According to a recent International Energy Agency (IEA) report, carbon emissions in 2022 rose by less than was feared, largely thanks to a multitude of new green energy projects worldwide. Carbon dioxide emissions worldwide increased by under 1 percent in 2022, or 321 million tonnes, lower than initially anticipated, according to the IEA. This was supported by the growth in solar and wind power, EVs, and heat pumps, as well as greater efforts at increased energy efficiency. Despite a rise in coal and oil use, in response to the global energy crisis, these efforts meant emissions did not rise substantially, particularly compared to the 6 percent increase seen in 2021. Despite the improvement last year, the world’s emissions are still rising in an unsustainable way, threatening the net-zero by 2050 scenario of many countries. Carbon emissions still totaled over 36.8 billion tonnes in 2022. However, the acceleration of renewable energy projects and the rollout of related technologies could support a rapid decrease in CO2 emissions.
And the IEA has made its stance on the oil and gas industry clear, suggesting that greater efforts need to be made to hold oil majors accountable for their impact on climate change. The IEA Executive Director, Fatih Birol, explained “we still see emissions growing from fossil fuels, hindering efforts to meet the world’s climate targets. International and national fossil fuel companies are making record revenues and need to take their share of responsibility, in line with their public pledges to meet climate goals. It’s critical that they review their strategies to make sure they’re aligned with meaningful emissions reductions.”
Meanwhile, certain fossil fuels that many countries hoped to be moving away from saw increased use last year in response to the energy crisis. Carbon emissions from coal increased by 1.6 percent, as several countries across Asia used more coal, and states in Europe, such as the U.K., delayed the planned closure of several coal plants. The rise in coal emissions was offset by a 1.6 percent decline in natural gas emissions, thanks to the movement away from Russian gas, which led to stricter usage limits across Europe. However, instead of switching to green alternatives, many countries relied on an increase in coal use.
Nevertheless, the report highlighted some positive achievements in clean energy that have helped reduce emissions significantly. According to the report, an additional 550 million tonnes of emissions were avoided by increased deployment of clean energy technologies, showing the importance of developing the green energy sector at a more advanced rate. The IEA suggested that without the growth that’s been seen in clean energy, the increase in emissions last year would have been almost three times as high.
In 2022, the IEA stated that the Russian invasion of Ukraine, and the resulting global energy crisis, had spurred significant advancements in green energy. The increased momentum in the sector could make renewables the largest source of electricity generation globally by as early as 2025. As such, there is a huge green energy pipeline planned for this year and next, which will help several countries around the globe achieve energy security after a year of great uncertainty.
At the beginning of 2022, the renewable energy pipeline looked bleak due to supply chain disruptions, trade policy uncertainty, inflation, and increasing interest rates. However, due to the Russia-Ukraine conflict, it quickly became evident that countries worldwide would have to accelerate their green energy investments and timelines to ensure greater energy security. In addition, supply chain disruptions eased throughout the year, supporting this momentum. While several challenges continue into 2023, heightened interest in developing the renewable energy industry, seen through the launch of climate policies, such as the U.S. Inflation Reduction Act (IRA), will help address these issues.
Worldwide, continued growth is expected across the wind, solar, batteries, CCS, and hydrogen industries. Experts expect the demand for batteries to increase significantly from 2023 onwards, as a vital component to enhancing grid flexibility, as more electricity will be generated from renewables. In terms of the decarbonization of fossil fuel projects, the uptake of carbon capture and storage (CCS) technologies is expected to rise in 2023, helping to reduce emissions from oil operations.
Several factors are helping drive green energy projects forward including improved cost competitiveness, new climate policies, utility decarbonization, greater residential solar demand, and increased private investment in renewables. In the U.S., a rise in domestic manufacturing will help energy companies contend with supply chain disruptions. This will support the development of several new or revived sectors, such as green hydrogen production, lithium mining, and nuclear power plant development. Traditional renewable energy sources are also seeing rapid growth. The U.S. offshore wind project development pipeline grew to 40 GW across 12 states in 2022, from a total of 42 MW of capacity at present. Approximately 1 GW is currently under construction, with around 19 GW in the permitting phase.
While the IEA reported lower-than-expected carbon emissions in 2022, the organization was quick to quash any complacency that might have come with the results. It warned that carbon emissions need to rapidly decrease for the world to battle the effects of climate change; greater accountability is still needed in the oil and gas industry; and there needs to be an acceleration in green energy production. But with a positive renewable energy pipeline, and the ongoing pressures to reduce fossil fuel use, due to the Russia-Ukraine conflict, as well as climate concerns, this positive trend is set to continue.
By Felicity Bradstock for Oilprice.com
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