Energy groups must halt new oil and gas projects to reach net zero by 2050, says IEA

Energy groups must halt all new oil and gas exploration projects this year if global warming is to be brought under control, the International Energy Agency said.

The proposal is a radical scenario described in a report on how to achieve net zero carbon dioxide emissions by 2050 in order to meet the Paris Agreement target of preventing temperatures from rising more than 1.5 ° C above pre-industrial levels.

In addition to drastically reducing fossil fuel consumption, an unprecedented increase in spending on low-carbon technologies would also be needed – around $ 5 billion in energy investments per year by 2030, up from around $ 2 billion. dollars today, according to the report.

“We need a historic surge in investment,” Fatih Birol, head of the Paris-based IEA, said Tuesday, adding that this would add 0.4 percent per year to GDP growth. “The essential must be in clean energy.”

The IEA Net Zero Report comes as the institution founded in 1974 as the oil watchdog of Western countries faced pressure from climate activists to produce a roadmap to the target.

It details an overhaul of energy supply and demand whereby demand for coal drops 90%, demand for gas halves, and demand for oil drops nearly 75% by 2050.

Dave Jones, analyst with climate think tank Ember, said the report’s call to end new oil and gas exploration was extremely surprising given the agency’s history.

“I don’t think anyone expected this from the IEA. It’s a huge turnaround on their part, ”he said. “It was very pro-fossil, so coming out with something like that is just amazing. . . It really is a knife in the fossil fuel industry. “

The majority of the world economy is subject to some form of net zero emissions target, which means eliminating virtually all carbon dioxide emissions and offsetting the rest with carbon elimination programs.

Although the report is neither a forecast nor a recommendation, the IEA scenarios are considered final by many governments and often form the basis of energy policy.

As more governments, including the UK, EU and China, pledge to reduce their emissions to net zero, the IEA report clarifies how difficult it will be to do so. reach. “It’s a narrow track,” Birol said. “But still achievable.”

Many large oil companies and producing countries, like those of OPEC, have long argued that investments in new fossil fuel projects must continue to meet the needs of emerging economies in Asia and Africa.

However, the modeled reduction in fossil fuel consumption by the IEA is much more severe than most producers expected. The share of fossil fuels in the world’s energy supply is expected to increase from about four-fifths currently to one-fifth by 2050. Solar would become the largest source of energy – accounting for 20% of global energy demand.

A petrochemical plant: the demand for oil is expected to decline by 90% by 2050, according to the IEA © Nathan Laine / Bloomberg

“Countries whose economies depend on oil and gas revenues will face enormous challenges,” said Birol. “We have established over 400 milestones, and one of them is – there is no need for new oil, gas and coal development, which does not require investments in oil exploration. and gas. ”

The IEA, however, recognized that “continued investments in existing sources of oil production are necessary”.

Even if demand for oil declines, the share of oil production controlled by Opec will increase from around 37% to around 52% in 2050, according to the report.

It envisions carbon-free electricity in the world by 2040, as well as increased research funding over the next decade for new technologies such as batteries and hydrogen electrolyzers.

Renewable energy supply is expected to overtake fossil fuels by 2040. Graph showing energy supply in exajoules for renewables and fossil fuels

Joeri Rogelj, senior lecturer on climate change at Imperial College, called the IEA’s net zero scenario very significant.

Improvements in energy efficiency mean that global energy demand in 2050 will be around 8% lower than it is today, even though the global economy will be twice as large. Electricity consumption will increase, accounting for about half of total energy consumption by 2050.

“The IEA is used as a de facto benchmark for much of the planning, both by governments and by industry,” said Rogelj, who called on the IEA to develop a net zero scenario.

Previous IEA scenarios had been heavily criticized for not including enough renewables and underestimating the growth rate of solar and wind power around the world.

“If you look back over the past decade, the IEA scenarios have always been a little late,” Rogelj said. “The IEA is just a slow, gray, rusty, dusty machine, and it just takes a while. . . but I am really happy to see that the IEA has now reached a trajectory of net zero. “

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