How to achieve net zero by 2050?

Yet there are plausible paths to reach a global warming well below two degrees Celsius, if governments and businesses take determined action to transition to low-carbon energy technologies.

This is what the 2022 New Energy Outlook, from the BNEF (BloombergNEF). The report explores how the world's energy system and the energy systems of nine critical countries, which represent 63% of global emissions, could evolve between now and 2050, under two scenarios: the so-called ETS (Economic Transition Scenario) and the NZS (Net Zero Scenario) aligned with Paris.

Economic Transition Scenario

The global energy crisis has made renewables even more competitive against coal and gas power generation in many parts of the world, as prices for these fuels have soared and many countries and regions are seeking a faster transition to clean energy in supporting a push for greater energy security.

In the ETS, which assumes no new policy action to accelerate the clean energy transition, the rapid growth of renewable energy and the electrification of transportation eliminate about half of the world's energy-related emissions by 2050, versus a baseline in which no such transition occurs.

According to BNEF, these technologies stand on their own merit, without the need for additional subsidy, thanks to drastic cost reductions in wind, solar and battery technology over the last decade – which are expected to resume after a hiatus during the current inflation crisis.

In the ETS, for example, wind and solar will provide around two-thirds of global energy generation by 2050, and these two technologies, combined with battery storage, account for 8.5 % of the 23 TW of new power capacity additions installed over the next three decades.

Forecasts also indicate that emissions from the energy sector will fall by 57% and emissions from the general transport sector will fall by 22% by 2050, driven by the transition of the road segment to electric vehicles. Global use of coal, oil and gas will peak in the next decade, with coal reaching a high point and immediately beginning to decline, while oil does the same in 2028 and gas in the early 2030s.

“The energy transition in the power sector is well underway and our modeling shows that global emissions in the power sector will peak around 2023,” said Matthias Kimmel, energy economics team leader at BNEF.

“Despite recent inflationary pressures, renewables remain competitive and the gap between renewables and fossil fuels continues to widen. We are on the right path, but there is still a lot more work needed to find solutions that we already know make economic sense”, he reported.

Even with these rapid gains for clean energy, the ETS is a long way from reaching net zero by mid-century. By 2050, emissions have fallen by 29%, but unabated coal, oil and gas still emit 24.6 gigatons of CO2 per year. The result is a trajectory consistent with 2.6°C of global warming, failing to meet the goals of the Paris Agreement.

Net Zero Scenario

In the NZS, BNEF indicates that the world can remain on track for 1.77°C and global net zero by 2050, with rapid deployments of clean energy generation, electrification and, to a lesser extent, carbon capture, storage and hydrogen.

According to the study, shifting power generation from fossil fuels to clean energy is the biggest contributor to global emissions reductions, accounting for half of all emissions reduced in 2022-50.

This includes the seamless replacement of fossil fuel with wind, solar, other renewables and nuclear – largely mature technologies that exist at scale today.

By 2050, the global energy system will be dominated by wind (48% of generation) and solar (26%), with the remainder supplied by other renewable sources (7%), nuclear (9%), hydrogen and coal or gas with carbon capture. carbon.

The electrification of transport and industrial processes, buildings and heating – using low-carbon electricity – is the second biggest contributor to emissions reductions, reducing around a quarter of total emissions over the period.

“Here again, the technologies already exist, although in the case of heating for buildings and industries, electrification is not yet advancing at a rapid pace,” BloombergNEF reported.

The remainder of the emissions reductions come from demand-side efficiency gains and recycling, hydrogen, bioenergy and carbon capture and storage, together representing approximately the last quarter of emissions reductions.

Although they appear to play a smaller role, the growth required for these technologies is still notable. Carbon capture and storage capacity grows from around 40 megatons in 2021 to 1.7 gigatons in 2030 and more than 7 gigatons in 2050.

Hydrogen use more than fivefolds, from more than 90 million tonnes of fossil-based hydrogen today to around 500 Mt of emissions-free hydrogen by 2050.

“Our Net Zero Scenario shows that there is still a credible path to achieving the goals of the Paris Agreement, but getting there requires immediate action. Clean energy deployment needs to quadruple by 2030, in addition to major investment in carbon capture and storage, advanced nuclear technologies and hydrogen,” commented David Hostert, global head of economics and modeling at BNEF and lead author of the report.

“To get on the right track this decade, we need to invest US$ 3 in low-carbon supply for every US$ 1 in fossil fuel supply. There are also critical enabling factors to consider: electrification and economic growth will quadruple the planet’s energy demand by 2050,” he emphasized.

“We need to see a massive acceleration in the construction of electrical grids, manufacturing capacity for low-carbon technologies and the supply of critical metals and materials. These could become painful bottlenecks tomorrow if they are not resolved today,” said Hostert.

Countries

In the Net Zero Scenario, countries follow different paths to net zero. The developed countries covered in the report (USA, UK, France, Germany, Japan and Australia) have reduced emissions rapidly this decade.

Developing economies (India, Indonesia and the rest of the world) have seen emissions increase for several years, decreasing rapidly in recent years. China charts its own course, combining elements of developed and developing paths.

The report pointed out that cleaning up the power system is most impactful in countries that rely heavily on coal today, such as China (61% of coal's share of electricity generation in 2021), India (78%) and Australia (53%).

The shift to clean energy is responsible for at least two-thirds of its total emissions reductions over the next 28 years. Electrification of fossil fuel-based processes in transport, industry and buildings should be a priority in countries that have already reduced the carbon intensity of their electricity generation.

Furthermore, BloombergNEF finds that several countries could exceed their officially established emissions targets, known as Nationally Determined Contributions, or increase the ambition of these targets by 2030, relying only on technologies that are economically competitive today, or very soon.

“Our Net Zero Scenario and Economic Transition Scenario describe very different paths for the energy transition and, by extension, the global climate crisis, and the fork in the road is coming,” said David Hostert.

“Policymakers returning home from COP-27 have the opportunity to begin closing the so-called 'implementation gap' by removing barriers to the deployment of renewable energy and electric vehicles, accelerating the development of new technologies such as hydrogen and of carbon, and actively managing the transition from fossil fuels unabated”, he concluded.