The report undertakes analysis of projected investment in fossil fuel production over the next 20 years- and identifies the expenditure that needs to be not approved if we are to avoid CO2 emission levels that are consistent with staying within a 2 degrees Celsius global temperature rise.
The attached images are taken from the report- a table and set of charts that breakdown, by fossil fuel type, potential unneeded capex (ie wasted investment) and related CO2 emissions in projects (first 2 images), where this is globally spread (map image), and some overarching recommendations for relevant stakeholders (circular diagram).
The publication, while focused on some quite technical analysis and discussions, is really worth reading. However, aside from reiterating the in-depth analysis, I thought to pick out some lines from the report that struck me as significant- while I have placed in bold italics particularity pertinent points.
On an energy transition:
‘…there is a clear direction of travel –
the energy transition is underway. The question is how far and how fast will it go… It is clear that if the industry misreads future demand by underestimating
technology and policy advances, this can lead to an excess of supply, and create
stranded assets. This is where shareholders should be concerned – are companies
committing to future production which may never generate the returns expected?’
On CCS (Carbon Capture and Storage):
‘Given where the technology and deployment currently is, it is difficult to see CCS coming in at scale, at a reasonable cost before 2030. This means that in the timescale considered in our analysis to 2035, it makes a small contribution to increasing fossil fuel consumption within the carbon budget… CCS may yet have a significant contribution to make – but not until post-2050.’
On coal:
‘A 2°C pathway does not see demand to 2035 for coal exceeding the amount
that could be produced from mines that are already producing…
no new
thermal coal mines are necessary under the IEA 450 scenario, as confirmed by
our analysis.’
On gas:
‘The IEA 450 scenario still sees growth for gas, but at a lower level than expected
under a business as usual scenario. Where domestic gas is readily available we see
this going ahead. It is thereforethe more capital intensive LNG market that is likely
to have its ambitions blunted.’
On oil:
‘In the 450 scenario, oil demand peaks around 2020. This means that the oil sector
does not need to continue to grow, which is inconsistent with the narrative of
many companies.’
And in conclusion:
‘In terms of the total amounts of capex unneeded above the IEA 450 scenario,
we see around $2.2 trillion of capex over the next decade – $1.9 trillion of that
associated with new projects. It is these new projects that see much higher levels of
cut needed – especially for coal, where all new projects need reviewing. Looking at
production to 2035, the databases we analyse indicating business as usual industry
supply suggest that at least 156 GtCO needs to be avoided over the next 20 years.
This means that 24% of the potential capex over the next decade needs to not be
spent which would result in energy emissions being around 30% lower over the
next twenty years.’