Even though the trend for fossil fuel consumption has been toward steady growth, the IEA sees it dropping off in the future.
Editor’s note: During October, the International Energy Agency (IEA) released its World Energy Outlook 2022 (WEO). As an energy crisis grips the world, the agency continues to shape statistics to fit an anti-carbon agenda. What follows are excerpts that frame the agency’s position and the report’s solid fuels section, where the agency claims the coal phase-down has been postponed, despite the fact that world coal usage continues to grow. The entire report is available for free at: www.iea.org/
reports/world-energy-outlook-2022.
The global energy crisis sparked by Russia’s invasion of Ukraine has prompted short-term responses from governments as well as a deeper debate about ways to reduce the risk of future disruptions and promote energy security. This is a global crisis, but Europe is the main theater in which it is playing out, and natural gas is center stage – especially during the coming northern hemisphere winter.
There remain huge uncertainties over how this energy crisis will evolve and for how long fossil fuel prices will remain elevated, and the risks of further energy disruption and geopolitical fragmentation are high. In all the scenarios, the WEO contemplates, price pressures and a dim near-term outlook for the global economy feed through into lower energy demand than in last year’s WEO.
The crisis provides a short-term boost to demand for oil and coal as consumers scramble for alternatives to high-priced gas.
In the Stated Policies Scenario (STEPS), global energy demand growth of around 1% per year to 2030 is met in aggregate almost entirely by renewables. Emerging markets and developing economies, such as India, see increases across a broader range of fuels and technologies, while the only sources to show growth in advanced economies to 2030 are low-emissions.
The cost advantages of mature clean energy technologies and the prospects for new ones, such as low-emissions hydrogen, are boosted by the Inflation Reduction Act in the United States, Europe’s increased push for clean energy, and other major new policies. The result is to turbo-charge the emerging global clean energy economy.
The STEPS in this WEO scenario are based on prevailing policy settings that see a definitive peak in global demand for fossil fuels.
The WEO identified global coal demand rebounding strongly in 2021 to 5,640 million metric tons of coal equivalent (Mtce) as economies recovered from the pandemic and coal-fired power generation reached a historic high in 2021. Both China and India have boosted investment in domestic coal production, but global production struggled to keep pace with demand increases, causing coal prices to surge. Russia — the world’s third-largest coal exporter — and its invasion of Ukraine complicated coal market dynamics and brought additional pressure on prices.
The outlook for coal is heavily dependent on the strength of the world’s resolve to address climate change. In the STEPS scenario, coal demand declines gradually. In the Announced Pledges Scenario (APS), it declines about 20% below current levels by 2030, and 70% by 2050; coal demand peaks in China in the early 2020s and in India in the late 2020s. In the Net Zero Emissions by 2050 (NZE) Scenario, demand falls 45% by 2030 and 90% by 2050.
There is very limited use of carbon capture, utilization and storage (CCUS) with coal in the STEPS scenario. Around 500 Mtce of coal consumed in 2050 is equipped with CCUS in both the APS and NZE Scenario, corresponding to around 30% of coal demand in the APS and more than 80% in the NZE Scenario in 2050. Unabated coal use drops by 99% between 2021 and 2050 in the NZE Scenario.
Following the European Union ban on Russian imports, a short-lived increase in coal consumption in Europe is supplied from a variety of sources including South Africa and Colombia. The Asia Pacific region accounted for more than three-quarters of global coal imports in 2021 and this share is set to rise. Despite efforts to increase domestic production, India becomes the world’s largest coal importer in the STEPS scenario in the mid-2020s, while, by far, China remains the largest producer and consumer. In the APS, coal trade falls by 60% by 2050; in the NZE Scenario, it falls by 90%.
