🗺️ The geography of accelerating the net zero transition bp released its 2024 Energy Outlook a few days ago - although it has a different perspective to that of the International Energy Agency (IEA), it offers pretty consistent insights (e.g. displaying peak oil demand by as early as 2025 even in its Current Trajectory scenario (a scenario that would sit in between a current policy scenario and an announced policy scenario) with a few notable differences (the most striking one being the continued increase in gas demand esp. in the current trajectory scenario). Incidentally, the report makes an interesting point which is not often illustrated so clearly and which has not been picked up in the media: the acceleration of the transition has a geography. ⛽️ On the fossil fuel supply side, timing and place will matter: adjustment in OPEC+ countries come last and late (and only if we try to stay well below 2C). While the Current Trajectory scenario implies a reduction in oil supply concentrated in non-OPEC+ countries and only after 2035, the acceleration of the transition in line with the objective of the #ParisAgreement (Net Zero scenario) brings forward these reductions in the coming decade with further reductions in both OPEC+ and non-OPEC+ countries after 2035 (see upper panel). ⚡️🚛 On the energy demand side, the transition gap is in emerging markets and developing economies (EMDEs). There is an ambition gap (the difference between the Current Trajectory and the Net Zero scenarios) in all regions but… the larger part of the gap is in China, India and the other EMDEs (see lower panel). While we discuss at length the transition in Europe, in the US and in other advanced economies (for good reasons), we should not forget that the race to net zero will be won or lost in China, in India and in other EMDEs where deploying renewable electricity and decarbonising transportation should be prioritised. ℹ️ Three additional takeaways of the report (which is worth reading) - the Net Zero scenario makes it clear that: 1️⃣ very often, the decarbonisation of power generation is an important driver of the decarbonisation of economic sectors (industry, buildings) along with energy efficiency and technological changes; 2️⃣ for some sectors (marine and aviation), a reduction in activity (i.e. less miles sailed or flown) is necessary: although very significant, progress in deploying alternative fuels will not be enough; and 3️⃣ in the industry, the energy sector (oil & gas exploration & production, coal mining to a lesser extent) controling methane emissions and flaring (for which abatement technologies are reasonably well known and abatement costs reasonable) is as important (if not more) as carbon capture, utilisation and storage (CCUS) for the other sub sectors (and CCUS cost and potential remain very uncertain). bp 2024 Energy Outlook: https://lnkd.in/ebaWjZCb
Thanks for these summaries ! Your takeaway nr 1 is key: electrification and the decarbonisation of other sectors go hand in hand. And that’s why grids are key: unless we significantly expand the grid capacity, many energy intensive sectors will sit on the fence when it comes to decarbonisation
Climate and Sustainability Leader, Advisor, and Expert; Founder- D. A. Carlin and Company
1moLove reading your perspectives and analysis Jean!