Policymakers are neglecting energy efficiency as one of the main tools to lower emissions and overly focusing on the need to boost renewable power, according to the head of Denmark’s largest private industrial group.
Kim Fausing, chief executive of Danfoss, told the Financial Times that while there was “good understanding and urgency” on building up renewable power, there was not enough attention on energy efficiency issues such as reusing excess heat from industrial processes.
“The real crisis is that we’re not driving energy efficiency in the way we could. It’s not really happening at the speed that is needed. The political world is not talking about this,” he added.
Danfoss, which is active in both energy efficiency and renewable energy, is one of European industry’s main players in the green transition, offering products such as heat pumps, data centre cooling systems, and electrification of machines and transport.
The Danish group, which is owned by its founding family and a related charitable foundation, benefited from “very high growth momentum” last year around the green transition, according to Fausing.
Sales last year increased by 36 per cent to €10.3bn, while pre-tax profits rose by 16 per cent to €949mn.
Danfoss has had particular success in the US where its sales have increased by almost 150 per cent in the past two years as it benefited from a move towards green technology championed by the Biden administration and its Inflation Reduction Act.
Fausing said that the US was “more visionary” than Europe. “It’s very clear that Europe definitely needs to step up the game. I hear a lot of talk about the intention to do something. But it needs to be concrete,” he added, citing in particular the need to focus on the chip industry.
On energy efficiency, the Danfoss boss pointed to the potential of harnessing excess heat from industrial processes, which in Denmark represent more than double its famed offshore wind capacity and in the Netherlands is more than its entire demand for heat.
“That is not being talked about very much, but one-third of decarbonisation has to come from efficiency. It is not sexy. It is smaller things that you need to do. But it’s difficult to understand because the payback times [on investments] are very small. For some reason, it doesn’t get the attention renewables do,” he added.