Global Fossil Fuel Demand to Peak Within the Decade, Warns International Energy Agency
A recent report by the International Energy Agency (IEA) has projected a landmark shift in global energy consumption. For the first time in history, the worldwide demand for fossil fuels, including coal, oil, and natural gas, is set to peak before the end of the decade, even without the implementation of new government climate policies.
The surge in renewable energy, electric vehicles, and heat pumps has driven this remarkable change. However, the report asserts that this does not necessitate significant new oil and gas extraction projects, or the development of new coal mines or plants.
An Uphill Battle Against Global Warming
Despite these promising findings, the IEA’s report emphasizes that much more needs to be done to limit global warming to the 1.5-degree Celsius target agreed on at the 2015 Climate Summit in Paris. The pathways to achieve this critical target are narrowing, and further action is required to curb the rise in global carbon dioxide emissions, which reached a record 37 billion tonnes from the energy sector in 2022.
Investing in Clean Energy for a Sustainable Future
The IEA suggests that investments in clean energy must surge from US$1.8 trillion in 2023 to US$4.5 trillion by the early 2030s to achieve net-zero emissions by 2050. Increasing renewable energy usage, enhancing energy efficiency, reducing methane emissions, and boosting electrification are all crucial steps to meeting global climate targets.
Furthermore, the report underscores the importance of maintaining investment in existing oil and gas assets and previously approved fossil fuel projects. This strategy prevents potentially damaging price spikes or supply gluts during the energy transition.
Methane Emissions and the Energy Industry
The report also highlights the significant role of methane emissions in the energy industry. Reducing methane emissions from oil and natural gas operations by 75% from current levels would cost an estimated US$75 billion, only 2% of the net income generated by the industry in 2022.
The Role of Carbon Capture and Storage
The IEA stresses the need for rapid advancements in carbon capture and storage (CCS) before 2030 to maintain the 1.5 C temperature target. Despite the increase in proposed CCS projects worldwide, only 5% have reached the final investment decision stage, indicating that more policy support is needed in this area.
‘Build Big’ to Reach Net-Zero
The IEA’s report advocates for a ‘build big’ approach. This involves expanding electricity transmission and distribution grids by approximately 2 million kilometers annually by 2030 to align with the IEA’s net-zero scenario.
Preventing Severe Impacts of Global Warming
To avert the most drastic effects of global warming, emissions must decrease by 80% from 2022 levels in developed countries and by 60% in developing countries by 2035. Failure to make such strides by 2035 would result in a steeper temperature increase, necessitating reliance on costly and uncertain carbon removal technologies in the second half of the century. The IEA encourages efforts to prevent carbon emissions rather than focusing solely on removing them from the atmosphere.
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