Does ISO 50001 adoption reduce manufacturing energy intensity? Micro-evidence from China

Numerous qualitative case studies suggest that ISO 50001 Energy Management System (ISOEnMS) effectively enhances organizational energy performance. However, empirical evidence is lacking to substantiate this claim and explore the potential mechanisms. This study addresses this gap by empirically examining the impact of ISO 50001 Energy Management System on energy intensity. We manually compiled information on all Chinese organizations that obtained ISOEnMS certification from 2011 to 2021 and matched this data with micro-level data from manufacturing firms spanning 2007 to 2016. Using a propensity score matching difference-in-differences approach, we analyzed the impact of ISOEnMS on energy intensity and explored potential mechanisms. Our findings reveal that firms with ISOEnMS certification experience a reduction in energy intensity of approximately 26 %. This reduction is primarily driven by increased investments in energy-efficient technologies, specifically through the acquisition of high-efficiency equipment, and increased external financing at lower costs. Additionally, the reduction in energy intensity is more pronounced in firms with higher management efficiency, those that purchase external energy services, non-state-owned enterprises, foreign-invested firms, firms with lower financing constraints, exporting firms, and firms that import coal. Finally, ISOEnMS does not appear to promote a shift towards cleaner energy sources, such as electricity. These findings underscore the effectiveness of ISOEnMS in reducing energy intensity while also highlighting its limitations in facilitating an energy transition.