The world is missing the chance to accelerate energy transition when pumping trillions of dollars into pandemic recovery packages, says DNV’s latest outlook.
Fossil fuels are not going to disappear any time soon and will account for half of the primary energy mix in 2050, according to DNV’s Energy Transition Outlook 2021, published last Wednesday.
Natural gas will maintain its current position with around 25 percent of the total, although oil demand is forecast to halve, while coal will decrease to a third of its current utilization by mid-century.
Gas use will grow over the coming decade, surpassing oil in 2032 as the largest primary energy source and levelling off for a 15-year period before starting to decline in the 2040s.
DNV’s outlook makes for stark reading, however, as the Norway-based international consultancy said the roll-out of carbon capture and storage will be too slow, with only 3.6 percent of fossil fuels’ carbon dioxide emissions being abated in 2050.
DNV said: “Decarbonized fossil energy is an important aspect of reaching the Paris Agreement, but the uptake of carbon capture and storage is forecast to be woefully slow, mainly for reasons of cost.”
The report added: “Global emissions likely peaked in 2019, followed by an unprecedented 6 percent drop in 2020 due to COVID-19.”
Emissions are now rising sharply again and will grow for the next three years before starting to decline.
While renewables are being added at great speed, they often supplement — rather than fully replace — thermal power generation. By 2030, global energy-related CO2 emissions are likely to be only 9 percent lower than 2019 emissions, and by 2050 only 45 percent lower, DNV said.
The report said: “This is in sharp contrast to ambitions to halve greenhouse emissions by 2030 and to achieve the net zero emissions by 2050 required to limit global warming to 1.5 degrees Celsius, above pre-industrial levels.
“Our forecast is that we are most likely headed towards global warming of 2.3 degrees Celsius by 2100.
“As CO2 emissions continue to accumulate, the window of opportunity to act narrows every year.
“Relying on large-scale, net-negative emissions technologies and carbon removal in the latter half of the century is a dangerous, high-risk approach. With global warming, every fraction of a degree is important, and all options to reduce emissions need urgent realization.”
To limit global warming to less than 1.5 degrees Celsius, the Intergovernmental Panel on Climate Change (IPCC) has concluded cumulative emissions must be limited to 400 gigatonnes of CO2 from the start of 2020 and into the future, and to 1150 gigatonnes of CO2 to limit global warming to below 2.0 degrees Celsius.
Yet DNV found that, using the IPCC carbon budgets and the aggregated CO2 emissions from its forecast, the 1.5 degrees C budget would be exhausted in 2029.
To exhaust the budget associated with the 2.0 degrees Celsius threshold would take a further 24 years until 2053.
DNV stated that governments missed an opportunity to accelerate the energy transition as they committed trillions of dollars to spur economic recovery from the coronavirus-related downturn.
Government interventions to stop the spread of the virus and then to restart activity revealed how effective national and global actions can be, but similar action and funding have yet to be applied to the unfolding global climate crisis, the outlook noted.
With some exceptions, particularly in the European Union, governments have not steered recovery spending towards a decarbonised outcome. Global CO2 and greenhouse gas emissions fell 6per cent in 2020 but will rise again this year.
The report said: “While the emissions trajectory has shifted down slightly, that is due to lost economic activity, not energy-system renewal.
“The overall pace of the transition has not accelerated, and that is a lost opportunity.”
Hydrogen is viewed as “a major contender” for hard-to-abate sectors where electrification is either not feasible due to the low energy density of batteries, or very costly.
However, hydrogen production is expensive and involves significant energy losses.
DNV said: “Absent some extraordinary policy shift …we do not foresee hydrogen supplying more than 5 percent of global energy demand by 2050,” which includes synthetic fuels — such as e-methanol, e-ammonia and sustainable aviation fuels — in its total hydrogen-demand forecast.
It believes that by 2050, synthetic fuels will account for 70 percent of aviation’s and virtually all of the maritime sector’s “hydrogen” demand.
The report said: “We forecast that, by 2050, hydrogen will have replaced fossil fuels in many industrial heat applications … [and] one-fifth of aviation fuel will be hydrogen based by 2050, equating to 11 percent of total hydrogen demand.”
In October, DNV will publish its first Pathway to Net Zero Emissions report — a detailed look at how best to close the gap between this forecast and one that is aligned with the Paris Agreement.
DNV chief executive Remi Eriksen said: “It is vital that we mobilize all the forces of the Fourth Industrial Revolution towards a green energy transformation, including innovative ways to finance this shift.”
For more information visit www.dnv.com
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