Between predictions and global agreements, the long road to divest from fossil fuels

According to the United Nations, fossil fuels (oil, gas and coal) account for 80% of current global primary energy demand, but are the main causes of greenhouse gas emissions, accounting for 78% of total emissions. By 2023, fossil fuel emissions will reach 36.8 billion metric tons of carbon dioxide (CO2).

Reducing emissions by 2030 and achieving carbon neutrality by 2050, with average temperatures below 2°C, aims to limit and, within a few years, abandon the use of fossil fuels. Can you imagine a world without fossil fuels? What do global estimates suggest for the coming decades?

The Production Gap 2023 report, published by Stockholm Environmental Research, highlights the gap between governments' projections for fossil fuel production and the actions needed to limit global warming. According to the report, by 2030, governments plan to produce 110% more fossil fuels than needed to keep temperatures below 1.5 degrees Celsius. By 2050, the gap is even wider, 350% and 150% at 1.5°C and 2°C, respectively.

In particular, with regard to oil, the International Energy Agency (IEA) estimates that for the remainder of this decade, increased demand is expected to be driven by emerging economies in Asia. Demand, which was over 102 million barrels per day in 2023, will reach about 106 million barrels per day by the end of the decade. In turn, supply will reach capacity of nearly 114 million barrels per day by 2030.

This increase could be offset by increased use of electric cars, a shift towards renewable energy in the Middle East and lower demand for oil from China, as indicated by the IEA. Goldman Sachs Research predicts that demand will continue to increase until 2034, with a peak of 110 million barrels per day. This increase is likely to be heavily influenced by demand for petrochemical products, which will offset lower demand for gasoline.

In one of his publications this year, the Secretary General of the Organization of the Petroleum Exporting Countries (OPEC), Haitham Al Qais, points against estimates that see a peak in oil demand in the short to medium term. In his words: “Oil has exceeded expectations of peaks. “Logic and history say it will continue to do so.” Additionally, he adds, the increase in the coming years will be due to “the emergence of a large middle class, expansion of transportation services and greater demand and access to energy.”

The shift towards renewable energies continues to be a key alternative to clean energy and to curb global warming. However, the agreements to accelerate this transition, the Paris Agreement (2015) and the last one signed in Dubai in December 2023, should be far from the predictions regarding the abandonment of fossil fuels during the Conference of the Parties (COP) of the United Nations Framework Convention on Climate Change (UNFCCC).

At the last conference, the Global Stock Resolution included the goal of “transitioning energy systems away from fossil fuels in a clean, orderly and equitable manner, in this critical decade, achieving net zero emissions by 2050.” Simon Steele, the UN's executive secretary for climate change, said: “While we in Dubai are not returning to the fossil fuel era, this decision is the beginning of the end.”

It remains to be asked whether a series of international agreements will be sufficient to underpin the transition towards an era free of fossil fuels.

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