Industry 4.0 (I4.0) holds transformative potential for manufacturing, promising significant gains in productivity. However, existing studies predominantly focus on technology advancements within energy-intensive industries, with limited attention to the specific context of small and medium enterprises (SMEs). This study aims to bridge this gap by investigating the energy management status, current adoption scenario of I4.0 on energy productivity, barriers and drivers to I4.0 for energy productivity within the Australian SMEs. Semi-structured interview method is adopted in this research considering the study’s scope and objective. The findings reveal that energy management is not a primary focus for most SMEs. While energy audits and efficiency measures are implemented on an as-needed basis, energy-saving technologies are more often adopted for operational improvements rather than for energy efficiency. Additionally, SMEs typically use I4.0 technologies as individual components, mainly for planning, scheduling, and maintenance. Cost-effectiveness emerges as the most influential driver for I4.0 adoption, followed closely by enhanced energy management systems. Conversely, the largest barriers are identified as limited access to capital and a lack of information on technologies. The insights gained in this study could deepen the understanding of I4.0’s role in enhancing energy productivity in SMEs, further shaping targeted recommendations.