IEA reaffirms that there is no room for new oil, gas or coal

There is no room for new oil, gas, and coal activities if global warming is to be limited to 1.5°C, says the latest net-zero roadmap from the International Energy Agency (IEA).

The report outlines pathways to achieve net-zero emissions by 2050 and underscores the imperative for a substantial increase in global investment in clean energy. It advocates raising annual investments to US$4.5tn, starting in the next decade, up from the projected US$1.8tn in 2023.

By aiming for a 10-1 ratio of clean energy versus fossil fuel investment by 2030, this strategy significantly amplifies wind and solar capacity, tripling and quintupling their growth from 2022 to 2030. It also reveals record growth in clean energy technology in the two years since the first edition of the roadmap.

Civil society organisations immediately responded to the updated report, which was first published in 2021.

“Achieving this requires a mobilisation of all stakeholders,” said Paul Schreiber of Reclaim Finance. “While public finance is essential to enable investment in some areas and address equity concerns, it is ultimately private finance that will make or break the transition.”

However, the financial sector is continuing to push towards climate breakdown, Schreiber said. In 2022, the 60 biggest banks provided almost US$150bn to fossil fuel developers, and earlier this week UK prime minister Rishi Sunak began controversial proceedings to develop the UK’s largest untapped oilfield.

“Policymakers, supervisors, regulators and central bankers cannot ignore the situation. They must remake the rules of the game to ensure no support is provided to fossil fuel development and funds are directed toward real climate solutions, such as wind and solar deployment and efficient building renovation,” said Schreiber.

Due to the long lifespan of fossil fuel infrastructure, the IEA explicitly warns that a net-zero scenario requires substantial changes to operating patterns and the early closure of some existing fossil fuel-based infrastructure. Furthermore, the rate of reduction in oil and gas demand necessary to reach net-zero emissions by 2050 is now so fast that it may imply the early closure of some existing oil and gas fields.

In contrast to the first edition, the latest roadmap reduces its reliance on fossil-based technologies including carbon capture and storage (CCS) and, highlighting that such projects have a history of failure. Similarly, the IEA has almost halved its projection for gas in 2050.

“Flexible and renewable solutions, not new gas or dangerous distractions like CCS, are the keys to delivering 100% energy access by 2030,” said Kelly Trout, research director at Oil Change International.

Speaking about the social equality aspects of the green transition, Stephan Singer of Climate Action Network welcomed suggestions from the IEA for “international grants-based support by rich nations to developing countries for clean energies like renewables to multiply by up to US$1tn annually in the next decade to have a chance to curtail escalating climate impacts”.

Capital costs for renewables-based projects in emerging markets and developing economies remain at least double those in advanced economies.The report also says rich nations should reach net-zero emissions by 2045, implementing an “equitable pathway” in which historical polluters take the lead.

The run-up to Cop28 has narrowed focus on the responsibility of the global north to drive climate action while leaving no one behind. The loss and damage fund to provide finance to climate-vulnerable nations was celebrated as a major win at last year’s UN climate meeting.

This has not quietened voices raising alarm over the huge debt levels of those vulnerable nations. Earlier this month, senior officials met at the Climate Vulnerable Forum, calling on international financial institutions to take urgent action to combat debt levels as well as address the issue of loss and damage.

Separately, the IEA hosted the European Investment Bank and the European Central Bank at a high-level conference on Thursday, calling on finance and industry leaders to deliver a clean energy transition.