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The role of Energy Management System based on ISO 50001 for

Energy-Cost Saving and Reduction of CO2-Emission: A review of
implementation, benefits, and challenges
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The 3rd ICoGEE 2021 IOP Publishing
IOP Conf. Series: Earth and Environmental Science 926 (2021) 012077 doi:10.1088/1755-1315/926/1/012077

The role of Energy Management System based on ISO 50001

for Energy-Cost Saving and Reduction of CO2-Emission: A
review of implementation, benefits, and challenges

B Prasetya*, D R Wahono, A Dewantoro, W C Anggundari and Yopi

Center of Research and Human Resources Development, National Standardization Agency of
Indonesia (BSN), PUSPIPTEK, South Tangerang 15314

*E-mail: bambang.prasetya@gmail.com

Abstract. Increasing demand of energy consumption lead to significant support effort to support
the sustainable supply by exploring a new resource, development technology, and strategy of
energy-mix. In line with this, the development and implementation of management systems in
energy utilization play an important role. Based on several studies the implementation of ISO
50001 has significant to improve the performance of energy management, saving of the energy
cost, and reduction of CO2 emission. This paper will be reviewed the state of the art of imple-
mentation of this standard, benefits, and challenges based on literature studies from several sci-
entific journals and publications released by international organizations, associations, and gov-
ernment policies. Some selected case studies describing quantitative energy performance af-
fected by the implementation of ISO 50001 at the international level with different sectors and
some role models from Indonesia are described. Moreover, the challenges and difficulties facing
by the implementation of this standard were also reviewed.

1. Introduction
Availability of energy is the main prerequisite for national development. With the increasing of peo-
ple's living standards and economic growth, energy supply management plays a very important role. In
the perspective of energy supply, there are various energy options to meet the energy consumption, but
until now mostly is still based on fossils. Many efforts on developing renewable energy like biomass-
based energy, biohydrogen, solar cell, biorefinery offered a good prospect in the near future [1-3]. The
significant thing related to energy supply is that it is in accordance with market needs, such as safe,
affordable prices, and environmentally friendly. Another thing that is not less important is climate
change which has become a major concern in various countries for 2 decades. This has prompted the
international community to continuously take appropriate measures to mitigate greenhouse gases, espe-
cially carbon dioxide, methane, as well as sulfur dioxide, and nitrous oxide. Emissions of these gases
are mostly caused by the use of fossil fuels as the main energy source. Regulation and standardization
play a significant role in maximizing efficiency and reduce the environmental impact. To illustrate the
quantitative data, the International Energy Agency, IAE (2014) reported in 2013 only 22% of the energy
consumed worldwide came from renewable energy sources. Based on these facts, many government
initiatives in the world are carried out to mitigate climate change and reduce energy-related spending
that can reduce environmental, social, and economic burdens [4-6].

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The 3rd ICoGEE 2021 IOP Publishing
IOP Conf. Series: Earth and Environmental Science 926 (2021) 012077 doi:10.1088/1755-1315/926/1/012077

At the practical level in industrial activity, energy management is a key factor for the operation of
many industries or organizations. Variety Energy consumption generally varies between companies or
organizations because it depends on their activities. And efforts to reduce energy consumption are not
easy to implement because price fluctuations often occur in a relatively short time, so the best choice is
to optimize activities and reduce energy costs. At the same time improving the management system
based on spending data. It should be emphasized that reducing energy costs not only benefits the organ-
ization but also provides other benefits such as contributing to environmental issues. One of the inter-
national standards that are widely applied in various companies or organizations is ISO 500001 which
is issued by the International Organization for Standardization (ISO). ISO 50001 is an Energy Manage-
ment System standard that aims to improve the energy performance of all types of companies and or-
ganizations. Some of the advantages are reduced energy consumption, energy costs. and systematic re-
duction of carbon emissions [7].

2. Methodology
The method used in this review is descriptive-analytic based on literature studies from several scientific
journals and publications released by international organizations, associations, and government policy.
Selected topic related to the state of the art and trend energy supply, energy management, energy policy,
and case studies of some selected role models in implementation of the energy management system. The
roles of the energy management system are identified and a description of ISO 50001 is summarized.
The trend implementation of ISO 50001 worldwide and their role on improvement of energy perfor-
mance and reduction of the impact on climate change are summarized, For the more quantitative per-
formance of the implementation of the standard, some role models as case studies are selected from
Clean Energy Ministerial (CEM ) Energy Management Leadership Awards. The performance of role
models from Indonesian companies in the different sectors can give the illustration of the implementa-
tion of standards that affected energy performance improvement, energy saving, energy cost-saving, and
reduction of CO2 emission. The cost to implementation of standard and time period needed for imple-
mentation from 2016 to 2020 also identified, Moreover, the challenge, difficulties, and opportunities
for more improvement in energy management are described.

3. Standard for Energy Management and Description of the Standard ISO 50001
Many success stories show that the standardization play important role in development platform require-
ments of goods, services, process, management system and also person’s competency. To support the
good implementation need the conformity assessment incl. certification and accreditation, as well as
metrology when it is related to the measurement. Standard ISO 50001 belongs to the management sys-
tem (EnMS) which was already published in 2011 and review in 2018. This standard belongs to a high-
level structure and is connected and integrated with another standard management system, like environ-
mental management systems, quality management systems, and others [8,9].
All management system standards generally are subjected to increase the effectiveness of manage-
ment and efficiency of the business process. There are some key elements such as strategy, tool, pro-
cess, technology. These elements can be used to ensure the full integration of energy efficiency im-
provements into the production or manufacturing process [10]. A systematic and in-depth review of
academic articles shows that different EnMS exert substantially different energy-saving effects, in par-
ticular, that energy-saving performance is correlated with the function of the EnMS used [11]. From
several case studies of the implementation of the ISO 50001 standard shows an increase in energy per-
formance indicators and encourages continuous improvement to implement the standard [12]. Another
study also found that the implementation of ISO 50001 had a positive effect on monetary savings, mo-
tivating other organizations to implement it [13,14]. For environmental improvement efforts, the imple-
mentation of ISO 50001 can contribute to the mitigation of CO2 emissions, the implementation of a
green and low-carbon supply management system [15]. In other cases, the implementation of ISO
50001:2018 proves that it is a good practice that company vulnerabilities can be reduced and mitigated
through the implementation of a comprehensive management system concept. Matters of significant

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IOP Conf. Series: Earth and Environmental Science 926 (2021) 012077 doi:10.1088/1755-1315/926/1/012077

importance also involve quality, safety and health, environmental management, energy efficiency, and
other risk components, following the achievement of the main target in reducing significant energy con-
sumption [16,17].
The standard on Energy Management Systems ISO 50001 was created by the International Organi-
zation for Standardization (ISO). The ISO is an independent international non-governmental organiza-
tion and has a membership of 161 national standards bodies from various parts of the world. Has pub-
lished more than 22 000 standards. The ISO 50001 gives organizations a recognized framework for
developing an effective energy management system. Generally, the principle of the “ Plan-Do-Check-
Act ” is the main tool to gain continual improvement. A set of requirements is provided for the organi-
zation and allows it to take several actions such as 1). develop policies to achieve more efficient energy
use; 2). set realistic targets and objectives to meet the outlined policies; 3) collect data to better under-
stand and use it as a basis for making decisions regarding energy use; 4). measure the results achieved;
4). reviewing the effectiveness of the established policies, and 5). carry out continuous improvement of
energy management. ISO 50001 version 2018 (ISO 50001: 2018) is revised from version 2011 (ISO
5001: 2011).As with all ISO standards, ISO 50001 is reviewed every five years with the aim of ensuring
it is in line with dynamic developments including market needs. In addition, this review and update of
ISO 50001 are to align it with ISO requirements for management system standards, as this standard
includes High-Level-Structure (HLS). Within this structure, the framework designed allows the integra-
tion of other management systems into the existing management systems defined by the organization.
Important changes in the latest version compared to the previous edition include a stronger emphasis on
the role of senior management, updates to terms and definitions. Other changes were also made to the
normalization and clarification of energy performance indicators and basic energy narratives to provide
a better understanding of these concepts [7,18].
As mentioned earlier, ISO 50001 is designed based on the HLS structure, so integration with other
standards that are close together is possible. For example, ISO 9001 (Quality Management System),
ISO 14001 (Environmental Management System), ISO 37001 (Anti-Bribery Management System), ISO
27001 (Information Security Management System) [7,19]. One thing that is important in HLS is the
principle of Plan Do Check Action. Figure 1. Describe the PDCA diagram and the clauses in the ISO
50001.

Figure 1. The PDCA diagram and the clauses in the ISO 50001:2018

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IOP Conf. Series: Earth and Environmental Science 926 (2021) 012077 doi:10.1088/1755-1315/926/1/012077

4. Implementation of Energy Management System based ISO 50001

As already mentioned before, that like the other management system standard, the ISO 50001 standard
is subjected as a tool which able to improve the better practice for energy management. Their imple-
mentation can help to manage energy performance and efficiency. It depends on the need and regulation
the implementation of this standard can be certified by external organizations in order to get objectives
results of compliance through suitable assessment. The best assessment is in general by a certification
company accredited by International Accreditation Forum (IAF) [19].
Indicators of standard implementation can be seen from the number of certifications in a country. As
an illustration in 2015, ISO 50001 accounted for 11,985 registered organizations. The data before that,
certification showed a significant rapid development, recorded from 459 in 2011 to 1981 in 2012. It was
also reported that the total growth was calculated at around 332% per year. Given these factual condi-
tions, the growth of ISO 50001 and ISO 14001, also referred to as meta-standards, and on the other hand
because of the importance of promoting energy management for cleaner production, is a more system-
atic and detailed study that analyzes the causal relationship between incentives, difficulties, and benefits.
required [20]. In 2019, recorded 18,277 certificates in around 42,215 sites worldwide achieved ISO
50001. The growth of ISO 50001 is expected to accelerate as an increasing number of companies inte-
grate ISO 50001 into their corporate sustainability strategies and supplier requirements [20,21].
Based on the trend of the implementation of ISO 50001 it is predictable for the benefit of the company
in terms of cost savings from energy consumption, and also the important contribution to reducing CO2
emissions. Based on the report of McKane et al. [22] who analyzes future energy needs concludes that
based on a scenario with 50% projected energy consumption, especially in the global industrial and
service sectors with the implementation of the ISO 50001 management system, in 2030 the cumulative
primary energy needs will be saved around 105 EJ, saving costs nearly US$700 billion (discounted to
2016 net present value). CO2 emission reductions of around 6,500 million metric tons (Mt) will be
achieved. The annual CO2 emissions avoided by 2030 alone would be equivalent to removing 210 mil-
lion passenger vehicles from the road [23-25].
To give more detail the illustration of the benefit of the implementation of ISO 50001, published
about the profile of winner of reported the case study by annual program CEM Energy Management
Leadership Awards. Clean Energy Ministerial (CEM) is a high-level international forum that carries out
activities to promote policies and programs that encourage actions that promote clean energy. This pro-
gram carried every year since 2016 and involving representatives around the world Data of the case
study of the winner from 2016 to 2020 indicate that benefits related to energy saving, environmental
improvement, and significant business performance achieved by various types of organizations that ap-
ply this management system concept More than 75 percent of award recipients in 2020 are in the indus-
trial sector, 17 percent in the commercial sector, and the rest in the public sector (city, airport, and
school). The majority of 2020 award recipients represent a single business activity, but 28 percent have
utilized energy management systems in various businesses that have successfully multiplied their sav-
ings. Overall, 46 winner in 2020 winners (representing 368 business activities in 14 countries) reported
energy cost savings of up to USD 37 million annually. As for the emission reductions reported up to
452,000 metric tons of carbon dioxide. This value is equivalent to removing 95,000 passenger vehicles
from the road. As shown in Table 1, the benefits gained by the implementation of ISO 50001 for
different sectors ad different locations in 5 contingent are described which interconnected with other
measures. . The energy performance improvement as a result of the implementation of ISO 50001 de-
pend on the Industry sector from service, education hospitality, transplantation to heavy manufacture,
Interestingly, the multinational company which has a location in many country show also that energy
reduction and CO2 emission very significant high. In Table 2, show the profile of companies from In-
donesia that participation in energy management leadership awards from 2016 to 2020 [26].

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IOP Conf. Series: Earth and Environmental Science 926 (2021) 012077 doi:10.1088/1755-1315/926/1/012077

Table 1. Case study of Energy Performance Improvement after Implementation of ISO 50001 from
the selected company from the winner of CEM Energy Management Leadership Awards.

No Company ’s Name Industry Type Cost CO2 Periode Pay back

(Country) Saving Reduction (year) time or
(US$S) (Metric Cost)
Tons

1 Hilton Hospitality Global $783.7 769,356 2008- <1 year

Over 5,100 sites globally million metric tons 2016

2 Magnitogorsk Iron & Iron Steel and Fabricated 38.6 698,186 over 3 >1 month
Steel Works Metals (Russia) million year

3 3M Manufacturing 13,500,000 330,000 3 (2016- 2,000,000

(30 sites in 7 Countries) 2018)

4 ABB Buenos Aires Electrical Equipment 55,000 894 over 5 2.2 years
(Argentina) years

6 Google Information Technology >$1 billion 3.8 million over 3 <1 year
HQ and 12 more sites Global: USA, Belgium, metric tons years
across 6 countries Ireland, Finland, Singapore,
Taiwan

7 Abu Dhabi Municipality Municipality Buildings 86,398 354,443 over 1 <10 months
Buildings (United Arab Emirates) year

8 Banco de Crédito e Financial Services $7,640 25 metric over 1 5.8 years

Inversiones (Chile) tons year
-Edificio Corporativo

9 Beijing Capital Public Transportation (China) 9.3 million 43,225 over 3 ~10 months
International Airport Co., years
Ltd.

10 China National Heavy Automotive 59.1 99,600 over 4 1.2 years

Duty Truck Group Co., (China ) million years
Ltd (16 sites )

11 Dubai Municipality Municipality 423,652 2,087.2 over 6 5 months

-Al Tawar Center (United Arab Emirates) years

12 Dublin City University-5 Educational Services > 10 50,000 over 11 <1 year
campuses (Ireland) million years

13 El Araby Company for Electrical Equipment (Egypt) $1.7 7,901 over 3 1.1 years
Trading and million years
Manufacturing

14 General Motors Ómnibus Automotive 617,626 20,463 over 5 <8 months

BB Transportes S.A-7 (Ecuador) years
sites in Ecuador

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15 LG Display Electrical Equipment $11.77 million 169,511 over 1 <5

-2 sites in Republic of Korea Republic of Korea over 1 year metric tons year months

16 Makstil AD Iron Steel and Fabricated $200,000 2,424 metric over 2 <4
2 sites in Republic of Metals tons years months
Macedonia (Republic of Macedonia)

17 Mastellone Hnos. S.A. Food and Beverage( $65,658 263 metric over 1 <8
2 sites in Argentina (Argentina) tons year months

18 Misr Fertilizers Production Chemicals $5.4 million 125,844 over 2 <4

Company (MOPCO) (Egypt) metric tons years months

19 Municipality of Sovizzo Municipality $96,251 146.5 metric over 4 3.7 years

property management (Italy) tons years

20 Nissan North America, Inc. Automotive $9.42 million 132,199 over 3 <1
-3 sites in United States (United States) metric tons years month

21 Raymond Limited Textiles India $671,142 4,137 metric over 1 <6

-Vapi Unit tons year months

22 Roads and Transport Public Transportation $12.2 million 81,362 over 4 ~3

Authority Dubai (RTA) United Arab Emirates metric tons years months

Representative of industry sector involving and location give profile about energy performance im-
provement, total energy cost saving, total energy saving, and CO2 Reduction, moreover also reported
about the cost spending for the implementation of ISO 50001, and time needed for the implementation.
In terms of energy performance varied from 3.6 % to 37.5. in which the high value recorded for industry
footwear manufacturing. It is also notified that the sector of power plan generation (Indramayu) has
very high total energy saving and can reach 46,110,419 USD, energy saving for 17,174,515 GJ, and
CO2 Reduction emission reached 474,016.62 metric tons for five years operation, even the cost imple-
mentation also relative high 9,318,090 USD. Almost the same number in terms of CO2 reduction
443,565 metric tons recorded petrochemical Industry in East Kalimantan), This was archived for 2.5
years of implementation with a spend of 91,830 USD. The energy-saving reached 3,921,855 USD and
866,262 GJ, and energy performance improvement is 3.76 % [26].
Based on the facts it is undeniable that ISO 50001 has been proven to be able to contribute to the
Sustainable Development Goals (SDGs) by saving energy and reducing GHG emissions, however, ac-
cording to several literature reviews, there are still many challenges to be faced. Some of the challenges
that can be identified are a). insufficient resources (infrastructure, technology, finance, and time), b).
insufficient data or difficult to determine energy and energy performance baseline, c). low qualification
of human resources (competence, knowledge, and ability), d). low commitment and support from the
management, e). inconsistency and unclear policies (organizational or governmental), f). trouble in
quantitatively measuring the benefits resulting from the adoption of ISO 50001, g). technical and man-
agerial barriers to achieving the full energy and carbon efficiency that ISO 50001 allows, h). difficulty
in finding external consultants, i). problems in obtaining third-party international certification, j). poor
documentation management, k). trouble in maintaining certification [27-29].
In the future, dissemination and promotion of the implementation of ISO 50001 will be very im-
portant to achieve maximum benefits. Building awareness among organizations and companies, the
public, and decision-makers is an important driving factor [30-32]. Thus, the benefits offered from
implementing this standard can be optimized. Benefits that can be taken include increasing the efficiency
and effectiveness of managing energy assets and energy resources, adopting new technologies, speed in
decision making, building employee awareness about energy and environmental issues, compliance with

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IOP Conf. Series: Earth and Environmental Science 926 (2021) 012077 doi:10.1088/1755-1315/926/1/012077

applicable laws and regulations, providing and increasing linkages within the framework of energy ef-
ficiency throughout the supply chain [33-35]. Besides, to be much more efficient, it is very possible to
integrate with other management systems such as environment, quality, and health and safety [36,37].

Table 2. Case study of Energy Performance Improvement after Implementation of ISO 50001 from
the selected Indonesian company from the winner of CEM Energy Management Leadership Awards,
2016 to 2020).

No Company’s Name/ Industry Type/ Cost for Energy Energy Cost CO2 Report
EnMS Performan- Saving Reduction Relea-
Location Products (Periode of ce (Total se Year
Imple- Improve- Energy
mentaion) ment Saving)

1 PT Petrokimia Gresik Fertilizer 53.021 3.16% 3,261,914 46,583 met- 2020

Plant 1 A (Ammonia) USD USD ric tons
(1 year) (512,880 GJ)

2 PT Indofood CBP Food and 50,850 USD 10.7 % 830,400 25,526 2020
Sukses Makmur Tbk. Beverage 3 years Aggregate USD metric tons
Pasuruan, Sema-rang Division Noodle (2017-2020)
Bandung (154.707 GJ)

3 PLTU Indramayu Power Generation 9,318,090 6% 46,110,419 474,016.62 2020

Indramayu, WestJava (Electricity) USD USD metric tons
(5 year) (17,174,515
GJ)

4 PT Chandra Asri Petro- 89,400 3.76% 6,360,000 55,697 2019

Petrochemical Tbk chemical USD (aggregate USD Metric Ton
(CAP) (Olefin, Polypro-
Cilegon, Banten, pylene, 2 Years (771,838 GJ
Polyethylene) )

5 PT Pupuk Kalimantan Petro-chemical 91,830 3.76% 3,921,855 443,565 2019

Timur (PUPUK USD (aggregate metric tons
KALTIM) -PKT-3 Ammonia, Urea, 2.5 years
Plant and Utility (PKT-3 (866,262 GJ)
1 year (PKT-
1A)

6 PT. Cheil Jedang Chemicals 3 years 4.99% 10,752,751 61,052.99 218

Indonesia- Amino acid (2014-2017) USD metric ton
Pasuruan Plant (Lysine) (139,574.28
GJ)

7 PT. Pembangkitan Power Generation 8,170,000 4,56 % 32,090,000 3,320,000 2018

Jawa-Bali Paiton USD USD metric tons
5 years (13,110,000
GJ)

8 PT Great Giant Food Industry 137.314,61 5.77% 528,070.48 18,908.87 2017

Pineapple Canned Pineapple USD USD metric tons
Lampung 2 Years (221,535.41
GJ)

9 PT Schneider Indonesia Electronic & 8,076 10.5% 32,480 206.51 met- 2017
EJIP Cikarang Selatan Electrical USD USD ric tons
Bekasi MV & LV 2014 - 2016 (512,880 GJ)
switch-gear

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10 PT Indah Kiat Pulp Paper 2,3 00,00 15.2% 1,600,00 Not 2016
Paper Manufacturer USD USD/year available
Tangerang Colored paper

11 PT. KMK GLOBAL Manufacturing 2,000,0000 37.5% 1,000,000 Not 2016

SPORTS Cikupa USD USD/year available
Footwear Mfg. 5 years (13,110,000
GJ)

13 PT. Apac Inti Corpora Yarn, Greige and 339.782 13.52% 318.752 Not 2016
Denim USD USD/year available

5. Conclusion
Based on literature studies from several scientific journals and publications released by international
organizations, associations, government policy, and several case studies from some role models, there
are some significant effects on the improvement of energy performance and reduction of the impact on
climate change by reduction of CO2 emission by the implementation of energy management system ISO
50001. The positive correlation between improvement energy performance and total energy cost saving
is also identified. The cost of implementation of this standard is varies depending on the business model,
sector, and period of implementation. Besides that implementation of this standard also have a positive
influence on the management of energy assets, evaluate and prioritize the use of energy-efficient tech-
nologies, and drive efficiency throughout the supply chain. However, some challenges that must be
overcome are also identified as influenced by the commitment of management and awareness.

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