The growing demand for gas following last year’s decline indicates that the world is on track to miss the climate goal of achieving net-zero emissions by 2050, the International Energy Agency (IEA) says in its new report, urging users and producers to step up their climate efforts.
More than 190 countries have signed the Paris agreement designed to limit global warming to 1.5 degrees Celsius, which 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.
According to the IEA’s latest quarterly Gas Market Report, global gas demand is expected to rise by 3.6 percent in 2021 before easing to an average growth rate of 1.7 percent over the following three years, which means that gas demand would be too high to keep to the Agency’s roadmap towards meeting global net-zero emissions by 2050.
In May, the IEA published a 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 said.
“The rebound in gas demand shows that the global economy is recovering from the shock of the pandemic and that gas is continuing to replace more emissions-intensive fuels. But stronger policies need to be implemented to put global gas demand on a path in line with reaching net-zero emissions by 2050 while still fostering economic prosperity. These include measures to ensure gas is used more efficiently. At the same time, the gas industry needs to significantly step up efforts to shift to cleaner and low-carbon gases and to act quickly and effectively to address needless methane emissions.”
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 like 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. The IEA also added that the gas industry should ramp up efforts to reduce emissions such as addressing methane leaks.