Industry 4.0 and energy in manufacturing sectors in China

Digitalisation in manufacturing (or “industry 4.0”) is expected to improve energy efficiency and thus reduce energy intensity in manufacturing, but studies show that it may also increase energy consumption. In this article, we investigate to what extent the degree of industry 4.0 is linked to energy consumption and energy intensity in ten Chinese manufacturing sectors between 2006 and 2019. We approximate the degree of industry 4.0 by combining data on a) patent intensity of industry 4.0-related technologies and b) industrial robot intensity. Our results indicate that there is no significant overall relationship between the degree of industry 4.0 and energy consumption or energy intensity, in contrast to some earlier studies in the Chinese context which find energy intensity reducing effects of digitalisation. We argue that industry 4.0 in China might have fewer energy related benefits than expected by politics and industry. Growth-inducing effects and outsourcing of energy-intensive manufacturing tasks, for instance, may counteract efficiency-related savings. To decarbonise manufacturing in line with China's proclaimed objective of carbon neutrality by 2060, policy makers and industry should identify specific opportunities and take seriously risks of industry 4.0. The focus should be on reducing absolute energy consumption as opposed to energy intensity, which may disguise digital rebound effects; and on integrating renewable energies, particularly in the most energy-intensive sectors (metals, chemicals, non-metallic minerals). [Display omitted] •The relationship between energy indicators and Industry 4.0 (I4.0) in Chinese manufacturing sectors is being analysed.•No significant overall link can be found between I4.0 and energy consumption or energy intensity.•In sectors with low energy consumption, I4.0 is associated with increasing energy use.•In highly digitalised sectors, I4.0 is associated with decreasing energy intensity.•Sustainability policies should consider the risks of digital rebounds, heterogeneous technology effects, offshoring and output increase driven energy intensity reductions through I4.0.