Archives May 2025

When discussing which sector consumes the most energy, many people immediately think of transportation. But is that really the case?

Surprisingly, it’s not. According to the Handbook of Energy and Economic Statistics of Indonesia 2023, the transportation sector ranks second in terms of total energy consumption.

So, which sector actually tops the list? Let’s take a closer look at the real energy consumption across various sectors.

Which Sectors Consume the Most Energy?

Based on the latest data, here’s how energy consumption ranks by sector:

1. Industrial Sector

The industrial sector is the largest energy consumer. It includes a wide range of activities, from heavy industries to manufacturing consumer goods like food, textiles, and electronics.

Industrial processes such as operating heavy machinery, chemical production, and raw material extraction require massive and consistent energy input. A country’s level of industrialization greatly affects its total industrial energy use.

Read More: Top Benefits of Natural Gas, More Than Just Low Emissions

2. Transportation Sector

The movement of people and goods—via cars, public transit, aviation, and shipping—demands vast energy resources.

Transportation heavily depends on fossil fuels, making it a major contributor not only to total energy consumption but also to global greenhouse gas emissions. Urbanization, population growth, and global trade are all drivers of increasing energy needs in this sector.

3. Building Sector (Residential & Commercial)

Energy is widely used in buildings for lighting, appliances, cooking, and office equipment.

The level of energy consumption in buildings is influenced by design efficiency, the use of energy-saving technologies, and occupant behavior. Both residential homes and commercial facilities like offices, malls, and hotels contribute significantly to energy demand.

4. Agriculture Sector

While agriculture may not top the list in total consumption, it still plays a vital role.

Energy in this sector powers farm machinery, irrigation pumps, fertilizer and pesticide production, food processing, and the transportation of agricultural products. Agricultural modernization often leads to increased energy needs.

Read More: The Crucial Role of Alternative Electricity Sources in Shaping Our Future

Energy Consumption by Sector

Though transportation is often perceived as the biggest energy user, it actually trails slightly behind industry. Here’s the breakdown based on energy consumption in Million BOE (Barrel of Oil Equivalent):

Rank	Sector	Energy Consumption (Million BOE)
1	Industry	556,6
2	Transportation	448,5
3	Residential	166,2
4	Commercial	55,5
5	Others	10,6

Here are how each sector uses energy:

• Industry: High consumption in manufacturing, steel, cement, and chemical sectors, relying heavily on electricity and heat.
• Transportation: High fuel use, especially from private vehicles, is a major factor in energy demand.
• Residential: Energy used for electricity, cooking (LPG), heating water, and appliances.
• Commercial: Heavy use of lighting, cooling (AC), and electronics in offices, hotels, and retail centers.
• Others: Includes agriculture, construction, and smaller miscellaneous sectors.

Read More: Why Switching to Green Energy Matters and How It Impacts the Planet?

What Drives Energy Consumption?

Energy consumption is influenced by various interconnected factors, including:

• Economic growth
• Technological development
• Consumer behavior

Generally, as a nation’s economy and population grow, so does its energy use. Additionally, the demand for modern technology and digital infrastructure adds to this increase.

Energy policy, public awareness, and environmental concern also play vital roles in shaping consumption trends.

Read More: Decarbonization: Why the World Must Shift to Clean Energy?

The Role of LNG in Tackling High Energy Use

Liquefied Natural Gas (LNG) is gaining recognition for its role in reducing inefficient and polluting energy use. It serves as a cleaner alternative to coal and oil, offering:

• Lower greenhouse gas emissions
• Higher combustion efficiency
• Versatility across heavy transport, industry, and power generation

LNG usage helps cut national fuel consumption, especially in energy-intensive sectors like industry and transportation. As a transitional fuel, LNG can bridge the gap between traditional fossil fuels and renewables, ensuring a stable and gradual shift to a sustainable energy system.

As global population growth and economic expansion drive ever-increasing energy demand, the world also faces mounting pressure to cut carbon emissions and accelerate the shift to low-carbon energy systems.

Caught in this dilemma, Liquefied Natural Gas (LNG) has emerged as a strategic transitional energy source. With significantly lower emissions than coal and oil, LNG offers a practical path to ensure energy security while reducing environmental impact.

What Is the Energy Transition?

The energy transition refers to the global shift from fossil fuel-based systems toward cleaner, more efficient, and sustainable energy models.

Several key factors are accelerating this transition:

• Climate change and carbon reduction targets
• Net-zero commitments from major economies
• Technological innovation and green policy initiatives
• Public pressure and increased environmental awareness

However, this process faces considerable challenges:

• Renewable energy sources are intermittent and cannot yet fully replace baseload power
• Energy storage and geographical dependency remain issues
• Large-scale investment in infrastructure is still required

Read More: Top Benefits of Natural Gas, More Than Just Low Emissions

Why Does LNG Play a Key Role in the Global Energy Transition?

Here are several reasons LNG is considered a vital player in the shift to a cleaner energy future:

1. Lower Emissions Than Coal and Oil

LNG emits significantly less carbon dioxide and other harmful pollutants than traditional fossil fuels. Replacing coal-fired power plants with LNG facilities can greatly contribute to reducing greenhouse gas emissions and improving air quality.

2. Ensures Energy Stability While Renewables Scale Up

Renewable energy requires time and investment to scale. Its availability is also intermittent (e.g., solar and wind). LNG provides a reliable backup source that can be ramped up quickly to stabilize national energy supplies during periods when renewables fall short.

Read More: The Crucial Role of Alternative Electricity Sources in Shaping Our Future

3. Existing Infrastructure and Mature Technology

The global LNG supply chain is already well-established, including liquefaction plants, shipping fleets, and regasification terminals. Unlike pipeline-based gas systems that are limited by geography, LNG can be shipped across oceans, making it a highly flexible energy solution.

4. Reduces Dependence on Coal

LNG plays a major role in displacing coal as a primary fuel for electricity generation. As one of the dirtiest energy sources, reducing coal use is critical to any serious decarbonization strategy, and LNG offers a cleaner, scalable alternative.

Read More: Why Cutting Carbon Emissions Is Critical for the Planet’s Future?

5. Easier Cross-Border Distribution

Unlike pipeline gas, which requires geographically connected routes, LNG can be transported globally by sea. In an increasingly volatile geopolitical environment, this flexibility is strategic, it reduces reliance on specific transit routes that may be affected by conflict or natural disasters.

6. Potential for Transport and Industrial Applications

Beyond electricity, LNG has significant potential in the transport and industrial sectors. In maritime shipping, LNG is a cleaner alternative to traditional bunker fuels, helping reduce port and sea-route pollution. Industries can also adopt LNG to cut emissions from high-heat processes.

Read More: Why Switching to Green Energy Matters and How It Impacts the Planet?

LNG as a Strategic Pillar in the Global Energy Transition

LNG is a vital bridge to a cleaner global energy system. Its lower carbon footprint, high flexibility, and compatibility with renewable energy make it a pragmatic solution during the long-term decarbonization journey.

When managed responsibly, LNG can serve as a cornerstone of the global energy transition, linking current energy demands with a more sustainable future.

A stable and affordable energy supply is one of the cornerstones of global economic growth and stability. When energy availability is disrupted, such as through sudden price spikes, the impact ripples across all sectors of the economy, driving inflation, stalling production, and potentially triggering social and political unrest.

In short, an energy crisis can have far-reaching consequences for the global economy.

What Is an Energy Crisis?

An energy crisis refers to a situation where the supply of energy fails to meet the needs of society and industry, often accompanied by sharp price increases.

History has seen several major crises, such as the 1973 oil crisis and the global energy turmoil of 2022 sparked by geopolitical conflict. These events highlight how vulnerable the global economy is to disruptions in the energy sector.

Read More: Why Switching to Green Energy Matters and How It Impacts the Planet?

What Causes an Energy Crisis?

Key factors contributing to an energy crisis include:

• Heavy dependence on fossil fuels, particularly oil and gas
• Geopolitical tensions, such as wars or energy embargoes
• Imbalances between energy supply and demand, often due to rapid economic growth or delayed investment
• Lack of energy diversification, especially in developing countries
• Uneven progress in energy transition, leaving gaps when fossil fuel use is restricted

How Does the Energy Crisis Affect the Global Economy?

Triggers Inflation and Reduces Consumer Purchasing Power

Rising energy prices have a broad inflationary impact. Not only do they increase production costs, but they also hit household budgets directly through higher fuel and electricity bills.

When a large share of consumer income goes to cover energy expenses, spending on other goods and services drops. This weakens demand, slows economic growth, and can even push economies toward recession.

Disrupts Production and Industry

Industry is the largest consumer of energy. When energy becomes scarce or prohibitively expensive, companies may reduce work hours, cut production capacity, or halt operations altogether.

This creates a domino effect: rising unemployment, broken supply chains, and declining global economic output.

Undermines Investment Confidence

Volatile energy prices and supply disruptions create uncertainty for long-term investments. Businesses may delay expansion plans or infrastructure development due to fears over future energy availability.

Countries highly dependent on energy imports are also more vulnerable to external shocks and currency fluctuations.

Fuels Social and Political Instability

Sharp increases in energy costs often spark protests and civil unrest, especially in countries with high poverty levels. Competition over scarce energy resources can also strain international relations and escalate geopolitical tensions.

Read More: Why Cutting Carbon Emissions Is Critical for the Planet’s Future?

Who Suffers the Most from an Energy Crisis?

Developing Countries

Developing nations typically have fragile energy infrastructure and rely heavily on imports. During an energy crisis, they struggle to meet basic energy needs, hampering economic progress, slowing poverty reduction, and widening the global inequality gap.

Agriculture and Food Security

Agriculture is heavily dependent on energy, for tractors, irrigation pumps, and fertilizer production. When energy is expensive or scarce, food production costs rise, which in turn increases food prices and exacerbates food insecurity, especially in vulnerable regions.

Households and Small Businesses

Energy crises hit households and small enterprises particularly hard. As electricity and fuel prices soar, profit margins shrink for small businesses, and families are often forced to cut other essential expenses just to cover energy bills.

Read More: What’s the Difference Between LPG and LNG? A Clear Breakdown

Strategies to Tackle the Global Energy Crisis

The long-term solution lies in diversifying energy sources and accelerating the adoption of renewables like solar, wind, and biomass. Energy efficiency is equally important, from household energy-saving practices to advanced industrial technologies.

In addition, major investment in modern energy infrastructure is critical to reduce vulnerability to future crises.

The Role of LNG in Energy Security

Liquefied Natural Gas (LNG) has emerged as a key transitional energy source. It is cleaner than coal and more flexible to transport than piped natural gas.

Because of this flexibility, LNG can help meet cross-border energy demands quickly during times of crisis. Utilizing LNG helps ease short-term energy pressure while supporting the longer-term shift toward cleaner, more sustainable energy systems.