Global market for fossil fuels expected to peak by 2030

fossil fuel

Global demand for coal, oil and natural gas will peak this decade for the first time in history, the International Energy Agency (IEA) said on Tuesday.

In its World Energy Outlook 2023, IEA said that based on current policy settings, the combination of growing momentum behind clean energy technologies and structural economic shifts around the world has major implications for fossil fuels.

The share of fossil fuels in the global energy supply, which has been stuck for decades at around 80 percent, will decline to 73 percent by 2030, IEA said. Global energy-related carbon dioxide (CO2) emissions will peak by 2025.

“The transition to clean energy is happening worldwide and it’s unstoppable. It’s not a question of ‘if’, it’s just a matter of ‘how soon’, and the sooner the better for all of us,” said IEA Executive Director Fatih Birol.

In 2020, one in 25 cars sold was electric, IEA said. However, in 2023, this figure is reaching one in five. Meanwhile, a new record of over 500 gigawatts (GW) of generation capacity for renewables should be reached in 2023.

Renewables are set to contribute 80 percent of new power generation capacity by 2030 under current policy settings, with solar alone accounting for more than half of this expansion, the agency added.

It also welcomed China’s efforts to deploy clean energy. “China is also a clean energy powerhouse, accounting for around half of wind and solar additions and well over half of global EV sales in 2022,” the IEA said.

However, it also underlined that global demand for fossil fuels is set to remain far too high to allow for the attainment of the Paris Agreement goal of limiting the rise in average global temperatures to 1.5 degrees Celsius.

“The costs of inaction could be enormous: despite the impressive clean energy growth based on today’s policy settings, global emissions would remain high enough to push up global average temperatures by around 2.4 degrees Celsius this century,” the agency said.

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