- The IEA allows for continued high levels of fossil fuel consumption, largely based on a belief in the viability of massive deployment of carbon capture and storage
On the short term, the IEA allows for substantially more coal and gas use than the 2020 UN Production Gap Report:
- In the NZE scenario, coal use declines by only 53% from 2020 to a level of 72 EJ in 2030; in the Production Gap Report it drops 11% a year to reach less than 50 EJ in 2030.
- In the NZE, fossil gas supply declines by a total of 5% from 2019 to 2030; the Production Gap Report states that gas needs to decline by 3% each year up to 2030. The accelerating decline of gas after 2030 never makes up for the gap accumulated from 2020 to 2030: in 2050 gas demands remains higher than IPCC P2 scenarios and more than twice the level of IPCC P1.
Fossil fuels continue to account for a significant portion of the energy mix in 2050, making up for 119 EJ in 2050, the equivalent of 60% of the energy provided by wind and solar power. Despite the end to new fossil supply projects, fossil fuels benefit from decreasing but significant investments to maintain current infrastructures and reserves. Capital spending on oil and gas supply still amounts to $350 billion per year from 2021 to 2030 – a level only 30% below that of recent years and equivalent to expenditure in 2020 -. After 2030 oil and gas supply expenditure falls to $170 billion per year.
To allow continued reliance on fossil fuels, the IEA forecasts large-scale deployment of carbon capture and storage (CCS / CCUS) and the use of negative emissions such as biomass energy with carbon capture and storage (BECCS) and direct air capture (DAC). The use of unabated fossil fuels still generates 1.7 Gt CO2 emissions in 2050, which are supposed to be entirely offset by BECCS and DAC. A total of $650 billion is predicted to be spent exclusively on fossil fuels with CCUS from 2020 to 2050.
The projection for CCS deployment seems particularly unrealistic. Of a total 7.6 Gt CO2 captured and stored by 2050, 70% comes from CCS (rising from close to zero today) and 30% from BECCS and DAC (1). CCS captures 1.6 GtCO2 by 2030, more than three times the level of the IPCC’s P2 pathway and an increase of 4,000% compared to current levels (2). The IEA decides to largely rely on technologies that are still at the demonstration or prototype phase: 55% of CCS emission reductions comes from such unproven technologies.
As 50% of total CO2 captured is devoted to absorbing emissions from fossil fuel combustion, the massive deployment of CCS benefits mainly coal and gas power plants and industries. The NZE projects a huge buildup of so-called “low carbon” hydrogen production, much of it produced from coal and gas: 46% of the hydrogen output in 2030, and 38% in 2050 (3).
The IEA itself implicitly recognizes that this level of CCS deployment is unrealistic as it presents a “low CCS” case where CCS capacity does not expand beyond current and already planned infrastructure (4). In this case, a much-faster build-up of renewable energy capacity and renewable hydrogen production is needed, at a higher overall cost. As the NZE has been designed to “minimize stranded assets”, the IEA notes that limited CCS deployment could in return lead to $90 billion of coal and gas plants becoming stranded in 2030 and up to $400 billion in 2050.
Of course, it is worth noting as dangerously reliant on CCS as it is, the IEA’s 1.5°C scenario already requires a drastic change of strategy from the fossil fuel industry. If fossil gas reduction is slowed down by “abated” uses, the IEA still forecast a drop of gas demand by 55% by 2050 that should be compared to a 38% rise in BP’s energy outlook.
2. Biomass becomes a major energy source, despite competition for land and negative sustainability impacts
In the NZE, biomass becomes a major energy source by 2050, rising from 65 EJ in 2020 (5) to 102 EJ in 2050 (6), thus making up for about 20% of total energy needs and almost as much as solar energy (109 EJ). “Modern biomass” swiftly replaces traditional uses that are phased-out by 2030. The total land area dedicated to bioenergy production in the NZE increases from 330 million hectares (Mha) in 2020 to 410 Mha in 2050, the size of India and Pakistan combined and more than a fourth of total available cropland (7).
The NZE relies on BECCS to capture 1.3 Gt CO2. While this amount falls within the sustainability range cited in the IPCC’s SR1.5 (0.5-5 Gt CO2), it still raises questions regarding its impact on land-use and its feasibility in a context of overall massive carbon capture development.
Furthermore, biomass use can emit large quantities of CO2, a fact that does not seem to be accounted for in the NZE. Notably, the use of wood and forest biomass could generate greater emissions per unit than coal and contribute to deforestation worldwide. However, more than half of the IEA’s bioenergy comes from forest and wood (55 EJ)(8).
The IEA integrates a “low biomass” case, where land use for dedicated bioenergy crops and forestry plantations remains at today’s level (330 Mha) in 2050 and biomass produces 90 EJ of energy in 2050. It admits that it is possible to achieve net-zero without expanding land use for bioenergy but indicates that it would require additional investments – notably in solar, wind and energy networks – come at an overall significantly higher cost. The IEA’s preference for massive – and seemingly unsustainable and unviable – biomass use seems to emanate from the fact that it allows for the continued use of existing fossil infrastructure (9), and therefore minimizes the risk of stranded assets and limits the need for new investments.
3. Renewable energy potential remains underestimated
The IEA has a long track-record of underestimating renewable energy development.
While the IEA projects an annual growth of solar power of 21% from 2020 to 2030, this then slows down so that overall average growth from 2020 to 2050 is only 11%. Similarly for wind energy, NZE shows annual growth of 17% in the current decade but only 9.6% annual growth over the period to 2050. This slowdown in renewable energy buildup after 2030 appears totally unjustified. It could be explained by the relatively limited place of electricity – which makes up 49% of total energy consumption in 2050 compared to 70% in the Energy Transition Commission work -, the aforementioned bets on CCS and biomass, and the development of nuclear energy (10). Together these limit renewable development for electricity generation, heat generation and the production of “green” gases.
The IEA has repeatedly been criticized over many years for repeatedly underestimating the rate at which renewable costs have declined. It seems to have repeated this error in NZE with cost assumptions that undermine renewable energy development: the costs of solar and batteries fall at only 5% a year from 2020 to 2030, and then 1-2% a year after 2030, whereas these costs have fallen by much more in recent years (11). These unrealistically high assumptions of future solar and battery costs contribute to raising the projected cost of the low CCS, low nuclear or low biomass cases.