The Strategist

IEA: Demand for fossil fuels will decline beyond the 2030s

10/14/2021 - 08:05

The global community's plans to cut greenhouse gas emissions will not radically reduce demand for fossil fuels, according to the International Energy Agency's (IEA) global outlook to 2050.

However, even the agency's most conservative scenario now foresees a drop in overall demand for gas, coal and oil beyond the 2030s for the first time. In the baseline scenario, however, fossil fuel demand will plateau in the 2030s and then decline slightly by 2050.

A 'new energy economy' is emerging around the world, linked to a changing energy mix - with an increasing share of renewable energy sources (RES). This is happening against a backdrop of struggling CO2 emissions, the introduction of new technologies and geographical shifts in demand, says the International Energy Agency's forecast to 2050.

The market for new technologies (wind and solar installations, batteries, etc.) could be comparable to the oil market by that date, the authors of the review point out.

CO2 emissions in this case will increase from 31.6 million tonnes to 33.4 million tonnes by 2030 and will decrease to 30.9 million tonnes by 2050, which is quite far from the declared 'global zero' goal.

According to the IEA baseline scenario, fossil fuel demand will plateau in the 2030s and then decline slightly by 2050. This is the first time such a forecast is given in the baseline scenario - previous estimates envisaged steady growth. Compared with the previous forecast, the prospects for coal have worsened: in the coming years, demand for it will grow but then a sharp decline is expected (minus 25% in 2050 compared to 2020). After 2025, coal consumption will decline in China (although China's own production covers 90% of demand) and in developed countries. This will offset the latest surge in demand by 2030.