Swedish perspectives on energy efficiency

Upgrade to High-Speed Internet for only ₱1499/month!

Enjoy up to 100 Mbps fiber broadband, perfect for browsing, streaming, and gaming.

Visit Suniway.ph to learn

Last week, the Swedish Embassy and Business Sweden hosted a briefing on Swedish perspectives on energy efficiency in the industrial sector at the Manila Peninsula, specifically to highlight the need for the Philippine energy sector to adopt better regulation and lower cost pressures.

In her welcoming remarks, Sweden’s Ambassador Anna Ferry cited that Sweden has long been recognized as a global leader in sustainability and innovation.

Sweden, she pointed out, “invests an equivalent of 3.5 percent of our gross domestic product (GDP) in research and development, or three times more than the global average (which is at 1.2 percent).”

Seventy percent of the funding, she said, comes from the Swedish private sector. This has enabled Swedish companies to pioneer solutions in energy efficiency, industrial modernization and economic circularity.

Sweden, she said, has reduced greenhouse gas (GHG) emissions by more than 30 percent since 1990, while maintaining high economic growth for mature economies standard, “a clear demonstration that growth, competitiveness and sustainability can go hand in hand.”

Sustainability, she stressed, is part and parcel of the business model of companies to pioneer cutting edge solutions.

In the World Competitiveness Ranking 2024 by the International Institute for Management Development in Switzerland, Ambassador Ferry said, Sweden is ranked number six among 67 countries. “So we must be doing something right.”

She, thus, noted that “We all want to be more competitive. Be it a country as a whole or individual companies. We all struggle to implement the critical factors that make a difference.”

However, Ambassador Ferry stressed that “For the Philippines, where electricity prices remain among the highest in Asia, energy efficiency is not just an environmental imperative – it is a business imperative and a societal imperative.”

She expressed the need “to promote economic growth, job creation and ensure self-sufficiency of necessities.”

Energy efficiency, she said, is often called the “first fuel” because it is the most cost-effective way to reduce emissions and improve resilience.

Citing the first ever Business Sweden “Climate Survey of Swedish Companies in the Philippines 2025,” she referred to the study of the Philippine energy efficiency landscape in the industrial sector.

The findings, she said, highlight significant opportunities for collaboration, particularly in food and beverage and manufacturing, which accounts for one of the largest shares of industrial energy use. The insights, she added, can help identify strategic interventions and partnerships to accelerate adoption.

The energy briefing was attended by Patrick Aquino, director of the Energy Utilization Management Bureau of the Department of Energy, Alexander Abalaza, president of the Philippine Energy Efficiency Alliance, leaders from the private sector, representatives of business associations and Swedish companies.

Among the issues highlighted during the briefing was that regulation and cost pressures are pushing energy efficiency forward.

Electricity cost in the Philippines remains among the highest in the ASEAN (at an average electricity price of $0.18 per kWh, the second highest), adding economic pressure. Unfortunately, adoption of energy efficiency measures still lags due to limited capital and technical knowledge, especially among small and medium enterprises or SMEs.

Many firms meet the minimum requirements of the Energy Efficiency Act, but it was acknowledged that compliance is viewed more as an obligation rather than a pathway to operational savings or higher competitiveness.

On the other hand, multinational companies with Philippine operations use energy efficiency aggressively as a cost-reduction lever, driven by the country’s high electricity prices and the need to remain competitive against lower-cost sister plants in the region.

Energy Efficiency Plan (EEP) financing exist, yet SMEs rarely access them due to complex requirements or plain lack of awareness.

Larger companies, on the other hand, are generally reluctant to take on additional debt and instead prioritize investments with short payback periods, limiting the scope of deeper energy efficiency upgrades.

Thus, the Philippines, in the Competitive Industrial Performance Index, ranks 45th out of 153 countries.

Among the barriers affecting energy efficiency adoption growth are: limited awareness of available technologies, implementation models and financing options constrains adoption.

Likewise, technical capacity to structure and develop bankable EEPs remains insufficient, particularly among SMEs, and audits still focus on core process lines, leaving auxiliary systems under assessed despite significant energy use.

Restricted access to capital slows down implementation, and there is high dependence on donor agencies for funding the pilot programs.

On the other hand, it was acknowledged that the EE Act continues to evolve, strengthening regulatory pressure and shaping investment behavior. There is also increasing pressure on industries to improve energy performance and decarbonize operations to attain 75 percent GHG reduction by 2030.

Emerging first-movers, it was also noted, are creating early traction in energy efficiency adoption and local development banks are increasingly positioned to provide project financing for EEPs, while international financing institutions are providing technical assistance, capacity building and funding support, and strengthening market readiness.

Notable was the perception that industrial firms are beginning to shift from compliance-based behavior to more strategic and technology-based EE practices.

It has been observed that there is a gradual move from price-driven decisions to value-driven improvements, with large enterprises setting higher performance standards. There is also increasing adoption of digital tools, such as monitoring systems, smart meters, dashboards to improve visibility of consumption.

Export-oriented firms now face rising EU sustainability requirements, accelerating EE and decarbonization efforts.

This is complemented by rising interest in rooftop solar, and waste-to-energy to counter high electricity prices and grid dependence.

There is also growing energy service company or ESCO activity that enables shared-savings and performance-based project delivery.

Furthermore, multinational companies and large local firms are aligning with global ESG targets, integrating EE into broader decarbonization strategies.

It was also noted that industrial zones are exploring shared services to achieve efficiency at scale.