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Wind and solar power capacity expanded rapidly in 2020 while global energy demand cratered because of the pandemic, yet this did not yet reflect a “decisive shift” toward meeting UN-backed climate goals, BP PLC said in its annual energy review.

Last year witnessed the biggest fall in carbon emissions in more than 75 years, putting the world closer to the path needed to hit a target of keeping global warming below 2 degrees C this century, BP’s 2020 Statistical Review said.

“Importantly, there was no sign of the decisive shift envisaged” by the less than 2 degrees C scenario, BP chief economist Spencer Dale said in remarks ahead of the release of the review, seen as a benchmark for the industry.

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“There is a good chance that much of that dip proves transitory,” he said, adding that changes in 2020 were induced by the pandemic and the world still needed “tangible, concrete differences” to meet climate targets.

The economic slowdown in 2020 as countries sought to contain the pandemic led to a 4.5-per-cent drop in global energy demand, driven mostly by a 9.3-per-cent collapse in oil consumption, the review said.

At its lowest point in April, 2020, oil demand dropped by around 20 per cent or 20 million barrels a day.

“This is just off the charts relative to anything seen in history,” Mr. Dale said, adding that the slide in energy use would reverse as economies revved up after the COVID-19 crisis.

EMISSIONS

Heat-trapping carbon emissions dropped by 6.3 per cent last year, the biggest fall since the Second World War, breaking a steady climb in recent years even as governments were accelerating their efforts to tackle climate change, the review said.

BP, one of the world’s biggest energy companies, itself aims to reduce emissions from the oil and gas it produces to net zero by 2050, amid pressure on the energy industry to cut greenhouse gas emissions.

“The trends we’re seeing here are exactly the trends we’d want to see as the world transitions to net zero – strong growth in renewables. Crowding out coal is exactly what the world needs to see,” Mr. Dale said.

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Many oil companies and climate groups have called for governments to set a price on carbon in order to boost the use of renewables and low-carbon energy.

In Europe, which has one of the world’s most active carbon trading markets, the price of carbon rose in recent weeks to an all-time high of more than €59 (US$69.76) a tonne.

Wind and solar installed capacity increased by a “colossal” 238 gigawatts last year, the review said.

“The increase in installed capacity last year was 50 per cent bigger than at any time seen in history, despite the world [being] in turmoil, despite the largest peacetime recession,” Mr. Dale said.

The growth in renewables last year came largely at the expense of coal-fired generation, which experienced one of its largest annual declines on record of 4.4 per cent.

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