Faster progress on implementing clean energy technologies such as carbon capture, utilisation and storage (CCUS) and hydrogen is crucial if the global energy industry is to hit its emissions-reduction targets, according to the International Energy Agency (IEA).

To avoid the worst consequences of climate change, the global energy system must rapidly reduce its emissions, the Paris-based agency said in its Energy Technology Perspectives 2020 report released on Thursday.

“Global CO2 emissions are set to fall in 2020 because of the Covid-19 crisis, but without structural changes to the energy system, this decline will be only temporary,” the report warned.

“Achieving net-zero emissions requires a radical transformation in the way we supply, transform and use energy. The rapid growth of wind, solar and electric cars has shown the potential of new clean energy technologies to bring down emissions.”

However, the report cautioned that, while meeting net-zero emissions will require these technologies to be deployed on a far greater scale than at present, at the same time the energy industry needs “the development and massive rollout of many other clean energy solutions that are currently at an earlier stage of development, such as numerous applications of hydrogen and carbon capture”.

Electricity cannot decarbonise entire economies alone

One of the biggest takeaways for the oil and gas industry from the report - which took three years to compile - is that electricity cannot decarbonise entire economies alone.

Capturing CO2 emissions in order to use them sustainably or store them - known as CCUS - is a “crucial technology for reaching net-zero emissions”, according to the report.

The IEA said CCUS is also vital for producing some of the low-carbon hydrogen that is needed to reach net-zero emissions targets, mostly in regions with low-cost natural gas resources and available CO2 storage.

In addition, as the use of modern bioenergy is expected to triple from today’s levels, it can be used to directly replace fossil fuels - for example, by using biofuels for transport - or to offset emissions indirectly through its combined use with CCUS.

However, the development of these energy technologies hinges on additional innovation, the IEA said.

“Quicker progress towards net-zero emissions will depend on faster innovation in electrification, hydrogen, bioenergy and CCUS. Just over one-third of the cumulative emissions reductions stem from technologies that are not commercially available today,” the IEA warned.

Emissions from existing assets a ‘pivotal challenge’

Meanwhile, as power and heavy industry together currently account for about 60% of emissions from existing energy infrastructure, the IEA also cautioned that these are set to climb to nearly 100% in 2050 “if no action is taken”.

“Reaching net-zero will depend on how we manage the emissions challenge presented by these sectors’ long-lasting assets, many of which were recently built in Asian economies and could operate for decades to come,” the report noted.

“The situation underscores the need for hydrogen and CCUS technologies. Ensuring that new clean energy technologies are available in time for key investment decisions will be critical.

“In heavy industries, for example, strategically timed investments could help avoid around 40% of cumulative emissions from existing infrastructure in these sectors,” the IEA said.

Policy support

Governments will need to play the decisive role in ensuring net-zero ambitions are met, the report contended.

“Governments have an outsized role to play in supporting transitions towards net-zero emissions. Long-term visions need to be backed up by detailed clean energy strategies involving measures that are tailored to local infrastructure and technology needs,” the IEA report noted.

“Governments in countries may have different policy priorities reflecting local conditions and opportunities for specific low-carbon technologies.

“Countries with excellent renewable resources may focus on renewable technologies to cut emissions in the power sector, while regions with low-cost fossil fuels and access to CO2 storage may put more emphasis on CCUS as part of their strategy to decarbonise power and industry,” it noted.

Challenges ahead

Despite what he termed the “grave challenges” faced by humanity, IEA executive director Fatih Birol said he is “increasingly optimistic about the world’s clean energy future”.

“The reportshows that we know what needs to be done to develop and deploy the technologies that can put emissions on a sustainable path,” Birol said.

“The spectacular success of solar PV [photovoltaics] in becoming the cheapest source of power in many economies and the impressive rise of offshore wind demonstrate the ability of clean energy technologies to break through if governments put in place the right policies to support their expansion.”

Birol warned, however, of the significant challenges to come.

“More work needs to go into mapping out pathways for fair and inclusive clean energy transitions for all parts of the world. Moreover, huge portions of the global energy sector are yet to make reducing their emissions a top priority,” Birol said, pointing out that the oil companies that have pledged to reduce their own emissions to net zero produce less than 10% of global oil output.

Energy Transition

‘Structural changes to energy system’ crucial to rapidly reduce emissions: IEA