IEA’s net-zero recipe: Going green and slashing fossil fuels’ role in energy mix while pursuing ‘equitable’ transition
As we get closer to 2030 and 2050 emission reduction deadlines, warnings about the need to curb the carbon footprint and mitigate climate change are multiplying, with many urging the globe to use the remaining time wisely before it runs out. In line with this, the International Energy Agency (IEA) believes that the path to limiting global warming to 1.5 °C has narrowed, however, clean energy growth is still keeping it open for business, enabling the world to reach climate goals by employing more renewables, pursuing less fossil fuels, and chasing stronger international cooperation.
The energy landscape keeps evolving with many changes taking place since 2021, when the IEA published its landmark report Net Zero Emissions by 2050: A Roadmap for the Global Energy Sector, which set out a narrow but feasible pathway for the global energy sector to contribute to the Paris Agreement’s goal of limiting the rise in global temperatures to 1.5 °C above pre-industrial levels.
Following the global energy crisis triggered by Russia’s invasion of Ukraine in February 2022, the energy sector’s carbon dioxide emissions continued to rise, reaching a new record in 2022. However, many still see growing grounds for optimism, as the last two years have also seen significant progress in developing and deploying clean energy technologies.
While surveying the current complex and dynamic landscape, the IEA decided to publish an updated pathway to net-zero by 2050, taking into account the developments that have occurred since 2021. The new edition of the Net Zero Roadmap shows that driving down greenhouse gas emissions from the world’s energy sector to net-zero and limiting global warming to 1.5 ̊C remains possible due to the record growth of key clean energy technologies. Despite this optimistic verdict, the IEA is adamant that the momentum behind the pivot to greener energy still needs to increase rapidly in many areas.
While the updated roadmap outlines a route to net-zero emissions for the global energy sector by 2050, it also recognizes the importance of fostering an “equitable” transition that takes different national circumstances into account. To illustrate this, the IEA’s report explains that advanced economies need to reach net-zero sooner to allow emerging and developing economies more time. In turn, the net-zero pathway will achieve full access to modern forms of energy for all by 2030 through annual investment of nearly $45 billion per year – just over 1% of energy sector investment.
Nonetheless, staying on track not only means that almost all countries need to move forward with their targeted net-zero dates but it also hinges on mobilizing a significant increase in investment, especially in emerging and developing economies. In the new zero pathway, global clean energy spending will rise from $1.8 trillion in 2023 to $4.5 trillion annually by the early 2030s.
The International Energy Agency’s 2023 update incorporates the post-pandemic economic rebound and the growth in some clean energy technologies along with the increased investment in fossil fuels – coal, oil, and gas – and high emissions. The world has witnessed record growth in solar power capacity since 2021 and electric car sales are in line with a pathway towards net-zero emissions globally by mid-century, as are industry plans for the roll-out of new manufacturing capacity for them.
This is perceived to be significant since those two technologies alone deliver one-third of the emissions reductions between today and 2030 in the pathway. In accordance with this, clean energy innovation has also been delivering more options and lowering technology costs.
The IEA claims that “bolder action” is necessary this decade. With this in mind, global renewable power capacity will triple by 2030 in this year’s updated net-zero pathway. In addition, the annual rate of energy efficiency improvements doubles, sales of electric vehicles and heat pumps rise sharply, and energy sector methane emissions fall by 75%. These strategies for lowering emissions are anticipated to deliver more than 80% of the reductions needed by the end of the decade.
Fatih Birol, IEA Executive Director, commented: “Keeping alive the goal of limiting global warming to 1.5 °C requires the world to come together quickly. The good news is we know what we need to do – and how to do it. Our 2023 Net Zero Roadmap, based on the latest data and analysis, shows a path forward. But we also have a very clear message: Strong international cooperation is crucial to success. Governments need to separate climate from geopolitics, given the scale of the challenge at hand.”
What’s in store for coal, oil & gas?
Within the updated net-zero scenario, a huge policy-driven ramping up of clean energy capacity is expected to cut fossil fuel demand, making it 25% lower by 2030, and reducing emissions by 35% compared with the all-time high recorded in 2022. Bearing this in mind, fossil fuel demand is forecasted to fall by 80% by 2050.
Therefore, the IEA underscores that no new long-lead-time upstream oil and gas projects, coal mines, mine extensions, or new unabated coal plants are needed. However, the agency still points out that continued investment is required in some existing oil and gas assets and already approved projects. In the IEA’s view, sequencing the increase in clean energy investment and the decline of fossil fuel supply investment is “vital” if damaging price spikes or supply gluts are to be avoided.
Aside from this, more resilient and diverse supply chains for clean energy technologies and the critical minerals needed to make them are perceived to be key to building an energy sector with net-zero emissions, according to the report. On the other hand, it is equally important that supply chains remain open, given the pace and scope of clean energy development required. Although different countries will need to chart their own routes depending on their own circumstances and capacities, there are some key milestones – even with these regional differences – that are important for policymakers around the world to take into account.
Furthermore, the IEA’s report stresses the importance of stronger international cooperation to limit global warming to 1.5 °C and warns that a failure to sufficiently step up ambition and implementation between now and 2030 would create additional climate risks and make achieving the 1.5 °C goal dependent on the massive deployment of carbon removal technologies, which are deemed to be expensive and unproven at scale.
In a delayed action case that the report examines, a failure to expand clean energy quickly enough by 2030 means nearly 5 billion tonnes of carbon dioxide would have to be removed from the atmosphere every year during the second half of this century. If carbon removal technologies fail to deliver at such scale, returning the temperature to 1.5 °C would not be possible, based on the IEA’s findings.
“Removing carbon from the atmosphere is very costly. We must do everything possible to stop putting it there in the first place… With international momentum building behind key global targets such as tripling renewable capacity and doubling energy efficiency by 2030, which would together lead to a stronger decline in fossil fuel demand this decade, the COP28 climate summit in Dubai is a vital opportunity to commit to stronger ambition and implementation in the remaining years of this critical decade,” concluded Dr Birol.
What is being said about the IEA’s updated net-zero pathway?
Climate Action Network-International (CAN), an environmental network of over 1,800 non-governmental organizations in over 130 countries fighting the climate crisis, emphasizes that the IEA’s new report offers a path forward for governments and decision-makers to make the right choices that will keep global warming below 1.5ºC. To this end, the report reiterates its finding that there is no room for new oil, gas, and coal beyond operating fields and mines for 1.5ºC.
Dr Stephan Singer, Climate Science and Energy Policy Advisor, CAN International, stated: “In this report, the IEA does not question the feasibility of keeping global warming below 1.5ºC as governments have significant resources and tools available to make this happen. Despite successes of renewable deployment in recent years, particularly in Europe and China, it is clear that political will is missing to enforce stronger ambition and phase out fossil fuels at the pace and scale needed.
“CAN also strongly underscores the suggestions from the IEA for international grants-based support by rich nations to developing countries for clean energies like renewables to multiply by up to $1 trillion annually in the next decade to have a chance to curtail escalating climate impacts.”
Kaisa Kosonen, Policy Coordinator, Greenpeace International, said: “It’s an extraordinary moment in history: we now have all the tools needed to free ourselves from planet-heating fossil fuels, but there’s still no decision to actually do it. That’s what leaders must deliver at the COP28 climate summit this year. They can’t claim to support the Paris Agreement and its 1.5°C warming limit if they keep permitting new fossil fuel projects.
“We need a clear and just plan with benchmarks to get rid of the old, polluting fuels that are killing us. Those who’ve polluted and profited the most must be made accountable for supporting the lower-income countries and communities in their transition to clean, renewable energy. Solar and wind power are set to grow exponentially, bringing down energy costs, but that alone won’t help if our leaders fail to regulate the fossil fuel industry out of the way.”
Moreover, the IEA’s report charts a faster phase-out of fossil gas. Compared to its 2021 scenario, the IEA has cut its projection for fossil gas demand in 2050 by almost half.
Kelly Trout, Research Director, Oil Change International, pointed out: “The 2023 Net Zero Energy report reaffirms a stark truth: To limit global temperature rise as agreed upon internationally, there’s no room for new oil, gas, or coal fields. The time for a swift, equitable, and fully funded phase-out of fossil fuels is now, with rich countries moving first and fastest and paying their fair share to finance a global just transition. As countries prepare to make serious climate commitments at COP28, they must take into account the unequivocal evidence that the shift away from fossil fuels must happen, and it must happen fast.”
The new pathway calls for at least tripling total renewable energy capacity to 1.5 TW or above by 2030 and strengthens the IEA’s call for wealthy nations to accelerate their energy transition more quickly.
Dean Cooper, Global Energy Lead, WWF, underlined: “What we do need is to accelerate the scaling up of solar and wind energy and commitment from financiers, public and private, to enable this. We must ensure that there is agreement at COP28 on a global renewable energy goal, and work together to phase out fossil fuels with a definitive timeline. Anything delaying coordinated global action will cause great harm to people, nature, and our planet.”
The report also highlights that carbon capture and storage (CCS) has a history of unmet expectations. The roadmap reduces its projections for CCS deployment in 2030 by around 40% compared to the original NZE scenario.
Dongjae Oh, Oil and Gas Program Lead, Solutions for Our Climate, commented: “The fossil fuel industry continues to promote CCS as a climate silver bullet. But the reality is that CCS is only driving new oil and gas development that is pushing the world closer to tipping over its 1.5C limit. As the IEA reiterates, there must be no new oil and gas if we want to stop the climate crisis.”
Caleb Heeringa, Campaign Director for Gas Leaks, said: “This new IEA report makes it clear: cleaning up methane pollution from the ‘natural’ gas system isn’t enough — we can’t avoid the worst climate outcomes without also phasing out the use of gas and transitioning to clean electricity. The fossil fuel industry continues to push distractions like ‘certified’ ‘low-carbon’ methane gas that allow them to mislead the public about the true threats of their product. Reducing methane pollution should be a legal requirement for the gas industry, not a marketing campaign for its expansion.”
Along these lines, Teresa Anderson from ActionAid International claims that the IEA report confirms carbon capture and storage “consistently failed” to achieve “any of its overblown promises” even though billions of dollars have been invested over decades. For Anderson, there is no magical tool around the corner that will justify continued fossil fuel expansion.
Gerry Arances, Executive Director of Center for Energy, Ecology, and Development (CEED), remarked: “The IEA’s updated net-zero roadmap warns of an even slimmer window to keep 1.5°C within reach, and thus leaves no illusion that coal, gas, and oil can still have roles to play in the global energy transition. For the world’s most climate-vulnerable communities and for generations yet to come, keeping the 1.5°C goal alive is not an option but a matter of survival.
“This report tells us that not only should new fossil fuel extractions and power capacity expansions be stopped today, an urgent phaseout of existing power and fields should also happen with haste. Governments and companies still keeping the fossil fuel industry alive should listen to science and finally deliver the leadership necessary to end the age of fossil fuels, and make way for a just transition to renewables.”
Additionally, Anabella Rosemberg, CAN Senior Advisor on Just Transition, notes that the IEA’s updated report does not give enough attention nor calls for supporting public policies that would make a just transition happen. Rosemberg mentions social protection, inclusive and rights-based mechanisms for planning the transition, and economic diversification plans as “critical” tools for a 1.5°C trajectory along with clean energies and efficiency.
Catherine Abreu, Founder & Executive Director, Destination Zero, added: “IEA report once again confirms the main barriers holding back a just transformation of the global energy system: government policies corrupted by fossil fuel interests to give them the advantage, and the trillions of public dollars still being dumped into coal, oil and gas.
“History will condemn the major producers that are already trying to spin this report to justify their limitless expansion of fossil fuel projects – we can now plainly see the architects of our collective devastation. 2023 is a make-or-break year for the credibility of UN climate talks. This report makes it clearer than ever that outcomes at COP28 must include a global commitment to phase out all fossil fuels, triple renewable energy, and double energy efficiency.”