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Recently, Fatih Birol, Executive Director at the International Energy Agency (IEA), outlined in an article for Financial Times that the world was on the brink of “a historic turning point,” with the demand for fossil fuels set to peak before 2030, although, the decline in oil, gas and coal would not be “steep enough” to meet the requirements of the Paris Agreement and limit global warming to 1.5 C.
“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,” explained Birol in its article.
According to the IEA’s Executive Director, this year’s World Energy Outlook, which is slated to be published next month, points out that the demand for each of these fossil fuels is on the road to hitting a peak this decade. As this comes earlier than anticipated, Birol elaborates that these shifts will also bring forward the peak in global greenhouse gas emissions, driven by the ramp-up of clean energy technologies.
“The ‘Golden Age of Gas,’ which we called in 2011, is nearing an end, with demand in advanced economies set to fall away later this decade. This is the result of renewables increasingly outmatching gas for producing electricity, the rise of heat pumps and Europe’s accelerated shift away from gas following Russia’s invasion of Ukraine,” highlighted Birol.
While the IEA’s Executive Director describes peaks for coal, oil and gas demand as “a welcome sight,” he also warns that the projected declines in demand based on current policy settings are “nowhere near steep enough” to bring to life the Paris Agreement goals. In addition, demand for coal, oil, and gas will vary considerably among regions and spikes, dips and plateaus are still possible on the way down.
“Even as demand for fossil fuels falls, energy security challenges will remain as suppliers adjust to the changes. The peaks in demand we see based on today’s policy settings don’t remove the need for investment in oil and gas supply, as the natural declines from existing fields can be very steep. At the same time, they undercut the calls from some quarters to increase spending and underline the economic and financial risks of major new oil and gas projects — on top of their glaring risks for the climate,” underlined Birol.