Planet’s pathway to net-zero means no new oil and gas spending, IEA says

MAY 18, 2021

Investment in any new oil and gas developments must stop immediately, electricity should be 90 per cent renewable by 2050 and governments must “close the gap between rhetoric and action” if the world is to meet its goal of net-zero emissions and limit the worst impacts of climate change, according to a new report by the International Energy Agency.

Net Zero by 2050: A roadmap for the global energy system, released Tuesday, found that climate pledges by governments to date – even if fully achieved – will fall well short of what is required to meet global carbon dioxide emissions reduction goals. It lays out more than 400 recommendations spanning all energy sectors and technologies for what needs to happen, and when, to transform the global economy from one dominated by fossil fuels into one powered predominantly by renewable energy.

Fatih Birol, the IEA’s executive director, pulled no punches in his introduction to the report, writing that meeting net-zero goals “requires nothing short of a total transformation of the energy systems that underpin” economies around the world.

“We are in a critical year at the start of a critical decade for these efforts,” he said.

“Despite the current gap between rhetoric and reality on emissions,” he said the road map shows that there are still pathways to reach net zero by 2050. But he also warns that those pathways are “narrow and extremely challenging,” and will require governments, businesses, investors and citizens “to take action this year and every year after so that the goal does not slip out of reach.”

The report by the Paris-based agency – which advises industrialized countries on energy issues – is designed to inform high-level negotiations slated for the United Nations’ climate change conference in Glasgow in November.

It recommends no investment in new fossil fuel supply projects or coal plants without carbon-reduction technology, starting today. By 2030, it says, solar and wind should be scaling up at four times the speed they did in 2020, and by 2035 there should be no sales of new internal-combustion-engine passenger cars.

Reaching net-zero will require a huge decline in the use of fossil fuels, falling from almost four-fifths of total energy supply today to slightly more than one-fifth by 2050, it says. Those that remain in play in 2050 should only be used where the carbon is part of the product (such as plastics), in facilities fitted with carbon capture utilization and storage (CCUS) and in sectors in which low-emissions technology options are scarce.

Reaching net-zero by 2050 will hinge on an unprecedented clean technology push to 2030 and rapid deployment of both available technologies and those that aren’t yet on the market, the report notes.

And while Mr. Birol acknowledged that transforming global energy systems will pose an enormous challenge, he said it’s also “a huge opportunity for our economies, with the potential to create millions of new jobs and boost economic growth.”

The report identifies batteries, hydrogen electrolyzers and direct-air CCUS (a method using chemical reactions to capture carbon dioxide from the atmosphere) as the largest opportunities to reduce emissions, but says their deployment must be accompanied by large-scale construction of the infrastructure they need. That includes new pipelines to transport captured CO2 emissions, and systems to move hydrogen around and between ports and industrial zones.

The road map also calls for government spending on research and development in those and other critical areas such as electrification, bioenergy and CCUS to be increased and reprioritized, and for US$90-billion of public money to be mobilized globally as soon as possible to complete a portfolio of demonstration projects before 2030.

“Developing and deploying these technologies would create major new industries, as well as commercial and employment opportunities,” it says.

According to the report, almost 90 per cent of electricity should be generated by renewable sources by 2050. Wind and solar should account for nearly 70 per cent of that, with most of the rest coming from nuclear.

Every month from 2030 onward, it recommends that 10 heavy industrial plants should be equipped with CCUS and three new hydrogen-based industrial plants be built. It says bans on new fossil fuel boilers in buildings need to start being introduced globally in 2025, driving up sales of electric heat pumps.

Although the report lays out swaths of specific targets, it emphasizes that people – and their access to reliable, affordable energy – need to be at the heart of all decision-making. Not every worker in the fossil fuel industry can ease into a clean energy job, it notes, so governments must promote training and devote resources to facilitating new opportunities.

Citizens must also be active participants in the entire process, making them feel part of the transition and not simply subject to it, Mr. Birol wrote in his introduction to the report.

“Clean energy transitions must be fair and inclusive, leaving nobody behind,” he said. “We have to ensure that developing economies receive the financing and technological know‐how they need to continue building their energy systems to meet the needs of their expanding populations and economies in a sustainable way.”