Demand for oil, gas and coal will peak by 2030, but that’s not fast enough to keep global warming within 1.5 degrees, says IEA chief

Published Tue, Sep 12 2023 Catherine Clifford@in/catclifford/@CatClifford www.cnbc.com/

Demand for fossil fuels like oil, gas and coal will hit an all-time high before 2030, according to Fatih Birol, executive director of the International Energy Agency.

That’s due to changing energy governmental policy around the globe, the surge in development of clean technologies like solar panels and electric vehicles, the rise in use of heat pumps, and the forced accelerated move off of gas in Europe after Russia invaded Ukraine, Birol said.

While the pace in moving away from fossil fuels, which cause global warming, is faster than previously expected, it is not fast enough to keep global warming to within the 1.5 degree threshold that international leaders are targeting, Birol said.

Demand for fossil fuels like oil, gas and coal will hit an all-time high before 2030, according to Fatih Birol, executive director of the International Energy Agency.

That’s notable progress for the global fight against climate change, but it’s not fast enough to keep global warming within the internationally supported target of limiting global warming to 1.5 degrees Celsius above pre-industrial..., Birol said.

“Despite recurring talk of peak oil and peak coal over the years, both fuels are hitting all-time highs, making it easier to push back against any assertions that they could soon be on the wane. But according to new projections from the International Energy Agency, this age of seemingly relentless growth is set to come to an end this decade, bringing with it significant implications for the global energy sector and the fight against climate change,” Birol wrote in an op-ed published in the Financial Times.

The IEA is a global intergovernmental energy agency founded in 1974 after the oil crisis in 1973, and which now includes in its energy charter clean energy and the global energy transition.

Birol’s assessment is based off of the IEA’s forthcoming report, the World Energy Outlook, which is due out in October and which will show “the world is on the cusp of a historic turning point,” Birol said.

The sea change in energy demand is due to, among other reasons, growth of clean energy technologies like solar panels and electric vehicles, and current global governmental policies, Birol said.

“Based only on today’s policy settings by governments worldwide — even without any new climate policies — demand for each of the three fossil fuels is set to hit a peak in the coming years. This is the first time that a peak in demand is visible for each fuel this decade — earlier than many people anticipated,” Birol said.

China is the largest consumer of coal, but Birol said China has seen a growth in its use of renewable and nuclear energy. Also, China’s slowing economy will decrease its use of coal, Birol said.

The surge in adoption of electric vehicles, including in China, contributes to the IEA’s forecast that oil demand will peak before 2030. The growth in adoption and use of electric buses and two and three-wheeled scooters is also contributing to the expected peak of oil, Birol said.

The “Golden Age of Gas,” which the IEA dubbed in 2011, is set to fade because of the growth in renewables, Birol said. Also, the rise in the use of heat pumps for temperature regulation and Europe’s forced accelerated transition off of Russian pipelines of gas following the Russian invasion of Ukraine contributed to the IEA’s view that gas demand will peak this decade, Birol said.

The drop-off in demand for fossil fuels will be more accelerated in advanced economies, and the climate benefits of that will be at least in part offset by the growth in demand for fossil fuels, especially gas, in emerging and developing economies, Birol said.

Also, the global trends away from fossil fuels will be interrupted by extreme weather events. Heatwaves drive demand for electricity up and droughts make hydropower less available, so in those instances, Birol predicted some spikes in demand.

Since 2015, global leaders have underscored the importance of holding global warming to 1.5 degrees Celsius to stave off ever more extreme heatwaves, droughts and flooding.

Even as the peak for fossil fuels appear to be closer than previously expected, fossil fuel use is not declining fast enough to be sure the Earth stays within the target of 1.5 degree Celsius of warming above pre-industrial levels.

“The projected declines in demand we see based on today’s policy settings are nowhere near steep enough to put the world on a path to limiting global warming to 1.5C. That will require significantly stronger and faster policy action by governments,” Birol said.