A rebound in global gas demand to 2024 following the record fall last year is poised to knock the world off track from reaching its goal of net zero emissions by 2050, the International Energy Agency (IEA) warned on Monday (5 July).
More than 190 countries have signed the Paris Agreement, which is designed to limit global warming to 1.5°C above pre-industrial levels. That will require a huge reduction in the use of fossil fuels, such as coal and gas.
“Natural gas demand is set to rebound strongly in 2021 and will keep rising further if governments do not implement strong policies to move the world onto a path towards net-zero emissions by mid-century,” the IEA said in its latest gas outlook.
Gas demand in 2021 is expected to rise by 3.6% as global economies recover following a record fall in 2020 when restrictions to limit the spread of COVID-19 caused a drop in demand.
From 2022-2024, demand growth is expected to average 1.7% per year, meaning gas demand would be too high to keep to the IEA’s roadmap towards meeting global net zero emissions by 2050.
In May, the IEA published its pathway for the energy sector to meet the net zero emissions target and said investors should not fund new oil, gas and coal supply projects.
But new demand could be met by projects already approved or under development before the pandemic, the latest report has warned.
Global gas prices have soared to multi-year highs over the past month, with high temperatures driving demand for power generation in the northern hemisphere for air conditioning and as some regions such as Asia seek to boost stocks before winter.
The report said Europe’s benchmark Dutch gas prices are expected to average $9.5 per million British Thermal Units (MBtu) in 2021 – their highest since 2013 – while Asian spot LNG prices are expected to average $11/MBtu, the highest since 2014.
In Monday’s report, the IEA said the gas industry should ramp up efforts to reduce emissions such as addressing methane leaks.