Supporters of the Fridays for Future climate action movement hold up a sign reading "God Save the Green" during a global climate strike on September 23, 2022 in Vienna, Austria. Similar marches are taking place in cities across the globe today with participants demanding an end to fossil fuel consumption.Thomas Kronsteiner/Getty Images
The global demand for fossil fuels will peak much earlier than previously expected if governments follow their current energy policies, according to a new report by the International Energy Agency.
At the same time, investment in clean energy is set to rise more than 50 per cent from today’s levels to more than US$2-trillion a year by 2030, as global energy markets undergo a wholesale reorientation to grapple with an energy shock of “unprecedented breadth and complexity” triggered by Russia’s invasion of Ukraine.
The numbers are contained in the latest flagship report from the Paris-based energy watchdog, released on Thursday. The IEA’s World Energy Outlook warns that the world is in the grip of the first truly global energy crisis – and its impact will be felt for years to come.
With its OPEC cuts, Saudi Arabia won the battle but will lose the war
However, those “profound and long-lasting changes” to global energy markets have the potential to hasten the transition to a more sustainable and secure energy system and reduce greenhouse gas emissions in the fight against climate change, the report found.
At a time when geopolitical fractures over energy and climate change are all the more visible, “it is essential to bring everyone on board” with the energy transition, IEA executive director Fatih Birol said in a statement.
“The journey to a more secure and sustainable energy system may not be a smooth one. But today’s crisis makes it crystal clear why we need to press ahead.”
Under a scenario in which current government policies stay the course, the 2022 report is the first World Energy Outlook to outline definitive peaks in global demand for fossil fuels, with coal expected to reach a peak in the next few years, natural gas by the end of the decade and oil in the mid‐2030s.
As a result, the share of fossil fuels in the global energy mix will drop to about 60 per cent by mid-century, from 80 per cent today.
For oil, demand reaches 103 million barrels a day, then declines very gently to 2050 under current policies.
Aviation, shipping, heavy trucking and petrochemicals will be the main sectors increasing their use of oil. However, from the mid‐2030s, growth in those industries will be more than offset by declining oil use elsewhere, especially in passenger cars, buildings and power generation.
Fossil fuel demand in the Stated Policies Scenario, 1990-2050
Left scale (exajoules)
Right scale (per cent)
Oil
Share of fossil fuels in total energy supply
Coal
Natural gas
100%
500
80
400
60
300
40
200
20
100
0
0
1990
2000
2010
2020
2030
2040
2050
Note: Stated Policies Scenario looks not at what governments say they will achieve, but at what they are actually doing to achieve the targets and objectives they have set out, and assesses where this leads the energy sector.
THE GLOBE AND MAIL, SOURCE: IEA,
WORLD ENERGY OUTLOOK 2022
Fossil fuel demand in the Stated Policies Scenario, 1990-2050
Left scale (exajoules)
Right scale (per cent)
Oil
Coal
Share of fossil fuels in total energy supply
Natural gas
100%
500
80
400
60
300
40
200
20
100
0
0
1990
2000
2010
2020
2030
2040
2050
Note: Stated Policies Scenario looks not at what governments say they will achieve, but at what they are actually doing to achieve the targets and objectives they have set out, and assesses where this leads the energy sector.
THE GLOBE AND MAIL, SOURCE: IEA,
WORLD ENERGY OUTLOOK 2022
Fossil fuel demand in the Stated Policies Scenario, 1990-2050
Left scale (exajoules)
Right scale (per cent)
Oil
Coal
Natural gas
Share of fossil fuels in total energy supply
100%
500
80
400
60
300
40
200
20
100
0
0
1990
2000
2010
2020
2030
2040
2050
Note: Stated Policies Scenario looks not at what governments say they will achieve, but at what they are actually doing to achieve the targets and objectives they have set out, and assesses where this leads the energy sector.
THE GLOBE AND MAIL, SOURCE: IEA, WORLD ENERGY OUTLOOK 2022
The rapid global growth in natural gas demand is also set to draw to a close. Even under the highest-gas-use scenario, global demand rises by less than 5 per cent between 2021 and 2030, then remains flat to 2050.
“Momentum behind gas in developing economies has slowed, notably in South and Southeast Asia, putting a dent in the credentials of gas as a transition fuel,” the report notes.
Between the drop in fossil fuel use, a surge in clean-energy investment and a rebalance in global energy markets, the outlook has the world hitting its highest emission levels in 2025.
“Today’s alignment of economic, climate and security priorities has already started to move the dial towards a better outcome for the world’s people and for the planet,” Mr. Birol said.
However, the report warns that the world has not been investing enough in energy in recent years, which is why the energy market was so vulnerable to the shocks seen this year. A smooth and secure energy transition will require a major uptick in clean-energy investment, and reaching net-zero emissions in the coming decades will require spending in the sector to triple through 2030.
But that investment must happen in developing economies, not just established global powers, the report warns.
The combination of the pandemic and the energy crisis means that 70 million people who recently gained access to electricity will likely lose the ability to afford that access – and 100 million people may no longer be able to cook with clean fuels, returning to unhealthy and unsafe means of cooking, the analysis found.
“That is a global tragedy. And it is not only an energy crisis with which we are dealing: many countries also face a food security crisis and increasingly visible impacts of climate change,” Mr. Birol wrote in his introduction to the report.
To fend off a messy transition that throws energy access and markets into turmoil, the IEA highlighted the need to synchronize the growth of clean-energy technologies with the reduction of fossil fuels, prioritize energy efficiency to help suppress demand, and build more flexible, diverse and resilient energy infrastructure.
It also recommended careful management when retiring existing infrastructure to avoid any negative consequences for energy security and jobs. That includes refinery capacity, with the report noting that oil demand for transport will not disappear immediately, even in places that ban the sale of traditional internal combustion engine vehicles.
Emma Graney