Energy Efficiency Management across EU Countries: A DEA Approach

We examine energy efficiency in the European Union (EU) using an integrated modelthat connects labor and capital as production factors with energy consumption to produce GDPwith a limited amount of environmental emissions. The model is a linear output-oriented BCC dataenvelopment analysis (DEA) that employs variables with non-negative values to calculate efficiencyscores for a sample of 28 EU member states in the period 2010–2018. We assume variable returns toscale (VRS) considering the natural inclination of countries to adopt technologies that allow them toproduce higher outputs over extended periods of time, which we observed through the trends ofincreasing labor productivity and decreasing energy intensity over the analyzed period. The averageEU inefficiency margin in the sample period is 16.0%, with old member states being significantlymore efficient (4.2%) than new member states (29.5%). Energy efficiency management does notimprove over time, especially in new member states that had substantially worse efficiency by 2018than in 2010. New member states could increase energy efficiency through the liberalization ofthe energy market, the support of energy-saving and technologically advanced industries, and theintroduction of measures aimed at increasing the productivity levels in the economy