The European Commission is proposing to increase funding of green IT research to €40m (£32m) to help Europe reduce energy use whilst driving economic growth, according to an EU report out yesterday.

Technology will be key in helping meet targets set by the European Council – to save 20 per cent of energy consumption through energy efficiency by 2020, according to the 'High Tech Low Carbon' research paper.

Viviane Reding, member of the European Commission responsible for the information society, said she wanted to increase the budget for research into IT driven energy efficiency.

"Europe must more than double the rate of improvement of energy efficiency," she said. "I have proposed to increase by 48 per cent the budget for IT and energy efficiency in the IT 2009-2010 work programme, bringing it to €40m."

The paper recommends further research in a number of different areas.

It shows how IT can replace physical products and services with on-line services both in business and in the public sector with e-Government and e-Health initiatives.

It says the IT industry must work to improve the energy efficiency of hardware, and persuade end-users of the cost benefits.

Energy monitoring in buildings can intelligently regulate a building's energy use, according to the paper.

And the research estimates that LED – efficient lighting technology – could save 30 per cent of today's consumption by 2015 and up to 50% by 2025.

IT could be key in analysing energy distribution and storage in the future, the paper says, helping optimise demand and facilitating trade between grid operators.