The threat to Australia’s giant coal and LNG industries is rising, with major economies pledging support to net zero emissions targets.
Global coal use will drop by as much as 55% by 2030 under net zero considerations, according to the International Energy Agency’s latest World Energy Outlook.
The IEA’s net zero pathway also sees no new gas fields being developed beyond those already approved and LNG demand falling by 20% by 2030.
Australia is the biggest LNG exporter in the world and one of the largest producers of coal supplying Asian markets.
Under its Stated Policies Scenario (STEPS), the increase in oil demand means oil prices rise to around US$77 a barrel in 2030. Internationally traded volumes of natural gas expand by over 240 bcm between 2020 and 2030. Australia remains the largest exporter of coal, although exports fall by around 5% to 2030..
Global climate change commitments are in focus ahead of the COP26 Glasgow climate meeting at the end of October. The IEA report says more than 50 countries and the whole of the European Union have pledged to meet net zero emissions targets.
Even as deployments of solar and wind go from strength to strength, the world’s consumption of coal is growing strongly this year, the IEA report says, pushing carbon dioxide (CO2) emissions towards their second largest annual increase in history.
As the world emerges from the Covid-19 pandemic, a surge in demand has pushed LNG and thermal coal prices to records and oil has reached multi-year highs.
“The world’s hugely encouraging clean energy momentum is running up against the stubborn incumbency of fossil fuels in our energy systems,” said Fatih Birol, the IEA Executive Director. “Governments need to resolve this at COP26 by giving a clear and unmistakeable signal that they are committed to rapidly scaling up the clean and resilient technologies of the future. The social and economic benefits of accelerating clean energy transitions are huge, and the costs of inaction are immense.”