. One of the company’s major investments was a CNC router. Work that was previously carried out on several machines could be carried out automatically and in a more efficient manner on just a single machine, inevitably leading to both energy and materials savings. Another energy-saving action was the introduction of a new exhaust system, which, unlike the old one, shuts down the vents when the machines are not in operation. This particular intervention had to do more with the well-being of the workers, rather than an energy saving aspect (which anyway is welcome an added benefit). Other interventions are rather low-key; utilization of low-energy light bulbs, staff training to be energy sensitive, i.e. to turn off the lights when they leave a room or building, etc. (Calogirou, Constantinos, Sørensen et al., 2010).
A company in Denmark, dealing with the production of liquid gases, decided to carry out a project aiming at reducing its energy consumption. A technology combining an ozone unit and a sand filter was implemented allowing the company to decrease the temperature of the required cooling water. As a result, the company achieved a reduction in energy consumption of 153 MWh/year, which is equivalent to an annual saving of $12,000. The implemented energy efficiency improvements led to additional benefits. In particular, there was a reduction in the amount of required process chemicals, the need for corrosion inhibitors and corrosion damage implying additional annual cost savings of $50,000, $12,000 and $20,000 respectively. The company also reported further (non-energy related) benefits, such as lower labour cost, less down time, lower negative environmental impacts and enhanced working environment (Fawkes, Oung and Thorpe, 2016).
Firozabad, a cluster of SMEs of the glass sector in India, implemented a simple waste heat recovery system exploiting the high furnace and exhaust gas temperatures characterizing glass manufacturing. Almost all the cluster units have installed a counter flow metallic recuperator made up of 5 stainless steel modules which would result to an annual energy saving of 25-30% for a payback period of 0.5 years (Crittenden, 2015).
6.6. Non-manufacturing industry sectors
Druckerei Senser, a printing company in Germany, reduced its power consumption by 30% installing particularly energy-saving printing machines. Since January 2008, Senser has been exclusively operating with hydropower green electricity. In addition, it has installed a new solar power system which produces almost 25% of its own electricity requirements. The roof of the entire production area was insulated before the installation of the solar power system in order to minimize heat losses. The company has acquired two new energy-efficient printing machines. Nonetheless, the company also decided to implement a system to extract the machines’ waste heat generated during printing and to use it as a heating source for neighbouring rooms. The heat is directed using a decentralized distribution network of suction pipes. The implementation of these measures resulted to the reduction of energy requirements for heating by 20% through the recovery of waste heat (Energie - Atlas Bayern - Klimaneutrales Drucken, 2011).
A study focused on analysing the energy saving potential of specific SMEs in energy intensive industrial sectors in Sri Lanka has been carried out. Results of the study showed that incorrect power factor adjustments, poor practice of switch off policy on lights and fans, inadequate modifications on lighting systems, compressed air systems, boilers, and machinery were the most significant factors contributing to energy inefficiencies. Furthermore, if prompt actions were to be taken for the above issues, it was estimated that the total energy saving potential for the selected firms would be about 20% - 30% of the total energy consumption. Moreover, this accounted for about 10% - 15% of the energy cost of the selected firms (Dilhani, Dissanayake and Pallegedara, 2020).
Reunion Island Coffee Roasters, a company located in Oakville, Canada, looked for ways to make its roastery, shipping and distribution facility more energy efficient. In late 2015, the company updated the lighting in the plant with new energy-efficient commercial LED lighting. The old lighting used to take up almost half an hour to reach full brightness, while the new LEDs created a brighter environment that made the relevant 75 employees of the company to feel safer. Additionally, the company installed six motion-activated occupancy sensors that turn on the lights in different sections of the plant only when people are working or passing through the corresponding area. That reduces the number of hours the lights are on which, in turn, leads to energy savings. It should be noted that the electricity cost associated with lighting was reduced by almost 25%. The company installed five smart thermostats in order to manage facility’s temperature in a more efficient way, i.e. to maintain a lower heating level when nobody is using the building. It also applied reflective tint to facility’s windows in order to reduce air conditioning requirements during warmer months. Reunion Island has also upgraded coffee roasting procedure itself. The company invested in an energy-efficient roasting machine for all of its whole-bean specialty coffee. This machine operates with 80% less energy than larger machines. Thus, Reunion Island could test out new roasting procedures, in a more efficient way, wasting less coffee in the process, and present its clients with better and more tasteful products (Coffee roaster serves up energy savings | Save on Energy | Case Study, no date).
Bröckl, M. et al. (2014) Energy Efficiency in Small and Medium Sized Enterprises. Copenhagen.
Southernwood, J. et al. (2021) ‘Energy Efficiency Solutions for Small and Medium-Sized Enterprises’, p. 19. doi: 10.3390/proceedings2020065019.
Calogirou, Constantinos, Sørensen, S. Y. et al. (2010) SMEs and the environment in the European Union, European Commission, DG Enterprise and Industry.
Energie - Atlas Bayern - Bäckerei: Kleine Massnahmen, Grosse Wirkung (2011). Available at: https://www.energieatlas.bayern.de/energieatlas/praxisbeispiele/details,37.html.
Energie - Atlas Bayern - Equitherm spart energie beim bierbrauen (2013). Available at:
Energie - Atlas Bayern - Equitherm spart energie beim bierbrauen (2018). Available at: https://www.energieatlas.bayern.de/energieatlas/praxisbeispiele/details,257.html.
Kannan, R. and Boie, W. (2003) ‘Energy management practices in SME - Case study of a bakery in Germany’, Energy Conversion and Management, 44(6), pp. 945–959. doi: 10.1016/S0196-8904(02)00079-1.
Cooremans, C. (2015) ‘Competitiveness benefits of energy efficiency : a conceptual framework’, Proceedings of the Eceee summer study, pp. 123–131.
Crittenden, P. (2015) Promoting Energy Efficiency in Small and Medium Sized Enterprises (SMEs) and Waste Heat Recovery Measures in India, 6th workshop for Energy Management and ActionNetwork (EMAK).
UNECE (2021) Guidelines and Best Practices for Micro-, Small and Medium Enterprises in Delivering Energy-Efficient Products and in Providing Renewable Energy Equipment in the Post-COVID-19 Recovery Phase, UNECE. doi: 10.18356/9789210052559.
Fawkes, S., Oung, K. and Thorpe, D. (2016) Best Practices and Case Studies for Industrial Energy Efficiency Improvement, Copenhagen Centre on Energy Efficiency. Copenhagen.
Crittenden, P. (2015) Promoting Energy Efficiency in Small and Medium Sized Enterprises (SMEs) and Waste Heat Recovery Measures in India, 6th workshop for Energy Management and Action Network (EMAK).
Dilhani, N., Dissanayake, J. and Pallegedara, A. (2020) ‘Energy saving potential in SMEs: selected case studies from the industrial sector in Sri Lanka’, Interdisciplinary Environmental Review, 20(3/4), p. 310. doi: 10.1504/IER.2020.112595.
It is estimated that the average SME could reduce its energy bills by 18 – 25% by adopting energy efficiency improvement measures with an average payback period of less than 1.5 years. It is also estimated that 40% of these savings do not require any capital investment (UK Department of Energy & Climate Change, 2015). In this section, some best practices and guidelines for energy footprint reduction of SMEs are presented. The proposed measures could be simple and cheap (or even free of charge) or more complex and costlier. They could refer to different sections or aspects of the enterprise operation.
7.1. Measures related to operational processes and maintenance for energy footprint reduction
There are various simple measures related to operational and maintenance activities that can be implemented within SMEs to improve their energy efficiency (Fawkes et al., 2016; Fernandes et al., 2016):
- Maintenance activities should be carried out by specialized and experienced technical staff. There should be sufficient time to complete the relevant maintenance work according to relevant quality standards. Following a maintenance routine and a mid-term schedule is of outmost importance. In the case of replacement activities, the spare parts to be used should be the most modern and efficient ones.
- In the case of recurring plant failures, it should be ensured that the root causes are identified. For this purpose, experiments and tests should be conducted and everyone must contribute to uncover them. It is very important to ensure that any root cause should be addressed effectively without causing another failure elsewhere in the facility.
- During the installation of new equipment or machinery, it must be ensured that all the relevant parts and components are installed properly following the guidelines of the manual(s) provided by the manufacturer. Additionally, the actual installation should be reviewed carefully before handover in order to ensure that it is as per design.
- Regarding equipment size, it should be ensured that equipment specifications meet the operational requirements and match the actual demand without excess capacity.
- Regarding equipment operation, it should be verified that the relevant machinery can be turned off easily and safely when it is not being used. Facility and equipment safety rules should be strictly There should be safety valves and appropriate protective devices that ‘guarantee’ the safety of the facility and the installed machinery. The ability also to restart facility’s operation at short notice is very important for achieving improved energy efficiency.
- If there is a variety of available machines one should choose to use the ones that exhibit the highest efficiency. It is evident, therefore, that production managers supervisors, and/or staff should be aware and have good knowledge of the minimum, normal and maximum operating conditions of all the available equipment.
- Production processes should be designed in such a way so as to minimize idle time of machinery. Also, there should be an effort to stop machines’ operation as soon as possible and start them as late as possible. Production processes should be carefully monitored and reviewed aiming at identifying potential for efficiency improvement.
- It should be ensured that all thermal and electrical insulation is in good condition minimizing heat losses and eliminating electricity leakages.
7.2. Measures related to the thermal insulation of buildings for energy footprint reduction
There may be significant energy saving potential for enterprises in the buildings they occupy. The importance of monitoring in the energy management of buildings has already been analysed. Improving the building fabric via the application of appropriate thermal insulation leads to a reduction of heat losses, thus, helping to achieve considerable energy (and operational cost) savings. Such a solution could be sometimes quite costly and labour intensive. Nevertheless, there are various simple and low cost measures that can enhance the energy efficiency of existing buildings (Fawkes et al., 2016; IPCC, 2006):
- Windows present a common source of heat losses in buildings. For that reason, their frames should be regularly checked and maintained in good condition in order to ensure that they can be closed tightly and are draught-proof. Single glazed windows should be replaced with double or, if it is possible, with triple glazed ones. The application of proper shading systems could also prevent building spaces from over-heating.
- Like windows, doors could also be tested in order to ensure that they are draught-proof and can be closed tightly. The replacement of the existing doors with thicker ones and the implementation of self-closing mechanisms could also help to control the temperature of internal spaces consuming less energy.
- Walls and roofs should be regularly checked in order to spot existing gaps or holes which should be repaired/closed applying appropriate filling materials. Additionally, dedicated audits could be carried out in order to explore the potential of reducing thermal losses through the application of proper thermal insulation.
7.3. Measures related to heating and cooling for energy footprint reduction
Improving and/or modifying HVAC systems could contribute significantly to achieving energy efficiency in office buildings, production plants and other facilities of SMEs. HVAC systems should be properly regulated in order not only to ensure appropriate comfort and health living conditions for the staff of the organization, but also to minimize its energy consumption. The main parameters that should be monitored and controlled are: humidity, temperature and air quality. Some simple and practical measures that ensure good and efficient operating conditions of HVAC systems include (Fawkes et al., 2016; UK Department of Energy & Climate Change, 2015):
- Appropriate control systems that regulate room temperature should be employed. Office temperature, for instance, during winter months (heating operation) is recommended to be set to 19°C. Obviously, it could be set lower than 19°C in corridors, storerooms and areas of higher physical activity. In the summer (cooling operation) the corresponding air temperature is recommended not be lower than 24°C. Regarding cooling temperatures, there is an empirical rule according to which an increase of the set cooling air temperature by 1°C will result to an increase of energy consumption of the order of 3% by the chiller.
- Cooling systems release/reject heat to the environment, namely to ambient air. It is evident, therefore, that in order cooling systems to operate efficiently, they should have good and unobstructed access to ambient air. Thus, the positioning of cooling units with respect to existing furniture, equipment and/or machinery is very important. Space restrictions and/or poor engineering judgment might result in positioning cooling units close to hot air exhausts or in a way that they have restricted ambient air flow, inevitably lowering the overall efficiency of the system. Facility space arrangement should cater for cooling systems to have unobstructed access to the coolest possible ambient air.
7.4. Measures related to lighting for energy footprint reduction
Simple measures, techniques and technologies could be applied in order to reduce the energy consumed by lighting systems. The most common and efficient measures are presented and discussed below (Fawkes et al., 2016; The Business Case for Power Management | ENERGY STAR, n.d.; UK Department of Energy & Climate Change, 2015):
- There are sensors and automatic devices that can identify human presence in a room/space of a building or a facility. Such devices could be deployed to turn on the lights of the corresponding room/space only when the room/space is occupied.
- There are standards and norms that specify the lighting level in a room/space according to the activity that is being carried out in the room/space. In order to achieve energy savings over-lamping should be avoided.
- All incandescent lightbulbs should be replaced by more energy-efficient LED lighting in order to save energy.
- It is often highlighted that company spaces do not exploit to its full potential natural lighting. Designing spaces in such a way so as to use natural light from windows and/or skylights at its maximum, has almost no cost, mitigating at the same time electricity demand for artificial lighting. This is why objects that block windows, e.g., filing cabinets, should be relocated, while the space arrangement should always aim at maximizing the use of natural light, e.g., working desks should be positioned near windows.
7.5. Optimal water chemistry as a measure for energy footprint reduction
Improving water quality in industrial SMEs is very important. Water in liquid state or in its gaseous state, i.e., steam, is commonly employed to carry and transfer heat within a plant, equipment, thermal devices, etc. Water is not pure; it contains various elements such as mineral salts, dissolved organic matter, and microbiological organisms. Although the quantities of these elements in water are minute, they adversely affect water properties and the operational efficiency of thermal equipment and devices of a production plant. It is imperative, therefore, to control and monitor water quality closely. Including regular water testing in maintenance schedules of SMEs could ensure improved quality of feed water into boilers and a reduction in energy consumption, and in water purchase and treatment bills (Fawkes et al., 2016).
7.6. Measures related to process design and energy supply for energy footprint reduction
Various simple and affordable measures/actions to achieve energy savings have been already presented. Nevertheless, the highest energy efficiency improvements could be achieved through extensive changes related to process design and/or energy supply. Compared to simpler measures, extensive changes are always associated with high (investment) cost and the corresponding high business/financial risk. Such changes might include the implementation of appropriate CHP plants, the redesign of production lines and/or procedures, the application of sophisticated prediction, simulation and control techniques, and the connection of the facility to the local heating or cooling network to channel waste energy or heat (Zhang et al., 2021).
Renewable sources and energy storage
SMEs have a high potential for the installation of on-site rooftop solar PV systems. Both for the manufacturing and services sectors, as much of the relevant processes are electrified, it is expected that their energy load demand could be matched with periods of high solar generation. Solar water heating could be also adopted as an alternative for heating or pre-heating. This allows water to be heated well above 80˚C. Additionally, onsite battery storage might be also worth considering as battery prices decline. Batteries enable not only a greater on-site exploitation of solar PV systems throughout the day, but they also provide a backup option in the event of grid failure. For the food and beverage sector, in particular, energy could be also stored thermally in water, phase changing materials, or in the bulk mass of food products in refrigeration (Food and Beverage | Energy.Gov.Au, n.d.; Royo et al., 2019)
Combined heat and power (CHP)
Conventional (thermo-electric) power generation technologies, exhibit relatively low fuel-to-power efficiencies, simply because considerable amounts of high-temperature heat are lost to the environment through the stack. This is the reason why common conventional (thermal) engines exhibit energy efficiency rates which do not normally exceed 38% - 40%. Specifically, energy efficiency rates for reciprocating engines are in the range of 28% - 38%. Energy efficiency rates of small gas turbines (nominal power up to 5 MW) vary between 20% to 25%, whilst the corresponding efficiency figures for bigger gas turbines (nominal power between 5 MW and 500 MW) are in the range of 25% to 35%. Modern gas turbine power plants with a nominal power higher than 500 MW might reach efficiency rates close to 50%. CHP technology captures and utilizes the thermal energy (heat) which is released (lost) to the environment. The captured thermal energy can be used to produce steam, which in turn can drive a steam turbine to generate electricity. At a smaller scale, CHP systems, industrial gas turbines or reciprocating engines fuelled by gas or oil are employed. Apart from electricity generation, the captured heat can be used in other thermal processes such as steam generation or water heating. Typically, the overall efficiency of CHP plants is much higher than the one exhibited by conventional power plants, namely of the order of 75% – 85% (Fawkes et al., 2016).
It is estimated that waste heat represents about 20% – 50% of the overall industrial energy consumption. This is because waste heat can be generated in several forms within an industrial SME, e.g., as hot exhaust gases, cooling water, or heat loss from equipment surfaces and heated components. All thermal industrial processes may reduce their heat demand by utilizing part of these heat losses, appropriately termed as recovered (waste) heat, employing heat (recovery) exchangers. The captured heat is commonly used to preheat the inputs to heat chambers reducing the overall energy demand of the relevant process. Recovered heat may be used by a neighbouring industrial facility. Currently, there are various heat recovery technologies available that can be implemented in industrial plants. In order this technological option to be successful, there should be an easily accessible source of waste heat and a relevant industrial or commercial heat demand to be satisfied, as well as the appropriate recovery technology. SMEs that intend to implement waste heat recovery technologies, should carry out special audits by appropriate staff and/or advisors in order to determine the requirements of their industrial facility and evaluate the technoeconomic feasibility of this solution (Fawkes et al., 2016; Jouhara et al., 2018).
Waste heat to power
The temperatures involved in production processes of certain industrial sectors might be above 1,000°C. Typical examples of such industrial sectors are steel and cement industries. Their corresponding waste heat generated is associated with temperatures reaching 750°C. In some other processes, such as CHP plants and boilers, waste heat might be available at considerably lower temperatures ranging between 160°C and 180°C. The generated waste heat can be converted to power, following the approach that is commonly known as Waste Heat to Power (WHP) technology. Different WHP technologies can be implemented depending on the temperature of the available waste heat. Waste heat available at high temperatures, for instance, is appropriate for the preparation of steam which may be used for electricity generation employing a steam turbine. On the other hand, waste heat available at relatively lower temperatures may be also used to generate electricity with a technology quite similar to the one of steam turbines. In this latter case, however, the working fluids to be used, should have a boiling point much lower than that of water. It is evident, therefore, that industrial SMEs that generate high temperature waste heat should certainly investigate WHP options in their effort to enhance their energy efficiency and reduce their energy footprint (Fawkes et al., 2016).
UK Department of Energy & Climate Change (2015) SME Guide to Energy Efficiency, Department of Energy & Climate Change.
Fawkes, S., Oung, K. and Thorpe, D. (2016) Best Practices and Case Studies for Industrial Energy Efficiency Improvement, Copenhagen Centre on Energy Efficiency. Copenhagen.
SMEs make up over 99% of all businesses and account for approximately 13% of global final energy consumption, meaning that their contribution to the energy efficiency improvement targets of European Union is crucial. It has been found that energy efficiency is not a high priority for SMEs due to high investment costs, lack of profitability, lack of awareness and lack in time and resources to work. There are many case studies of successful implementation of measures reducing the energy footprint of SMEs from different sectors showing that the barriers to energy efficiency improvement could be overcome. Additionally, there are several measures related to heating, cooling, lighting, production equipment, process design and energy supply that could be implemented to reduce the energy footprint of businesses. Many of these measures are simple, require zero or low capital cost and would have other benefits, such as personnel satisfaction and productivity improvement. However, there are step changes related to processes design and energy supply that could be implemented, resulting to significant energy and carbon footprint reduction. These changes require considerable investments from the SMEs, but they have relatively small payback period due to the energy and cost savings.