Assessing rebound effects in industrial efficiency for net-zero

A project for the UK Department for Energy Security and Net Zero (DESNZ)

In partnership with Cambridge Econometrics, Cambridge Industrial Innovation Policy (IfM Engage) conducted a study examining how industrial resource and energy efficiency measures may generate rebound effects that influence the UK’s pathway to net zero. Rebound effects occur when efficiency improvements lead to changes that increase overall resource or energy use, potentially undermining the intended benefits of climate and industrial policies. Understanding their nature, drivers and scale is essential for designing policies that deliver genuine emissions reductions.

The project explored resource efficiency rebounds in sectors such as steel, cement and concrete, automotive and construction through literature review, conceptual analysis and interviews with industry and academic experts. It also assessed evidence on energy efficiency rebounds in sectors including iron and steel, chemicals, refining, food and drink, pulp and paper, cement, glass and ceramics.

Findings highlighted the complexity of measuring true efficiency gains, the diversity of rebound mechanisms, and the need for improved evidence and metrics to inform effective industrial decarbonisation policy in the UK.