IEA: Oil Industry Must Cut Emissions by 60% by 2030 to Meet 1.5°C Global Warming Scenario

Emmanuel Addeh in Abuja

To hold the proposed global warming scenario to 1.5 °C, oil and gas companies will have to cut emissions by at least 60 per cent by 2030, a new report by the International Energy Agency  (IEA) has stated.

Released ahead of the COP28 climate summit in Dubai, the special report sets out what the global oil and gas sector would need to do to align its operations with the goals of the Paris Agreement.

The IEA stated that stronger action to tackle climate change would mean clear declines in demand for both fuels, projecting that if governments will deliver in full on their national energy and climate pledges, demand would fall 45 per cent below today’s level by 2050.

Yet the oil and gas sector – which provides more than half of global energy supply and employs nearly 12 million workers worldwide – it said, has been a marginal force in transitioning to a clean energy system.

According to the report, oil and gas companies currently account for just 1 per cent of clean energy investment globally – and 60 per cent of that comes from just four companies.

While the global oil and gas industry encompasses a large and diverse range of players – from small, specialised operators to huge national oil companies, the Fatih Birol-led organisation said that attention often focuses on the role of the private sector majors, who own less than 13 per cent of global oil and gas production and reserves.

The production, transport and processing of oil and gas results in nearly 15 per cent of global energy-related greenhouse emissions – the report added.

As things stand, companies with targets to reduce their own emissions account for less than half of global oil and gas output.

“To align with a 1.5 °C scenario, the industry’s own emissions need to decline by 60 per cent by 2030. The emissions intensity of oil and gas producers with the highest emissions is currently five to 10 times above those with the lowest, showing the vast potential for improvements.

“Furthermore, strategies to reduce emissions from methane – which accounts for half of the total emissions from oil and gas operations – are well-known and can typically be pursued at low cost.

“While oil and gas production is vastly lower in transitions to net zero emissions, it will not disappear – even in a 1.5 °C scenario,” the IEA added.

The  $800 billion currently invested in the oil and gas sector each year is double what is required in 2030 on a pathway that limits warming to 1.5 °C, the IEA stressed, noting that in that scenario, declines in demand are sufficiently steep that no new long-lead-time conventional oil and gas projects are needed.

Some existing oil and gas production would even need to be shut in, the global agency explained.