The year 2024 will go down as the year of peak energy-related CO2 emissions, according to DNV’s recently issued Energy Transition Outlook.
Energy-related emissions are at the cusp of a prolonged period of decline for the first time since the industrial revolution, says DNV. Emissions are set to almost halve by 2050, “but this is a long way short of requirements of the Paris Agreement,” the classification society noted.
The peaking of emissions is largely due to “plunging costs” of solar and batteries which are “accelerating the exit of coal from the energy mix and stunting the growth of oil,” according to DNV.
DNV notes that annual solar installations increased 80% last year “as it beat coal on cost in many regions.” Cheaper batteries, which dropped 14% in cost last year, are also making the 24-hour delivery of solar power and electric vehicles more affordable,” DNV says. “The uptake of oil was limited as electrical vehicles sales grew by 50%. In China, where both of these trends were especially pronounced, peak gasoline is now in the past,” DNV said in the outlook report.
The outlook noted that China is “dominating much of the global action on decarbonization at present, particularly in the production and export of clean technology.”
According to DNV, China accounted for 58% of global solar installations and 63% of new electrical vehicle purchases last year. “And while it remains the world’s largest consumer of coal and emitter of CO2, its dependence on fossil fuels is set to fall rapidly as it continues to install solar and wind.”
DNV further noted that China is the dominant exporter of “green technologies” although international tariffs are making their goods more expensive in some territories.
“Solar PV and batteries are driving the energy transition, growing even faster than we previously forecasted,” said Remi Eriksen, Group President and CEO of DNV.
The outlook report did note that the success of solar and battery technologies has not replicated in the hard-to-abate sectors, where essential technologies are scaling slowly. DNV has revised the long-term forecast for hydrogen and its derivatives down by 20% (from 5% to 4% of final energy demand in 2050) since last year.
And although DNV has revised up its carbon capture and storage forecast, only 2% of global emissions will be captured by CCS in 2040 and 6% in 2050. “A global carbon price would accelerate the uptake of these technologies,” DNV commented.
Wind energy remains an important driver of the energy transition, the report noted, contributing to 28% of electricity generation by 2050. In the same timeframe, offshore wind will experience 12% annual growth rate – although DNV notes that “the current headwinds impacting the industry are weighing on growth.”
Despite these challenges, the peaking of emissions is a sign that the energy transition is progressing, DNV says. The energy mix is moving from a roughly 80/20 mix in favor of fossil fuels today, to one which will be equally divided between fossil and non-fossil fuels by 2050.
