October 13, 2021 | oil and gas

Clean energy investment needs to triple over the next decade, IEA says

World oil demand is set to decline to 75 million bpd by 2050

The International Energy Agency is urging countries to increase investments in clean energy and to divest from polluting fuels such as coal.

World oil demand is set to fall in the Paris-based agency's assessment of energy consumption until 2050.

Consumption of oil, the mainstay of global economy today, is set to decline to 75 million barrels per day from 100 million bpd. The decline will be made possible if countries continue to make the pledge towards reaching net-zero emissions by the middle of the century, in line with the 2016 Paris Agreement goals.

The accord mandates capping of the global rise in temperatures to 1.5 degrees Celsius above pre-industrial levels.

'Today’s climate pledges would result in only 20 per cent of the emissions reductions by 2030 that are necessary to put the world on a path towards net zero by 2050,” said Fatih Birol, IEA's executive director.

“Reaching that path requires investment in clean energy projects and infrastructure to more than triple over the next decade, he added.

In the announced pledges scenario highlighted by the IEA, demand for fossil fuels peaks by 2025, with carbon dioxide emissions set to fall by 2050, if all pledges towards carbon neutrality are met.

All sectors will see a decline in emissions, with the electricity sector delivering the largest share. The global rise in temperatures will also hold around 2.1 degrees Celsius by 2100.

“The world’s hugely encouraging clean energy momentum is running up against the stubborn incumbency of fossil fuels in our energy systems,” said Mr Birol.

“Governments need to resolve this at COP26 by giving a clear and unmistakable signal that they are committed to rapidly scaling up the clean and resilient technologies of the future. The social and economic benefits of accelerating clean energy transitions are huge, and the costs of inaction are immense,' he added.

The IEA's call to increase spending on clean energy comes amid a worldwide shortage of energy supplies, including oil and gas.

Oil prices are trading above $80 per barrel for the first time in three years, prompting organisation such as Opec to cite an 'energy transition' fuelled rally as a key reason.

The IEA's earlier call for no new investment in fossil fuel supply projects has also come under sharp criticism from oil producing states such as Saudi Arabia.

Prince Abdulaziz bin Salman, the energy minister of Saudi Arabia, the world's largest oil exporter, previously dismissed the IEA's call to end fossil fuel investments as 'a sequel of [the] La La Land movie'.


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