Thanks to advances in green energy production and the rise of electric vehicles, demand for oil, gas, and coal will go into decline before the year 2030, according to new projections from the International Energy Agency (IEA).
The body, which is funded by the Organization for Economic Cooperation and Development, previously predicted that the fossil fuel industry’s output would peak in 2030, but has now pushed that back into this decade as a result of governmental efforts and global events, according to IEA Director Fatih Birol.
“Based only on today’s policy settings by governments worldwide — even without any new climate policies — demand for each of the three fossil fuels is set to hit a peak in the coming years,” Birol wrote in an op-ed for the Financial Times. “This is the first time that a peak in demand is visible for each fuel this decade — earlier than many people anticipated.”
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He argues that the rise of wind and solar power, the drying up of investments for coal from China toward renewables and nuclear power, and the rise of electric vehicles around the world (from cars to scooters), all point to a fast-approaching peak in demand for fossil fuels.
In addition, Russia’s invasion of Ukraine has pushed many European powers to invest in alternative energy sources, including renewables. All of which suggests that the end of the “Golden Age of Gas” is nearing, and that investments in fossil fuels should slow.
However, Birol warns that this development does not mean the end of global warming. Even by the IEA’s optimistic outlook, existing policy will not limit global warming to 1.5°C, seen by many as a crucial measure to avoid the worst impacts of climate change.
While the IEA accepts some continued investment in fossil fuels will be necessary in the coming years to maintain energy security, it believes its projections should be a warning to investors around the world.
“The peaks in demand we see based on today’s policy settings don’t remove the need for investment in oil and gas supply, as the natural declines from existing fields can be very steep,” said Birol. “At the same time, they undercut the calls from some quarters to increase spending and underline the economic and financial risks of major new oil and gas projects — on top of their glaring risks for the climate.”
