The world has missed an opportunity to speed up the transition to renewables as economic recovery packages aimed at mitigating the impact of COVID-19 have entrenched the existing system, according to Norwegian energy consultancy DNV.
The firm, which last year forecast oil demand had likely peaked in 2019 thanks to travel restrictions and other means to curb the virus, said its prediction had since become less certain.
“From an energy transition perspective, the pandemic has been a lost opportunity,” DNV CEO Remi Eriksen said. “Recovery packages have largely focused on protecting rather than transforming existing industries.”
Progress in reducing emissions from hard-to-abate sectors, such as heavy industry, which are responsible for around a quarter of all emissions, was stubbornly slow, DNV said.
Energy-related greenhouse gas emissions were expected to rise by 3% in 2021 from the last year, when they fell about 6%, it said.
The use of crude oil was set to grow until the middle of the current decade, DNV said, but it was not clear if it would climb back to pre-pandemic levels, the consultancy said.
“Our forecast demand (for oil) between 2019 and 2025 differs by just 1%,” DNV wrote.
Oil demand would again decline after 2025 along with an expected rise in sales of electric cars and was expected to be 45% lower by 2050, it added. Gas demand, however, was seen to be down by only 10% by the same time.
DNV said the total share of fossil fuels, including coal, in the global energy mix was expected to fall to 50% by 2050 from around 80% today, saying this was a testament to the inertia of fossil energy in an era of decarbonisation.