The International Energy Agency (IEA) predicts that global demand for fossil fuels will peak by 2030.
This is driven by the rising adoption of electric vehicles, a slowdown in China’s economic growth, and a shift towards cleaner energy. These factors challenge the rationale for increased investment in the fossil fuel sector.
This outlook by the IEA, which advises industrial nations, is at odds with the views of the Organization of the Petroleum Exporting Countries (OPEC).
OPEC anticipates sustained oil demand well beyond 2030 and advocates for trillions of dollars of investment in the sector.
In its annual Global Energy Outlook report released on Tuesday, the IEA highlighted that a peak in demand for oil, natural gas, and coal is evident this decade under existing governmental policies. This marks the first time such a prediction has been made.
Fatih Birol, the IEA’s executive director, commented, “The transition to clean energy is unfolding worldwide and is unstoppable. It’s not a question of ‘if’, but ‘when’, and the sooner, the better for all of us.” He further emphasized that governments, companies, and investors should be supporting the clean energy transition rather than hindering it.
However, the IEA also warned that if current trends persist, fossil fuel demand will remain high, jeopardizing the Paris Climate Agreement’s goal of limiting global temperature rise to 1.5°C above pre-industrial levels.
The agency expects a tenfold increase in the adoption of electric vehicles globally by 2030. The pro-clean energy policies in major markets were cited as negatively impacting future fossil fuel demand.
Regarding China, the IEA perceives it as a significant player in shifting energy demand patterns. While China accounted for nearly two-thirds of the global oil usage increase in the past decade, its economic growth momentum is waning. China has become a “powerhouse for clean energy,” representing over half of global electric car sales in 2022.
