Pathway to Net Zero: The IEA’s updated Scenario
The international community’s commitment, enshrined in the Paris Agreement, aims to limit global warming to well below 2°C, with efforts focused on a 1.5°C target. The International Energy Agency (IEA) has developed a Net Zero Emissions by 2050 Scenario (NZE scenario) to map a viable energy sector pathway towards achieving this enterprising goal. This scenario has been recently updated to reflect the latest data and evolving trends. While each nation will forge its own route to net zero, the updated NZE Scenario rests on four core principles applicable globally: widespread clean energy adoption through electrification, important gains in energy efficiency, the deployment of low-emissions fuels, and aggressive methane emission reduction.
To meet these goals, renewable energy capacity must expand dramatically – nearly quadrupling by 2035. Alongside this growth, nuclear power and other low-emission technologies will play an increasingly vital role, especially as electricity demand rises to comprise one-third of total energy consumption.Concurrently, improvements in energy efficiency are projected to average 4% annually through 2035, more than double the rate observed in 2022.Enduring fuels, including biofuels, biogases, low-emission hydrogen, and hydrogen-derived fuels, will also see ample growth, with usage increasing more than fourfold from current levels. crucially, the scenario requires a reduction of methane emissions exceeding 80% by 2035.
currently, global energy-related carbon dioxide (CO2) emissions stand at 38 gigatonnes (Gt) per year. The NZE Scenario projects a nearly 55% reduction in these emissions by 2035, bringing them down to approximately 18 Gt. Despite these significant cuts, the scenario acknowledges that the 1.5°C warming threshold will likely be exceeded around 2030, peaking at approximately 1.65°C around 2050. Though, the NZE Scenario is aligned with the commitments made at COP28 – doubling energy efficiency and tripling renewable energy capacity by 2030 - and is designed to keep warming well below 2°C throughout the 21st century.
The updated scenario recognizes that some degree of overshoot is now unavoidable, necessitating the growth and deployment of carbon dioxide removal (CDR) technologies to ultimately bring global temperatures back below 1.5°C. These technologies are currently expensive and lack large-scale implementation, highlighting the importance of rapid and substantial emission reductions to minimize the reliance on CDR. The NZE Scenario forecasts a return to below 1.5°C global average temperature increase by 2100.
Achieving this transition requires a substantial increase in energy investment, rising to around USD 4.8 trillion per year over the next decade, compared to USD 3.3 trillion today. However, these upfront investments are expected to be offset by savings from reduced fuel costs and efficiency improvements, resulting in comparable energy service costs for households through 2035, and lower costs in the long term. Countries that currently import fuel will also benefit from considerably reduced import bills – a projected two-thirds decrease. The increasing reliance on electricity underscores the need for robust electricity security and diversified, secure supply chains for critical minerals and energy technologies.
