The head of the International Energy Agency (IEA) emphasized that energy investments should align with the objectives outlined in the COP28 agreement, which aims to accelerate the global transition away from fossil fuels within this decade.
Executive Director Fatih Birol stressed the need for governments, companies, and investors to communicate their actions to shift away from fossil fuels following COP28.
At the recent climate summit in Dubai, governments made commitments to move away from fossil fuels to mitigate the impacts of climate change. There is a growing recognition among countries that the increased use of fossil fuels is linked to extreme weather events, according to Birol.
While COP28 incorporated some of the IEA’s prior recommendations, such as tripling renewable energy capacity and doubling energy efficiency by 2030, it did not address the crucial issue of financing the clean energy transition in developing nations.
Birol highlighted this challenge as a top priority for discussion at COP29, set to take place in Azerbaijan next year. He noted that the IEA revised its oil demand forecast upward for the coming year, suggesting continued strong demand for oil in the near term.
However, the IEA’s long-term outlook anticipates a peak in demand for oil, gas, and coal by 2030 as more people transition to electric vehicles and the world adopts low-carbon energy sources. Birol expressed concern that certain entities were not aligning with the global climate targets.
The IEA, originally established in 1974 to address energy security and stockpile reserves, has shifted its focus toward supporting the transition to clean energy. In 2021, it asserted that no new oil, gas, or coal developments should proceed if the world aims to limit global warming to 1.5 degrees Celsius.
While some oil-producing countries argue for technologies like carbon capture and storage to address emissions, the COP28 agreement included measures to accelerate the deployment of low-carbon technologies.
The IEA’s position on carbon capture and storage has faced criticism from oil producers, including OPEC, where Birol began his career. OPEC accused the IEA of vilifying the oil and gas industry in response to its stance.
“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.
