Fossil fuel consumption is expected to peak or plateau within this decade, accelerated by the policy and trade flow shifts following the Russian invasion of Ukraine, the International Energy Agency (IEA) said on Thursday.
For the first time ever, a World Energy Outlook scenario from the IEA based on the current government policies and settings has global demand for every fossil fuel showing a peak or plateau, the agency said in its World Energy Outlook 2022 published today.
Even natural gas, which was previously expected to continue rising, could now join coal and oil in peaking around 2030, according to the IEA’s latest estimates.
“For the first time ever, a WEO scenario based on today’s prevailing policy settings – in this case, the Stated Policies Scenario – has global demand for every fossil fuel exhibiting a peak or plateau,” the international agency said.
In the Stated Policies Scenario (STEPS) scenario, coal use is set to fall back within the next few years, natural gas demand will reach a plateau by the end of the decade, and rising sales of electric vehicles (EVs) mean that oil demand will level off in the mid-2030s before ebbing slightly to mid-century.
“One of the effects of the current crisis is that the era of rapid growth in global gas demand draws to a close,” the IEA’s Executive Director Fatih Birol said.
“In Europe, climate policies accelerate the shift away from gas. New supply brings prices down by the mid-2020s, and LNG becomes even more important to gas security,” Birol added.
The recent rise in coal is small and only temporary, the IEA’s latest analysis shows. At the same time, renewables are expected to continue surging and eating into the share of coal and gas of the power mix.
The IEA’s World Energy Outlook 2022 also predicts that “Russian fossil fuel exports never return – in any of our scenarios – to their 2021 levels,” Birol said. “Within 10 years, Russia’s share of internationally traded oil & gas is set to fall by half.”