IEA report calls for immediate end to new fossil fuel investments

A new report issued today by the International Energy Agency (IEA) called for an end to investments in new fossil fuel supply projects and to sales of new internal combustion engine passenger cars by 2035. The IEA called their roadmap a viable pathway to building a global energy sector with net-zero emissions in 2050.

Climate pledges by governments to date – even if fully achieved – would fall well short of what is required to bring global energy-related carbon dioxide (CO2) emissions to net zero by 2050, according to the report, “Net Zero by 2050: a Roadmap for the Global Energy Sector.”

“Our roadmap shows the priority actions that are needed today to ensure the opportunity of net-zero emissions by 2050 – narrow but still achievable – is not lost. The scale and speed of the efforts demanded by this critical and formidable goal – our best chance of tackling climate change and limiting global warming to 1.5°C – make this perhaps the greatest challenge human kind has ever faced,” said Fatih Birol, IEA Executive Director.

The roadmap sets out more than 400 milestones to guide the global journey to net zero by 2050. These include, from today, no investment in new fossil fuel supply projects and no further final investment decisions for new unabated coal plants. By 2035, there are no sales of new internal combustion engine passenger cars, and by 2040, the global electricity sector has already reached net-zero emissions.

In the near term, the report describes a net-zero pathway that requires the immediate and massive deployment of all available clean and efficient energy technologies, combined with a major global push to accelerate innovation. The pathway calls for annual additions of solar PV to reach 630 gigawatts by 2030 and those of wind power to reach 390 gigawatts. Together, this is four times the record level set in 2020. For solar PV, it is equivalent to installing the world’s current largest solar park roughly every day. A major worldwide push to increase energy efficiency is also an essential part of these efforts, resulting in the global rate of energy efficiency improvements averaging 4% a year through 2030 – about three times the average over the past two decades.

Most of the global reductions in CO2 emissions between now and 2030 in the net-zero pathway come from technologies readily available today. But in 2050, almost half the reductions come from technologies that are currently only at the demonstration or prototype phase. This demands that governments quickly increase and reprioritize their spending on research and development – as well as on demonstrating and deploying clean energy technologies – putting them at the core of energy and climate policy. Progress in the areas of advanced batteries, electrolyzers for hydrogen, and direct air capture and storage can be particularly impactful.

Providing electricity to approximately 785 million people who have no access to it and clean cooking solutions to 2.6 billion people who lack them is a part of the net-zero pathway. This costs around $40 billion a year, equal to around 1% of average annual energy sector investment.

Total annual energy investment surges to US$5 trillion by 2030 in the net-zero pathway, adding an extra 0.4 percentage points a year to global GDP growth, based on a joint analysis with the International Monetary Fund. The organizations expect that the jump in private and government spending will create millions of jobs in clean energy, including energy efficiency, as well as in the engineering, manufacturing and construction industries. All of this puts global GDP 4% higher in 2030 than it would reach based on current trends.

By 2050, the IEA expects global energy demand to be around 8% smaller than today while serving an economy more than twice as big and a population with 2 billion more people. Almost 90% of electricity generation comes from renewable sources, with wind and solar PV together accounting for almost 70%. Most of the remainder comes from nuclear power. They expect fossil fuels will fall from almost four-fifths of total energy supply today to slightly over one-fifth. Fossil fuels that remain are used in goods where the carbon is embodied in the product, such as plastics, in facilities fitted with carbon capture, and in sectors where low-emissions technology options are scarce.

The IEA report is designed to inform the high-level negotiations that will take place at the 26th Conference of the Parties (COP26) of the United Nations Climate Change Framework Convention in Glasgow in November. It was requested as input to the negotiations by the UK government’s COP26 Presidency.

New energy security challenges will emerge on the way to net zero by 2050 while longstanding ones will remain, even as the role of oil and gas diminishes. The contraction of oil and natural gas production will have far-reaching implications for all the countries and companies that produce these fuels. No new oil and natural gas fields are needed in the net-zero pathway, and supplies will become increasingly concentrated in a small number of low-cost producers. OPEC’s share of a much-reduced global oil supply grows from around 37% in recent years to 52% in 2050, a level higher than at any point in the history of oil markets.

Growing energy security challenges that result from the increasing importance of electricity include the variability of supply from some renewables and cybersecurity risks. In addition, the rising dependence on critical minerals required for key clean energy technologies and infrastructure brings risks of price volatility and supply disruptions that could hinder the transition.

Click here to access the full report on the IEA’s website.