Energy efficiency improvement is a basic yet significant way of addressing both energy security and environment concerns. There are various measures of industrial energy efficiency performance, with different purposes and applications. This paper explores different ways to measure energy efficiency performance (MEEP): absolute energy consumption, energy intensity, diffusion of specific energy-saving technology and thermal efficiency. It discusses their advantages and disadvantages, and roles within policy frameworks. Policy makers should consider the suitability of MEEP based on criteria such as reliability, feasibility and verifiability. The limitations of both energy intensity and necessity of broader all-inclusive indicators and technology diffusion indicators are also discussed. A case study on Japan's iron and steel industry illustrates the critical role of proper boundary definitions for a meaningful assessment of energy efficiency in industry. Depending on the boundaries set for the analysis, the energy consumption per ton of crude steel ranges from 16 to 21 GJ. This paper stresses the importance of a proper understanding of various methods to assess energy efficiency, and the linkage with policy objectives and frameworks. Possible next steps for improvement of MEEP, such as database development, were also discussed. (C) 2008 IEA. Published by Elsevier Ltd. All rights reserved.