Search Energy.ink

February 26, 2024     

DATA DIVE: Traveling through Time with IEA

The wealth of information available to today’s energy professionals can seem overwhelming at times. With so much coming at you at once, where should you direct your attention? Each issue, energy.ink’s Data Dive features one informational report, study or survey worthy of closer inspection.

traveling-through-time-IEA.jpgOn May 18, the International Energy Agency (IEA) released Net Zero by 2050: A Roadmap for the Global Energy Sector. Governments, businesses, trade associations and advocacy groups have put forward many such “road maps,” but few if any have had the reverberations of this report. Major news outlets across the world covered it, various different sectors weighed in, and financial markets responded in turn.

However, the response from the biofuels industry has been relatively mute. With this in mind, energy.ink has sifted through the IEA report’s more than 400 “milestones” — i.e., benchmarks — with an eye toward goals and trends that might be relevant to our readership. Below are some of IEA’s key milestones for biofuels, along with our own commentary.

2021

  • No new oil or gas field development approvals
  • No new coal mines, mine extensions, or unabated coal plant approvals

The first bullet point above was one of the most eyebrow-raising benchmarks throughout the report, as the IEA is essentially saying here that for the world to achieve net-zero carbon by 2050, governments everywhere need to stop approving new oil and gas fields. In effect, the world needs to make due with those fossil fuels that have already been discovered.

2025

  • No new sales of fossil fuel boilers
  • All new buildings in advanced economies are zero-carbon ready

While the first bullet for 2025 generated some of biggest news stories and loudest backlash from the oil and gas industries, the second points to a disturbing trend that can be found all throughout the report. Note how “advanced economies” are singled out for the first “zero-carbon ready” buildings. As shown below, it’s another five years before new buildings everywhere else catch up. During that interim, populations of poorer countries continue to rely on older technologies and dirtier fuels. This international trend mirrors a domestic pattern, wherein underserved communities continue to bear the brunt of air pollution and related health issues (see “Environmental Justice Story Comes into Focus” and “Increasing Biodiesel Use Will Save 340 Lives and $3 Billion Per Year” from issues 4 and 6, respectively).

2030

  • All new buildings are zero-carbon ready
  • 60 percent of global car sales are electric
  • 13% biofuel blends in oil products

Another head-turning benchmark can be found with the above EV sales target. While federal and state policymakers have established similar goals, the U.S. still has a long way to go in this regard. According to the Energy Information Administration’s (EIA’s) 2021 Annual Energy Outlook, gasoline and flex-fuel vehicles (running up to 85 percent ethanol) still account for 79 percent of new vehicles sales in 2050 – never mind 2030. In terms of overall biofuels consumption, however, EIA is on about the same page as IEA, projecting biofuels’ share of U.S. petroleum could hit 10 percent by 2030.

2035

  • No new internal combustion engine car sales
  • Global fossil fuel use is 50 percent of 2020 level
  • Net-zero electricity in advanced economies

In 2035, we again see the disparity between “advanced economies” and everyone else, this time with regard to power generation. While the other bullet points above might seem extreme to some observers, they are in fact relatively in line with goal posts already set by some major auto manufacturers and oil producers. For example, General Motors plans to stop making gas-burning cars vehicles by 2035, and BP aims to reduce its fossil fuels output 40 percent by 2030.

2040

  • Net-zero electricity globally
  • 50 percent of fuels in aviation are low-emissions
  • Oil demand is 50 percent of 2020 level

The 50-percent low-emissions fuel target for aviation is one instance in which IEA is actually somewhat behind industry benchmarks. As reported in this issue (see “Is SAF Ready for Takeoff?”), Boeing plans to transition to 100 percent sustainable aviation fuel (SAF) by 2030, and the Airlines for America association has set its sights on net-zero emissions by 2050. Of course, the achievability of these goals — along with the others listed above — remains a subject of some debate.

2045

  • Natural gas demand is 50 percent of 2020 level
  • 50 percent of heating demand is met by heat pumps

Notably, IEA has natural gas demand falling off slower than oil demand, but not that much slower. Elsewhere in the energy transition, IEA’s call for electric heat pumps to meet 50 percent of worldwide heating demand by 2045 seems overly optimistic, if not impossible, for some parts of the world. ISO-New England, the grid operator in one of the more progressive parts of the U.S., expects only 18.8 percent of homes in the region will have a heat pump by 2030, and less than 35 percent of these heat pumps will provide full heating, meaning 65 percent of homes with heat pumps will maintain a second (non-electric) heating system.

2050

  • 41 percent biofuel blending in oil products
  • 86 percent of cars are EVs
  • 59 percent of heavy trucks are EVs

While the overall timeline might leave biofuel industry stakeholders with mixed impressions, the final 2050 benchmarks provide several positive signals. An oil product mix that’s 41 percent biofuels offers plenty of room for growth, and some petroleum product providers have set even more progressive goals. For example, Northeast heating oil dealers plan to transition their core product to 100 percent biofuels by 2050. Meanwhile, the disparity between EVs’ shares of passenger vehicles and commercial vehicles illustrates what most truck manufacturers and even some progressive policymakers readily acknowledge – that on-road fleets will continue to depend on lower-carbon liquid fuels like biodiesel and renewable diesel for the foreseeable future.