International Energy Agency calls time on new fossil fuels

June 2, 2021
Image: Viv Miley

The International Energy Agency (IEA) has issued a strong call for a global about turn in climate policy in the lead-up to the United Nations Climate Change Conference in Glasgow in November.

The Net Zero by 2050: a Roadmap for the Global Energy Sector report, released on May 18, said the world can build a global energy sector with net zero emissions by 2050, but it would require an about turn.

“The world has a viable pathway to building a global energy sector with net-zero emissions in 2050, but it is narrow and requires an unprecedented transformation of how energy is produced, transported and used globally”, the report said.

The report warned that the carbon cuts promised by governments — even if achieved — “would fall well short of what is required” to have a chance of limiting the global temperature rise to 1.5°C.

The report details the steps necessary to achieve net zero emissions by 2050. It represents a significant shift for the IEA, an intergovernmental organisation that is part of the Organisation for Economic C-operation and Development, of which Australia is a member.

The IEA has previously been criticised for downplaying the potential of renewable energy in combating climate change, while supporting a future for fossil fuels. The federal government has often cited the IEA to justify opening new gas and coal plants.

However, this IEA roadmap is a change of approach. There should be “no investment in new fossil fuel supply projects and no further final investment decisions for new unabated coal plants”, it said bluntly.

“By 2035, there [should be] no sales of new internal combustion engine passenger cars and by 2040, the global electricity sector [should have] already reached net-zero emissions.”

It paints a picture of the “energy world” in 2050 and projects that global energy demand would be about 8% smaller, even while serving a bigger economy and bigger population.

It said about 90% of electricity generation would come from renewable sources, with wind and solar PV together accounting for almost 70%. It said most of the remainder would come from nuclear power.

Solar would be the world’s “single largest source of total energy supply”, it said, while “fossil fuels would fall from almost four-fifths of total energy supply today to slightly over one-fifth”.

Fossil fuels that remain would be “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”.

IEA Executive Director Dr Fatih Birol talked up the roadmap as both a “challenge” and “a huge opportunity” for economies. He added this showstopper: “For the first time, the IEA clearly states that investment in fossil fuels needs to stop.”

The transition has to be “fair and inclusive”, Birol said, to “ensure that developing economies receive the financing and technological know-how they need” for new energy systems to their expanding populations’ needs in a sustainable way.

Birol said that any new investment in fossil fuels will end up as “stranded investments” and urged the finance industry “to adjust its investment policies immediately”.

Associate Professor Dr Sven Teske, from the Institute for Sustainable Futures at the University of Technology in Sydney, said solar and wind power will have to become the main energy “pillar”, not only for global electricity demand, but for global energy supply — including for transport, industry and heating.

But Teske challenged the IEA report’s view that “half the [carbon] reductions [will] come from technologies that are currently at the demonstration or prototype phase”.

“The IEA still relies on unproven carbon capture and storage technologies. To take carbon dioxide out of the atmosphere is technical and economically much harder than avoiding the emission in the first place.”

He said the main technologies to decarbonise are already “market ready” and are either “cost competitive” or will be within the next 5 to 10 years. These are solar and wind technologies, battery technologies, electric mobility and various technologies to provide industrial process heat. “There is no need to wait for more research, the transition to a full renewable energy supply until 2050 can start now,” Teske said.

Unsurprisingly, the fossil fuel lobby rejected the IEA report.

The Organization of the Petroleum Exporting Countries (OPEC) said a lack of investment in new oil projects to curb emissions could lead to oil-price volatility. The American Petroleum Institute said any pathway to net zero “must include” natural gas and oil which, it said, remains “crucial to displacing coal in developing nations and enabling renewable energy”.

Japan and Australia also disputed the IEA report, saying they would continue to invest in (read subsidise) fossil fuels.

Federal resources minister Keith Pitt insisted that coal, oil and gas “will continue to be a big part of Australia’s energy mix”. He complained that previous IEA reports had outlined a bigger role for coal and said the latest scenario failed to account for carbon capture and storage — a technology that is yet to be proven to work at the scale and pace required by the climate emergency.

The federal government is deploying public funds to pursue a “gas-fired pandemic recovery” policy and is resisting pressure to set a net zero emissions target.

The federal Labor Opposition and state governments in Queensland, Victoria, Western Australia and the Northern Territory are conflicted on climate change policy: they say they support a transition to renewable energy but, at the same time, support new and expanding coal and gas projects.

Greens leader Adam Bandt said the report was “a code red alarm call”. If the Greens win the balance of power they will “kick the Liberals out and rely on this report to push Labor to phase out coal, oil and gas”, he said.

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