This study investigates the industrial energy efficiency of the European Union countries. An input-oriented Data Envelopment Analysis is used to calculate the potential energy efficiency improvements, financial savings and potential CO2 emission reductions of the most energy intensive manufacturing industries. The data is taken from the European Commission's Eurostat database and from the Turkish Statistical Institute. The year 2014 is chosen because of extensive data availability. European

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... stry as total and 12 industrial sub-sectors are analysed. The analysis results of European industry as total show that 18 countries appear to be the most energy efficient where 12 others appear to have lower efficiency ratings. The results also show that the countries Belgium, Romania, Finland, Austria, Poland, Hungary and Bulgaria have a high potential of financial savings as well as CO2 emission reductions. The findings show that there is €19,775.49 million total financial saving potential and 102,267.60 ktons of total CO2 emission reduction potential. This thesis is structured as follows: the first chapter gives a brief introduction to energy efficiency, the research objective, background and literature review, the second chapter contains the methodology, the third chapter includes the results of each sub-sector and the fourth chapter includes the conclusion and recommendations for further study.