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Report extract

Keeping the door to 1.5 °C open

Announced net zero pledges and updated NDCs, reflected in full in the Announced Pledges Scenario, represent an important boost to the world’s efforts on climate but, as they stand, they close less than 20% of the gap in 2030 between the STEPS and the NZE. An additional 12 Gt CO2 emissions need to be abated in 2030 in order to get the world on track for the NZE, and this needs to be accompanied by reductions of almost 90 million tonnes (Mt) in methane emissions from fossil fuel operations (equivalent to another 2.7 Gt of CO2 emissions). That is the task before the world’s decision makers as they assess how to keep a 1.5 °C stabilisation in global average temperatures within reach.

Selected indicators in the Net Zero Emissions by 2050 Scenario

 

2010

2020

2030

2040

2050

Global indicators

         

CO₂ emissions per capita in AE (t CO₂ per capita)

10

8

4

1

0

CO₂ emissions per capita in EMDE (t CO₂ per capita)

3

4

2

1

0

CO₂ emissions intensity (t CO₂ per USD 1 000, PPP)

318

259

114

25

0

Energy intensity (MJ per USD, PPP)

5.4

4.5

3.0

2.2

1.7

Share of electricity in TFC

17%

20%

26%

39%

49%

Share of fossil fuels in TES

81%

79%

62%

35%

22%

Share of population with access to electricity in EMDE

75%

88%

100%

100%

100%

Investment in clean energy (billion USD)

619

974

4 344

4 348

4 210

Total CO2 captured (Mt CO₂)

14

40

1 665

5 619

7 602

Supply

         

Emissions intensity of oil and gas (kg CO₂-eq per boe)

91

93

40

35

31

Methane emissions from fossil fuel operations (Mt CH4)

104

117

28

14

10

Low-carbon share in total liquids

2%

2%

10%

21%

39%

Low-carbon share in total gases

0%

0%

14%

33%

62%

Low-carbon share in total solids*

18%

21%

39%

55%

72%

Electricity generation

         

CO₂ emissions intensity (g CO₂ per kWh)

523

459

138

-1

-5

Share of unabated coal

40%

35%

8%

0%

0%

Share of renewables

20%

28%

61%

84%

88%

Share of wind and solar PV

2%

9%

40%

63%

68%

Buildings

         

CO₂ emissions intensity (g CO₂ per MJ)

25

23

18

8

1

Existing buildings retrofitted to be zero-carbon-ready level

< 1%

< 1%

20%

50%

85%

Share of new buildings that are zero-carbon-ready

< 1%

5%

100%

100%

100%

Appliance unit energy consumption (index 2020=100)

106

100

75

64

60

Industry

         

CO₂ emissions intensity (g CO₂ per MJ)

56

56

41

21

3

Energy intensity (MJ per USD PPP)

4.8

4.0

3.0

2.3

1.7

Share of electricity in TFC

18%

22%

28%

37%

46%

Transport

         

CO₂ emissions intensity of passenger cars (g CO₂ per km)

231

200

106

34

4

CO₂ emissions intensity of heavy trucks (g CO₂ per km)

984

898

589

273

54

Share of low-carbon fuel use in aviation and shipping

0%

0%

17%

51%

81%

Share of PHEV, BEV and FCEV in total passenger car sales

0%

5%

64%

100%

100%

Share of PHEV, BEV and FCEV in total heavy truck sales

0%

0%

30%

84%

99%

*Traditional use of biomass is not considered low-carbon. Notes: AE = advanced economies; EMDE = emerging market and developing economies; PPP = purchasing power parity; TFC = total final consumption; TES = total energy supply; Mt CO₂ = million tonnes of CO₂; kg CO₂-eq per boe = kilogrammes of CO₂ equivalent per barrel of oil equivalent; Mt CH4 = million tonnes of methane; g CO₂ per kWh = grammes of CO₂ per kilowatt-hour; g CO₂ per MJ = grammes of CO₂ per megajoule; g CO₂ per km = grammes of CO₂ per kilometre; PHEV = plug-in hybrid electric vehicle; BEV = battery electric vehicle; FCEV = fuel cell electric vehicle.

The four key priorities for action to close this gap over the next decade, and to prepare the ground for further rapid emissions reduction beyond 2030, are to:

  • Deliver a surge in clean electrification.
  • Realise the full potential of energy efficiency.
  • Prevent methane leaks from fossil fuel operations.
  • Boost clean energy innovation. 

Energy intensity in the Net Zero Scenario, 2020-2030

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Low emissions share of electricity generation in the Net Zero Scenario, 2020-2030

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Investment in advanced clean technologies in the Net Zero Scenario, 2020-2030

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Methane emissions in the Net Zero Scenario, 2020-2030

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The first three priorities require the application, at massive scale, of technologies and approaches that are mature today, using policies and measures that are tried and tested. Boosting clean energy innovation is essential to bring new technologies through the demonstration and prototype stages so that they are ready to scale up dramatically in the 2030s in areas where electrification is difficult to achieve, such as heavy industry and long-distance transport. Ensuring adequate financing for all of these priority areas is a crucial cross-cutting component.

There are strong synergies between all of these efforts. Clean electrification brings major efficiency gains, as well as helping to decarbonise end-use sectors, because many electric technologies are significantly more efficient than their fossil fuel counterparts. For example, today’s electric cars use on average 70% less energy to travel one kilometre than a conventional car. In turn, by reducing upward pressure on electricity demand, efficiency measures on appliances and equipment make it easier for cleaner sources of power to gain market share. Clean electrification and efficiency bring down fossil fuel demand and production. This helps to reduce associated methane emissions, although it is not a substitute for concerted policy efforts to reduce emissions as quickly as possible from fossil fuel operations. Innovation has the potential to support more rapid electrification, for example through the development of advanced batteries that are able to bring electricity into heavy-duty segments of the transport sector, and also to bring low emissions electricity indirectly into other sectors via low-carbon hydrogen. 

Cleaning up the electricity mix and extending the electrification of end-uses is a central pillar of transition strategies. It plays a key role in the structural transformation of the energy sector in all our scenarios, and it supports energy-related sustainable development goals, notably access to electricity.

The electricity sector emitted 12.3 Gt CO2 in 2020 (36% of all energy-related emissions), which is more than any other sector. Coal remains the largest single source of electricity worldwide, and by far the largest source of electricity sector emissions: it contributes just over one-third of electricity supply but is responsible for nearly three-quarters of electricity sector CO2 emissions. The power sector is already moving away from coal, and it continues to do so in all our scenarios. Accelerating the decarbonisation of the electricity mix is the single most important way to close the 2030 gap between the APS and NZE. In the NZE, faster decarbonisation of electricity cuts emissions by 5 Gt, compared with the APS, and this accounts for 40% of the CO2 emissions gap between the two scenarios in 2030. We calculate that nearly 60% of this total (about 2.9 Gt) could be cut at no cost to electricity consumers.

Rapid decarbonisation of the electricity sector requires a massive surge in the deployment of low emissions generation. The share of renewables increases from almost 30% of electricity generation globally in 2020 to about 45% in 2030 in the APS, but this is still fifteen percentage points short of the level reached in the NZE. Nuclear power and dispatchable low emissions capacity, such as hydropower, biomass and geothermal are important elements of the picture, but capacity additions are dominated by solar PV and wind. The largest increases in deployment to close the emissions gap take place in emerging market and developing economies.

Decarbonising the global power sector is not only a question of expanding low emissions generation, but also of tackling emissions from existing sources. This requires an end to investment in new unabated coal-fired power plants, as well as strategies to retrofit, repurpose or retire existing ones (see section "Phasing out coal"). Scaling up grids and all sources of flexibility, including energy storage systems, is also pivotal: investment in electricity infrastructure in the NZE accelerates more quickly than investment in generation. Alongside a rapid expansion and modernisation of grids, utility-scale battery storage capacity increases 18-times from 2020 to 2030 in the APS, and more than 30-times in the NZE.

The transformation of electricity supply goes hand-in-hand with a major increase in electricity use as demand in existing end-uses grows and as new end-uses such as transport and heating are electrified. Rapid electrification of passenger mobility in advanced economies and China is already built into the APS, and expanding this to emerging market and developing economies is essential if the gap between the APS and the NZE is to be closed. The challenge is significant: in the NZE, the share of EV cars in total car sales is over 60% in 2030. Faster electrification of transport, together with some deployment of hydrogen-based fuels, would close about 1 Gt of the ambition gap with the NZE.

ZEV sales in the Announced Pledges and Net Zero Scenarios, 2020-2030

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Capacity additions of renewables in the Announced Pledges and Net Zero Scenarios, 2020-2030

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Heat pumps are the largest electrification opportunity in the buildings sector, displacing heating from fossil fuel boilers. Although electric heat pumps are an increasingly attractive option, gas-fired boilers remain the dominant form of space heating in the STEPS and in many countries in the APS. Ensuring that new buildings meet zero-carbon-ready standards 1, and providing incentives for householders to install heat pumps when existing heating options breakdown or need to be replaced, both help to close the gap between the APS and the NZE. Electrification is also increasingly used in the NZE to provide low-temperature heat in industry.

Improvements in energy efficiency curb demand for electricity and fuels of all kinds. In the STEPS, overall global energy demand continues to climb; in the APS it plateaus after 2030; in the NZE, it is 15% lower than in the APS by 2030. As a result, the energy intensity of the global economy decreases by 4% per year between 2020 and 2030 in the NZE, more than double the average rate of the previous decade. Without this improvement in energy efficiency, total final consumption in the NZE would be about a third higher in 2030, significantly increasing the cost and difficulty of decarbonising energy supply.

Much stronger policies on end-use energy efficiency in the NZE reduce emissions by about 1.3 Gt CO2 in 2030, compared with the APS, and are of particular importance in the transport and buildings sectors. We estimate that almost 80% of these additional energy efficiency gains in the NZE could be achieved cost-effectively over the next decade. Avoided demand through measures such as digitalisation and materials efficiency reduce emissions in the NZE by a further 1.3 Gt by 2030: much of the potential here is in the industry sector, where opportunities for materials efficiency are substantial and low emissions technologies are less mature than in most other sectors. Behavioural changes contribute around another 1 Gt by 2030 to the additional emissions reductions in the NZE, notably in the transport sector.

Stronger standards for appliances and fuel economy are instrumental in achieving these efficiency gains in the NZE, as is a stronger policy emphasis on materials efficiency in industry. In the buildings sector, the number of building retrofits would need to increase two-and-half‑times compared with announced pledges to close the gap; this is particularly important in advanced economies. Energy efficiency measures such as retrofits and appliance standards also save about 0.5 Gt of indirect CO2 emissions outside the buildings sector, largely by reducing electricity demand.

Methane has contributed around 30% of the global rise in temperature today and the IPCC 6th Assessment Report highlights that rapid and sustained reductions in methane emissions are key to limit near-term warming and improve air quality. The energy sector is one of the largest sources of methane emissions today: we estimate that fossil fuel operations emitted around 120 Mt of methane globally in 2020, equivalent to around 3.5 gigatonnes of carbon-dioxide equivalent (Gt CO2-eq).

We estimate that almost 45% of current oil and gas methane emissions could be avoided at no net cost (based on average natural gas prices from 2017-21) given that the cost of deploying the abatement measures is less than the value of the gas that would be captured. There are a number of well-known technologies and measures that can be deployed to address methane emissions from oil and gas operations. If countries were to implement a set of well-established policy tools – namely leak detection and repair requirements, staple technology standards and a ban on non-emergency flaring and venting – emissions from oil and gas operations could be halved within a short timeframe. Further reductions could be pursued through measures such as performance standards or emission taxes supported by more robust measurement and verification systems. Technology developments, in particular in the field of satellite observation, could help with the development of such systems. Applying a USD 15/t CO2-eq price to methane from oil and gas operations would be enough to deploy nearly all abatement measures.

There are also opportunities to reduce methane emissions from coal production using existing technologies. However abatement opportunities in the coal sector are often less cost-effective than in the oil and gas sector. This is because methane sources in coal mines tend to be more widely dispersed and to have lower methane concentrations. Plus, often there is inadequate infrastructure to facilitate the use of captured methane. In the NZE, most of the decline in coal-related methane emissions comes from the rapid decline in coal production.

Methane emissions from fossil fuel operations and reductions to 2030 in the Net Zero Scenario

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Total methane emissions from all fossil fuel operations fall by around 75% between 2020 and 2030 in the NZE. Around one-third of this decline is the result of an overall reduction in fossil fuel consumption. The larger share comes from a rapid deployment of emissions reduction measures and technologies, which leads to the elimination of all technically avoidable methane emissions by 2030.

Clean electrification, efficiency and methane emissions reductions do the heavy lifting over the next ten years, but they cannot carry the world all the way to a net zero future. Almost half of the emissions reductions achieved in the NZE in 2050 come from technologies that are at the demonstration or prototype stage today, and that are needed in particular to decarbonise heavy industrial sectors and long-distance transport because these sectors are in general not susceptible to electrification. For this reason, another important “gap” that needs to be closed in the 2020s relates to innovation. Governments need to step up support in key technology areas, such as advanced batteries, low-carbon fuels, hydrogen electrolysers and direct air capture. They also need to collaborate internationally to reduce costs and ease the path of new technologies to market. In the NZE, around USD 90 billion of public money is mobilised to complete a portfolio of demonstration projects before 2030. Currently, only about USD 25 billion is budgeted for that period.

Announced pledges lag on key NZE milestones related to hydrogen-based and other low-carbon fuels, as well as CCUS. For example, by 2030 the APS achieves less than 40% of the level of deployment of clean shipping fuels seen in the NZE, and it is even further behind the NZE on the deployment of hydrogen in industry. Options like industrial CCUS or electric trucks make substantial inroads into emissions in the NZE only after 2030, but early deployment before 2030 is essential to drive down costs and establish enabling infrastructure. Because of long infrastructure lifetimes and relatively slow rates of change in these areas, catching up after 2030 will be particularly challenging if these milestones are missed. It is therefore critical that policy support in the near term is directed towards early deployment of key innovative technologies and the development of supporting infrastructure.

In the NZE, new technologies that have an important future role make vital early progress. Hydrogen-based fuels and fossil fuels with CCUS make up just under 1.5% of total final consumption by 2030, up from almost nothing today. These relatively small inroads into the market prepare the ground for these technologies to ramp up after 2030 and make a bigger contribution towards net zero energy emissions by 2050. 

References
  1. A zero-carbon-ready building is highly energy efficient and uses either renewable energy directly or from an energy supply that will be fully decarbonised by 2050 in the NZE (such as electricity or district heat).