The global goal of attaining net zero emissions by 2050 has seen commitments from dozens of countries as part of the Paris Climate Agreement, but a clear path to that goal has been difficult to quantify.
The International Energy Agency has set out to do just that in a new report published on Tuesday.
Looking beyond the report’s major bombshell—the halting of funding for new oil and gas developments—is the call for a massive deployment of renewable energy.
By 2050, almost 90% of electricity generation should come from renewables, according to the report, with an increased focus on hydrogen fuel and carbon capture, utilisation and storage to decrease and contain emissions.
The report comes as major oil and gas companies expand into transition-focused businesses to play a role the future of energy. Shell’s shareholders, for example, on Tuesday voted to support a major energy transition plan that would see a decrease in the Anglo-Dutch supermajor’s oil and gas output. The company would build its renewable energy business and utilise offsetting measures, such as carbon capture and sequestration and forestation.
Electric and fuel cell vehicles
Following the IEA pathway to net zero, electric cars would account for more than 60% of car sales by 2030, while fuel cell or electric vehicles would make up 30% of heavy truck sales. By 2035 nearly all cars sold would be electric.
The same morning the IEA report was released, the Biden administration called for the US to lead in the manufacturing, infrastructure, deployment and innovation of electric vehicles.
“In 2020, China had approximately 800,000 public charging points compared to just 100,000 in the US,” a report said. The administration plans to build a network of 500,000 public charging stations by 2030 to close the gap.
The push for electric vehicles is a part of the America Jobs Plan, in which jobs focused on building energy transition infrastructure and more are promised. The plan also includes a $25 billion investment into clean transit buses and $20 billion to electric school buses.
Oil and gas companies that could be affected if governments follow the call to halt new developments have been reaching out to other revenue sources that would allow their participation in the energy transition.
US oil giant Chevron recently announced a partnership with automobile manufacturer Toyota to develop commercially viable businesses in hydrogen, specifically in hydrogen-powered transportation. The IEA report anticipates a key use for hydrogen fuel will be in the transportation sector.
The partnership is newly launched and does not specify how the hydrogen would be produced, but many oil and gas companies entering the hydrogen production sector, often to use hydrogen to reduce carbon emissions in industrial processes, produce the hydrogen from fossil fuels. Other types of hydrogen production, considered ‘green’ hydrogen, produce hydrogen from renewable energy.
“US policy should put us on a path toward 100% renewably generated hydrogen,” Hydrogen Forward told Upstream.
Hydrogen Forward is a coalition of companies in the hydrogen value chain that work with stakeholders to determine the role of hydrogen in the energy transition.
“Hydrogen produced with fossil fuels but utilising carbon capture and sequestration to minimize carbon impact is an important step in this process and should be part of the broader energy transition solution.”