No new oil, gas projects in IEA net zero 2050 scenario

The world's path to achieve net zero emissions by 2050 excludes any new oil and gas fields being approved for development beyond those already committed as of 2021, the IEA said in its latest report.

"The focus for oil and gas producers switches entirely to output — and emissions reductions — from the operation of existing assets," the IEA said in its Net Zero by 2050 report. "Supplies become increasingly concentrated in a small number of low-cost producers. Opec's share of a much-reduced global oil supply grows from around 37pc in recent years to 52pc in 2050, a level higher than at any point in the history of oil markets."

By 2050, oil demand drops by 75pc to 24mn b/d compared with 90mn b/d in 2020, while gas consumption falls by 55pc to 1.75 trillion m³, the IEA's Net‐Zero Emissions by 2050 Scenario (NZE) scenario shows. Upstream oil and gas investments average some $350bn/yr in 2021-2030, little changed from last year's level, which was impacted by the Covid-19 pandemic, but about 30pc lower than the average of the previous five years.

"Once fields under development start production, all of the upstream investment in the NZE is to support operations in existing fields; after 2030, total annual upstream investment is around $170bn each year," the IEA said.

The NZE scenario also shows no sales of new internal combustion engine passenger cars by 2035.

By 2050, global energy demand is 8pc lower than now, but "it serves an economy more than twice as big and a population with 2bn more people," the Paris-based energy watchdog said. By 2050, "almost 90pc of electricity generation comes from renewable sources, with wind and solar PV together accounting for almost 70pc," the NZE scenario shows. "Fossil fuels fall from almost four-fifths of total energy supply today to slightly over one-fifth."

The remaining fossil fuels 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 said. Increased energy efficiency also plays a significant part in the NZE scenario, with the global rate of energy efficiency improvements averaging 4pc/yr this decade, which is about three times the average of the previous two decades.

The IEA said that a net zero pathway "requires the immediate and massive deployment of all available clean and efficient energy technologies, combined with a major global push to accelerate innovation". In the NZE scenario, the majority of the global cuts in CO2 emission in this decade 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," the IEA said. "Progress in the areas of advanced batteries, electrolysers for hydrogen, and direct air capture and storage can be particularly impactful."

The NZE scenario shows annual investments in transmission and distribution grids jumping to $820bn in 2030, from $260bn today. Over the same period of time, the number of public electric vehicle (EV) charging points rises to 40mn from 1mn today, requiring almost $90bn of annual investment in 2030.

"The required roll-out of hydrogen and carbon capture, use and storage (CCUS) after 2030 means laying the groundwork now: annual investment in CO2 pipelines and hydrogen-enabling infrastructure increases from $1bn today to around $40bn in 2030," the IEA said.

By Konstantin Rozhnov