Global demand was forecast to rise by 3.5mln barrels per day by 2025 but it should decline by 3mln instead to meet the Paris Agreement goals
However, countries need to make more concrete action if they want to reach ambitious mid-century goals for net-zero emissions.
The IEA forecast global demand to rise by 3.5mln barrels per day (bpd) between 2019 and 2025 in its base case scenario, but it should decline by 3mln bpd over the same period to meet the Paris Agreement goals.
A pathway to net-zero emissions globally by 2050 would require an even sharper decrease, the IEA added.
In 2020, oil demand was 9mln bpd below 2019 levels and is not expected to recover before 2023.
Demand growth will be driven by emerging and developing economies, with Asian oil rising strongly, albeit at a slower pace than in the recent past. OECD demand, instead, is not forecast to return to pre-crisis levels.
The intergovernmental organisation said the oil and gas industry has an important role to play and companies should minimise emissions, especially methane, as an “urgent priority”.
“There are technologies vital to energy transitions that can be a match for the industry’s capabilities, such as carbon capture, low-carbon hydrogen, biofuels and offshore wind,” it said in a report.
“In many cases, these can help decarbonise sectors where emissions are hardest to tackle. A number of oil and gas companies are already scaling up their commitments in these areas.”
“An effective and orderly transition will be critical – not only to reach international climate targets but also to prevent serious supply disruptions and destabilising price volatility along the way.”
FTSE 100 oilers had mixed reactions, with BP plc () rising 1% to 312.9p and Plc () dipping 1% to 1,514.4p on Wednesday morning.
Read More: Oil demand could peak early if governments implement clean energy strategies, says IEA