IEA Says Energy Investments Must Reflect COP28 Outcome

Energy investments should be informed by the COP28 agreement to accelerate the move away from fossil fuels this decade, the head of the International Energy Agency (IEA) said on Friday.

“After COP28, governments, companies, investors, need to tell the people around the world what actions they are taking to move the world away from fossil fuels,” Executive Director Fatih Birol told Reuters.

Earlier this week at the climate summit in Dubai, governments agreed to transition away from fossil fuels to avert the worst of climate change.

Countries are increasingly “making a clear link between the high use of fossil fuels and the extreme weather events,” Birol said.

The COP28 agreement included some of the recommendations the IEA had been pushing previously, including the tripling of renewable energy capacity, and doubling of energy efficiency by 2030, but did not address how to finance the clean energy transition in developing countries, Birol said.

“This is the main challenge for Baku, COP29, which will be the top priority for the International Energy Agency to discuss with the global leaders and the presidency of COP29,” said Birol, referring to next year’s summit in Azerbaijan.

On Thursday, the IEA revised up its forecast for oil demand next year, signaling that the outlook for near-term oil use remains robust.

The IEA forecasts that oil, gas, and coal demand will peak by 2030, however, as more drivers switch to electric cars, and the world shifts to low carbon energy.

Birol noted that some of the energy industry has resisted change.

“They are failing the test, if the test is whether or not they are part of our journey to reach our climate targets.”

CHANGING SHAPE

Formed in 1974 by oil consuming countries after the oil embargo the previous year, the IEA’s primary responsibility was to focus on energy security and hold stocks.

But the organisation has changed its focus in recent years to embrace the shift to clean energy. In 2021 it stated that no new developments of oil, gas or coal should go ahead if the world is to limit global warming to 1.5 degrees Celsius.

“We are now leading the global clean energy transition efforts by our data analysis and our convening power,” Birol said.

Meanwhile oil producers have said emissions are the problem, not energy, promoting technologies like carbon capture and storage. The COP28 agreement included speeding up the deployment of such low carbon technologies.

Last month, the International Energy Agency said using large amounts of carbon capture and storage to fight climate change was an implausible “illusion”.

The IEA’s stance has drawn criticism from oil producers, including the Organization of the Petroleum Exporting Countries (OPEC), where Birol started his career. Last month OPEC accused the IEA of vilifying the oil and gas industry.

“Some companies, some oil producing governments say that ‘we do want to reach the climate targets, but we want at the same time to continue to produce fossil fuels with our current business as usual plans and we will fix the gap by using carbon capture and storage.’ This is impossible,” Birol said.

Source : Zawya