Global oil, gas, coal demand to peak by 2030

Global fossil fuel demand will peak by 2030 as more electric cars join the road and China’s economy expands more slowly and switches toward cleaner energy, undermining the case for more investment, according to the International Energy Agency.

The analysis from the International Energy Agency, which advises industrialized nations, contrasts with the position of the Organization of Petroleum Exporting Countries, which sees oil consumption growing long after 2030 and asks for trillions of dollars in additional oil industry investment.

The International Energy Agency (IEA) stated in its annual World Energy Outlook that peaks in oil, natural gas, and coal consumption will be apparent this decade in its scenario based on countries’ present policies—the first time this has occurred.

“The global move to sustainable energy is inexorable. It’s not a question of if, but of when. Governments, businesses, and investors must support renewable energy transitions rather than stifle them,” said IEA Executive Director Fatih Birol.

According to a graph in the IEA report, global consumption of the three fossil fuels will peak by 2030. While coal consumption begins to fall sharply after 2030, gas and oil use will continue to reach high levels for the following two decades.

Nonetheless, the IEA stated that, as things stand, demand for fossil fuels will remain much too high to meet the Paris Agreement objective of limiting the rise in average world temperatures to 1.5 degrees Celsius.

“This risks not just aggravating climate consequences after a year of record-breaking heat but also weakening the security of the energy system, which was designed for a cooler world with fewer extreme weather events,” the IEA said in a statement.

The IEA forecasts nearly ten times as many electric cars on the road by 2030, citing renewable energy regulations in major regions as a factor influencing future fossil fuel consumption.

The government now anticipates that 50 percent of new US automobile registrations will be electric by 2030, up from 12% in its previous forecast two years ago, owing partly to the US Inflation Reduction Act.

According to the IEA, China’s status as a main source of energy demand growth is also shifting.

While China contributed to about two-thirds of the increase in global oil usage over the previous decade, the impetus behind its economic expansion is ebbing, and the country is now a “clean energy powerhouse,” according to the report, with China accounting for more than half of worldwide electric car sales in 2022.

The key to a smooth transition, according to the IEA, is to increase investment in all parts of a clean energy system rather than in fossil fuels.

“The end of the boom period for fossil fuels does not signify the end of fossil fuel investment,” the IEA report noted.