Abstract The improvement of energy efficiency is seen as one of the most promising measures for reducing global CO 2 emissions. However, the emission reduction potential may seem different from the industrial plant and policy-maker’s perspectives. This paper evaluates the influences of process heat conservation on CHP electricity production, primary energy consumption and CO 2 emissions from both the mill site and national perspectives. The results indicate that heat conservation in an industrial process may lead to varying results in primary energy consumption and CO 2 emissions, depending on the form of marginal heat production used at the mill site. In the CHP process, reduction of the heat load lowers electricity production, and this reduction may have to be compensated for at the national level. Therefore, the energy conservation potential in industry has to be evaluated by taking into account the connections to the outside society, which means that a wider system boundary than a mill site has to be used. This study demonstrates by theoretical analysis and case mill studies the magnitude of the effects of system boundary definition when evaluating the contribution of an individual energy efficiency investment towards fulfilling the commitment to reduce CO 2 emissions at the national level.