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Net Zero

Roadmap

A Global Pathway to

Keep the 1.5 °C Goal

in Reach

2023 Update

INTERNATIONAL ENERGY

AGENCY

IEA member

countries:

Australia

Austria

Belgium

Canada

Czech Republic

Denmark

Estonia

Finland

France

Germany

Greece

Hungary

Ireland

Italy

Japan

Korea

Lithuania

Luxembourg

Mexico

Netherlands

New Zealand

Norway

Poland

Portugal

Slovak Republic

Spain

Sweden

Switzerland

Republic of Türkiye

United Kingdom

United States

The European

Commission also

participates in the

work of the IEA

IEA association

countries:

Argentina

Brazil

China

Egypt

India

Indonesia

Kenya

Morocco

Senegal

Singapore

South Africa

Thailand

Ukraine

The IEA examines the

full spectrum

of energy issues

including oil, gas

and coal supply and

demand, renewable

energy technologies,

electricity markets,

energy eiciency,

access to energy,

demand side

management and

much more. Through

its work, the IEA

advocates policies

that will enhance the

reliability, aordability

and sustainability of

energy in its

31 member countries,

13 association

countries and

beyond.

Please note that this

publication is subject to

speciic restrictions that limit

its use and distribution. The

terms and conditions are

available online at

www.iea.org/t&c/

This publication and any

map included herein are

without prejudice to the

status of or sovereignty

over any territory, to the

delimitation of international

frontiers and boundaries and

to the name of any territory,

city or area.

Source: IEA.

International Energy Agency

Website: www.iea.org

Foreword

The publication of the first Net Zero Roadmap by the International Energy Agency (IEA) in

May 2021 was a landmark moment for the energy and climate world, setting out what would

need to happen in the global energy sector in the years and decades ahead to limit global

warming to 1.5 °C. The interest in the report was huge. The world finally had an authoritative

benchmark for what a clear pathway to net zero energy sector CO2 emissions by 2050 would

look like – something against which the proliferation of net zero pledges could be compared.

The significance of the report was reflected by the massive number of readers it attracted

online. It quickly became our most viewed and downloaded publication ever, a sign of the

strong demand for clear and unbiased analysis, translating the temperature goals of the Paris

Agreement into practical milestones for the global energy sector. Our Roadmap became a

reference point for governments, companies, investors and civil society, helping inform

discussions and decision-making on pursuing secure, inclusive and affordable transitions to

clean energy.

Much has happened since its launch two and half years ago: first, the strong and carbon-

intensive economic recovery from the Covid crisis; then, the global energy crisis triggered by

Russia’s invasion of Ukraine. The negative consequences of these major events include the

rise of global energy-related carbon dioxide emissions to a new record in 2022 and increased

investment in new fossil fuel projects.

However, we have also seen some extremely positive developments, most notably the rapid

progress of key clean energy technologies, such as solar PV and electric vehicles, backed by

significant policy efforts to advance them further. Recognising the importance of these

industries of the future for energy security and economic competitiveness, countries around

the world are seeking to boost their clean technology manufacturing capacities, driving a

resurgence in industrial policy. Innovation is also accelerating, strengthening the pipeline of

technologies that will be needed to complete the world’s journey to net zero.

At the same time, the case for climate action is stronger than ever. July 2023 was the hottest

month on record – and 2023 as a whole appears likely to become the hottest year. Severe

wildfires, droughts, floods and storms further underlined that the climate crisis is with us and

that the costs are mounting. Politically, this year is an important test for the Paris Agreement,

with the first Global Stocktake at the COP28 Climate Conference providing a comprehensive

assessment of where things stand five years on. To succeed, it needs to set a course for all

countries to step up to meet the challenge.

With this in mind, the IEA is therefore providing a 2023 update to our Net Zero Roadmap,

drawing on the latest data and analysis to map out what the global energy sector would need

to do, especially in the crucial period between now and 2030, to play its part in keeping the

1.5 °C goal in reach. The findings are clear: while the global pathway to net zero by 2050 we

mapped out previously has narrowed, it is still achievable. It is too soon to give up on 1.5 °C.

And I would like to underscore that net zero by 2050 globally doesn’t mean net zero by 2050

for every country. In our pathway, advanced economies reach net zero sooner to allow

emerging and developing economies more time.

IEA. CC BY 4.0.

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NetZeroRoadmapAGlobalPathwaytoKeepthe1.5°CGoalinReach2023UpdateINTERNATIONALENERGYAGENCYTheIEAexaminestheIEAmemberIEAassociationfullspectrumcountries:countries:ofenergyissuesincludingoil,gasAustraliaArgentinaandcoalsupplyandAustriaBrazildemand,renewableBelgiumChinaenergytechnologies,CanadaEgyptelectricitymarkets,CzechRepublicIndiaenergyefficiency,DenmarkIndonesiaaccesstoenergy,EstoniaKenyademandsideFinlandMoroccomanagementandFranceSenegalmuchmore.ThroughGermanySingaporeitswork,theIEAGreeceSouthAfricaadvocatespoliciesHungaryThailandthatwillenhancetheIrelandUkrainereliability,affordabilityItalyandsustainabilityofJapanenergyinitsKorea31membercountries,Lithuania13associationLuxembourgcountriesandMexicobeyond.NetherlandsNewZealandPleasenotethatthisNorwaypublicationissubjecttoPolandspecificrestrictionsthatlimitPortugalitsuseanddistribution.TheSlovakRepublictermsandconditionsareSpainavailableonlineatSwedenwww.iea.org/t&c/SwitzerlandRepublicofTürkiyeThispublicationandanyUnitedKingdommapincludedhereinareUnitedStateswithoutprejudicetothestatusoforsovereigntyTheEuropeanoveranyterritory,totheCommissionalsodelimitationofinternationalparticipatesinthefrontiersandboundariesandworkoftheIEAtothenameofanyterritory,cityorarea.Source:IEA.InternationalEnergyAgencyWebsite:www.iea.orgForewordThepublicationofthefirstNetZeroRoadmapbytheInternationalEnergyAgency(IEA)inMay2021wasalandmarkmomentfortheenergyandclimateworld,settingoutwhatwouldneedtohappenintheglobalenergysectorintheyearsanddecadesaheadtolimitglobalwarmingto1.5°C.Theinterestinthereportwashuge.TheworldfinallyhadanauthoritativebenchmarkforwhataclearpathwaytonetzeroenergysectorCO2emissionsby2050wouldlooklike–somethingagainstwhichtheproliferationofnetzeropledgescouldbecompared.Thesignificanceofthereportwasreflectedbythemassivenumberofreadersitattractedonline.Itquicklybecameourmostviewedanddownloadedpublicationever,asignofthestrongdemandforclearandunbiasedanalysis,translatingthetemperaturegoalsoftheParisAgreementintopracticalmilestonesfortheglobalenergysector.OurRoadmapbecameareferencepointforgovernments,companies,investorsandcivilsociety,helpinginformdiscussionsanddecision-makingonpursuingsecure,inclusiveandaffordabletransitionstocleanenergy.Muchhashappenedsinceitslaunchtwoandhalfyearsago:first,thestrongandcarbon-intensiveeconomicrecoveryfromtheCovidcrisis;then,theglobalenergycrisistriggeredbyRussia’sinvasionofUkraine.Thenegativeconsequencesofthesemajoreventsincludetheriseofglobalenergy-relatedcarbondioxideemissionstoanewrecordin2022andincreasedinvestmentinnewfossilfuelprojects.However,wehavealsoseensomeextremelypositivedevelopments,mostnotablytherapidprogressofkeycleanenergytechnologies,suchassolarPVandelectricvehicles,backedbysignificantpolicyeffortstoadvancethemfurther.Recognisingtheimportanceoftheseindustriesofthefutureforenergysecurityandeconomiccompetitiveness,countriesaroundtheworldareseekingtoboosttheircleantechnologymanufacturingcapacities,drivingaresurgenceinindustrialpolicy.Innovationisalsoaccelerating,strengtheningthepipelineoftechnologiesthatwillbeneededtocompletetheworld’sjourneytonetzero.Atthesametime,thecaseforclimateactionisstrongerthanever.July2023wasthehottestIEA.CCBY4.0.monthonrecord–and2023asawholeappearslikelytobecomethehottestyear.Severewildfires,droughts,floodsandstormsfurtherunderlinedthattheclimatecrisisiswithusandthatthecostsaremounting.Politically,thisyearisanimportanttestfortheParisAgreement,withthefirstGlobalStocktakeattheCOP28ClimateConferenceprovidingacomprehensiveassessmentofwherethingsstandfiveyearson.Tosucceed,itneedstosetacourseforallcountriestostepuptomeetthechallenge.Withthisinmind,theIEAisthereforeprovidinga2023updatetoourNetZeroRoadmap,drawingonthelatestdataandanalysistomapoutwhattheglobalenergysectorwouldneedtodo,especiallyinthecrucialperiodbetweennowand2030,toplayitspartinkeepingthe1.5°Cgoalinreach.Thefindingsareclear:whiletheglobalpathwaytonetzeroby2050wemappedoutpreviouslyhasnarrowed,itisstillachievable.Itistoosoontogiveupon1.5°C.AndIwouldliketounderscorethatnetzeroby2050globallydoesn’tmeannetzeroby2050foreverycountry.Inourpathway,advancedeconomiesreachnetzerosoonertoallowemerginganddevelopingeconomiesmoretime.Foreword3Amongthewealthofinsightscontainedinthisreport,Iwouldliketohighlightonemessageinparticular:inaneraofinternationaltensions,governmentsneedtoseparateclimatefromgeopolitics.Meetingthesharedgoalofpreventingglobalwarmingfromgoingbeyondcriticalthresholdsrequiresstrongercooperationnotfragmentation.Climatechangeisindifferenttogeopoliticalrivalriesandnationalboundaries–initscausesanditseffects.Whatmattersisemissions,regardlessofwhichcountryproducesthem,callingforleadershiponcollaborativeeffortstotacklethem.AsthisRoadmapmakesclear,wehavetheproventechnologiesandpoliciestoreducethoseemissionsquicklyenoughthisdecadetokeep1.5°Cinreach.Allcountriesneedtoworktogethertomakethathappenorweallloseintheend.IhopetheinsightsthisreportofferswillinforminternationaldiscussionsgoingintoCOP28andbeyond.Fortherigorousandincisiveanalysisitcontains,I’dliketothankmycolleagueswholedthework,LauraCozziandTimurGül,andtheirexcellentteams.DrFatihBirolExecutiveDirectorInternationalEnergyAgency4InternationalEnergyAgencyNetZeroRoadmapIEA.CCBY4.0.AcknowledgementsThisInternationalEnergyAgencyreportwasdesignedanddirectedbyLauraCozzi,DirectorforSustainability,TechnologyandOutlooks,andTimurGül,ChiefEnergyTechnologyOfficer.Theleadauthorsandco‐ordinatorsoftheanalysiswereAraceliFernándezandThomasSpencer.AnalyticalteamswereledbyStéphanieBouckaert(demand),ChristopheMcGlade(fossilfuelssupply),UweRemme(hydrogenandalternativefuelssupply)andBrentWanner(power).DavideD’Ambrosiowasalsopartofthecoreteam.Theothermainauthorsandmodellerswere:CaleighAndrews(employment),OskarasAlšauskas(transport),YasmineArsalane(leadoneconomicoutlook,power),HeymiBahar(renewables),PraveenBains(bioenergy),SimonBennett(hydrogen,innovation),JoseBermúdezMenéndez(leadonhydrogen),SaraBudinis(carboncapture,utilisationandstorage),EricBuisson(criticalminerals),OliviaChen(co-leadonbuildings,equity),LeonardoCollina(industry),ElizabethConnelly(co-leadontransport,electrification),DanielCrow(leadonclimatemodelling,behaviour),AmritaDasgupta(criticalminerals),TomásdeOliveriraBredariol(fossilfuels,methane),ChiaraDelmastro(co-leadonbuildings),StavroulaEvangelopoulou(hydrogen),MathildeFajardy(carboncapture,utilisationandstorage),VíctorGarcíaTapia(buildings),AlexandreGouy(industry,criticalminerals),WillHall(low-emissionsstandards),PaulHugues(co-leadonindustry),JérômeHilaire(leadfossilfuelmodelling),MathildeHuismans(transport),BrunoIdini(employment),HyejiKim(transport),Tae‑YoonKim(criticalminerals,energysecurity),MartinKueppers(industry,decompositionanalysis),Jean-BaptisteLeMarois(innovation),PeterLevi(co-leadonindustry,cleanenergytechnology),LucaLoRe(NationallyDeterminedContributionsandpledges),ShaneMcDonagh(transport),RafaelMartinezGordon(buildings),YannickMonschauer(energyefficiency,affordability),FaidonPapadimoulis(decompositionanalysis),FrancescoPavan(hydrogen),DianaPerezSanchez(industry),ApostolosPetropoulos(co-leadontransport),AmaliaPizarro(hydrogen),RyszardPospiech(fossilfuelmodelling,datamanagement),ArthurRogé(datascience),GabrielSaive(NationallyDeterminedContributionsandpledges),RichardSimon(cleanenergytechnology,industry),LeonieStaas(buildings,behaviour),CeciliaTam(finance),JacobTeter(transport),TiffanyVass(cleanenergytechnology,industry),AnthonyVautrin(buildings),DanielWetzel(leadonemployment)andWonjikYang(datavisualisation).MarinaDosSantosandEleniTsoukalaprovidedessentialsupport.EdmundHoskercarriededitorialresponsibility.TrevorMorganprovidedwritingsupport.DebraJustuswasthecopy-editor.OtherkeycontributorsfromacrosstheIEAwere:Franced’Agrain,TanguydeBienassis,ClaraCamarasa,LaurenceCret,CarlGreenfield,AlexandraHegarty,TeoLombardo,JeremyMoorhouse,AlanaRawlinsBilbao,MelanieSladeandFabianVoswinkel.Acknowledgements5IEA.CCBY4.0.ValuablecommentsandfeedbackwereprovidedbyTimGould(ChiefEnergyEconomist),otherIEAseniormanagementandnumerousothercolleagues,inparticularMaryWarlick,KeisukeSadamori,DanDorner,NickJohnstone,TorilBosoni,PaoloFrankl,DennisHesseling,BrianMotherway,AlessandroBlasi,HiroSakaguchiandPabloHevia-Koch.ThanksgototheIEACommunicationsandDigitalOfficefortheirhelptoproducethereportandwebsitematerials,particularlyJethroMullen,PoeliBojorquez,CurtisBrainard,HortenseDeRoffignac,AstridDumond,MerveErdil,GraceGordon,JuliaHorowitz,OliverJoy,RobertStone,JuliePuech,ClaraVallois,LucileWallandThereseWalsh.TheIEAOfficeoftheLegalCounsel,OfficeofManagementandAdministrationandEnergyDataCentreprovidedassistancethroughoutthepreparationofthereport.Valuableinputtotheanalysiswasprovidedby:DavidWilkinson(independentconsultant).SupportforthemodellingofairpollutionandassociatedhealthimpactswasprovidedbyPeterRafaj,GregorKiesewetter,LauraWarnecke,KatrinKaltenegger,JessicaSlater,ChrisHeyes,WolfgangSchöpp,FabianWagnerandZbigniewKlimont(InternationalInstituteforAppliedSystemsAnalysis).Valuableinputtothemodellingandanalysisofgreenhousegasemissionsfromlanduse,agricultureandbioenergyproductionwasprovidedbyNicklasForsell,ZuelcladyAraujoGutierrez,AndreyLessa-Derci-Augustynczik,StefanFrank,PekkaLauri,MykolaGustiandPetrHavlík(InternationalInstituteforAppliedSystemsAnalysis).AdvicerelatedtothemodellingofglobalclimateimpactswasprovidedbyJaredLewis,ZebedeeNicholls(ClimateResource)andMalteMeinshausen(ClimateResourceandUniversityofMelbourne).ThisworkwassupportedbytheCleanEnergyTransitionsProgramme,theIEA’sflagshipinitiativetotransformtheworld’senergysystemtoachieveasecureandsustainablefutureforall.6InternationalEnergyAgencyNetZeroRoadmapIEA.CCBY4.0.PeerreviewersManyseniorgovernmentofficialsandinternationalexpertsprovidedinputandreviewedpreliminarydraftsofthereport.Theircommentsandsuggestionswereofgreatvalue.Theyinclude:DougArentNationalRenewableEnergyLaboratory,UnitedStatesIEA.CCBY4.0.FlorianAusfelderDechemaAdamBaylin-SternCarbonEngineeringChristophBeuttlerClimeworksSamaBilbaoYLeonWorldNuclearAssociationDianeCameronNuclearEnergyAgencyRebeccaCollyerEuropeanClimateFoundationDelphineEyraudPermanentRepresentationofFrancetotheOECDNicklasForsellInternationalInstituteforAppliedSystemsAnalysisHiroyukiFukuiToyotaOliverGedenGermanInstituteforInternationalandSecurityAffairsBerndHackmannUnitedNationsClimateChangeRyoHamaguchiUnitedNationsClimateChangeYuyaHasegawaMinistryofEconomy,TradeandIndustry,JapanHaraldHirschhoferTCXFundRonanHodgeGlasgowFinancialAllianceforNetZeroChristinaHoodCompassClimateDaveJonesEMBERVijayalaxmiJumnoodooUnitedNationsClimateChangeKenKoyamaInstituteofEnergyEconomics,JapanFranciscoLaveronIberdrolaEmilioLèbreLaRovereUniversidadeFederaldoRiodeJaneiroJoyceLeeGlobalWindEnergyCouncilRituMathurNITIAayog,GovernmentofIndiaMalteMeinhausenUniversityofMelbourne,AustraliaVincentMinierSchneiderElectricSteveNadelAmericanCouncilforanEnergy‐EfficientEconomy,UnitedStatesYasukoNishimuraMinistryofForeignAffairsofJapanThomasNowakEuropeanHeatPumpAssociationHenriPaillereInternationalAtomicEnergyAgencyGlenPetersCICEROStephaniePfeiferInstitutionalInvestorsGrouponClimateChangeAcknowledgements7CédricPhilibertFrenchInstituteofInternationalRelations,CentreforEnergy&ClimateVickyPollardDirectorate-GeneralforClimateAction,EuropeanCommissionAndrewPurvisWorldSteelAssociationAnshariRahmanGenZeroJuliaReinaudBreakthroughEnergyToshiyukiSakamotoInstituteofEnergyEconomics,JapanVivianScottUKClimateChangeCommitteeStephanSingerClimateActionNetworkInternationalJimSkeaImperialCollegeLondon,Chair,IntergovernmentalPanelonClimateChangeSandroStaritaEuropeanAluminiumAssociationWimThomasIndependentconsultantFridtjofFossumUnanderAkerHorizonsNoéVanHulstInternationalPartnershipforHydrogenandFuelCellsintheEconomyMarkusWråkeSwedishEnergyResearchCentreTheworkreflectstheviewsoftheInternationalEnergyAgencySecretariat,butdoesnotnecessarilyreflectthoseofindividualIEAmembercountriesorofanyparticularfunder,supporterorcollaborator.NoneoftheIEAoranyfunder,supporterorcollaboratorthatcontributedtothisworkmakesanyrepresentationorwarranty,expressorimplied,inrespectofthework’scontents(includingitscompletenessoraccuracy)andshallnotberesponsibleforanyuseof,orrelianceon,thework.Thisdocumentandanymapincludedhereinarewithoutprejudicetothestatusoforsovereigntyoveranyterritory,tothedelimitationofinternationalfrontiersandboundariesandtothenameofanyterritory,cityorarea.Commentsandquestionsarewelcomeandshouldbeaddressedto:LauraCozziandTimurGülDirectorateofSustainability,TechnologyandOutlooksInternationalEnergyAgency9,ruedelaFédération75739ParisCedex15FranceE-mail:ieanze2050@iea.orgwww.iea.org8InternationalEnergyAgencyNetZeroRoadmapIEA.CCBY4.0.TableofContentsForeword.................................................................................................................................3Acknowledgements.................................................................................................................5Executivesummary...............................................................................................................131Progressinthecleanenergytransition191.1Thecontext....................................................................................................201.2Bendingtheemissionscurve.........................................................................231.3NationallyDeterminedContributionsandNetZeroEmissionsPledges.......311.3.1NationallyDeterminedContributions...............................................311.3.2Netzeroemissionspledges...............................................................321.4Cleanenergytechnologies............................................................................351.4.1Deployment.......................................................................................351.4.2Supplychains.....................................................................................411.4.3Costsandperformance......................................................................481.4.4Innovation..........................................................................................502Arenewedpathwaytonetzeroemissions552.1OverviewoftheNZEScenario.......................................................................562.1.1Scenariodesign..................................................................................562.1.2Emissionsandtemperaturetrends...................................................622.1.3Keymitigationlevers.........................................................................662.2Energytrends................................................................................................722.2.1Totalenergysupply...........................................................................722.2.2Fuelsupply.........................................................................................752.2.3Electricitygeneration.........................................................................792.2.4Finalenergyconsumption.................................................................842.3Netzeroemissionsguide...............................................................................90Low-emissionssourcesofelectricity.............................................................91Unabatedfossilfuelsinelectricitygeneration..............................................92Roadtransport...............................................................................................93Shippingandaviation....................................................................................94Steelandaluminium......................................................................................95Cement..........................................................................................................96Primarychemicals.........................................................................................97IEA.CCBY4.0.TableofContents9Spaceheating................................................................................................98Spacecooling.................................................................................................99Energyefficiencyandbehaviouralchange..................................................100Hydrogen.....................................................................................................101Carboncapture,utilisationandstorage......................................................102Bioenergy.....................................................................................................103Energyaccessandairpollution...................................................................104Fossilfuelsupply.........................................................................................1053MakingtheNZEScenarioareality1073.1Achievingdeepemissionsreductionsby2030............................................1083.1.1Triplerenewablescapacity..............................................................1083.1.2Doubletherateofenergyintensityimprovements........................1163.1.3Accelerateelectrification.................................................................1243.1.4Reducemethaneemissions.............................................................1293.2Acceleratelongleadtimeoptions...............................................................1323.2.1Carboncapture,utilisationandstorage..........................................1323.2.2Hydrogenandhydrogen-basedfuels...............................................1363.2.3Bioenergy.........................................................................................1413.2.4Infrastructure...................................................................................1463.3Consequencesoffurtherdelaysforthecleanenergytransition................1493.3.1Theworldhasalreadydelayedtoolongtoavoidhardchoices.......1503.3.2Implicationsofnotraisingclimateambitionsto2030....................1513.3.3Whatwouldittaketobringtemperaturesbackbelow1.5°C?......1523.3.4Implicationsfortheoilandnaturalgasindustry.............................1564Secure,equitableandco-operativetransitions1574.1Introduction.................................................................................................1584.2Energysecurity............................................................................................1584.2.1Bridgingthegapbetweencriticalmineralsupplyanddemand......1584.2.2Scalingupcleanenergytechnologiesandscalingbackfossilfuelsneedtobewellsynchronised..........................................................1624.2.3Fossilfuelmarketsshrink,butvigilanceisstillneeded...................16310InternationalEnergyAgencyNetZeroRoadmapIEA.CCBY4.0.4.3Equity...........................................................................................................1654.3.1Acceleratingcleanenergydeploymentinemergingmarketanddevelopingeconomies.....................................................................1654.3.2Enhancingcleanenergyaffordability..............................................1694.3.3Managingtheemploymenttransition.............................................1724.4Internationalco-operation..........................................................................1734.4.1Addressingfinancingbarriersinemergingeconomies....................1734.4.2EnhancingambitionsthroughtheUnitedNationsFrameworkConventiononClimateChangeandGlobalStocktake....................1794.4.3Acceleratingcleanenergytechnologydeployment........................181AnnexesAnnexA.Tablesforscenarioprojections............................................................................191AnnexB.Definitions............................................................................................................201AnnexC.References...........................................................................................................217TableofContents11IEA.CCBY4.0.IEA.CCBY4.0.ExecutiveSummaryIn2021,theIEApublisheditslandmarkreport,NetZeroby2050:ARoadmapfortheGlobalEnergySector.Sincethen,theenergysectorhasseenmajorshifts.Basedonthelatestdataontechnologies,marketsandpolicies,thisreportpresentsanupdatedversionoftheNetZeroEmissionsby2050(NZE)Scenario;apathway,butnottheonlyone,fortheenergysectortoachievenetzeroCO2emissionsby2050andplayitspart,asthelargestsourceofgreenhousegasemissions,inachievingthe1.5°Cgoal.Thepathto1.5°Chasnarrowed,butcleanenergygrowthiskeepingitopenThecasefortransformingtheglobalenergysysteminlinewiththe1.5°Cgoalhasneverbeenstronger.August2023wasthehottestonrecordbyalargemargin,andthehottestmontheverafterJuly2023.Theimpactsofclimatechangeareincreasinglyfrequentandsevere,andscientificwarningsaboutthedangersofthecurrentpathwayhavebecomestrongerthanever.Globalcarbondioxide(CO2)emissionsfromtheenergysectorreachedanewrecordhighof37billiontonnes(Gt)in2022,1%abovetheirpre-pandemiclevel,butaresettopeakthisdecade.Thespeedoftheroll-outofkeycleanenergytechnologiesmeansthattheIEAnowprojectsthatdemandforcoal,oilandnaturalgaswillallpeakthisdecadeevenwithoutanynewclimatepolicies.Thisisencouraging,butnotnearlyenoughforthe1.5°Cgoal.PositivedevelopmentsoverthepasttwoyearsincludesolarPVinstallationsandelectriccarsalestrackinginlinewiththemilestonessetoutfortheminour2021NetZeroby2050report.InresponsetothepandemicandtheglobalenergycrisistriggeredbyRussia’sinvasionofUkraine,governmentsaroundtheworldannouncedaraftofmeasuresdesignedtopromotetheuptakeofarangeofcleanenergytechnologies.Industryisrampingupquicklytosupplymanyofthem.Iffullyimplemented,currentlyannouncedmanufacturingcapacityexpansionsforsolarPVandbatterieswouldbesufficienttomeetdemandby2030inthisupdateoftheNZEScenario.WehavethetoolsneededtogomuchfasterRampinguprenewables,improvingenergyefficiency,cuttingmethaneemissionsandincreasingelectrificationwithtechnologiesavailabletodaydelivermorethan80%oftheemissionsreductionsneededby2030.Thekeyactionsrequiredtobendtheemissionscurvesharplydownwardsby2030arewellunderstood,mostoftencosteffectiveandaretakingplaceatanacceleratingrate.Thescalingupofcleanenergyisthemainfactorbehindadeclineoffossilfueldemandofover25%thisdecadeintheNZEScenario.Butwell-designedpolicies,suchastheearlyretirementorrepurposingofcoal-firedpowerplants,arekeytofacilitatedeclinesinfossilfueldemandandcreateadditionalroomforcleanenergytoexpand.IntheNZEScenario,stronggrowthincleanenergyandotherpolicymeasurestogetherleadtoenergysectorCO2emissionsfallingby35%by2030comparedto2022.ExecutiveSummary13IEA.CCBY4.0.RenewablesandefficiencyarekeytodrivefossilfueldemanddownIEA.CCBY4.0.Triplingglobalinstalledrenewablescapacityto11000gigawattsby2030providesthelargestemissionsreductionsto2030intheNZEScenario.Renewableelectricitysources,inparticularsolarPVandwind,arewidelyavailable,wellunderstood,andoftenrapidlydeployableandcosteffective.CurrentpolicysettingsalreadyputadvancedeconomiesandChinaontracktoachieve85%oftheircontributiontothisglobalgoal,butstrongerpoliciesandinternationalsupportarerequiredinotheremergingmarketanddevelopingeconomies.Forallcountries,speedinguppermitting,extendingandmodernisingelectricitygrids,addressingsupplychainbottlenecks,andsecurelyintegratingvariablerenewablesarecritical.Doublingtheannualrateofenergyintensityimprovementby2030intheNZEScenariosavestheenergyequivalentofalloilconsumptioninroadtransporttoday,reducesemissions,boostsenergysecurityandimprovesaffordability.Althoughthemixofprioritieswilldifferbycountry,atthegloballevelenergyintensityimprovementsstemfromthreeequallyimportantactions:improvingthetechnicalefficiencyofequipmentsuchaselectricmotorsandairconditioners;switchingtomoreefficientfuels,inparticularelectricity,andcleancookingsolutionsinlow-incomecountries;andusingenergyandmaterialsmoreefficiently.Thesetwoactionsreducefossilfueldemand,enablingcontinuedadherencetoakeymilestoneofour2021report:animmediateendtonewapprovalsofunabatedcoalplants.AcceleratingelectrificationandcuttingmethanearealsoessentialBoomingtechnologieslikeelectricvehiclesandheatpumpsdriveelectrificationacrosstheenergysystem,providingnearlyone-fifthoftheemissionsreductionsto2030intheNZEScenario.Recentgrowthputselectriccarsalesontracktoaccountfortwo-thirdsofnewcarsalesby2030–acriticalmilestoneintheNZEScenario.Announcedproductiontargetsfromcarmakersunderscorethatthishighshareisachievable.Heatpumpsalesincreasedby11%globallyin2022,andmanymarkets,notablyintheEuropeanUnion,arealreadytrackingaheadoftheroughly20%annualgrowthrateneededto2030intheNZEScenario.Chinaremainstheworld’slargestmarketforheatpumps.Cuttingmethaneemissionsfromtheenergysectorby75%by2030isoneoftheleastcostopportunitiestolimitglobalwarminginthenearterm.StrongreductionsinbothenergysectorCO2andmethaneemissionsareessentialtomeetingthe1.5°Cgoal.Withouteffortstoreducemethaneemissionsfromfossilfuelsupply,globalenergysectorCO2emissionswouldneedtoreachnetzerobyaround2045,withimportantimplicationsforequitablepathways.Reducingmethaneemissionsfromoilandnaturalgasoperationsby75%costsaroundUSD75billionincumulativespendingto2030,equivalenttojust2%ofthenetincomereceivedbytheoilandgasindustryin2022.Muchofthiswouldbeaccompaniedbynetcostsavingsthroughthesaleofcapturedmethane.14InternationalEnergyAgencyNetZeroRoadmapInnovationisalreadydeliveringnewtoolsandloweringtheircostInthe2021NZEScenario,technologiesnotavailableonthemarketatthetimedeliverednearlyhalfoftheemissionsreductionsneededin2050toreachnetzero;thatnumberhasfallentoaround35%inthisupdate.Progresshasbeenrapid:forexample,thefirstcommercialisationofsodium-ionbatterieswasannouncedfor2023,andcommercial-scaledemonstrationsofsolidoxidehydrogenelectrolysersarenowunderway.Butwestillneedtodomuchmore,notablyoninfrastructureTodaymuchofthemomentumisinsmall,modularcleanenergytechnologieslikesolarPVandbatteries,butthesealonearenotsufficienttodelivernetzeroemissions.Itwillalsorequire:largenew,smarterandrepurposedinfrastructurenetworks;largequantitiesoflow-emissionsfuels;technologiestocaptureCO2fromsmokestacksandtheatmosphere;morenuclearpower;andlargelandareasforrenewables.Electricitytransmissionanddistributiongridsneedtoexpandbyaround2millionkilometreseachyearto2030tomeettheneedsoftheNZEScenario.Buildinggridstodaycantakemorethanadecade,withpermittingaparticularlytime-consumingbottleneck.Thesameistrueforotherkindsofenergyinfrastructure.Policymakers,industryandcivilsocietyneedtoworktogethertonurturea“buildbig”mentalityandtoexpeditedecisionmaking,whilepreservingpublicengagementandrespectingenvironmentalsafeguards.Carboncapture,utilisationandstorage(CCUS),hydrogenandhydrogen-basedfuels,andsustainablebioenergyarecriticaltoachievenetzeroemissions;rapidprogressisneededby2030.ThehistoryofCCUShaslargelybeenoneofunderperformance.AlthoughtherecentsurgeofannouncedprojectsforCCUSandhydrogenisencouraging,themajorityhaveyettoreachfinalinvestmentdecisionandneedfurtherpolicysupporttoboostdemandandfacilitatenewenablinginfrastructure.IncreasingcleanenergyinvestmentindevelopingcountriesisvitalTheworldissettoinvestarecordUSD1.8trillionincleanenergyin2023:thisneedstoclimbtoaroundUSD4.5trillionayearbytheearly2030stobeinlinewithourpathway.Cleanenergyinvestmentispaidbackovertimethroughlowerfuelbills.By2050,energysectorinvestmentandfuelbillsarelowerthantodayasashareofglobalGDP.ThesharpestjumpincleanenergyinvestmentisneededinemergingmarketanddevelopingeconomiesotherthanChina,whereitsurgessevenfoldbytheearly2030sintheNZEScenario.Thiswillrequirestrongerdomesticpoliciestogetherwithenhancedandmoreeffectiveinternationalsupport.AnnualconcessionalfundingforcleanenergyinemergingmarketanddevelopingeconomieswillneedtoreacharoundUSD80-100billionbytheearly2030s.ExecutiveSummary15IEA.CCBY4.0.AscleanenergyexpandsandfossilfueldemanddeclinesintheNZEScenario,thereisnoneedforinvestmentinnewcoal,oilandnaturalgasStringentandeffectivepoliciesintheNZEScenariospurcleanenergydeploymentandcutfossilfueldemandbymorethan25%by2030and80%in2050.Coaldemandfallsfromaround5800milliontonnesofcoalequivalent(Mtce)in2022to3250Mtceby2030andaround500Mtceby2050.Oildeclinesfromaround100millionbarrelsperday(mb/d)to77mb/dby2030and24mb/dby2050.Naturalgasdemanddropsfrom4150billioncubicmetres(bcm)in2022to3400bcmin2030and900bcmin2050.Nonewlong-leadtimeupstreamoilandgasprojectsareneededintheNZEScenario,neitherarenewcoalmines,mineextensionsornewunabatedcoalplants.Nonetheless,continuedinvestmentisrequiredinexistingoilandgasassetsandalreadyapprovedprojects.Sequencingthedeclineoffossilfuelsupplyinvestmentandtheincreaseincleanenergyinvestmentisvitalifdamagingpricespikesorsupplyglutsaretobeavoided.Thedropinfossilfueldemandandsupplyreducestraditionalriskstoenergysecurity,buttheydonotdisappear–especiallyinacomplexandlowtrustgeopoliticalenvironment.IntheNZEScenario,highercostproducersaresqueezedoutofadecliningmarketandsupplystartstoconcentrateinlargeresource-holderswhoseeconomiesaremostvulnerabletotheprocessofchange.Butattemptsbygovernmentstoprioritisedomesticproductionmustrecognisetheriskoflockinginemissionsthatcouldpushtheworldoverthe1.5°Cthreshold;andthat,iftheworldissuccessfulinbringingdownfossildemandquicklyenoughtoreachnetzeroemissionsby2050,newprojectswouldfacemajorcommercialrisks.ThenetzeroemissionstransitionmustbesecureandaffordableIEA.CCBY4.0.Particularattentionneedstobepaidtobridgingtheloomingsupplyanddemandgapforcriticalminerals.AnnouncedminingprojectsformineralssuchasnickelandlithiumfallshortofboomingdemandintheNZEScenarioin2030.Newprojects,innovativeextractiontechniques,morerecyclingandmaterial-efficientdesigncanhelptobridgethisgap.Extraordinaryadvancesincleanenergytechnologysupplychainshavekeptthedoortonetzeroemissionsopen,buthavebeenaccompaniedbyahighdegreeofgeographicalconcentration.Theminingandrefiningofcriticalmineralsaresimilarlyhighlyconcentrated.Thispresentsanincreasedriskofdisruption,suchasfromgeopoliticaltensions,extremeweathereventsorasimpleindustrialaccident.Whilemorediverseandresilientsupplychainsarehighlydesirable,thepaceatwhichcleanenergymustbescaledupwillbeevenhardertoachievewithoutopensupplychains.Aselectricitybecomesthe“newoil”oftheglobalenergysystemintheNZEScenario,secureelectricitysuppliesbecomeevenmoreimportant.Thehugelyincreasedneedforelectricitysystemflexibilityrequiresmassivegrowthofbatteryenergystorageanddemandresponse;expanded,modernisedandcybersecuretransmissionanddistributiongrids,andmoredispatchablelow-emissionscapacity,includingfossilfuelcapacitywithCCUS,hydropower,biomass,nuclear,andhydrogenandammonia-basedplants.16InternationalEnergyAgencyNetZeroRoadmapBy2030intheNZEScenario,totalhouseholdenergyexpenditureinemergingmarketanddevelopingeconomiesdecreasesby12%fromtoday’slevel,andevenmoreinadvancedeconomies.Thedecreasereflectslargeenergyandcostsavingsfromenergyefficiencyandelectrification.However,policymakersneedtosupporthouseholds,particularlylow-incomeones,tomeettheoftenhigherupfrontcostsofcleanenergytechnologies.Thereisnolowinternationalco-operationroutetolimitwarmingto1.5°CandnoslowrouteeitherBy2035,emissionsneedtodeclineby80%inadvancedeconomiesand60%inemergingmarketanddevelopingeconomiescomparedtothe2022level.CurrentNationallyDeterminedContributionsarenotinlinewithcountries’ownnetzeroemissionspledges,andthosepledgesarenotsufficienttoputtheworldonapathwaytonetzeroemissionsby2050.COP28andthefirstGlobalStocktakeundertheParisAgreementprovideakeyopportunitytoenhanceambitionandimplementation.Aspartofanequitablepathwaytotheglobalgoalofnetzeroemissionsby2050,almostallcountriesneedtobringforwardtheirtargetednetzerodates.IntheNZEScenario,advancedeconomiestaketheleadandreachnetzeroemissionsbyaround2045inaggregate;Chinaachievesnetzeroemissionsaround2050;andotheremergingmarketanddevelopingeconomiesdosoonlywellafter2050.TheNZEScenarioisaglobalbutdifferentiatedpathway:eachcountrywillfollowitsownroutebasedonitsresourcesandcircumstances.However,allmustactmuchmorestronglythantheyaretoday.Thenetzeropathwayachievesfullaccesstomodernformsofenergyforallby2030throughannualinvestmentofnearlyUSD45billionperyear—justover1%ofenergysectorinvestment.OurDelayedActionCaseshowsthatfailuretoincreaseambitionto2030wouldcreateadditionalclimaterisksandmakeachievingthe1.5°Cgoaldependantonthemassivedeploymentofcarbonremovaltechnologieswhichareexpensiveandunprovenatscale.Nearly5GtCO2wouldhavetoberemovedfromtheatmosphereeveryyearduringthesecondhalfofthiscentury.Ifcarbonremovaltechnologiesfailtodeliveratsuchscale,returningthetemperatureto1.5°Cwouldnotbepossible.Removingcarbonfromtheatmosphereiscostlyanduncertain.Wemustdoeverythingpossibletostopputtingitthereinthefirstplace.ThefierceurgencyofnowIEA.CCBY4.0.Theenergysectorischangingfasterthanmanypeoplethink,butmuchmoreneedstobedoneandtimeisshort.Momentumiscomingnotjustfromthepushtomeetclimatetargetsbutalsofromtheincreasinglystrongeconomiccaseforcleanenergy,energysecurityimperatives,andthejobsandindustrialopportunitiesthataccompanythenewenergyeconomy.Yet,momentummustbeacceleratedtobeinlinewiththe1.5°Cgoalandtoensurethattheprocessofchangeworksforeveryone.Aboveall,thisneedstobeaunifiedeffortinwhichgovernmentsputtensionsasideandfindwaystoworktogetheronwhatisthedefiningchallengeofourtime.Allofus,andinparticularfuturegenerations,willrememberwithgratitudethosewhoactupontheurgencyofnow.ExecutiveSummary17IEA.CCBY4.0.Chapter1IEA.CCBY4.0.ProgressinthecleanenergytransitionBendingthecurveSUMMARY•TheIEA’slandmarkreportNetZeroby2050:ARoadmapfortheGlobalEnergySectorwaspublishedin2021.Ittranslatesthegoaloflimitingglobalwarmingto1.5degreesCelsius(°C)intoaconcreteroadmapfortheglobalenergysector.Inthetwoyearssincethen,theenergysectorhasundergonemajorshifts.•EnergysectorCO2emissionsremainworryinglyhigh,reachinganewrecordof37gigatonnes(Gt)in2022.Insteadofstartingtofallasenvisagedinthe2021report,demandforfossilfuelshasincreased–spurredbytheenergycrisisof2022afterRussia’sinvasionofUkraine–andsohaveinvestmentsinsupply.Progressonenergyaccesshasstalledwhilemillionsofpeoplestilllackaccesstoelectricityandcleancooking,notablyinsub-SaharanAfrica.•Onabrighternote,cleanenergytechnologyadoptionsurgedatanunprecedentedpaceoverthelasttwoyears.SolarPVcapacityadditionsincreasedbynearly50%,andcurrentlytrackaheadofthetrajectoryenvisagedinthe2021versionofourNetZeroEmissionsby2050Scenario(NZEScenario).Electriccarsalesexpanded240%andstationarybatteryinstallationsby200%since2020.WenowestimatethatglobalmanufacturingcapacitiesforsolarPVandelectricvehiclebatterieswouldbesufficienttomeetprojecteddemandin2030intheupdatedNZEScenario,ifannouncedprojectsproceed.Thisprogressreflectscostreductionsforkeycleanenergytechnologies–solarPV,wind,heatpumpsandbatteries–whichfellbycloseto80%onadeploymentweightedaveragebasisbetween2010and2022.•Drivenbypolicies,expandingmarkets,andfallingcosts,cleanenergytechnologiesareshiftingtheoutlookforemissionsevenundercurrentpolicies.IntheStatedPoliciesScenario,emissionsarenowprojectedtobe7.5Gtlowerin2030thaninour2015Pre-ParisBaselineScenario,ofwhichpolicydrivenexpansionsofsolarPVandwindaccountfor5Gtandelectricvehiclesfornearly1Gt.Thisshiftintheoutlookmeansthattheprojectedwarmingof2.4°Cin2100undercurrentpolicysettings,throughstillworryinglyhigh,isnow1°ClowerthanbeforetheParisAgreementin2015.•Nearly90%ofcountrieshaveupdatedtheirfirstNationallyDeterminedContribution(NDC)undertheParisAgreement.IfcountriesdeliverinlinewiththeirrevisedNDCs,emissionsin2030willbearound5GtlowerthanunderthefirstroundofNDCs.Butmoreneedstobedonetobeoncourseby2030todeliverannouncedlonger-termnetzeropledgesorourNZEScenario.Bothadvancedeconomiesandemergingmarketanddevelopingeconomiesneedtostrengthenambition.Fairandeffectiveinternationalco-operationisurgentlyneededtounlockcleanenergyinvestmentinemergingmarketanddevelopingeconomiesotherthaninChina.Chapter1Progressinthecleanenergytransition191.1ThecontextNetZeroby2050:ARoadmapfortheGlobalEnergySectorwaspublishedin2021(IEA,2021a).Ittranslatesthegoaloflimitingglobalwarmingto1.5°Cintoaconcreteroadmapfortheglobalenergysector.Itdescribesapathway,notthedefinitivepathway,tothegoalofnetzeroemissionsby2050.Ittakesintoaccountcountries’varyingcircumstancesandchallenges.Anupdateofthatroadmapisthefocusofthisreport.Itisbasedonrecentdevelopmentsintechnologies,markets,policiesandinvestment,andidentifieswhatgovernmentsandotherstakeholdersneedtodotokeepalivethegoalofnetzeroemissionsby2050.Theimportanceofthatgoalhasbeenunderlinedbyanumberofrecentclimate-relateddisasters,with2023seeingthehottestJulyandhottestAugusteverrecorded.Figure1.1⊳GlobalenergysectorCO2emissions,2000-202240GtCO₂30IEA.CCBY4.0.2010200020022004200620082010201220142016201820202022IEA.CCBY4.0.Globalenergysectoremissionshavenotfalleninthelasttwoyears,asenvisagedinour2021roadmap,butinsteadhaverisentorecordlevelsTheenergysectorhasundergonemajorshiftsinthetwoyearssincethereleaseofour2021report.Energysectoremissionshaveremainedstubbornlyhigh,reachinganewrecordof37gigatonnes(Gt)ofcarbondioxide(CO2)in2022,1%abovethe2019level(Figure1.1).1EvenwiththeverystrongeconomicreboundinadvancedeconomiessincetheCovid-19pandemic,theiremissionsin2022werearound4%belowthepre-pandemiclevel.Bycontrast,inemergingmarketanddevelopingeconomiesemissionswerearound4.5%(roughly1Gt)abovethe2019level.ThisrisewaslargelydrivenbythePeople'sRepublicof1Unlessotherwisespecified,energysectoremissionsinthisreportrefertoCO2emissionsfromfossilfuelcombustion,industrialprocesses,andfugitiveandflaringCO2fromfossilfuelextraction.20InternationalEnergyAgencyNetZeroRoadmapChina(hereinafterChina),whereemissionsincreased7%between2019and2022,relativetoa2%increaseinotheremergingmarketanddevelopingeconomies.SincethepublicationoftheoriginalNetZeroby2050report,concernsaboutenergysecurity1havebecomemoreacute,inlargepartduetotheinvasionofUkrainebytheRussianFederation(hereinafterRussia)in2022,whichprecipitatedanunprecedentedglobalenergycrisis.Pricesforenergycommoditiessurgedtofive-toten-timestheirhistoricallevelsinsomeinstances,addingtotheinflationarypressuresthathadbeenbuildinginthewakeoftheCovid-19pandemic.Thecrisisspurredanincreaseincleanenergydeploymentandinvestment,butalsoininvestmentinfossilfuelsupply.Concernsaboutenergysecuritywillremainanimportantconsiderationinthedevelopmentofpolicyframeworksthatshapeinvestmentdecisions.Increasinggeopoliticalfractureshavealsostokedenergysecurityconcernsaboutthepronouncedconcentrationinasmallnumberofcountriesofbothminingandprocessingofcriticalmineralsandcleanenergytechnologymanufacturing.Inresponse,severalcountriesintroducedmeasuresthataimtopromotethedevelopmentofdomesticsupplychains.Suchmeasuresshouldhelptoscaleupthesupplyofcleanenergytechnologiesbutcouldalsoputatriskthebenefitsofglobalsupplychains.Morebroadly,increasedgeopoliticalfragmentationhighlightstheneedforfairandeffectiveinternationalco-operationtoachievethecleanenergytransition.Althoughfossilfueldemandhasnotyetstartedtofall,deploymentandinvestmentinsomecleanenergytechnologysupplychainshasrisenveryrapidlysincethe2021NetZeroby2050report.Thisispartlythankstostrongerpolicysupportinpost-Covid-19economicrecoverypackagesandpartlyduetopolicyresponsestotheglobalenergycrisis.Recentratesofgrowthforsolarphotovoltaics(PV)adoptionandelectricvehicles(EVs)saleshavebeenparticularlyimpressive.Ifallannouncedprojectsarerealised,manufacturingcapacityforsolarPVwillexceedthelevelrequiredin2030inour2021NetZeroEmissionsby2050(NZE)Scenario,andcapacityforEVbatterieswillcomeveryclosetorequirements.Progressintechnologiessuchaswindpowerandcarboncapture,utilisationandstorage(CCUS)hasbeenlessrapid.Overall,recentprogressoncleanenergytechnologieshasbeenencouraging,althoughmuchmoreremainstobedonetogettheworldontrackwiththeroadmapintheNZEScenario.Thisreportisbeingpublishedinanimportantyearforglobalclimatechangediplomacy.ThesixthassessmentcycleoftheIntergovernmentalPanelonClimateChange(IPCC)recentlysetoutwithgreaterclaritythaneverbeforeboththedangersofexceedingthe1.5°Climitandtheavailabilityandcosteffectivenessofarangeofemissionsreductionoptions.AlongsidetheIPCCscientificstocktaking,apoliticalreviewoftheprogresstowardsinternationallyagreedclimategoalsconcludesthisyearintheformofthefirstGlobalStocktakeundertheParisAgreement(seeSpotlight).Chapter1Progressinthecleanenergytransition21IEA.CCBY4.0.SPOTLIGHTFirstglobalstocktakeundertheParisAgreementTheGlobalStocktake(GST)isaprocessundertheParisAgreementdesignedtoprovidearegularassessmentofcollectiveprogresstowardsthelong-termgoalsoftheAgreementinordertoinformsubsequentupdatesofNationallyDeterminedContributionsandenhanceinternationalco-operationonclimateaction.Thefirststocktake(GST1)startedat26thConferenceoftheParties(COP)in2021andisexpectedtoconcludeatCOP28in2023.Countriesandotherstakeholdershavesubmittedmorethan170000pagesofinputtotheGST1.The1.5°Cgoalisacentralpriorityofcountrysubmissions,asistheenhancementofclimatefinance(Figure1.2).Figure1.2⊳KeyaspectsofenergytransitionmentionedinGlobalStocktakesubmissionsbyregionClimatefinance1.5°CgoalJusttransitionsRenewablesActiononfossilfuelsTechnologytransferHard-to-abatesectorsOtherlow-emissionstectehcnh.nologyAtmosphericremoval20%40%60%80%100%PercentofsubmissionsAfricaAsiaPacificC&SAmericaEuropeEurasiaMiddleEastNorthAmericaIEA.CCBY4.0.Justtransitions,renewablesandactiononfossilfuelsareprioritytopicsinthefirstglobalstocktake,alongsideclimatefinanceandthe1.5°CgoalNote:C&SAmerica=CentralandSouthAmerica;Europe=thegeographicalregion,nottheEuropeanIEA.CCBY4.0.Union.22InternationalEnergyAgencyNetZeroRoadmapTheenergysectorisacentralcomponentoftheGST1countrysubmissions:96%ofthe181countriesincludedinouranalysisindicatethatmitigationactionintheenergysectorisapriority.Around65%ofcountries,representingaround60%ofglobalCO2emissions,1indicatethatjusttransitions,renewablesandactiononfossilfuelsareprioritytopicsfortheenergysector.OtherareassuchasatmosphericremovalsarenotyetperceivedaspriorityfortheGST1byallcountries.AtCOP28,theGST1willmovetothefinal,politicalphase.HowtheoutcomesoftheGST1processinfluencetheambitionofthenextroundofNDCs,expectedin2025aheadofCOP30,willbetheacidtestofitssuccess.ThisreportpresentsanupdatedNZEScenariothattakesaccountofanin-depth,sector-by-sectorassessmentofdevelopmentssince2021.ItenhancesthedetailofwhatisneededtomaketheNZEScenarioarealitybyregionandtechnology.Theanalysisispresentedinfourchapters.Chapter1providesanoverviewofkeydevelopmentsintheenergysectorinrecentyears.Ittakesstockofprogressintheenergytransitionanddevelopmentofcleanenergytechnologies.Chapter2presentsanupdatedNZEScenario.Itsetsoutsomeofthekeydifferenceswiththe2021versionandprovideshighlevel“dashboards”toshowhoweachsectorandtechnologyneedstocontribute.Chapter3assessesinmoredepthhowkeysectorsandtechnologiescanmaketheprogressassumedintheupdatedNZEScenarioandlooksattheimplicationsofnotreachingtheambitiousmilestonessetoutfor2030.Chapter4focussesonthecriticalimportanceofenergysecurity,equityandenhancedglobalco-operationforthepathwaysetoutintheNZEScenario.1.2BendingtheemissionscurveConsiderableprogresshasbeenmadeindeployingcleanenergytechnologiesandloweringtheircost,whichisalteringtheemissionsoutlookfortheenergysector.IEAprojectionsforglobalCO2emissionsfromtheenergysectorintheStatedPoliciesScenario(STEPS)havebeenprogressivelyreviseddownwardcomparedwithourPre-ParisBaselineScenario(IEA,2021b).ThePre-ParisBaselineScenarioconsideredgovernmentpoliciesinplacein2015whentheParisAgreementonclimatechangewasnegotiated.Onthebasisofthesepolicies,itprojectedariseinaverageglobaltemperatureof3.5°Cby2100.InthelatestversionoftheSTEPS,theequivalentfigureis2.4°C.Thisreflectsprogressmadeinthetransitiontoaloweremissionsenergysystemsince2015,althoughitstillfallsfarshortofwhatisneededtomeetthetemperaturegoalsoftheParisAgreement.Chapter1Progressinthecleanenergytransition23IEA.CCBY4.0.Box1.1⊳IEAscenariosThisreportisbasedonanupdatedandrevisedNetZeroEmissionsby2050Scenario(NZEScenario),whichsetsoutapathwayfortheglobalenergysectortoachievenetzeroCO2emissionsby2050.(Chapter2providesadescriptionofthedesignoftheNZEScenario.)ThreeotherscenariosareemployedasbenchmarksagainstwhichtheNZEScenarioiscompared:TheStatedPoliciesScenario(STEPS)projectsenergydemandandsupplyandtheirimplicationsforemissionstakingaccountofestablishedandplannedpoliciesandregulations.Itincorporatesthemostrecentavailabledataandprojectionsontechnologycosts,manufacturingcapacityandtheindustrialstrategiesofcountriesandcompaniesoperatingintheenergysector.TheAnnouncedPledgesScenario(APS)assumesthatallclimatecommitmentsmadebygovernmentsaroundtheworld,includingallthosesetoutinNDCsandlong‐termnetzeroemissionspledges,aremetinfullandontime.ThePre-ParisBaselineScenariowasproducedin2015.Itisbasedonthepoliciesthatwereinplaceatthetime;itdoesnotincorporateadditionalpolicyintentionsandtargetssincethen.ItcorrespondstotheCurrentPoliciesScenariosetoutinthe2015editionoftheWorldEnergyOutlook.DetailedprojectionsandanalysisoftheupdatedSTEPSandAPSwillbeincludedintheWorldEnergyOutlook2023,tobereleasedinOctober.WorldGlobalenergysectoremissionswere37gigatonnes(Gt)in2022–arecordhighanda5%increasefrom2015.Nonetheless,progresssincethe2015ParisAgreementmeansthattheoutlookintheSTEPSseesemissionspeakbythemiddleofthisdecadeandfalltoaround35Gtby2030,whichiswellbelowthelevelofaround43GtprojectedinthePre-ParisBaselineScenario(Figure1.3).Toputthisinperspective,this7.5GtdifferenceisequaltothecurrentcombinedenergysectoremissionsoftheUnitedStatesandEuropeanUnion.ThreetechnologiescontributethebulkoftheemissionsreductionsintheSTEPSrelativetothePre-ParisBaselineScenario:solarPV,windandEVs.2SolarPVisprojectedtoreduceemissionsbyaround3Gtin2030,roughlyequivalenttotheemissionsfromalltheworld’scarsontheroadtoday.Windpowerreducesemissionsbyaround2Gtin2030andEVsbyaround1Gt.3Thelatterreflectsreplacementofinternalcombustionengine(ICE)vehiclesby2STEPSreferstothe2023versionofthescenariointhisreportunlessotherwisespecified.IEA.CCBY4.0.3Thedecompositionanalysisinthissectionisbasedondirectemissions,withindirectemissionsallocatedtotheelectricitysector.24InternationalEnergyAgencyNetZeroRoadmapEVswhichareincreasinglypoweredbyloweremissionselectricitygenerationsources.Togethernumerousothersmallerchangesacrossallsectorsreduceemissionsbyafurther1.5Gt.1Figure1.3⊳GlobalenergysectorCO2emissionsinthePre-ParisBaselineScenarioandSTEPS,2015-2030GtCO₂45Pre-ParisBaselineOtherElectricvehicles40WindSolarPV35STEPS-202330202220302015IEA.CCBY4.0.SolarPV,windpowerandEVsreduceemissionsby6Gtin2030intheSTEPSrelativetothePre-ParisBaselineScenarioNote:OtherincludesallotherleverswithdownwardorupwardeffectsontheemissionsdifferencebetweenthePre-ParisBaselineScenarioandthe2023STEPSprojections,asdetailedinFigures1.5-1.8.InthePre-ParisBaselineScenario,onlymodestdeploymentofcleanenergytechnologieswasIEA.CCBY4.0.projectedto2030,basedonthepoliciesinplacein2015(Figure1.4).WindpowerandsolarPVwereprojectedtoaccountforlessthan10%ofglobalelectricitygenerationin2030,nearlyfourtimeslowerthanintheSTEPS.EVsareprojectedtocontinuerecentspectaculargrowth,accountingformorethanone-thirdofcarsalesin2030intheSTEPScomparedwithasmallfractioninthePre-ParisBaselineScenario.Asignificantstrengtheningofgovernmentpoliciesinmajoreconomiesisattheheartofthisimprovement.Forexample,successivefive-yearsplansinChinahaveprogressivelyraisedambitionsforsolarPVanddrivendownglobalcosts.OffshorewinddeploymentinEuropekick-startedaglobalindustry.EVtargets,andfuel-economyandCO2emissionsstandardsintheEuropeanUnionandChina–andmorerecentlyintheUnitedStates–havedrivenamajortransformationintheindustrialstrategiesofcarandtruckmanufacturers.Similarly,electrictwo/three-wheelersandbuseshaveseensignificantuptakeinIndiaandotheremergingmarketanddevelopingeconomiesthankstopolicysupport,increasingeconomiccompetitivenessandlimitedinfrastructureneeds.TheUnitedStates,throughtheInflationReductionAct(IRA)adoptedin2022,hasprovidedunprecedentedfundingtosupportChapter1Progressinthecleanenergytransition25deploymentandreducecostsforarangeoflow-emissionstechnologies,notablyCCUSandhydrogen.Progressacrossallsectorsinotherregionshasalsohelpedbendtheglobalemissionscurve.Thefollowingsectionsfocusonkeydevelopmentsinselectedeconomieswhichtogetheraccountforover60%ofenergy-relatedemissionstoday.Figure1.4⊳WindpowerandsolarPVinelectricitygeneration,andelectriccarsincarsales,Pre-ParisBaselineScenarioandSTEPS,2030WindSolarPVElectriccars20%20%40%15%15%30%10%10%20%5%5%10%Pre-ParisBaseline:2015STEPSeditionof:2017201920212023IEA.CCBY4.0.Keycleanenergytechnologiesby2030intheSTEPShaveincreasedprogressivelysince2015reflectingstrongerpoliciesandtechnologicaladvancesNotes:WindandsolarPVrefertotheshareoftotalelectricitygeneration.Electriccarsrefertotheshareofpassengerlight-dutyvehiclesales.UnitedStatesIEA.CCBY4.0.IntheUnitedStates,CO2emissionsin2030are1.7GtlowerintheoutlookinthecurrentSTEPSthaninthePre-ParisBaselineScenario,withsolarPVandwindtogetheraccountingforaround0.8Gtofthereduction(Figure1.5).Alargerswitchfromcoaltonaturalgasforelectricitygenerationaccountsforaroundanadditional340milliontonnes(Mt)ofCO2emissionsreductionsby2030.Theincreasedrenewablesprojectionsreflectfederalgovernmentsubsidies,postCovid-19recoveryspending,carbon-freeelectricitytargetsinanincreasingnumberofstates,andlarge-scalesupportprovidedforarangeofcleanenergytechnologiesbytheIRA.Amongothers,theIRAincludessubstantialfundingforenergyefficiencymeasuresinthebuildingssector,manufacturingoflow-emissionstechnologiesandCCUSprojects.Inthetransportsector,theprojectedshareofelectriccarsintotalcarsalesin2030increasesfromlessthan10%inthePre-ParisBaselineScenarioto50%intheSTEPS.ThisupwardrevisionreflectspubliccharginginfrastructurefundingundertheInfrastructureInvestmentandJobsAct,neweligibilityrequirementsforEVtaxcreditsundertheIRA,morestringent26InternationalEnergyAgencyNetZeroRoadmapnationalfuel-economystandards,andmoreaggressiveelectrificationstrategiesofcarandtruckmanufacturers.IncreaseddeploymentofEVsaccountsfor200MtofadditionalCO2ienmthisesimonarrkeedtuschtaiorensobfsyp2o0r3ts0u.tHiloitwyevevehric,ltehse(sSeUVresd),uwcthioicnhsaarreelepsasrftuiaelllyefofifcfsieenttbtyhaannsitnacnrdeaasrde1passengercars.Figure1.5⊳EnergysectorCO2emissionsintheUnitedStatesinthePre-ParisBaselineScenarioandSTEPS,2030GtCO₂6Electricity2030SolarPV2030WindPre-ParisSTEPSMorecoal-to-gasswitchingbaselineElectricitydemand5Otherelectricity20224TransportElectricvehicles3RoadactivityOthertransportOthersectorsBuildingsIndustryOtherIEA.CCBY4.0.Nearlyhalfoftheemissionsreductionsin2030betweenthePre-ParisBaselineScenarioandthe2023STEPSareduetoaccelerateddeploymentofrenewablesinthepowersectorNotes:Otherelectricityincludesnuclear,hydropower,emissionsintensityofheatgenerationandelectricitysectorefficiency.OthertransportincludeschangesinthefueleconomyofICEvehiclesandthedeploymentofbiofuels.Buildingsandindustryrefertodirectemissionsinthesesectors.EuropeanUnionandUnitedKingdomIEA.CCBY4.0.IntheEuropeanUnionandUnitedKingdom,CO2emissionsprojectionsintheSTEPSarearound0.9Gtlowerthaninthe2015Pre-ParisBaselineScenario(Figure1.6).Two-thirdsofthedifferencein2030areduetoincreasedsharesofwindandsolarPVinelectricitygeneration,drivenbyarangeofnewincentivesandtargets.Anumberofcoalphase-outtargetsintroducedinmajorEuropeancountriessuchasGermany,ItalyandtheUnitedKingdombetween2018and2020alsocontributetolowerprojectedemissionsintheelectricitysectorintheSTEPS.Thebuildingssectormakesabigcontributiontoloweremissions,withCO2emissions150MtlowerintheSTEPSthaninthepre-ParisBaselineScenarioin2030thanksinparttotherevisedEUEnergyPerformanceofBuildingsDirectiveaswellasnewandexpandedincentivesforenergyefficiencyretrofits.AnaccelerateddeploymentofheatpumpsundertheREPowerEUPlanandarangeoffossilfuelboilerbansalsocontributetoasmallershareofChapter1Progressinthecleanenergytransition27fossilfuelsinheatingdemandinbuildings,whichisnearly10percentagepointslowerin2030intheSTEPSthaninthePre-ParisBaselineScenario.ThetransportsectorcontributesthroughaccelerateddeploymentofEVs,whichreduceemissionsbymorethan100Mtin2030comparedwiththe2015projections.Fromasmallfractionofannualcarssalesby2030inthePre-ParisBaselineScenario,theprojectedshareofelectriccarsincreasestonearlytwo-in-threenewcarsintheSTEPS,drivenbynewCO2standards,forthcomingbansonnewICEvehicles,EVincentivesandinvestmentincharginginfrastructure.AsintheUnitedStates,however,slowerimprovementsinroadtransportfueleconomyduetoincreasingSUVsalespartiallyoffsetthisgain.Inindustry,strengtheningoftheEuropeanUnionEmissionsTradingSchemeisprojectedtoleadtolargersavingsfromenergy-intensiveindustriesin2030thanpreviouslyprojected,thoughmuchofthisisoutweighedbyhigherprojectionsforindustrialactivity.Figure1.6⊳EnergysectorCO2emissionsintheEuropeanUnionandtheUnitedKingdominthePre-ParisBaselineScenarioandSTEPS,20303.5GtCO₂2030ElectricitySolarPVIEA.CCBY4.0.Pre-ParisWindMorecoal-to-gasswitchingbaselineElectricitydemandOtherelectricity3.02022TransportRoadEVs2.5RoadactivityOthertransport2.02030STEPSOthersectorsBuildings1.5IndustryOtherIEA.CCBY4.0.Two-thirdsoftheemissionsreductionsin2030betweenthePre-ParisBaselineScenarioandtheSTEPSinEuropeareduetoaccelerateddeploymentofwindandsolarPVNotes:Otherelectricityincludesnuclear,hydropower,emissionsintensityofheatgenerationandelectricitysectorefficiency.OthertransportincudesthefueleconomyofICEvehiclesandthedeploymentofbiofuels.Buildingsandindustryrefertodirectemissionsinthesesectors.ChinaCO2emissionsinChinaareprojectedtobearound1.2Gtlowerin2030intheSTEPSthaninthePre-ParisBaselineScenario(Figure1.7).SolarPVandwindarethemaindrivers.InthePre-ParisBaselineScenario,windandsolarPVaccountforslightlylessthan10%oftotalelectricitygenerationin2030;intheSTEPStheyaccountformorethanone-third.Thischange28InternationalEnergyAgencyNetZeroRoadmapreflectsmoreambitiousrenewablesdeploymentgoalsinsuccessivefive-yearplansandanincreasefrom20%to25%intheupdatedNDCintheplannedshareofnon-fossilfuelsourcesinprimaryenergyby2030.1Figure1.7⊳EnergysectorCO2emissionsinChinainthePre-ParisBaselineScenarioandSTEPS,2030GtCO₂16ElectricitySolarPV1420302030WindPre-ParisSTEPSLesscoal-to-gasswitchingbaselineElectricitydemandOtherelectricity202212TransportElectricvehicles10RoadactivityOthertransportOthersectorsBuildingsIndustryOtherIEA.CCBY4.0.EmissionsinChinain2030intheSTEPSareprojectedtobe1.2GtlowerthaninthePre-ParisBaselineScenario,thoughrisingcoaldemandpartiallyoffsetsreductionsfromrenewablesNotes:Otherelectricityincludesnuclear,hydropower,emissionsintensityofheatgenerationandelectricitysectorefficiency.OthertransportincudesthefueleconomyofICEvehiclesandthedeploymentofbiofuels.Buildingsandindustryrefertodirectemissionsinthesesectors.EVsareprojectedtoreduceCO2emissionsbyaround250Mtby2030inChinaintheSTEPSIEA.CCBY4.0.relativetothePre-ParisBaselineScenario.Electriccarsaccountforatinyshareoftotalcarsalesby2030inthePre-ParisBaselineScenario,butfortwo-thirdsofallnewcarsalesintheSTEPS.In2016,thegovernmentsetaplanningtargetforNewEnergyVehicles(largelyEVs)toreach12%oftotalvehiclesalesin2020.In2020,itsetanewtargetof20%ofnewvehiclesalesin2025supportedbylargepurchasesubsidiesandtaxexemptions.Thesemeasures,togetherwithcontinuedpolicysupporttopromoteEVmanufacturingandhighlevelsofEVsalesinrecentyears,haveledtosuccessiveupwardsrevisionsintheSTEPSprojectionsoftheEVshareintotalvehiclesalesin2030.China’sdrivetoincreaseelectrificationinthetransport,buildingsandindustrysectors,togetherwithstrongdemandgrowthinthemanufacturingandresidentialsectors,hasledtorapidlyrisingelectricitydemand.Between2015and2022,China’selectricitygenerationincreasedatmorethan6%peryear,fasterthantherateofGDPgrowth.ThemassiveexpansionofChina’slow-emissionselectricitygenerationduringthisperiodwasnotsufficienttomeetdemand,leadingtoanincreaseincoal-firedpowergeneration.Asaresult,Chapter1Progressinthecleanenergytransition29China’sshareinglobalcoal-firedpowergenerationincreasedby10percentagepointsduringtheseyears.Thisgrowthincoal-firedelectricitygenerationmoderatestheemissionsreductionsintheSTEPSrelativetothePre-ParisBaselineScenarioby2030.Inthelongerterm,however,China’searlyelectrificationofenergyconsumptionwillalsobringlowerCO2emissionsinend-usesectorsaspowergenerationcontinuestodecarbonise.IndiaProjectedCO2emissionsinIndiain2030are1.3GtlowerintheSTEPSthanthePre-ParisBaselineScenario(Figure1.8).TheshareofsolarPVinpowergenerationincreaseseightfold,savingnearly400Mtofemissionsin2030inSTEPS.InthePre-ParisBaselineScenario,windandsolarPVaccountforlessthan10%oftotalgenerationin2030;intheSTEPS,thisrisestoaround25%.Akeyreasonistheadoptionin2021ofa500gigawatt(GW)targetfornon-fossilfuelcapacityby2030.ComparedwithsolarPV,windpowerhasmadelessprogress,withprojectionsforcapacitydeploymentby2030intheSTEPSonlyslightlylargerthanexpectedinPre-ParisBaselineScenario.Thisreflectsalackofprogressinresolvinglandacquisitionandtariffsettingissuesrelatedtowindpowerdevelopments.Figure1.8⊳EnergysectorCO2emissionsinIndiainthePre-ParisBaselineScenarioandSTEPS,2030GtCO₂52030ElectricitySTEPSSolarPVIEA.CCBY4.0.2030WindPre-ParisbaselineLesscoal-to-gasswitching4ElectricitydemandOtherelectricity32022TransportRoadEVs2RoadactivityOthertransportOthersectorsBuildingsIndustryOtherIEA.CCBY4.0.IndiaseesmajoremissionsreductionsfromsolarPV;lowerGDPgrowthinSTEPSasaresultofthepandemicalsoreducesprojectedemissionsNotes:otherelectricityincludesnuclear,hydropower,emissionsintensityofheatgenerationandelectricitysectorefficiency.OthertransportincudesthefueleconomyofICEvehiclesandthedeploymentofbiofuels.Buildingsandindustryrefertodirectemissionsinthesesectors.ChangesinmacroeconomicassumptionsaccountforpartofthedifferenceinemissionsbetweenthePre-ParisBaselineScenarioandtheSTEPS.India’sGDPtookasignificanthitin30InternationalEnergyAgencyNetZeroRoadmaptheCovid-19pandemic,andthesubsequentgrowthprojectedintheSTEPSisnotsufficienttorecoverlostground.Therefore,GDPin2030isslightlylowerintheSTEPSthaninthePsorem-PeawrhisaBtalosewlienre,aSsceanrearpioro.jAesctaerdeseumlti,sisniodnusstirniabloptrhodthuectiinodnuasntrdyealnedcterilceicttyrdiceitmyasnecdtaorres.also11.3NationallyDeterminedContributionsandNetZeroEmissionsPledgesDespitetheprogressinrecentyears,nationalcommitmentstoreduceemissionscollectivelyfallshortofwhatisrequiredby2030tobringglobalemissionsdowntoalevelinlinewithachievingnetzeroemissionsby2050.Inaddition,thevariouscommitmentsarenotyetunderpinnedbysufficientlystrongandcomprehensivepoliciestogiveconfidencethattheywillbesuccessfullydelivered.Bothadvancedeconomiesandemergingmarketanddevelopingeconomiesneedtostrengthentheirimplementationofpledgesandtoraisetheirlevelofambition,includingthroughthesubmissionofstrongerNDCsattheinternationallevel(seeChapter4).1.3.1NationallyDeterminedContributionsTheParisAgreementrequiresallcountriestosubmitNationallyDeterminedContributions(NDCs)thatsetouttheirclimatetargets.AsofJuly2023,168NDCshadbeensubmitted,covering195PartiestotheUnitedNationsFrameworkConventiononClimateChange(UNFCCC).4SuccessiveConferencesoftheParties(COPs)haveencouragedcountriestoupdatetheirfirstNDCstoincreasetheirambition.Sofar,nearly90%ofNDCshavebeenupdatedsincethefirstsubmission.Therevisionshaveledtoasignificantreductionintargetedemissionsin2030totallingaround5Gt,ifalltargetsconditionaloninternationalsupportarereached(Figure1.9).5AccordingtoIEAanalysis,advancedeconomieswereprojectedtoemitslightlylessthan10GtofCO2emissionsfromfuelcombustionin2030underthefirstroundofNDCs;revisedNDCshaveloweredthisbyaround2.1Gt,oraround20%.FullimplementationofNDCsinadvancedeconomieswouldstillseeemissionsofaround5.5tonnespercapitain2030,about1tonnepercapitamorethanthecurrentworldaverage,butabout2tonneslessthaninChinatoday.Inemergingmarketanddevelopingeconomies,thepictureissomewhatdifferent.Inaggregate,revisedNDCsinemergingmarketanddevelopingeconomiesloweredemissionscomparedtotheirfirstNDCsby2.8Gt,mostlydrivenbyrevisionsunconditionalonfinancialsupport.4194countriesandoneregion,theEuropeanUnion,whosememberstatessubmitajointNDC.IEA.CCBY4.0.5Theanalysisinthissectionreferstoemissionsfromfuelcombustionandexcludesindustrialprocessemissionsandinternationalbunkers.ItconsidersthatconditionalmitigationpledgesputforwardbysomedevelopingeconomiesintheirNDCsarefullyachieved.Chapter1Progressinthecleanenergytransition31Figure1.9⊳CO2emissionsfromfuelcombustionimpliedbyNDCsandinIEAscenariosbyregion,2030AdvancedeconomiesEmergingmarketanddevelopingeconomiesGtCO₂1230820410FirstRevisedSTEPSAPSNZEFirstRevisedSTEPSAPSNZENDCsNDCsNDCsNDCsConditional+UnconditionalIEA.CCBY4.0.RevisedNDCsboostthereductionintargetedemissionsbyaround5GtCO2in2030,thisisfarshortofwhatisneededtobeontrackfornetzeroemissionsby2050However,IEAanalysissuggeststhatplannedenergypoliciesinemergingmarketanddevelopingeconomiesarealreadymoreambitiousintheaggregatethantheirNDCsindicate,particularlyinthecaseofconditionalNDCs.TheiremissionsintheSTEPSin2030areaccordinglylower,by1Gt,thanundertheirrevisedunconditionalNDCs.Thepictureisreversedinadvancedeconomies,whereemissionsin2030arenearly0.7GthigherintheSTEPSthaninrevisedNDCs,implyingthatthepoliciescurrentlyinplaceareinadequatetomeetstatedNDCs,letalonelonger-termnetzeroemissionspledges.1.3.2NetzeroemissionspledgesAsofSeptember2023,netzeroemissionspledges6covermorethan85%ofglobalenergy-relatedemissionsandnearly90%ofglobalGDP.Todate,94countriesandtheEuropeanUnionhavepledgedtomeetanetzeroemissionstarget.SomecountrieshavealsocommunicatedtheirnetzeroemissionspledgestotheUNFCCCintheformoflong‑termlow‑emissionsstrategies.ThesestrategiesdonothavethesamelegalforceundertheParisAgreementasNDCs,buttheyareimportantastheyprovideasignalofcountryambitionstocontributetothecollectivegoalofnetzeroemissions.Increasingnumbersofcountrieshaveadoptedanetzeroemissionstargetinnationallaw.Collectively,theycurrentlyaccountforaboutone-fifthofglobalenergysectoremissions.The6Netzeroemissionspledgesandtargetshereincludeclimateneutrality(allgreenhousegases)andcarbonIEA.CCBY4.0.neutrality(CO2only)objectives.AsofAugust2023,outofthe88netzeroemissionspledgesformulatedbycountries,83%haveatargetcomprisingallgreenhousegasesand17%atargetononlyCO2emissions.32InternationalEnergyAgencyNetZeroRoadmapadvancedeconomiesinAsiaPacificandEuropearetheleadersinthisregard:100%ofenergy-relatedemissionsarecoveredbyanetzeroemissionstargetinnationallawinathdevaEnUceCdlimecaotenoLmawie(sFiingutrhee1A.1s0ia).P7acificregionandabout80%inEurope,includingthrough1Figure1.10⊳Energy-relatedCO2emissionscoveredbyagovernmentnetzeroemissionspledgebytypeandbyregionAsiaPacific-AEDevelopingAsiaCentralandSouthAmericaEuropeEurasiaMENANorthAmericaSub-SaharanAfrica20%40%60%80%100%InlawPolicydocumentOralpledgeNopledgeIEA.CCBY4.0.ThebulkofemissionsarecoveredbysomeformofnetzeroemissionspledgeinallregionsexcepttheMiddleEastandNorthAfricaNote:AsiaPacific-AEincludesAustralia,Korea,JapanandNewZealand;MENAincludestheMiddleEastandNorthAfricacountrygroups.ThemajorityofemissionsinemergingmarketanddevelopingeconomiesinCentralandSouthAmerica,Eurasia,NorthAmericaandsub-SaharanAfricaarecoveredbynetzeroemissionspledges,butmostlyinanon-legallybindingpolicydocumentorinanoralpledge.IntheMiddleEastandNorthAfrica(MENA),11countriesoutof17haveyettoadoptanetzeroemissionstarget:ifEgypt,IranandAlgeriaadoptedsuchatarget,theywouldcollectivelycoveralmost90%ofCO2energy-relatedemissionsintheMENAregion.Theoverwhelmingmajorityofnetzeroemissionspledgescoverallsectorsofaneconomy,andallcovertheenergysector.However,asmanycountriesincludethelanduse,land-usechangeandforestrysectorintheirprojections,andaccountforthisasanemissionssink,thepaceofemissionsreductionintheenergysectorisusuallyslowerthanintheIEAscenarios.Settingmoretransparentnetzeroemissionstargets,forinstancebyspecifyingtheabsolutelevelofemissionreductionsforeseenbythegoalyearand,separately,thelevelofemissionremovals,wouldhelpbringmoreclarityandtrusttotheprocess.7This80%coveragereferstothegeographicalregionofEurope,notjusttheEuropeanUnion.IEA.CCBY4.0.Chapter1Progressinthecleanenergytransition33Countrieshavevaryingstartingpointsandlevelsofresponsibilityandcapabilities.Consequently,theyhaveadoptedvarioustimeframesfortheirnetzeroemissionspledges.Ingeneral,advancedeconomieshaveputforwardnetzeroemissionspledgeswiththeearliesttargetyears.About30%ofcurrentglobalenergy-relatedCO2emissionsarecoveredbynetzeroemissionspledgesby2050orsooner,buttheshareiscloseto95%inthosecountriesinthehighestdecileofglobalincomedistribution,e.g.Finland(climateneutralby2035),IcelandandAustria(climateneutralby2040),andGermanyandSweden(climateneutralby2045)(Figure1.11).Figure1.11⊳EnergysectorCO2emissionscoveredbynetzeroemissionstargetsbynetzeroyearandpercapitaincomegroup100%100000USD(2021,PPP)75%7500050%5000025%2500012345678910Globalincomedecile<20502050>2050NotargetGDPpercapita(rightaxis)IEA.CCBY4.0.Ambitionofnetzeroemissionstargetdatestendstocorrelatewithdevelopmentlevels;almostallcountrieswouldneedtobringthedateforwardtoalignwiththeNZEScenarioNote:GDP=grossdomesticproduct;PPP=purchasingpowerparity.Thepictureismoremixedinotherdeciles.Somecountriesinthetop30-40%oftheglobalincomedistributionhavenetzeroemissionstargetsafter2050ornotargetatall,suchasKuwaitandQatar(notarget),andBahrainandSaudiArabia(climateneutralby2060).Somecountriesmovedtheirtargetyearforward.Forinstance,in2021Germanyadvanceditsclimateneutralitygoalfrom2050to2045andBrazilfrom2060to2050.InitsupdatedNDC,Chinapledgedtopeakitsemissionsbefore2030andtotargetcarbonneutralityby2060atthelatest.34InternationalEnergyAgencyNetZeroRoadmapIEA.CCBY4.0.1.4CleanenergytechnologiesDevelopmentanddeploymentofcleanenergytechnologieshaveprogressedsignificantly1sincetheadoptionoftheParisAgreementin2015,boostedrecentlybystimulusspendingrelatedtotheCovid-19pandemic,theresponsefromgovernmentsandinvestorstotheglobalenergycrisis,andgrowingcommercialandgeopoliticalcompetitionformarketsandsupplychains.1.4.1DeploymentIEA.CCBY4.0.MassmanufacturedtechnologiesareleadingthewayThedeploymentofmanycleanenergytechnologieshasacceleratedmarkedlysince2015(Figure1.12)(IEA,2023a).Massmanufacturedtechnologieshaveseenthefastestgrowth,benefitingfromstandardisationandshortleadtimes.Forexample,between2015and2022:SolarPVcapacityadditionsincreasedbymorethan400%,withalmost1terawatt(TW)ofcapacityadded,nearlyequivalenttothetotalinstalledelectricitycapacityintheEuropeanUnion.Electriccarsalesincreasedbynearly2000%,withover25millionsoldovertheperiod,equivalenttomorethanallthecarsontheroadinCanada.Residentialheatpumpsalesincreasedby225%,withapproximately600GWsold,approximatelyequivalenttotheentireresidentialheatingcapacityinRussia.Stationarybatterystoragecapacityadditionsincreasedby2500%,withnearly45GWinstalled,approximatelyequivalenttothetotalinstalledelectricitycapacityinArgentina.Theaccelerationincleantechnologydeploymenthasbeenparticularlystronginthelasttwoyears.Aroundone-thirdofallPVsolardeploymenttodatetookplacein2021and2022,andthefiguresareevenhigherforsomeothercleanenergytechnologies:about60%forbothelectriccarsalesandfortheinstallationofstationarybatteries.ActualinstallationsforsolarPVin2022andestimatedinstallationsfor2023trackaheadofthelevelprojectedintheIEANetZeroby2050reportin2021(IEA,2021a).Emergingtechnologiessuchaselectrolysersforhydrogenproductionarealsomovingforward,withtotalglobalinstalledelectrolysercapacitymorethandoublinginthelasttwoyears,reachingnearly700megawatts(MW)in2022.Manufacturingcapacityforcleanenergytechnologiesisscalingupquickly,suggestingthatdeploymentwillcontinuetoincreasestronglyinthecomingyears.Importantandimpressiveasthisprogressis,thereismuchmoretobedone.Theslowpaceoftheturnoverofthestockofmosttypesofenergy-relatedequipmentmeansthatthereisaconsiderablelagbetweenatechnologybecomingdominantinnewdeploymentsandthattechnologybecomingdominantintheoveralloperatingstock,underliningtheurgentneedforcontinuedactiontofurtherboostdeploymentintheneartermtobeontracktoreachnetzeroemissionsby2050(seeChapter3).Chapter1Progressinthecleanenergytransition35Figure1.12⊳Globalinstallationsofselectedcleanenergytechnologies,2010-2022SolarPVadditions(GW)Electriccarsales(millionvehicles)30012200810042010202220102022120ResidentialheatpumpBatterystorageadditionssales(GW)(GW)2480164082010202220102022IEA.CCBY4.0.DeploymentofanumberofkeycleantechnologieshasacceleratedsignificantlysincetheParisAgreementin2015Moreover,deploymenthasbeenunevenacrossregions,withthestrongestprogressinIEA.CCBY4.0.regionswithsupportivepolicyenvironments,andstrongfinancialandtechnicalcapabilities.From2015to2022,advancedeconomiesandChinatogetheraccountedforover95%ofglobalelectriccarandheatpumpssalesandnearly85%ofcombinedwindandsolarcapacityadditions(Figure1.13).Nevertheless,sometechnologieshaveexpandedstronglyinsomeothercountries.Forinstance,IndiahasseenparticularlyrapidprogressinsolarPVdeployment.Therapidgrowthincleanenergytechnologieshasoccurredinparallelwithatrendtowardsdecliningdeploymentofnewfossilfuel-basedequipmentinseveralareas.Fossilfuel-basedelectricitycapacityadditionspeakedin2012anddeclinedtolessthanhalftheirpeaklevelby2022,whilesalesofICEvehiclespeakedin2017witha25%declinefromthispeakby2022.Asaresult,cleanenergytechnologieshaveexpandedinbothabsolutetermsandmarketshare.36InternationalEnergyAgencyNetZeroRoadmapFigure1.13⊳ShareoftheglobaldeploymentofselectedcleanenergytechnologiesinadvancedeconomiesandChina,2010and2022SolarPVWindElectriccarsHeatpumpsPopulation1100%Restofworld80%China60%Advancedeconomies40%20%2010202220102022201020222010202220102022IEA.CCBY4.0.DeploymentofcleanenergytechnologiesremainshighlyconcentratedinChinaandadvancedeconomiesNotes:SolarPVandwindindicatecapacityadditions.Electriccarsandheatpumpsindicatesales.Box1.2⊳ComparativepaceofthecleanenergytransitionIEA.CCBY4.0.Comparingcurrenteventstowhathappenedinthepastisnotwithoutpitfalls,asnohistoricalanalogyisaperfectfit.Nonetheless,lookingathowtechnologieswentfromnichetomassdeploymentinthepastisausefulwaytocontextualisethechangesunderwayforcleanenergytechnologies.Sometechnologiesexperiencedremarkablyrapidgrowthinthepast(Figure1.14).Forinstance,USaircraftproductionrosebyanannualaverageof75%between1939and1944,drivenbyaseismicshifttoawartimeeconomy.TheFordModelTachievedanannualaverageproductiongrowthrateof34%inthe1910s,thankstoinnovationinmassproductionandtheassemblyline.Thesetransitionsweretrulytransformational,kick‑startingthecommercialaviationindustryandtheadventofaffordablecars.EVbatteriesandsolarPVhavealsoexperiencedrapiddeploymentgrowthbyhistoricalstandards.AverageannualdeploymentgrowthofEVbatteriesbetween2010and2020was70%,withsolarPVat24%.AlthoughthislevelofdeploymentgrowthisslightlylessthanachievedinthecaseofUSaircraftproductionbetween1939and1944,theannualaveragecostreductionforbothEVbatteries(19%)andsolarPVmodules(18%),poweredbyhighlevelsofstandardisationinmanufacturing,outstriptheaveragecostdeclinesseeninbothUSaircraftproductionfrom1942-1945andtheFordModelTinthe1910s.Chapter1Progressinthecleanenergytransition37Therehavebeenevenfasterexamplesoftechnologytransitions,thougharguablylesscomparable.Forexample,computermemorypricesreducedeachyearbyanaverageofabout35%betweenboth1980-1990and1990-2000(McCallum,2023).Figure1.14⊳Deploymentgrowthandcostreductionofcleanenergytechnologies,2010-2020relativetoselectedhistoricaltechnologytransitions80%Averageannualdeploymentgrowth60%EVbatteries(2010-20)40%SolarPVmodules(2010-20)20%Windonshore(2010-20)-5%Windoffshore-10%(2010-20)-15%USWWIIaircraft-20%(1939-44/1942-45)FordModelT(1910-20)Gasturbines(1970-80)AverageannualcostreductionIEA.CCBY4.0.BatteriesandsolarPVhaveprogressedatratescomparabletosomeofthemostrapidhistorictechnologytransitionsNote:ThedatasetsforUSAircraftproductioninWWIIrunsfrom1939to1944foraverageannualdeploymentgrowthandfrom1942to1945foraverageannualcostreduction.Sources:Lafond,GreenwaldandFarmer(2022);Zeitlin(1995);AbernathyandWayne(1974);GrublerNakicenovicandVictor,(1999).Othertechnologiessuchaswindsofarhavefollowedasomewhatsloweraveragedeploymenttrajectory,comparabletopasttransitionssuchastheintroductionofgasturbinesinthe1970s,whilestillexhibitingannualgrowthratesof10-20%.Althoughprogressonsomecleantechnologiescomparesfavourablytohistorictransformationalexamples,theexampleofUSWWIIaircraftproductioninparticularsuggeststhatevenfasterdeploymentcouldbeachievedthroughmoreresearchanddevelopment(R&D)fundingandmoreconcertedgovernmentaction.38InternationalEnergyAgencyNetZeroRoadmapIEA.CCBY4.0.Plansforlarge-scaletechnologyprojectsarestartingtoincreaserapidlyLarge-scaletechnologies,suchasCCUS,liquidbiofuelorhydrogen-basedsteelproduction,haveseenslowerdeploymentoverthelastdecadethansmallermassmanufacturedand1modulartechnologies.Forexample,lessnewCO2capturecapacitywasaddedbetween2015and2022thanbetween2010and2015.Large-scaletechnologiesusuallyneedtobetailoredtosite-specificconditionsand,duetotheirlargeunitsizes,offerfeweropportunitiesforlearning-by-doingadvancesthansmallerandmoremodulartechnologies.Thistendstomeanslowercostimprovements.Somelarge-scaletechnologiesarenotyetavailableonthemarket,whichalsohindersimmediatecommercialdeployment.Figure1.15⊳GlobalCO2captureprojectpipeline,2010-2023400Numberofprojects300IEA.CCBY4.0.20010020102011201220132014201520162017201820192020202120222023Q2OperatingUnderconstructionAdvanceddevelopmentConceptandfeasibilityIEA.CCBY4.0.TherehasbeenstronggrowthintheprojectpipelineforCO2captureinrecentyears,implyingthatinstalledcapacityissettorisesignificantlyNotes:Includesallfacilitieswithacapacitylargerthan0.1MtCO2peryear.Q2=secondquarter.Underconstruction=afinalinvestmentdecisionhasbeenannouncedandconstructionisongoingorimminent.Advanceddevelopment=projectisatfront-endengineeringanddesignstageand/orengineershavebeencontractedand/orengineering,procurement,andconstructionhavebeenannounced.Inrecentyears,however,thenumberofannouncedprojectsforlarge-scaletechnologieshasincreasedsignificantly.Forexample,thenumberofCCUSprojectsinthepipelinenearlytripledin2021andhavenearlydoubledagainsincethen(Figure1.15),drivenbystrongerpolicysupport,particularlyintheUnitedStates(IEA,2023b).Ifallprojectsinthepipelinewererealised,CO2capturecapacitywouldexpandmorethaneight-fold,risingfromabout45Mttodaytoreachnearly400Mtperyearin2030,andCO2storagecapacitywouldincreasetocomparablelevels(seeChapter3).However,sofaronlyabout5%ofannouncedprojectshavereachedthefinalinvestmentdecisionstage.Rapidaccelerationofthedeploymentoflarge-scale,site-specifictechnologieswillrequireadditionalpolicysupport,includingthroughmeasurestoencourageinvestmentinkeyenablinginfrastructuresuchasChapter1Progressinthecleanenergytransition39CO2storagefacilities,tofacilitatethedemonstrationandcommercialisationofemergingtechnologies,andtocreatelargerandmoreinternationalmarketsforlow-emissionsproducts.Box1.3⊳CleanTechnologyDeploymentIndexIEA.CCBY4.0.ItcanbehardtograspthenatureandextentofthechangestakingplaceintheglobalenergysystemandbenchmarkthemagainstwhatneedstohappentomeetthegoalsoftheParisAgreement.Thedifficultyisincreasedbythesizeandcomplexityofthesystemandbytheslowrateofturnoverofthehugestocksofoftenlong-livedenergy-relatedinfrastructureandequipment.Inordertoprovideasuccinctandhigh-levelsummaryoftherateofchange,thisreporthascreatedaCleanTechnologyDeploymentIndex(CTDI).TheCTDIhasbeendevelopedby:Gatheringdataonthehistoricalannualdeploymentofcleanenergytechnologiesandprovidinganestimateofexpecteddeploymentin2023.IndexingthehistoricalannualvaluesforeachtechnologytotheannualaveragedeploymentofthattechnologyintheNZEScenariointheperiod2028-2032.WeightingeachtechnologyaccordingtoitsshareinglobalemissionsreductionsintheNZEScenarioin2030(seeChapter2,section2.1.3).ThismethodologymeansthattheCTDIgivesanaggregatemeasureofhowfarcurrentcleanenergydeploymentlevelsarefromthelevelrequiredin2030intheNZEScenario.Anindexvalueof100wouldmeanthatcleanenergydeploymentcapturedintheindexcollectivelyreachesthelevelrequiredin2030.Theestimatedindexvaluefor2023ofjustover30impliesthatcurrentlevelsofdeploymentofcleanenergytechnologiesareaboutone-thirdofthelevelrequiredin2030intheNZEScenario(Figure1.16).Between2010and2023,deploymentofcleanenergytechnologiesasmeasuredbytheCTDIroseatanaverageannualrateofaround13%,leadingtheindexvaluetoincreaseby5-timesovertheperiod.Therehasbeenaclearaccelerationinrecentyears,withcleanenergytechnologydeploymentmorethandoublingbetween2019andthe2023estimate,achievinganaverageannualgrowthrateofover20%.Thiscomparestoanaverageannualgrowthrateofjustunder20%neededfrom2023to2030toalignwiththeNZEpathway.TheCTDIneedstobeinterpretedwithadegreeofcaution.Onereasonisthatthecompositionofcleanenergytechnologydeploymentmattersasmuchastherate.Surgingaheadononetechnologyandfallingbehindonanothermightleadtoashort-termboostintheCTDIscorewithoutputtingtheenergysystemasawholeonapathwaytonetzeroemissionsbymid-century.Inaddition,theNZEScenarioisonepathwaytonetzeroemissionsby2050,andbenchmarkingcurrentcleantechnologydeploymentagainsttheneedsofalternativepathwayswouldyieldsomewhatdifferentresults.Nonetheless,the40InternationalEnergyAgencyNetZeroRoadmapCTDIhasvalueinshowingtheaccelerationindeploymentseeninrecentyears,aswellasingivinganindicationofthelevelsofdeploymentneededoverthecourseofthisdecadetobeontracktoreachnetzeroemissionsbymid-century.1Figure1.16⊳CleanTechnologyDeploymentIndexNZE2028-2032=10030HydrogenBiofuelsCCUS20HeatpumpsEfficientappliancesEVsNuclear10OtherrenewablesWindSolar2010201520202023eIEA.CCBY4.0.Deploymentofcleantechnologieshasincreasedsignificantlysince2010Notes:CCUS=carboncapture,utilisationandstorage.2023e=estimatedvaluesfor2023basedonthelatestavailabledatabytechnologyandprojectpipelinedata.1.4.2SupplychainsCleanenergytechnologysupplychainshavebeenscalinguprapidlyinrecentyears.Progresshasbeenparticularlyfastinthemanufacturingsegment,wherecountriesarecompetingtosecureaplaceinthenewglobalenergyeconomy.Forexample,thenascentmanufacturingsectorsofsolarPVintheearly2000sandofbatteriesinthe2010shavebecomevastindustries(IEA,2023c).Thespeedofexpansionhasexceededwhatwasexpectedjustafewyearsago,whichhasboostedhopesofgettingtheenergytransitionasawholeontrackfornetzeroemissionsby2050(seeChapter2).ManufacturingcapacityforsomecriticaltechnologiesisexpandingrapidlyIEA.CCBY4.0.Cleantechnologymanufacturingcapacitypostedstrongyear-on-yeargrowthratesin2022forbatteries(+72%),solarPV(+39%),electrolysers(+26%)andheatpumps(+13%).Thismomentumshowsnosignofslowingintheneartermgiventhepipelineofannouncedmanufacturingprojectscontinuingtoexpandrapidly(Figure1.17).Inthefirstquarterof2023alone,newannouncementsofsolarPVmanufacturingprojectswouldincreaseprojectedoutputbyaround60%in2030;theprojectedincreaseforbatterieswouldbearound25%andforelectrolysersaround30%(IEA,2023d).Chapter1Progressinthecleanenergytransition41Figure1.17⊳AnnouncedmanufacturingprojectthroughputanddeploymentofkeytechnologiesintheNZEScenario,2030150%Production100%202250%NZE2030deploymentWithincreasedutilisationAnnouncedprojectsCommitedPreliminarySolarPVBatteriesWindHeatElectrolyserspumpsIEA.CCBY4.0.Ifallannouncedprojectsproceed,solarPVmanufacturingwouldexceedandbatteriesmanufacturingwouldgetveryclosetothe2030levelsrequiredintheNZEScenarioNotes:2022productionvaluesreflectactualutilisationrates.Autilisationrateof85%isusedforbothexistingandannouncedmanufacturingcapacityin2030.Increasedutilisationindicatesthatutilisationofexistingmanufacturingcapacityincreasesfromcurrentrates,whichcanberelativelylowinsomecases,to85%.Committedreferstoprojectsthateitherhavereachedafinalinvestmentdecisionorareunderconstruction.Announcedprojectsindicateannouncementsthroughfirst-quarter2023.Notethatdataisavailableforannouncedelectrolysermanufacturingprojectsasofsecond-quarter2023intheGlobalHydrogenReview2023(IEA,2023e).IfallannouncedsolarPVmodulemanufacturingprojectsarerealised,theircombinedoutput,IEA.CCBY4.0.togetherwiththatfromtheincreasedutilisationofexistingmanufacturingcapacitywouldexceedthedeploymentneedsoftheupdatedNZEScenarioin2030byaround30%.EVandgridstoragebatteryneedsfor2030wouldalsobealmostfullymetunderthesameconsiderations.Cautionisneededhoweverasmanyannouncedprojectshavenotyetreachedafinalinvestmentdecisionorstartedconstruction.Onlyaround25%oftheannouncedprojectsforsolarPVmanufacturingcapacityworldwidecanbeconsideredcommitted.Theequivalentfigureforbatteriesisaround30%andabout5%forelectrolysers.Growthinmanufacturingcapacityforkeywindturbinecomponents–nacelles,towersandblades–wasmuchslowerataround2%in2022.SomewindmanufacturersarestrugglingtoboostoutputduetosupplychaindisruptionsandhighercostsresultingfromtheeffectsoftheCovid-19pandemicandRussia’sinvasionofUkraine.Thisfollowsaperiodoffallingcostsandrapidexpansioninthewindindustrypriorto2020.AdditionalpolicysupportwouldhelpthewindpowersectortoovercomethesechallengesandplaythecriticalroleenvisagedforitintheNZEScenario.42InternationalEnergyAgencyNetZeroRoadmapWhilethecleantechnologymanufacturingbaseisexpandingrapidly,itremainshighlyconcentratedgeographically;themajorityofcurrentandannouncedmanufacturingprojectsaTrheerineChhaivneab.Yeeetn,rneocteanbtlepoinliccryecahseasnginesthaerepbroejgeicntnpinipgetloineexfpoarnbdapttreorjeycptrpoidpueclitnioensefalsceilwithieesrien.1theUnitedStates,driveninlargepartbytheincentivesprovidedbytheIRA.MeanwhiletheProductionLinkedIncentive(PLI)programmeinIndiaisprovidingaboosttodomesticmanufacturing,includingthroughtheprovisionofnearlyUSD2.4billionunderthesecondphaseoftheHighEfficiencySolarPVModulesPLIthatbeganinOctober2022andUSD2.5billionundertheAdvancedChemistryCellBatteryStoragePLIannouncedinlate2021.AmongkeymeasuresintheEuropeanUnion,theNetZeroIndustryAct(NZIA),announcedinMarch2023,proposesmeasurestostrengthencleantechnologymanufacturingintheEuropeanUnion.Inaddition,othercountriesareprovidingsupporttopromotecleantechnologymanufacturing.RecentinitiativesincludeUSD1.8billioninsubsidiesforbatterymanufacturinginJapan’sGreenTransformation(GX)initiative;arefundabletaxcreditfor30%ofinvestmentcostinnewmanufacturingequipmentforkeycleantechnologiesinCanada’s2023Budget;USD5billioninloansandguaranteesfromtheExport-ImportBankofKoreaandstate-ownedKoreaTradeInsurancetoadvancedomesticbatterymanufacturing:andinAustralia,USD2billionfordomesticcleantechnologymanufacturingviatheNationalReconstructionFund.Morediverseandresilientsupplychainswillhelpstrengthensecurity.CleantechnologymarketsareboomingThecombinedglobalmarketforfivekeycleanenergytechnologies–solarPV,wind,batteries,electrolysersandheatpumps–surgedtojustunderUSD300billiondollarsin2022,anearly20%increaseoverthepreviousyear.Thiswasfuelledbyrapidgrowthincapacityandsales,thoughitalsoreflectsunitcostincreasesforsometechnologiesin2022resultingfromsupplychaindisruptionsandenergyandcommoditypriceinflation.Saleswereconcentratedinmajormarkets,notablyChina,NorthAmericaandtheEuropeanUnion.EVbatteriesandstationarystorageapplicationscontributed65%ofthemarketgrowthin2022,mainlyduetothehugeglobalincreaseinelectriccarsalesfromalmost7millionin2021(9%ofglobalcarsales)toover10millionin2022(14%ofglobalcarsales).Themarketsizeofthesefivetechnologieshasalmosttripledsince2010,aperiodduringwhichtheirunitcostsdeclinedonacombineddeploymentweightedaveragebasisbyaround80%(Figure1.18).Absentthesecostdeclines,anextraUSD1trillioninspendingwouldhavebeenneededin2022toachievethelevelofdeploymentinthatsameyear.Chapter1Progressinthecleanenergytransition43IEA.CCBY4.0.Figure1.18⊳Globalmarketsizeofselectedcleanenergytechnologies,BillionUSD(2022,PPP)2010-2022300ElectrolysersHeatpumpsBatteries200WindSolarPV1002010201520202022IEA.CCBY4.0.Theglobalmarketforfivekeycleantechnologies–solarPV,wind,batteries,electrolysersandheatpumps–hasalmosttripledoverthepastdecadeProgressinexpandingsupplychaincapacityhasbeenunevenIEA.CCBY4.0.Largequantitiesofcriticalmineralsarerequiredforcleanenergytechnologiesandtheirsupportinginfrastructure,rangingfromwindturbinesandEVbatteriestoCO2pipelinesandpowergrids.Sincecleanenergytechnologiesalreadyaccountforhighsharesoftotaldemandoftheseminerals(betweenabout15-55%forlithium,cobalt,nickelandcoppertoday),continuinggrowthinthedeploymentofthesetechnologieshingesonrapidexpansionsinsecureandsustainablecriticalmineralsupplychains.Criticalmineralsextractionandprocessingcapacityhasincreasedsignificantlyoverthelastdecadeinresponsetorisingcleanenergyandotherdemands.Between2010and2022,lithiumminingoutputrosebyafactoroffive,andnickelandcobaltbyafactoroftwo.Growthhasbeenparticularlystronginrecentyears,withlithiumminingoutputexpandingbyabout80%between2020and2022,andoutputofnickelincreasingbyabout35%andcobaltbyabout40%overthesameperiod(IEA,2023f).Despitethisgrowthinsupply,marketshavebeentightasaresultofrapiddemandgrowth,especiallyforbatteries.Lithiumpriceshaveshownthelargestvolatility,withinternationalpricemarkersincreasingmorethanfive-foldbetweenthefirsthalfof2020and2022.Investorsarerespondingtothesepricespikes.Thepipelineofannouncedprojectsfortheextractionandprocessingofkeycriticalmineralspointstocontinuedexpansioninsupplythisdecade.Forexample,announcedprojectstoexpandlithiumextractioncapacityincreasedby14%forlithiumbetweentheendof2022andthesecondquarterof2023.Anticipatedsupplybasedonannouncedextractionprojectswouldmeetapproximately90%ofdemandlevelsin44InternationalEnergyAgencyNetZeroRoadmap2030intheupdatedNZEScenarioforcopper,80%fornickel,65%forlithium,and85%forcobalt(Figure1.19).8(Chapter4explorescriticalmineralssupplyanddemandinmoredetailinthecontextoftheneedsoftheNZEScenario).1Figure1.19⊳ProductionfromexistingandannouncedextractionprojectsforkeycriticalmineralsrelativetoNZEScenariorequirementsin2030100%NZEneedsin2030Anticipatedsupply75%Productionin202250%25%CopperNickelLithiumCobaltIEA.CCBY4.0.Anticipatedsupplyfromthecurrentpipelineofannouncedprojectsforkeycriticalmineralswouldprovideatleast65%of2030'sNZEScenariorequirementsNotes:Thisfigureshowsprimarydemandandsupplyofcriticalminerals,excludingsecondaryproduction.‘Anticipatedsupply’isexpectedfutureproductionbasedonexpertjudgementfromthird-partydataproviders.Expectationsincommoditypricescanhavealargeimpactontheexpectedsupply;ahigherpricemightleadtomoresupplycomingonline.Atthesametime,unexpecteddelaysinfinancing,permittingorconstructioncoulddelayprojectsandyieldlowersupply.Thevalueisthereforelowerthanthesumofallannouncedprojects.Oneriskarisesfromthewaythatglobalsupplyissettoremainhighlyconcentratedamongasmallnumberofcountriesandcompanies.Morediversesupplychainswouldincreasesupplyresilience.Adifferentkindofriskcomesfromlengthyprojectleadtimesfornewsupplies.Miningprojects,includingexploration,permittingandconstruction,canoftentakemorethanadecade.Yet,thefastestminingdevelopmentscanhavealeadtimeoffiveyearsorlessfromdiscoverytothestartofproduction,e.g.theNova-BollingermineinAustraliawhichproducesnickel,cobaltandcopper,eventhoughrampingupproductiontofullcapacitytypicallytakesuptoanotherthreetofouryearswhenusingestablishedtechniques.ThissuggeststhatthereisstillenoughtimetofurtherscaleupsupplytomeetNZEScenarioneedsby2030,evenifthetimelinesarebecomingverytight.MeanwhilecontinuedR&Dcouldhelptoreducetheneedtousecriticalmineralsforwhichsuppliesareconstrained.8Mineralprocessingtendstofollowsimilartrendsasextraction.IEA.CCBY4.0.Chapter1Progressinthecleanenergytransition45Furtherincreasesininvestmentareurgentlyneededinthenearterm,asaregovernmenteffortstodiversifysupplychains,reduceleadtimesandreducematerialdemandbypromotingrecyclingandinnovation(seeChapter4).SPOTLIGHTEnergyaccessandenergysecurityEnergyaccessTheSustainableDevelopmentGoals(SDGs)wereadoptedin2015,alongsidetheParisAgreement.Wearenowhalfwaybetweentheyearthegoalswereadoptedandtheir2030targetyear.Fortheenergysector,theSDGssettheobjectiveofachievingfullenergyaccessby2030bothforelectricityandcleancooking.9In2015,about15%oftheglobalpopulationdidnothaveaccesstoelectricityandabout35%didnothaveaccesstocleancooking(Figure1.20).In2022,thosenumbershadfallento10%andaround30%respectively.Figure1.20⊳Populationwithoutaccesstomodernenergybyregion,2010-20221600Electricity3200CleancookingRestofworldMillionpeople12002400IEA.CCBY4.0.800DevelopingAsia1600800400Sub-SaharanAfrica20102014201820222010201420182022IEA.CCBY4.0.Todaynearlyone-in-tenpeopleworldwidedonothaveaccesstoelectricityandnearlyone-in-threestilllackaccesstocleancookingtechnologiesYetprogresshasbeenveryunevenamongregions.IndevelopingAsia,thepopulationwithoutaccesstoelectricityhasfallenfromabout20%in2010tolessthan5%in2022(thoughthisisstillmorethan120millionpeople).Thelargeincreaseinaccessto9Cleancookingisdefinedhereascookingfacilitiesthatusemodernfuelsandtechnologies,includingnaturalgas,liquefiedpetroleumgas(LPG),electricityandbiogas,orimprovedbiomasscookstoves(ICS)thathaveconsiderablyloweremissionsandhigherefficienciesthantraditionalthree-stonefires.46InternationalEnergyAgencyNetZeroRoadmapelectricitythatthisrepresentswasledparticularlybyIndiaandIndonesia,whichtogetherhaveseenthenumberofpeoplewithoutaccesstoelectricityfallbymorethan300millionsince2015.Ontheotherhand,sub-SaharanAfricahasbeengoinginthe1wrongdirection,despitesomeindividualcountriesmakingprogressearlierinthedecadeuntiltheCovid-19pandemicand2022energycrisis,andthetotalpopulationwithoutaccesstoelectricityhasslightlyincreasedinrecentyears.SubstantialgainsincleancookingareevidentindevelopingAsia,wheretheshareofthepopulationwithoutaccesstocleancookingsolutionshasdeclinedfrommorethan40%tolessthan30%since2015.ThishasbeenledbystronggainsinIndia,ChinaandIndonesia,wherenearlyhalfabillionpeoplegainedaccesstocleancookingtechnologiesinthelastsevenyears(equivalenttoabout7000peopleperhour).Insub-SaharanAfrica,however,populationgrowthhasoutpacedprogress:whiletheshareofthepopulationwithoutaccesstocleancookinghasbeengraduallyfalling,theabsolutenumberofpeoplewithoutaccesshasbeensteadilyclimbingduetorapidpopulationgrowth.Nearly1billionpeopleinAfricastillcookwithdirtyanddangerousfuelsthathaveseverenegativeconsequencesforhealthandlivelihoods.Thepandemicandtheglobalenergycrisisof2022wereamajorsetbacktoprogressonenergyaccess.Withenergypricesskyrocketing,weestimatethatin2022some75millionpeoplewhorecentlygainedaccesstoelectricitylosttheabilitytopayforit,andthatalmost100millionpeopleworldwidemayhavebeenpushedbackintorelianceonfirewoodandcharcoalforcookinginsteadofcleaner,healthieralternatives.EnergysecurityRussia’sinvasionofUkraineinearly2022triggeredasurgeinenergyprices(Figure1.21).NaturalgaspricesontheEuropeanbenchmarkbrieflyreachedanall-timehighofUSD99permillionBritishthermalunits(MBtu),almost20-timeshigherthantheir2016-2020average(thehighestmonthlyaveragereachedin2022wasUSD64/MBtu).Buyerswithlittlecapacitytopaywerepricedoutofthemarket,andcountriessuchasBangladeshandPakistanexperiencedblackoutsduetofuelshortages.Pricesforcoalalsoclimbedtounprecedentedlevels,reachingmonthlyaveragesashighasUSD350-420/tonne,orfive-tosix-timesthe2016-2020EUaverage.Insomecases,powerplantsandregionsdependentonimportedcoalwereforcedtocurtailpurchases.Thesehighpricesfedintoelectricitypricesinmanymarkets.GovernmentsaroundtheworldspentmorethanUSD500billionin2022tomitigatetheimpactofhighpricesonconsumers.Theenergycrisisexacerbatedexistinginflationarypressures,andtheworldexperiencedasynchronizedinflationaryupswingunprecedentedsincetheenergycrisesofthe1970s(IEA,2022a).Chapter1Progressinthecleanenergytransition47IEA.CCBY4.0.Figure1.21⊳Benchmarkinternationalfossilfuelprices,2020-2023OilNaturalgasCoal16080400USD/bblUSD/MBtu60USD/t12030080402004020100JanAugJanAugJanAug202020232020202320202023JapanBrentEuropeUnitedStatesEuropeIEA.CCBY4.0.Fossilfuelpricesskyrocketedoninternationalmarketsduringthe2022energycrisis,feedingintohighelectricitypricesandfurtherinflaminginflationNotes:bbl=barrel.Pricesshownaremonthlyaverages.Theenergycrisisacceleratedbothcleanenergydeploymentandinvestment,aswellasinvestmentinfossilfuelinresponsetoconcernsabouttheavailabilityandaffordabilityofenergysupplies.Cleanenergyinvestmentincreasedbyabout15%,toreacharoundUSD1.6trillionin2022andissettocontinuetoriserapidly.Atthesametime,investmentinfossilenergyclimbedbynearly10%,toreacharoundUSD1trillionandlookssettoincreaseagainin2023.Disruptionsinrecentyearshaveputthespotlightonthesecurityofcriticalmineralandcleanenergymanufacturingsupplychains.Promptedbyrapiddemandgrowthandsignificantsupplyconcentration,governmentshavebeentakingactionsuchaslegislationthataimstoincreasedomesticsupplyofkeycleanenergytechnologiesandrelatedinputssuchastheInflationReductionActintheUnitedStatesandtheNetZeroIndustryActintheEuropeanUnion,andthroughprogrammessuchastheProductionLinkedIncentivesinIndia.Thishashadthepositiveeffectofsignificantincreasesinthepotentialsupplyofcleanenergytechnologies,whileatthesametimeraisingconcernsaboutpotentialmarketdistortionsandtheextentofpublicfiscalcommitments.1.4.3CostsandperformanceIEA.CCBY4.0.Overthelastdecade,considerableadvancesincleanenergytechnologieshavecutcosts,improvedperformanceandreducedmaterialinputrequirements.Costsforselectedmassmanufacturedcleanenergytechnologies–includingsolarPV,wind,heatpumpsandbatteries,havefallenbycloseto80%inaggregate(Figure1.22).48InternationalEnergyAgencyNetZeroRoadmapFigure1.22⊳Equipmentcost,performanceandmaterialneedsperunitforselectedcleanenergytechnologies,2010-2022EquipmentcostPerformanceMaterialneeds1100%225%100%80%200%80%60%175%60%40%150%40%20%125%20%100%201020222010202220102022OnshorewindBatteryenergydensityLithiumuseinEVsSolarPVLEDefficiencyPolysiliconuseinSolarPVBatteriesSolarcellefficiencySilveruseinSolarPVWeightedaverageIEA.CCBY4.0.DeploymentboostedcostreductionsandimprovedtheperformanceofcleanenergytechnologiesinavirtuouscycleNotes:Indexvaluesin2010=100%.Equipmentcostexcludesengineering,procurement,constructionandinstallationcosts,andisinrealterms.Weightedaverageequipmentcostcomparesthecostsoftheannualdeploymentofselectedmassmanufacturedcleanenergytechnologies,i.e.solarPV,onshoreandoffshorewind,heatpumpsandbatteriesinaggregatetothecostsasiftherehadbeennocostreductionssince2010.Sources:IEAanalysisbasedonBNEF,(2022);VDMA,(2021)(2023);IEA,(2022a);IEA,(2023a);SPVMarketResearch,(2022);RTS,(2021);PVInfoLink,(2022).Notably,solarPVdemonstratesimpressivecostdeclines.Typically,asdeploymentincreases,IEA.CCBY4.0.thelearningrateforagiventechnology(definedasthefallinunitcostassociatedwithadoublingofcumulativedeployment)tendstodecrease.ForsolarPVmodules,however,thelearningratesince2006ofaround40%isactuallyhigherthantheaveragesincethe1970sofaround25%,largelythankstoeconomiesofscaleinmanufacturingandefficiencyimprovements(VDMA,2023)(IEA,2020a)(Kavlak,McNerneyandTrancik,2018).Costsdeclineshavebeenmoremodestforothertechnologies.Forexample,heatpumpunitcostsfellbyonlyaround5%onaverageoverthe2010-2022period,partlybecausethemanufacturingprocesswasalreadymature.Large-scalesite-tailoredtechnologies,suchascarboncapture,alsoexhibitslowercostdeclines.Slowerdeploymenthasprovidedfeweropportunitiesforlearning.Furthermore,thesite-specificandbespokenatureoflarge-scaleprojectsmeansthatknowledgeandexperiencegainedmaynotalwaysbeapplicabletootherprojects.Thislimitsthepotentialforstandardisationsuchthatcostdeclinesarelikelytobemoremodesteveninthelongerterm.CostshavestartedtoincreaseratherthandecreaseinthelasttwoyearsforsomecleantechnologiessuchassolarPVandbatteries,reflectinginflationarypressureand,inparticular,surgingcostsforcriticalminerals(IEA,2023g).ThisperiodofcostincreasesislikelytobeChapter1Progressinthecleanenergytransition49temporary,aswasthecaseforasimilarperiodofinflationandhighmaterialcostsinIEA.CCBY4.0.2007‑2009andgiventhatthecriticalmineralsupplyprojectpipelinehasbeguntorapidlyexpandinresponsetoincreaseddemand.Theriskoffuturevolatilityinrawmaterialpricescanbemitigatedbycontinuingtodevelopresilientandsecuresupplychains(seeChapter4).Considerabletechnologyperformanceimprovementshavecontributedtoincreasetheattractivenessoftechnologiesforconsumersandreducecriticalmineralrequirements.Forexample,driveninpartbychangesincompositionandchemistries,thesalesweightedaverageenergydensityofbatteriesdoubledsince2010fromaround90Watthourperkilogramme(Wh/kg)toaround190Wh/kgin2023(BNEF,2023).ThishasenabledincreaseddrivingrangesforEVsandareduceduseoflithiumbyabout30%perkilowatt-hour(IEA,2023h).SolarPVcellsareanotherexampleoftechnologyperformanceimprovements.In2010,onaverage14%ofthesolarenergyhittingasolarpanelwasconvertedtoelectricity;by2022,thatfigurehadrisenbyhalfto21%efficiency.Thisgainhelpedbringabouta60%reductionintheuseofpolysiliconandan80%reductionintheuseofsilverintheaveragesolarPVcellsince2010.Sincepolysiliconandsilvermakeuparound20-30%ofsolarPVmodulecosts,thislevelofimprovedefficiencyandtherelatedmaterialsavingshavebeenanimportantcontributortodecliningcosts.Withmoreadvancedcelldesignsandtandemtechnologiessuchassiliconperovskitesenteringthemarket,averageefficiencyisexpectedtoimproveevenmoreinthecomingyears.1.4.4InnovationInnovationhasacriticalroletoplayinreachingnetzeroemissions,especiallyinsectorssuchasheavyindustryandlong-distancetransportwhereemissionsarehardtoabatebecauselow-emissionstechnologiesorprocessesarenotyetreadilyavailable.Considerableprogresshasbeenmadeinrecentyearstoaddresspressinginnovationgaps,andthishasresultedinupgradesinthetechnologyreadinesslevelofsomecriticalcleanenergytechnologies(Figure1.23).Selectedillustrativeexamplesofinnovationprogressinrecentyearsincludethefollowingareas.Powergeneration:Newcommercial-scaledesignsofsmallmodularnuclearreactorsareexpectedtocomeonlinethisdecadeinChina,EuropeandNorthAmerica;floatingoffshorewindparksaregettingbiggerthaneverwithparksofseveralhundredMWannouncedfor2025-2026,alsoannouncedarea1GWoffshoreinstallationinChinafor2027anda6GWprojectinKoreafor2030;perovskitesolarcellsarenearing30%efficiency,withseveralfirmsinChina,EuropeandtheUnitedStatescompetingtocommercialisethefirstmodules.Low-emissionshydrogensupply:Commercial-scaledemonstrationsofsolidoxideelectrolysersareunderway.Thetwolargedemonstratorsstartedoperatingin2023.Roadtransport:Sodium-ionbatteriesforEVsarebeingscaledup,movingfromprototypespre-2021tofirst-of-a-kindcommercialproductioninChinain2023.50InternationalEnergyAgencyNetZeroRoadmapHeavyindustry:Scalingupcarboncaptureviadirectseparationincementproductionisunderway(afinalinvestmentdecisiontakenforLEILAC-2withproductionof1ir0o0nkpilrootdouncnteiosn[kct]ouolfdCOso2opnerbyeedare)m;1o0n0s%traetleedctraotlyintidcuhsytrdiraolgsecna-leba(sHeYdBdRiIrTe,ctthreedmucoesdt1advancedprojectforthistechnology,producedfossil-freesteelforthefirsttimeinSwedeninNovember2021);small-scaleuseofcarbon-freealuminiuminconsumergoodsismovingahead(ELYSIS,Canada,expectsfirst-of-a-kinddemonstrationofcommercialproductionby2026beforemovingtoindustrialproduction).Criticalminerals:Bioleachingforelectronicwasterecyclingandmetalrecoveryismovingtofirst-of-a-kindcommercialoperation(thistechniquehasbeenusedintheminingindustryforyearsandnowisbeingconsideredtorecovercriticalmineralsfrombatteries);directlithiumextractionfromgeothermalbrineisatthepre-commercialdemonstrationstage.Directaircapture:InIceland,afirst-of-a-kind4ktCO2/yearprojecthasbeguncapturingCO2fromtheairandstoringitundergroundwithplanstoexpandto36ktCO2/yearaspartofabroaderefforttodemonstratemulti-megatonnecapacityby2030.A0.5Mt/yearplantisunderconstructionintheUnitedStatesandaimstobeginoperationsin2025.Aviation:Regionalelectricplaneswithupto30passengersarebeingdesignedwithcommercialflightsexpectedbefore2030;electricverticaltake-offandlandingmodelsarebeingdemonstrated;hydrogen-poweredaircraftdesignsarebeingdeveloped,thoughtheyareatanearlierstageandoperationsarenotexpectedtobeginuntilafter2030.Shipping:Thefirstindustrialplantthatconvertsbiogasintolow-emissionsbio-liquefiednaturalgasforuseasdrop-infueltoreplaceheavyfueloilissettobeginoperationsin2023(FirstBio2Shipping,Netherlands,whichreceivedfundingfromtheEuropeanUnionInnovationFund).Severalmajorshipenginemakersareinthefinalstagesofdevelopingammoniatwo-strokeenginesforcommercialisationby2025;largemethanol-poweredcontainershipsarebeingdeliveredforthefirsttimein2023justaselectrolytichydrogen-basedmethanolcommercialproductionstarts;andsmall-scalehydrogenfuelcellferriesbeganoperatinginNorwayandtheUnitedStatesin2023.Foracomprehensiveoverviewofthefullsuiteoftechnologiesandprojectsrelatedtocleanenergyinnovation,seetheIEACleanEnergyTechnologyGuide.1010TheIEACleanEnergyTechnologyGuidecontainsinformationonmorethan550individualtechnologyIEA.CCBY4.0.designsandcomponentsthatcancontributetogettingontrackwiththeNZEScenario,withindicationsoftechnologymaturityandmajorR&Danddemonstrationactivities(https://www.iea.org/articles/etp-clean-energy-technology-guide).Chapter1Progressinthecleanenergytransition51Figure1.23⊳EvolutionoftechnologyreadinesslevelsforselectedcleanenergytechnologiesTRLMature11Grid-scaleonshorewindMarket10Grid-scalesolarPVuptake9Lithium-ionbattery8Sodium-ionbatteryDemonstration7CementdirectseparationLarge6carboncapture100%electrolyticH₂-basedprototype5DRIsteelmaking4Concept3andsmall2prototype1192019401960198020002020IEA.CCBY4.0.Significantadvancesincleanenergytechnologydevelopmenthavebeenmadeinrecentyears,butmuchremainstobedonetoputtheworldonanetzeroemissionspathwayNotes:TRL=TechnologyReadinessLevel;H2=hydrogen;DRI=directreducediron.For100%electrolyticH2-basedDRIsteelmaking,R&Drelatedtousinghydrogeninsteelmakinghasbeentakingplacefordecades,includingatonecommercialplantinthe1990srelyinglargelyonhydrogen.Inthisfigure,thefocusisspecificallyon100%electrolyticH2.PublicandcorporatespendingonenergyR&DhasbeenincreasingdespitethepandemicandIEA.CCBY4.0.macroeconomiccrises(IEA,2023g)(Figure1.24).GovernmentsallocatednearlyUSD44billiontoenergyR&Din2022,morethan80%ofwhichwasearmarkedforcleanenergy,comparedwitharoundUSD30billionin2015,when70%ofthetotalwasforcleanenergy.Muchoftheincreaseinpublicenergy-relatedR&DoverthelastfewyearsisinChina,whichisnowthelargestspenderinthisarea.Advancedeconomiesaccountformostoftherest.TheemergingmarketanddevelopingeconomiesexcludingChinatogetheraccountedforjust5%oftheglobaltotalin2022.EnergyR&DspendingbygloballylistedcompaniesexceededUSD130billionin2022,anincreaseof25%from2020.Spendingbycompaniesdevelopingrenewablesincreasedonaverageby25%eachyearbetween2020and2022comparedwith5%peryearoverthe2010-2020period.TheR&Dbudgetsofmajoroilandgascompanieshaveremainedmoreorlessflatsince2010.Aviation,railandshippingwerebadlyhitbytheCovid-19crisisandtheirR&Dspendinghasnotincreasedmuchsince.Bycontrast,R&Dspendingrecoveredquicklyinchemicals,cementandironandsteel,althougharelativelylowshareofenergyR&Dbudgetsinindustrialsectorsisdirectedtocleanenergy,indicatingfurtheropportunitiestoincreasespending.Theroleofstart-upsincleanenergyinnovationisalsogrowingandhasshownimpressiveresilienceinthefaceofrecentmacroeconomiccrises(IEA,2023g).Cleanenergyventure52InternationalEnergyAgencyNetZeroRoadmapcapitalinvestmentnearlydoubledbetween2010and2020andhasmorethandoubledagainsincethen.TotalinvestmentreachedUSD7billionforearly-stagestart-upsandUanSdDb3a5ttbeirlliieosn,hfoyrdgrorogwent,hrsetnaegweasbtalerts-aunpdsienn2e0rg2y2,ewffiicthienncoyt.ablegrowthininvestmentinEVs1Thenumberofglobalpatentsinlow-emissionsenergytechnologieshasbeenrisingoverthelasttwodecades,whileforfossilfuelsithasbeendecliningsince2015(IEA,2021c).Between2005and2018,forexample,patentinginbatteriesincreased14%annuallyonaverage,fourtimesfasterthantheaverageofalltechnologyfields(IEA,2020b).Cleantechnologiesaccountedfornearly80%ofallpatentsrelatedtohydrogenproductionin2020(IEA,2023i).Figure1.24⊳GlobalpublicandcorporatespendingonenergyR&Dandventurecapitalinvestmentincleanenergystart-ups,2010-2022GovernmentsListedcompaniesVenturecapital50100%150100%50BillionUSD(MER,2022)4080%12080%40IEA.CCBY4.0.3060%9060%302040%6040%201020%3020%10201020222010202220102022Shareincleanenergy(rightaxis)IEA.CCBY4.0.EnergyR&Dspendingbygovernmentsandcorporations,andcleanenergyventurecapitalinvestmenthavegrownsubstantiallyNote:MER=marketexchangerate.Chapter1Progressinthecleanenergytransition53IEA.CCBY4.0.Chapter2IEA.CCBY4.0.ArenewedpathwaytonetzeroemissionsNetzeroemissionsguideSUMMARY•TheNetZeroEmissionsby2050Scenario(NZEScenario)reliesonthedeploymentofawideportfoliooflow-emissionstechnologiesandemissionsreductionoptionstoreachnetzeroCO2fromtheenergysectorby2050,butitalsodependsonahighdegreeofglobalco-operationandcollaboration.Advancedeconomiestaketheleadandreachnetzeroemissionsby2045inaggregateintheNZEScenario,Chinaby2050andotheremergingmarketanddevelopingeconomiesafter2050.ThecomprehensiveNZEScenarioupdatepresentedherereflectsreal-worldprogresssinceourNetZeroby2050:ARoadmapfortheGlobalEnergySectorreportin2021andacontinuousassessmentoffeasibilityacrosssectorsandtechnologies,butitisnottheonlypathwaytoreachthegoalofnetzeroemissionsby2050.•Takentogether,solarphotovoltaics(PV)andelectricvehicles(EVs)provideone-thirdoftheemissionsreductionsto2030intheupdatedNZEScenario.Theshareofelectriccarsintotalcarsalessoarstomorethan65%by2030,andsolarPVcapacityincreasesfivefoldfromtoday.TheannouncedmanufacturingpipelineforsolarPVandbatteriesisprojectedtobesufficienttomeettheNZEScenariodeploymentneedsto2030.Demandforoilandgasdeclinesbyaround20%by2030–fastenoughthatnonewlongleadtimeconventionaloilandgasprojectsneedtobeapprovedfordevelopment.Low-emissionselectricityrisessorapidlythatnonewunabatedcoalplantsbeyondthoseunderconstructionatthestartof2023arebuilt.•Technologiesunderdevelopmentareessentialtoachievenetzeroemissions.Progressincleanenergyinnovationoverthepasttwoyears,suchasonbatterychemistries,andtheevenstrongermarketmomentumofcommercialtechnologiessuchassolarPV,havehadatangibleimpact.Inour2021report,theshareofemissionsreductionsin2050fromtechnologiesunderdevelopmentwasalmosthalf:thatfigurehasnowfallentoaround35%inourupdatedNZEScenario.•TheextraordinarysurgeinglobalmanufacturingcapacityforsolarPVandbatteriesunderpinstheirmoresignificantroleintheperiodto2030.Capacityadditionsofwindhavebeenreviseddownwardsrelativetothe2021NZEScenario,butwindisstillcriticaltoreachnetzeroemissions;furtherpolicysupportisrequiredtohelpovercomechallengesinwindpowerdeployment.Theroleofnuclearpowerhasbeenrevisedupwardsgivenrecentpolicysupport.•Hydrogenandhydrogen-basedfuelsandcarboncapture,utilisationandstorage(CCUS)haveanimportantparttoplaytoreduceemissionsinheavyindustryandlong-distancetransport.Inthe2023NZEScenario,theyprovideone-fifthofallemissionsreductionsbetween2030and2050.Buttheparttheyplayissmallerthaninthe2021version,particularlyinthenearterm.Thisreflectsslowertechnologicalandmarketdevelopmentprogressthanenvisagedin2021andstrongerelectrificationprospects.Chapter2Arenewedpathwaytonetzeroemissions552.1OverviewoftheNZEScenario2.1.1ScenariodesignThisreportsetsoutanupdatedNZEScenario–referredtoasthe2023NZEScenario–thattakesintoaccountthekeychangesthathaveoccurredsince2021inenergypolicies,technologies,marketsandsupplychains.ItreflectsthelatestIEAdatathattrackenergypolicies;developmentsinthedeploymentandinnovationofmorethan550cleanenergytechnologies;supplychaincapacitiesforcriticalmineralsandcleanenergytechnologymanufacturing;andprogresstowardsthemorethan400milestonespresentedinthe2021NetZeroby2050report(IEA,2021a).TheNZEScenariopathwayachievesnetzeroCO2emissionsfromtheenergysectorby2050,leadingtolimitedovershootofthe1.5°Climitsetoutinthe2015ParisAgreement,buttheincreaseinglobalaveragetemperaturefallsbelow1.5°Cby2100.1The2023NZEScenario:DescribesapathwayfortheglobalenergysectortoreachnetzeroemissionsofCO2by2050bydeployingawideportfolioofcleanenergytechnologiesandwithoutoffsetsfromland-usemeasures.Decisionsabouttechnologydeploymentaredrivenbycosts,technologymaturity,marketconditions,availableinfrastructureandpolicypreferences.BuildingontheIEA2021NZEroadmapanalysis,thisreportevaluatesthebalanceoftechnologydeploymenttakingintoconsiderationprogressandsetbacksoverthelasttwoyears(Spotlight).Italsoprovidesanin-depthanalysisofthecurrenttrajectoryofkeytechnologiesandmitigationoptions,andwhatitwouldtaketoputtheworldontrackfortheNZEScenario(seeChapter3).Prioritisesanorderlytransitionthataimstosafeguardenergysecuritythroughstrongandco‐ordinatedpoliciesandincentivesthatenableallactorstoanticipatetherapidchangesrequired,andtominimiseenergymarketvolatilityandstrandedassets.Rapiddeploymentofcleanenergytechnologiesandenergyefficiencyisatthecoreofthistransition.TheNZEScenarioisunderpinnedbydetailedanalysisofprojectleadtimesformineralssuppliesandcleanenergytechnologiesaspartofeffortstoensurethefeasibilityofthedeployment.Thereis,however,inevitablyariskofbottlenecksemergingforsometechnologies,whichunderscorestheimportanceofmeasurestoenhancematerialreuseandrecyclingandtodrivedownthematerialintensityofcleanenergytechnologies.RecognisesthatachievingnetzeroenergysectorCO2emissionsby2050dependsonfairandeffectiveglobalco-operation.Thepathwaytonetzeroemissionsby2050isverynarrow.Allcountriesarerequiredtocontributetodeliverthedesiredoutcomes;advancedeconomiestaketheleadandreachnetzeroemissionsearlierintheNZEScenariothanemergingmarketanddevelopingeconomies.Globalaccesstoelectricity1Highovershootreferstoanincreaseinglobalaveragetemperaturetoabove1.6°C,butbelow1.8°CaboveIEA.CCBY4.0.pre-industriallevelsandasubsequentfalltobelow1.5°C(IPCC,2023).56InternationalEnergyAgencyNetZeroRoadmapandcleancookingisachievedby2030inlinewithestablishedSustainableDevelopmentGoals.Rapidandmajorreductionsinmethaneemissionsfromtheoil,gasandcoalsectorshelptobuysometimeforlessabruptCO2reductionsinemergingmarketanddevelopingeconomies.Withoutthesereductions,globalenergysectorCO2wouldneedtoreachnetzerobyaround2045,withimportantimplicationsforequitablepathways.Globalcollaborationfacilitatesthedevelopmentandadoptionofambitiouspolicies,2drivesdowncleantechnologycosts,andscalesupdiverseandresilientglobalsupplychainsforcriticalmineralsandcleanenergytechnologies.Enhancedfinancialsupporttoemergingmarketanddevelopingeconomiesplaysacriticalpartinthiscollaboration.SPOTLIGHTIEA.CCBY4.0.Keychangessincethe2021versionoftheNZEScenarioTheIEAtrackshundredsofthousandsofenergysectordatapointsthatcoverelementsrangingfrompolicydevelopments,technologydeployment,investmentandsupplychainstoinfrastructure,innovationandcosts.Thisdata-drivenapproachfeedsthemodelusedtodeveloptheNZEScenario,whichalsofactorsinthevariouscircumstancesofindividualcountriesandregionsingreatdetail.ThisallowstheNZEScenariototakeaccountofthefeasibilityofscalingupemissionsreductionoptionsatthespeedandscalerequiredacrossvariousregions,sectorsandtechnologies,andtointegrateconcernsaboutequity(Box2.1).IntheNetZeroby2050reportin2021,wenotedthattheprecisepathwayforthetransitionwouldbeuncertain(IEA,2021a),stating“…someofthesemilestoneswillbemet,otherswillnot,andsometechnologieswillfailtodeliverandotherswillsurpriseus–technologydeploymentrarelyeverfollowsanidealisedtrajectory”(IEA,2021b).Themaindifferencesbetweenthis2023NZEScenarioandthe2021versionare(Table2.1):WhilethegoalofnetzeroenergysectorCO2emissionsby2050isretained,emissionsto2030arehigherinthiseditionofthescenario,reflectingtheextremelystrongreboundineconomicactivityandemissionsinthewakeoftheCovid-19pandemic,aswellasthefailuretoactinrecentyearsatthespeedenvisagedinouroriginalreport.Totalenergydemandin2030isslightlyhigherinthe2023NZEversion,reflectingthepost-pandemicreboundineconomicactivityandslowerprogressthanenvisagedinimplementingstrongenergyefficiencypolicies.Energyefficiencycontinuestoplayacriticalroleinthe2023NZEScenario(seeChapter3).Near-termuseofcoalishigherinthe2023NZEScenariotoreflectboththedesiretoplotamoreequitablepathwayforemergingmarketanddevelopingeconomies,whichdominateglobalcoaluse,aswellastheenergysecurityconcernsaroundnaturalgassparkedbyRussia’sinvasionofUkraine.Chapter2Arenewedpathwaytonetzeroemissions57Table2.1⊳Selectedindicatorsinthe2021and2023NZEScenarios2021version2023versionPeak2100Peak2100warmingwarmingwarmingwarmingConsistentConsistentMediantemperatureincrease(°C)withIPCCC11.4withIPCCC11.4TotalnetenergysectorCO2emissions(Gt)scenariosscenariosShareofunabatedfossilfuelsin2030205020302050totalenergysupply(%)Totalfinalconsumption(EJ)21.10.024.00.0SolarPVcapacityadditions(GW)Windcapacityadditions(GW)58%11%62%11%ShareofEVsincarsales(%)TotalCO2capture(Gt)390340410340TotalCO2removal(Gt)820820Installedstationarybatterycapacity(GW)630630320350Shareofelectricityin65%95%3903501.06.1totalfinalconsumption(%)0.21.7ShareofH2andH2-basedfuelsin60%90%10204200totalfinalconsumption(%)1.87.70.31.9590310026%49%28%53%2%10%1%8%Notes:IPCC=IntergovernmentalPanelonClimateChange.Gt=gigatonnes;EJ=exajoules;GW=gigawatts;EVs=electricvehicles;H2=hydrogen.IPCCC1scenariosarescenariosassessedbytheIPCCwhichkeepwarmingbelow1.5°Cwithnoorlimitedovershoot.Unabatedfossilfuelsincludesfossilfuelsusedfornon-energypurposes.SolarPVtakesamoreprominentroleinthe2023NZEScenario,thoughreductionsIEA.CCBY4.0.inprojectedwindcapacityadditionsmeanthatthecombinedshareofwindandsolarPVintotalgenerationisverysimilarinbothNZEScenarioversions,ataround40%by2030.ThisreflectsthesurgeinsolarPVinstallationsandmanufacturingcapacitysince2021report.Correspondingly,theboostinsolarPVgenerationspurstheneedforadditionalstationarybatterystoragetoensuresecurityofsupply.Electricvehicles(EVs)alsohaveanevenmoreprominentroleinthe2023NZEScenario.ThisreflectsbothasignificantuptickinEVsalesandprogressinscalingupmanufacturingsupplychains.Thiselectrificationinroadtransporttogetherwithacceleratedprogressinheatpumpdeploymentinbuildingsandrisingmarketconfidenceintechnologiessuchas100%electrolytichydrogen-baseddirectreducedironproduction,resultsinmorerapidgrowthintheshareofelectricityinfinalenergyconsumption.2Near-termdeploymentisslowerforsometechnologiesinthe2023NZEScenario,e.g.wind,hydrogenandcarboncapture,utilisation,andstorage(CCUS).Thisreflects58InternationalEnergyAgencyNetZeroRoadmapsupplychainconstraints,delaysinscalingupprojectpipelinesandrelatedinfrastructure,andsluggishprogressinthedevelopmentofmarketframeworksforlessmaturetechnologies.Forsomeofthesetechnologies,thedownwardrevisionisbasedonrecentinvestmenttrendsfromtechnologymanufacturersagainstotherlow-emissionsalternatives.Oneexampleisareducedroleforhydrogen-fuelled2trucks.Someofthechangessincethe2021versionoftheNZEScenarioarehelpfulintermsofachievingtheobjectiveswhileothersarenot.Overall,thepathtoachievingnetzeroemissionsby2050inthe2023NZEScenarioisasteeperonethaninthe2021versionandrequiresmoretobedoneafter2030.Butthepathremainsopen.ThelatestIntergovernmentalPanelonClimateChange(IPCC)reportsunderscoretheincreasingurgencyofachievingnetzeroemissions(IPCC,2023).Box2.1⊳IntegratingequityintotheNZEScenariodesignReachingnetzeroemissionsby2050requiresactiononthepartofallcountries.Differentcountrieshavevaryingstartingpoints,capacities,andresourceendowments.DifferentiatedpathwaysaredelineatedintheNZEScenarioasanessentialdesignprinciple(Figure2.1).Advancedeconomiestaketheleadandreachnetzeroemissionsbyaround2045asagroup,consistentbothwiththeirhigherfinancialcapacitiesandresponsibilityforhistoricalemissions.Withpercapitaemissionsabovethoseofadvancedeconomiestoday,Chinaachievesnetzeroemissionsaround2050intheNZEScenario;otheremergingmarketanddevelopingeconomiesreachitonlywellafter2050.TheglobalnetzeroCO2emissionstargetisachievedthankstonetnegativeemissionsinadvancedeconomies,withremainingresidualgrossemissionsconcentratedinemergingmarketanddevelopingeconomiesotherthanChina.Determinedaction,particularlyinadvancedeconomiesandinlargeoilandgasproducingcountries,causeoilandnaturalgasemissionsofbothCO2andmethanetofallfasterintheNZEScenariothanincomparablescenariosassessedbytheIPCC.EmissionsfromcoalfallmoreslowlyintheNZEScenariothanincomparablescenariosassessedbytheIPCCreflectingalessabrupttransitioninemergingmarketanddevelopingeconomies,whichtodayareresponsibleformorethan80%ofglobalcoaluse.Asaresult,emissionsinadvancedeconomiesfallnearlytwo-timesfasterinthecurrentdecadethanemissionsinemergingmarketanddevelopingeconomies.Successfulachievementofuniversalaccesstoelectricityandcleancookingby2030inlinewithSustainableDevelopmentGoal7isakeypillaroftheNZEScenario.Thishingesonbothenhancedfinancialsupportbytheinternationalcommunityandstronger2Finalenergyconsumptionreflectstheenergyformthatisbroughttoanindustrialsite,whichiselectricityinIEA.CCBY4.0.thecaseofcaptivehydrogenproducedonsiteatironandsteelfacilitiestoreduceironore.Chapter2Arenewedpathwaytonetzeroemissions59domesticpoliciesincountriesthatlackfullaccess.Inadditiontobringingimportantbenefitsforhealthandgenderequality,achievingSDG7yieldsanetreductioningreenhousegasemissionsandairpollution,byreducingtheincompletecombustionofbiomassanddeforestation.Figure2.1⊳Grossemissionsandremovals,andnetemissionsbyaggregatedregionintheNZEScenario,2010-2050GtCO2AdvancedeconomiesEmergingmarketanddeveloping1428122410Netemissions208166Gross12emissions482400-2Grossremovals-4201020102030205020302050IEA.CCBY4.0.Asagroup,advancedeconomiesreachnetzeroemissionsbeforeemergingmarketanddevelopingeconomies,andalsoachievenetnegativeemissionsby2050Note:GtCO2=gigatonnesofcarbondioxide;EMDE=emergingmarketanddevelopingeconomies.InemergingmarketanddevelopingeconomiesotherthanChina,theNZEpathwayrequirescleanenergyinvestmenttoincreasenearlysevenfoldbytheearly2030scomparedtorecentaverages.Suchmobilisationofcapitalrequiresframeworksthatattracttheprivatesectoraswellasinternationalpublicsupport.Equitablepathwayswithincountriesalsohaveaparttoplayingettingtonetzeroemissions.TheseaspectsarediscussedinChapter4.Keysocio-economicassumptionsTheNZEScenarioseesthetransformationoftheenergysectortakingplaceatthesametimeasalargeincreaseintheglobalpopulationandeconomy(Table2.2).By2030,theworldpopulationisprojectedtoreachover8.5billionandalmost10billionby2050.3Nearlyalloftheincreaseisinemergingmarketanddevelopingeconomies,includingaround1.1billionmorepeopleinAfricaby2050.Inparallel,theglobaleconomycontinuestorecoverfromrecentcrises.Growthisexpectedtoslowsomewhatinthenearterm,butthesizeoftheglobaleconomyisprojectedtoroughlydoubleby2050.3ThisisinlinewiththemedianvariantoftheUnitedNationspopulationprojections(UNDESA,2022).IEA.CCBY4.0.60InternationalEnergyAgencyNetZeroRoadmapTable2.2⊳Keysocio-economicassumptionsintheNZEScenario,2022-20502022203020402050Worldpopulation(millionpeople)7950852091619681ChinaIndia1420141013721307AdvancedeconomiesRestofworld2141715151612167014411461146014153698415447165244WorldGDP(USDtrillion,2022,PPP)164207270339Energyprices(USD,2022,MER)98423025IEAcrudeoil(USDperbarrel)Naturalgas(USD/MBtu)5.12.42.42.4UnitedStates32.34.34.24.1EuropeanUnionChina13.75.95.35.3JapanSteamcoal(USD/tonne)15.95.55.35.3UnitedStatesEuropeanUnion53272423JapanCoastalChina290574543336655147205645449CO2pricesforelectricity,industryand140205250energyproduction(USD/tCO2)90160200Advancedeconomies2585180Emergingmarketanddevelopingeconomies(withnetzeroemissionspledges)153555Selectedemergingmarketanddevelopingeconomies(withoutnetzeroemissionspledges)OtheremergingmarketanddevelopingeconomiesNote:PPP=purchasingpowerparity;MER=marketexchangerate;MBtu=millionBritishthermalunits.Energypriceprojectionsaresubjecttoahighlevelofuncertainty.InIEAscenariospricesareIEA.CCBY4.0.designedtoreflectanequilibriumbetweensupplyanddemand.IntheNZEScenario,arapiddropinoilandnaturalgasdemandlowerspricestotheoperatingcostofthemarginalprojectneededtomeetdemand.Asaresult,internationalfossilfuelpricesfallsignificantly,withtheoilpricedroppingbelowUSD50perbarrelby2030.AllregionsintroducepricingofCO2emissionsalongsideotherpoliciesdesignedtobringaboutcleanenergytransitionsintheNZEScenario.Carbonpricingisimplementedfirstinadvancedeconomies,whichseepricesriseonaveragetoUSD250pertonneofcarbondioxide(tCO2)by2050.Majoremergingmarketanddevelopingeconomieswithnetzeroemissionspledges,suchasChina,BrazilandIndonesia,seepricesreachUSD200/tCO2by2050.Carbonpricesarelowerintherestoftheworld.Chapter2Arenewedpathwaytonetzeroemissions612.1.2EmissionsandtemperaturetrendsCO2emissionsfromtheenergysectorintheNZEScenariofallsteeplyfrom37gigatonnes(Gt)in2022to24Gtin2030,areductionofaround35%.By2035,emissionsfalltoaround13.5Gt,ornearly65%belowthe2022level(Figure2.2).Atmosphericremovalsthroughdirectaircaptureandstorage(DACS)andbioenergywithcarboncaptureandstorage(BECCS)starttoscaleuprapidlyandreacharound0.6Gtin2035and1.7Gtin2050.TotalenergysectorCO2emissionsreachnetzeroin2050,withresidualgrossemissionsbalancedbygrossremovalsfromtheatmospherethroughBECCSandDACS.Thisisachievedwithoutoffsetsfromland-usemeasures.Totalgreenhousegas(GHG)emissionsfromallsectorsarereducedbyaround40%by2030andby60%by2035.Figure2.2⊳Energysectorgrossemissionsandremovals,totalnetCO2emissions,andnetemissionsbysectorintheNZEScenario,2010-20504016GtCO₂3514IEA.CCBY4.0.30Netemissions122510Electricity208Grossemissions6TransportIndustry154Buildings105Grossremovals2Other203002030205002050-5-220102010IEA.CCBY4.0.EnergysectorCO2emissionsarereduced65%by2035andreachnetzeroby2050,withresidualemissionsof1.7GtbalancedbyatmosphericremovalsofthesamemagnitudeTotalenergy-relatedemissionsreach2.3gigatonnesofcarbondioxide(GtCO2)inadvancedeconomiesby2035,4.2GtCO2inChinaandaround6GtCO2inotheremergingmarketanddevelopingeconomies.Advancedeconomiesreachnetzeroemissionsbyaround2045,Chinaby2050andotheremergingmarketanddevelopingeconomiesonlywellafter2050.Onasectorbasis,electricityseesCO2emissionsfallthemost,withemissionsalmosthalvingbetween2022and2030asrenewablesandotherlow-emissionssourcesofelectricitygenerationaredeployedrapidlyandunabatedfossilfuel-basedgenerationdeclines.Othersectors,wherelow-emissionsoptionsarestillbeingdevelopedorrampedup,areslowertodecreaseemissions.Nevertheless,emissionsfromallsectorspeakinthenearterm.Sectoral62InternationalEnergyAgencyNetZeroRoadmapemissiondecreasesbetween2022and2030are20%inindustry,around25%intransportandaround40%inbuildings.Between2030and2040,theelectricitysectorreachesverylowlevelsofemissionsintheNZEScenario,withadvancedeconomiesreachingnetzeroemissionsfromthesectorinaggregatein2035.Thismilestoneisreachedin2045inemergingmarketanddeveloping2economies,whichisfiveyearslaterthaninthe2021versionoftheNZEScenario.Manytechnologiesstillbeingdevelopedtoday,suchasthosethatsupporttheelectrificationofheavyindustryorzeroemissionsships,begintobedeployedquicklyinthe2030-2040decadewhichleadstoreplacementorretrofittingofexistingassets.Thoughemissionsintheindustryandtransportsectorsbothshrinkbyover60%between2022and2040,thesetwosectorsremainresponsibleforcloseto90%ofresidualemissionsin2040.Evenby2050,residualCO2emissionsfromfuelcombustionareconcentratedintheindustry(0.2Gt)andtransport(0.6Gt)sectors.By2050,theelectricity,buildings,andothertransformationsectorsaccountfor0.4Gtofresidualemissions,andindustrialprocessesforaroundafurther0.4Gt.TheseemissionsarecounteractedbyatmosphericcarbondioxideremovalthroughBECCSandDACS,whichaccountfor1Gtand0.7Gtofremovalsrespectively.TheIEAmodelstheconsequencesofitsscenariosforclimatechangeusingtheMAGICCclimatemodel,whichiswidelyusedinIPCCassessments.4Theglobalmeantemperaturerise5abovepre-industriallevelsstandstodayataround1.2°C.IntheNZEScenario,thisrisestoapeakofjustbelow1.6°Caround2040,andthengraduallyfallstoaround1.4°Cin2100(Figure2.3).Thisreductionintemperaturefromthepeakiscausedbytwoeffects.Firstisstrongreductionsinmethaneemissionsto2050.SecondisthattemperaturesarealsoreducedafterreachingnetzeroCO2emissionsasthelandandoceansdrawdownatmosphericcarboninlinewiththelatestgenerationofEarthsystemmodels(MacDougalletal.,2020).TheseeffectsareconsistentwiththeWorkingGroupIcontributiontotheIPCC’sSixthAssessmentReportandeachcontributeabout0.1°Cofcoolingbetween2040-2100.TheNZEScenariothereforemeetsthecriteriaofalimitedovershoot1.5°CpathwayasdefinedbytheIPCC.Bycontrast,theIEAStatedPoliciesScenario(STEPS)seesenergysector4Mostenergy‐relatedgreenhousegases(GHG)inIEAscenariosaremodelledusingtheIEA’sGECModelIEA.CCBY4.0.(https://www.iea.org/reports/global-energy-and-climate-model).SignificantsourcesofotherGHG,e.g.,blackcarbon,aswellasGHGrelatedtolanduseconsistentwithIEAscenariosaremodelledbytheInternationalInstituteofAppliedSystemsAnalysis(IIASA).TheMAGICCmodelsupplementsallremainingtypesandsourcesofGHGusingthescenariodatabasepublishedaspartoftheIPCCSpecialReportonGlobalWarmingof1.5°C(IPCC,2018).5Unlessotherwisestated,temperatureriseestimatesquotedinthissectionrefertothemediantemperaturerise,meaningthatthereisa50%probabilityofremainingbelowagiventemperaturerise.Allchangesintemperaturesarerelativeto1850‐1900andmatchtheIPCCSixthAssessmentReportdefinitionofwarmingof0.85°Cbetween1995‐2014(IPCC,2021).Modelledtemperatureriseestimatesreflectanthropogenicallyinducedtrendsbutdonotcapturenaturalmodesofvariability,suchasthoseconnectedtotheElNiñoSouthernOscillation(BerkeleyEarth,2023).Chapter2Arenewedpathwaytonetzeroemissions63CO2emissionsfallonlymoderatelyto30Gtby2050.Asaconsequence,globalwarmingcontinuestoworsen,withthetemperatureriseexceeding1.9°Caround2050andheadingtowards2.4°Cin2100.InherentuncertaintiesintheEarth’sresponsetofuturewarmingmeanthatthereisaboutaone-thirdprobabilityofwarmingexceeding2.6°CintheSTEPSin2100;intheNZEScenariothereisjustoveraone-thirdprobabilityofexceeding1.5°Cin2100.Figure2.3⊳MedianwarmingintheSTEPSandNZEScenario,2020-21003.02.5STEPS2.01.5NZE1.00.5°C20202040206020802100IEA.CCBY4.0.IEA.CCBY4.0.Rapidemissioncutsmoderatewarmingbelow1.5°Cby2100withlowovershootintheNZEScenario,whiletemperaturesinSTEPSreach2.4°Cby2100andcontinuerisingNotes:STEPS=StatedPoliciesScenario.Shadedarearepresentsthe33-67%confidenceinterval.Solidlinerepresentsmedianwarming.Source:IEAanalysisbasedonClimateResourceandMAGICC7.5.3.RapidreductionsingreenhousegasesotherthanCO2arealsoessentialtocurbtheglobaltemperaturerise.Lessthan60%ofthewarmingavoidedto2050intheNZEScenariocomparedtotheSTEPSisduetoCO2emissionscuts.Reducedemissionsofmethanemakeupalmost40%andcutstootherGHGsuchasnitrousdioxide(N2O)andfluorinatedgasesaccountfortheremainder.Rapidreductionsintheseothergasesareessentialtocurbglobaltemperatureincreases(Figure2.4).Sectorsotherthanenergyalsohaveanimportantparttoplayincuttingemissions.RapidcutsinGHGemissionsfromothersectors,suchasagriculture,forestryandotherlanduse(AFOLU)andwastetreatment,accountforjustunder30%ofthewarmingavoidedintheNZEScenariocomparedtotheSTEPSto2050,basedonIEAmodellingwiththeMAGICCclimatemodel.Forexample,parallelactiontostopdeforestationandimprovethemanagementofexistingforestsbringsCO2emissionsfromlandusetonetzerobyabout2030intheNZEScenario,andimprovementsinlivestockhusbandryalongsideefficiencygainsin64InternationalEnergyAgencyNetZeroRoadmapcropmanagementandfertiliserusecontributetocutsinAFOLU-relatedN2Oandmethaneemissionsofaround10%and35%respectivelyin2050comparedtothelevelsintheSTEPS.Figure2.4⊳GlobalwarmingavoidedintheNZEScenariorelativetotheSTEPSbygreenhousegasandsource,2022-20502100%Bygreenhousegas100%BysourceOthergasesOthersourcesN2O75%Methane75%50%50%25%CO2Fossilfuelsandcement25%IEA.CCBY4.0.IEA.CCBY4.0.ReductionsinCO2emissionsareresponsibleforlessthan60%ofthewarmingavoidedto2050intheNZEScenariorelativetotheSTEPSSource:IEAanalysisbasedonClimateResourceandMAGICC7.5.3.Box2.2⊳Effectsofglobalwarmingat1.2°CdegreestemperatureriseInsummerofthisyear,Earthhadthehottestthree-monthperiodeverrecorded,anditisnowlikelythat2023willbethehottestyearonrecord(CarbonBrief,2023).Todate,theglobalaveragetemperaturehasincreasedtoaround1.2°Cabovepre-industriallevels(BerkeleyEarth,2023).Thisisalreadyhavinganeffectineveryregionaroundtheworld.Theincreasingfrequencyandintensityofheatwaves,droughts,stormsandfloodsareinlinewithpredictionsmadeintheIPCCAssessmentReports.Ithasbeenestimatedthathottemperatureextremesthatwouldhaveoccurredoncein50yearswithouthumaninfluencearenowaboutfive-timesmorelikelytooccur(IPCC,2023).Initsmostrecentassessmentreport,theIPCCconcludesthat“thescaleofrecentchangesacrosstheclimatesystemasawhole[…]areunprecedentedovermanycenturiestomanythousandsofyears”(IPCC,2023).Recentextremeweathereventshaveledtoincreasinglywidespreadconcernabouta“climatecrisis”.IndiaandPakistanwerehitbydisastrousfloodingin2022.Overthesummerof2023,anextremeheatwavehitsouthernEuropeandotherpartsoftheworld;inChinaandtheUnitedStates,temperaturesreachedover52°C.Morethan30millionacreswerecharredbywildfiresinCanadabymid-2023,andtheHornofAfricaisexperiencingthelongestandmostseveredroughtonrecord.Chapter2Arenewedpathwaytonetzeroemissions65Theseextremeweathereventstakeaveryhighlargetollonpeople,ecosystemsandeconomies.Almost62000heat-relateddeathswererecordedinEuropein2022.InPakistan,floodingin2022killedover1700people,anddamagedthelivesofmillionsmore.In2023,manymonthsaftertheflooding,morethan8millionpeoplestilllivenearcontaminatedfloodwatersandareconsequentlyexposedtodisease.Healthriskscanalsooccurindirectly,forexamplethroughsmogfromwildfirestravellinglargedistances.Theseeventsalsocauseseriousfinancialdamageandweakeneconomicprosperity.IntheUnitedStates,wildfirescausedaroundUSD81.6billionindamagefrom2017to2021,anearlyten-foldincreaseoverthepreviousfive-yearperiod,whiletheeffectsofthedroughtsexperiencedinSouthAmericain2023areestimatedtohavereducedGDPinArgentinain2023bythreepercentagepoints.Thereisarapidlyclosingwindowtosecurealiveableandsustainablefutureforall.Deep,rapidandsustainedcutsinCO2emissionstonetzerocanlimitfuturewarming,butsocietieswillhavetoadapttotheeffectsoftheclimatechangethatisalreadyhappening.2.1.3KeymitigationleversIEA.CCBY4.0.BymitigationmeasureMeetingenergysectornetzeroemissionsby2050requiresusingallavailablemeasurestoreduceemissions(Figure2.5).Inthenearterm,almostallemissionsreductionsaredeliveredbytechnologiesandmeasuresthatareavailable,scalableandcosteffectivetoday.FirstamongtheseistherapiddeploymentofsolarPVandwind,whichtogetheraccountfor4GtofCO2ofemissionsreductionsby2030.ThisisequivalenttothecombinedemissionsoftheEuropeanUnion,JapanandKoreatoday.Thenextlargestdriverofemissionsreductionsiselectrification.Astheelectricitysectorisincreasinglydecarbonised,itdeliversemissionsreductionsthroughtheexpandingdeploymentoftechnologieslikeEVsandheatpumpsinbuildingsandlightindustries.IntheNZEScenario,electrificationbothdeliverssignificantenergydemandsavingsandreducesemissionsbyaround3Gtby2030.Measuressuchasmoreefficientend-usesofemissions-intensivematerialsandreducedmaterialintensityofproductionalsocontributetonear-termemissionsreductions,asdobehaviouralchangesonthepartofconsumerssuchasreducingindoortemperaturesanddrivingspeedsonhighways.Thisdiverseportfolioofmeasurescutsemissionsbymorethan2Gtin2030.Withoutsuchmeasurestoreducewastefulmaterialandenergyuse,thetransitionwouldbemuchmorechallenging(Box2.3).Fuelswitchingalsocontributestoemissionsreductionsthroughto2030intheNZEScenario.Thisincludesswitchingfromfossilfuelstoadditionalrenewableoptionssuchasbioenergy,hydropower,solarthermalandgeothermal,aswellasincreasingtheuseofnuclearpowertechnologyandswitchingfromcoaltonaturalgas.Thesemeasurestogetherprovidemorethan3Gtofemissionsreductionsby2030.Energyefficiencyimprovementsofequipment,66InternationalEnergyAgencyNetZeroRoadmapappliances,trucks,planesandbuildingenvelopesreduceemissionsfurtherbyslightlylessthan2Gt.HydrogenandCCUStaketimetoscaleupevenintheNZEScenario,buttogethertheydeliverafurther1Gtofreductionsby2030.Figure2.5⊳CO2emissionsreductionsbymitigationmeasureintheNZEScenario,2022-20502EmissionchangesovertimeCumulativesavingsGtCO₂40100%ActivityMitigationmeasures3075%BehaviourandavoideddemandEnergyefficiency2050%WindandsolarPVBioenergyHydrogen1025%ElectrificationOtherfuelshiftsCCUS202220302050IEA.CCBY4.0.ExpansionofsolarPV,windandotherrenewables,energyintensityimprovementsanddirectelectrificationofend-usescombinedcontribute80%ofemissionreductionsby2030Notes:Activity=energyservicesdemandchangesfromeconomicandpopulationgrowth.CCUSincludesBECCSandDACS.Theoutlookchangesintheperiodto2050.GettingemissionstonetzerorequiresactiveIEA.CCBY4.0.measuresinemission-intensivesectorssuchassteel,cementandlong-distancetransport.TogetherCCUS,hydrogenandhydrogen-basedfuelsaccountforone-fifthofemissionsreductionsinthe2030to2050period.Thecontributionmadebyelectrificationincreases,asEVscometodominatethestockofnotjustcarsandmotorbikesbutalsotrucks,andaselectrificationexpandsfurtherinthebuildingsandindustrysectors.Asaresult,electrificationaccountsfornearlyone-quarteroftheemissionsreductionsseeninthe2030-2050period.Fortheperiod2022to2050,thelargesttotalcontributiontoemissionsreductionsintheenergysectorisfromsolarPVandwind,whichaccountfor25%ofallcumulativeemissionsreductionsintheNZEScenario.Inaddition,measurestoreducedemandthroughincreasedenergyefficiency,moreefficientuseofmaterialsandbehaviouralchangetogetheraccountforafurtheralmost25%.Expandingelectrificationinthetransport,industryandbuildingssectorsprovides20%ofabatementaselectricitygenerationisprogressivelydecarbonised.Increasedbioenergyandotherfuelshiftsaccountforslightlylessthan20%,andhydrogenandCCUSaccountforslightlylessthan15%.Chapter2Arenewedpathwaytonetzeroemissions67Box2.3⊳Withoutbehaviouralchanges,cleanenergytechnologieswouldhavetoaccelerateevenmorerapidlyCleanenergytechnologiesaredeployedatunprecedentedspeedintheNZEScenario,butmanyCO2-intensiveenergyassetswillstillbeinusein2030.Reducingtheiremissionsorreplacingthemdependsonscalingupnovelorcomplexlow-emissionssolutionsanddeployingthemaroundtheworld,andthatwilltaketime.IntheNZEScenario,behaviouralchangescutaround1GtCO2fromemissions-intensiveassetswhicharestillinusein2030.(Chapter3providesmoredetailsofwhatthesechangesareandhowtheycanbeimplemented).Intheabsenceofenergydemandreductionsfrombehaviourchange,achievingthesameemissionsreductionsinend-useswouldrequirerampinguplow-emissionstechnologiesatstaggeringspeed(Figure2.6).Inaviation,theuseofsustainableaviationfuel(SAF)wouldneedtoincreasemorethantwiceasfastasintheNZEScenario,reachingabout4exajoules(EJ)by2030andaccountingforabout25%oftheaviationfuelmarket.Inroadtransport,theuseofmoreEVswouldrequireanadditional1.3milliontonnes(Mt)ofcriticalmineralsby2030–roughlytheamountofcriticalmineralsusedintheEVsectortoday.Inbuildings,heatpumpswouldneedtoprovideabout35%ofheatingdemandin2030,whereasitis20%intheNZEScenario,meaningthatheatpumpsaleswouldneedtorisefrom10%ofallheatingequipmentsalestodayto50%by2026.Figure2.6⊳EnergytransitionleverswithandwithoutbehaviouralchangeintheNZEScenarioSAF4CriticalmineralsCoolingefficiencyHeatpumpsshare121.440%EJMilliontonnes391.330%Index=20101.220%26131.110%1.0201020222030201020222030201020222030201020222030HistoricalNZEAdditionalwithoutbehaviouralchangesIEA.CCBY4.0.IEA.CCBY4.0.Othermitigationleversofferalternativestobehaviouralchanges,buttheadditionalpaceofuptakerequiredwouldbeverychallengingNotes:SAF=sustainableaviationfuel.Coolingefficiencyismeasuredastheratioofservicedemandoverfinalenergyconsumption,whichreflectsefficiencyofbothbuildingenvelopesandequipment.CriticalmineralsinthisfigurerefertothedemandforbatterymanufacturingforEVs.68InternationalEnergyAgencyNetZeroRoadmapBytechnologyreadinesslevelTheshareofemissionsreductionsintheNZEScenarioin2050fromtechnologiesateitherdemonstrationorprototypestage,i.e.notyetavailableonthemarket,hasbeenreducedfromaroundhalfinthe2021NZEScenariotoaround35%inthe2023version(Figure2.7).Figure2.7⊳ComparisonofCO2emissionsreductionsin2050relativetobase2yearbytechnologymaturityinthe2021and2023NZEScenarios20%40%60%80%100%NZE-2021NZE-2023BehaviourMatureMarketuptakeDemonstrationPrototypeIEA.CCBY4.0.Emissionsreductionsby2050fromtechnologiesindemonstrationorprototypestagehavebeenreducedfromalmosthalfinthe2021NZEtoaround35%inthe2023NZEScenarioNote:2020isthereferencebaseyearforthe2021versionoftheNZEScenarioand2022isthebaseyearforthe2023NZEScenario.Thischangereflectstwofactorsinparticular.First,therehasbeenconsiderableprogressoncleanenergyinnovationinthelastfewyears,withimportanttechnologyupgradesinseveralsectors,includingthecommercialisationofanumberoftechnologies(Figure2.8).6Second,therearedifferencesintherateofdeploymentforsomecleantechnologiesinthe2023NZEScenariorelativetothe2021versiontoreflectchangingtechnologyandmarkettrends.Keyselectedexamplesofchangessince2021thatarereflectedinthe2023NZEScenarioinclude:Roadtransport:Todaybatteryelectricpassengercarsandlithium-ionbatteriesaremuchmorewidespreadthantheywerein2021,andmarketsarematuringeventhoughtheystillneedsupportinmanycases.Costreductionsandstandardisationfor6Formoreinformationontechnologydevelopmentandprogress,see:TrackingCleanEnergyProgressIEA.CCBY4.0.(https://www.iea.org/reports/tracking-clean-energy-progress-2023)andtheCleanTechGuide,aninteractivedatabaseofover550individualtechnologydesignsandcomponentsacrossthewholeenergysystem(https://www.iea.org/data-and-statistics/data-tools/etp-clean-energy-technology-guide).Chapter2Arenewedpathwaytonetzeroemissions69commerciallithium-ionbatteriesinparticularhavestrengthenedthebusinesscaseforIEA.CCBY4.0.electromobilityoverotheroptionsacrossallsegmentsofroadtransport.Thefirstcommercialisationofcarspoweredbysodium-ionbatterieswasannouncedinChinafor2023;thistechnologywasstillatprototypestagein2021.Otherinnovativebatterychemistries,forexamplewithhigherenergydensityforheavy-dutyapplications,areemerging,althoughsome,suchassolid-statebatteries,arestillattheprototypestageandareexperiencingdelaysinproduction.Ifdelayspersist,furtheradvancesinlithium-ionbatterytechnologymightdecreasethecompetitiveadvantageoftheseemergingconceptsandreducetheirfuturerole.Electricvehiclecharginginfrastructureisexpandingrapidly.Developmentsinultra-fastelectricchargingandbatteryswappingaswellashydrogenrefuellingforheavy-dutyvehiclesaremakingsomeprogress.Overall,thedecarbonisationofroadtransportinthe2023NZEScenarioreliesaroundtenpercentagepointslessontechnologiesunderdevelopmentin2050thanthe2021assessment.Forexample,theshareoffuelcellelectricheavy-dutyvehiclesontheroadin2050is25-40%lowerinthe2023NZEScenariothaninthe2021version,withtheextentofthereductionvaryingbysegment.Powergeneration:ElectricitygenerationfromsolarPVandwindin2050is13%higherinthe2023NZEScenariothaninthe2021version.ThisreflectstheestablishmentofcrystallinesolarPVmodulesandonshorewindtechnologydesignsonthemarket,andincreasesthescaleofadvanceddesignssuchasfloatingoffshorewindturbines.Longdurationstorageismakingprogressthroughadvancesinbatterytechnologyanddemonstrationprojectsinthermalandmechanicalstorageforpower.Ontheotherhand,fossilfuel-basedelectricitygenerationfromfacilitiesequippedwithCCUS–anareacurrentlywithseveraltechnologiesatdemonstrationstage–ismovingmoreslowlythanprojectedin2021.ThecontributionofCCUStoemissionsreductionsinpowergenerationby2050hasbeenreducedbyaround40%inthe2023NZEScenario.Heavyindustry:Recentlytherehasbeensignificantprogressin100%electrolytichydrogen-baseddirectreducedironsteelmaking,whichaccountsfornearlyhalfofiron-basedsteelproductionby2050inthe2023NZEScenario.Progressisevidenttooincementproduction,bothoncarboncapturethroughindirectcalcination,andonalternativestoconventionalrawmaterialsandclinker.CCUSapplicationsforabroadrangeofchemicalsarematuringfromprototypetodemonstrationstages.Pilotprojectsforfullelectrificationofhydrocarboncrackingaremakingprogress.Thepipelineofprojectsforlow-emissionsammoniaproductionhasexpandedrapidlysince2021,mostlyelectrolyticandsomeviasteammethanereformingwithCCUS.Progressisalsonotedinbatteriesforheatstorage,whichcouldassistvariableelectricitygenerationtoprovideconstanthigh-temperatureheatorhigh-pressuresteam.Non-roadtransport:Smallelectricaircraftforregionaldistanceflightsareclosetobeingdemonstratedforthefirsttime.Productionoflow-emissionsaviationfuelsisrampingup.Largeprototypesofammonia-fuelledshipsarebeingbuilt,methanol-poweredcontainershipsarebeingdelivered,andsmall-scalehydrogenfuelcellferriesarestartingoperations.70InternationalEnergyAgencyNetZeroRoadmapFigure2.8⊳TechnologyreadinesslevelforselectedtechnologiesrelativetotechnologymaturitytargetsintheNZEScenarioMature11Market102025-202720252025-20282028-20302035uptake92202382023Demonstration720222023202220222021Large620222021202120212020prototype5Concept4andsmall3prototype21Sodium-ionSolidoxideDirect100%SmallmodularbatteryelectrolyticreactorsH₂separationH₂-DRIIEA.CCBY4.0.electrolysersCCSincementAcceleratingcleanenergyinnovationhasdeliveredimportanttechnologyupgradesinthelastfewyears,althoughmuchremainstobedonetoachievenetzeropathwaysNotes:H2=hydrogen;DRI=directreducediron.ForH2-basedDRIsteelmaking,R&Donincorporatinghydrogenintosteelmakinghasbeentakingplacefordecades,includingatonecommercialplantsincethe1980sthatrelieslargelyonhydrogen.Howeverherewehighlightspecifically100%electrolytic-H2production.FutureyearsshowninthegraphrefertotheyearwhenagiventechnologyreachescommercialoperationintheNZEScenario.Box2.4⊳AnnouncedmanufacturingoutputforsolarPVandbatterieswoulddeliveraroundathirdofalltheemissionsreductionsrequiredintheNZEScenarioin2030SolarPVandbatteriesaretwoofthemostcriticaltechnologiestodecarbonisetheenergyIEA.CCBY4.0.system.Togethertheydeliveraroundone-thirdoftheemissionsreductionsneededintheNZEScenarioin2030.In2022,solarPVcapacityadditionsandelectriccarsales–akeydriverofbatterydemand–expandedbyratesequivalenttotheaveragecompoundannualgrowthneededtomeettherequirementsfor2030intheNZEScenario.Manufacturersaregearinguptosupplyrapidlyrisingdemand(Figure2.9).In2022alone,totalinstalledmanufacturingcapacityjumpedbynearly40%forsolarPVandalmost60%forbatteries,ofwhichmostwasforEVswithasmallshareforgridstorage.Thepipelineofannouncedprojectsisalsoskyrocketing.Asoffirst-quarter2023,totalmanufacturingthroughputfromexistingandannouncedprojectsin2030forbothsolarPVandbatterieswouldbeabout75%higherthanwhenconsideringannouncedprojectsasoftheendof2021.Ifalltheseprojectsproceedandarecompletedontime,productionfromexistingChapter2Arenewedpathwaytonetzeroemissions71andannouncedmanufacturingcapacitywouldexceeddemandin2030intheNZEScenarioforsolarPV,andjustaboutmeetdemandforbatteries.Figure2.9⊳SolarPVandbatterymanufacturingthroughput,fromexistingcapacityandannouncedprojectscomparedtodeployment150%in2030intheNZEScenarioSolarPVBatteries100%NZE2030deployment50%Asof2021AsofMarch2023Asof2021AsofMarch2023AnnouncedprojectsProductionActualWithincreasedutilisationIEA.CCBY4.0.MassivegrowthinthelasttwoyearsisapparentinbothinstalledandannouncedcapacityforsolarPVandbatterymanufacturingNotes:BatteriesincludebatteriesforEVsandgridstorage.‘Increasedutilisation’indicatesthatutilisationofexistingmanufacturingcapacityincreasesfromactualratesto85%.Autilisationrateof85%isusedforannouncedprojects.For'AsofMarch2023','Actual'and'Withincreasedutilisation'areconsideringproductionfromexistingcapacityin2022,and'Announcedprojects'areasoftheendofMarch2023.2.2EnergytrendsIEA.CCBY4.0.2.2.1TotalenergysupplyTheNZEScenarioprojectsincreasinguseoflow-emissionsenergysourcesinplaceofunabatedfossilfuels(Figure2.10).Between2022and2030,low-emissionssourcesincreasebyover110EJ,equivalenttothecurrenttotalenergysupplyoftheUnitedStatesandJapancombined.Overtheremainderofthisdecade,theincreaseinlow-emissionsenergysourcesisledbymodernbioenergyinitssolid,liquidandgaseousforms.WindandsolarPValsoincreasestrongly,althoughtheshareinprimaryenergyisnotthebestindicatortoreflecttheirroleintheenergysystemgiventhattheyhavelowerconversionlosses.Totaldemandforfossilfuelsfallsbyslightlymorethanone-quarter,or140EJ,by2030.Coalfallsthemostatslightlylessthan75EJreflectingthehigherlevelofmaturityofemissionsreductiontechnologiesinelectricitygenerationwhichtodayaccountsformostcoaluse.This72InternationalEnergyAgencyNetZeroRoadmapdeclineincoaldemandismuchlessthanincomparablescenariosassessedbytheIPCC(seeBox2.1).Oildemanddeclinesbyaround39EJ.Naturalgasdropstheleast,around26EJ,partlyreflectingitsincreasinguseincombinationwithCCUStoproducehydrogen.Figure2.10⊳ChangesintotalenergysupplybysourceintheNZEScenario,2022–205025002500-250-5002022202520302035204020452050EJOtherTUOBIEA.CCBY4.0.OtherrenewablesSolarWindModernbioenergyHydroNuclearFossilfuelnon-energyuseNaturalgas:withCCUSOil:withCCUSCoal:withCCUSUnabatednaturalgasUnabatedoilUnabatedcoalTotalenergysupplyIEA.CCBY4.0.NZEScenarioreliesonahugeincreaseinlow-emissionssourcesofenergysupplyandenergyintensityimprovements;demandforunabatedfossilfuelsdeclinesby2030Notes:TUOB=traditionaluseofbiomass.Unabatedcoal,oilandnaturalgasrefertotheuseofthesefuelsforcombustionpurposeswithoutCCUS.TherisinguseoffossilfuelscombinedwithCCUSisfarsmallerthanthedeclineofunabatedfossilfuels.Unabatedfossilfueldemandfallsbyaround150EJto2030,whiletheuseoffossilfuelscombinedwithCCUSincreasesbyaround7.5EJto2030,despitethestrongpushonCCUSseenintheNZEScenario(seeChapter3).Totalenergysupplyisnearly10%loweror60EJin2030thanin2022,evenwithglobaleconomicgrowthofoverone-quarter.Thisimpliesdramaticprogressinreducingenergyintensityfromabout2%peryeartodaytoover4%by2030.Improvingtechnicalefficiencyinappliances,motorsandbuildingenvelopesiskey,butasubstantialportionofthisaccelerationinintensityimprovementresultsfromashifttomoreefficientenergycarrierssuchaselectricity.Behaviouralchangesalsocontributetoreducedenergydemand.After2030thepatternofenergysupplycontinuestoevolverapidlyanditistransformedby2050.Solar,includingsolarthermalandsolarPV,providesnearly140EJin2050,whichisalmostequivalenttothetotalenergysupplyofunabatednaturalgastoday.Modernbioenergyprovidesaround100EJandwindaround85EJ.Overall,renewablesourcesprovidemorenearlythree-quartersoftotalenergysupplyby2050.AbatedfossilfuelswithCCUSaccountforafurther5%.Unabatedfossilfuels,excludingthoseusedfornon-energyChapter2Arenewedpathwaytonetzeroemissions73purposes,declinefromaroundthree-quartersoftotalenergysupplyin2022toaround5%by2050.Theiremissionsareoffsetthroughcarbonremovaltechnologies.Intotal,includingnon-energyuses,fossilfuelsaccountforlessthanone-fifthoftotalenergysupplyin2050,reversingtheirsharetodayinwhichfossilfuelsaccountforaboutfour-fifthsoftotalenergysupply,includingnon-energyuses.Changesfromthe2021NZEScenarioThe2023NZEScenariorepresentsthreebroaddifferencesinthecompositionoftotalenergysupplyrelativetothe2021version(Figure2.11).Figure2.11⊳Changesintotalenergysupplybysourceinthe2021and2023NZEScenariosin2030and2050Changeinpercentagepoints8Other6TraditionaluseofbiomassIEA.CCBY4.0.4Otherrenewables2Solar0Wind-2Modernbioenergy-4Hydro-6Nuclear-8Fossilnon-energyuseNaturalgas:withCCUS2030Oil:withCCUSCoal:withCCUSUnabatednaturalgasUnabatedoilUnabatedcoal2050IEA.CCBY4.0.The2023NZEScenarioprojectsslightlyhighercoaluseintheneartermandloweruseofCCUS,andahighershareofsolarPVintotalenergysupplyinthelongtermFirst,unabatedfossilfuelsaccountforasomewhathighershareoftotalenergysupplyin2030thaninthe2021NetZeroScenarioversion.Forexample,althoughunabatedcoaldropsbyaround45%to2030comparedtolevelsofusein2022,itsshareintotalenergysupplyin2030isfourpercentagepointshigherinthe2023NZEScenariothanitwasinthe2021version.Thisreflectsdevelopmentssincethe2021version,notablytheunexpectedlystrongreboundintotalenergydemandpostCovid-19pandemic.Italsoreflectsadjustmentstothedesignofthescenario,whichaimstogivemoretimetoemergingmarketanddevelopingeconomiestotransitiontocleanenergy(seeBox2.1).Whilecoalandoilusein2030ishigherinthe2023NZEScenariothanin2021,naturalgasuseissomewhatlowerbecauseofenergysecurityconcernsarisingfromtheglobalenergycrisis.Second,thelong-termshareofsolarintotalenergysupplyishigherthaninthe2021version(section2.2.3).Third,theshareoffossilfuelswithCCUS,notablynaturalgas,islowerthanin74InternationalEnergyAgencyNetZeroRoadmapthe2021NZEScenario.Thisreflectsadownwardrevisiontohydrogendemand,causedinpartbyboostedconfidenceinthepossibilitythatdirectelectrificationcanplayalargerroleinusessuchastrucking.ItalsoreflectsarebalancingtowardselectrolytichydrogenproductionandawayfromproductionusingnaturalgaswithCCUS;thistakesaccountoftheslowpaceofcurrentprogressonthedevelopmentofCCUS.Inthe2023NZEScenario,reducedCCUSdeploymentiscompensatedbymorerenewablesandelectrification.22.2.2FuelsupplyFossilfuelsOil,naturalgasandcoalaccountedforaroundfour-fifthsoftotalenergysupplyworldwidein2022.7ThesurgeincleanenergyinvestmentintheNZEScenario–fromUSD1.8trillionin2023toUSD4.5trillionintheearly2030s–drivessharpdeclinesinfossilfueldemand.Theshareoffossilfuelsintotalenergysupplydropsbelowtwo‐thirdsby2030andtolessthanone-fifthin2050.Coaldemanddeclinesby45%,andoilandnaturalgasbyaround20%to2030(Figure2.12).Figure2.12⊳Oil,naturalgasandcoalsupplybyregionintheNZEScenario,2010-2050100Oil(mb/d)5000Naturalgas(bcm)7500Coal(Mtce)8040006000603000450040200030002010001500201020502010205020102050AsiaPacificMiddleEastNorthAmericaEurasiaAfricaC&SAmericaEuropeIEA.CCBY4.0.Declinesindemandcanbemetwithoutapprovingnew,longleadtimeupstreamconventionaloilandgasprojects,newcoalminesorminelifetimeextensionsNote:mb/d=millionbarrelsperday;bcm=billioncubicmetres;Mtce=milliontonnesofcoalequivalent;C&SAmerica=CentralandSouthAmerica.7FurtherinformationonoilandnaturalgasisforthcomingthisyearwiththeWorldEnergyOutlookSpecialIEA.CCBY4.0.Report:TheRoleoftheOilandGasIndustryinNetZeroTransitions.Chapter2Arenewedpathwaytonetzeroemissions75Coaldemandfallsquicklyinthe2020s,decliningby7%onaverageeachyearto2030from5800milliontonnesofcoalequivalent(Mtce)in2022to3300Mtcein2030andlessthan500Mtcein2050.Oildemanddropsfrom97millionbarrelsperday(mb/d)in2022to77mb/din2030and24mb/din2050.Demandfornaturalgasfallsfrom4160billioncubicmetres(bcm)in2022to3400bcmin2030,and920bcmin2050.Justunder90EJoffossilfuelsareconsumedin2050intheNZEScenario.One-thirdofthis,including60%ofnaturalgasand80%ofcoal,isusedinfacilitiesequippedwithCCUS.Afurther40%,including70%ofoil,isconsumedinapplicationswherethecarbonisembodiedintheproductandtherearenodirectCO2emissions,e.g.chemicalfeedstocks,lubricants,paraffinwaxesandasphalt.Theremaining25%isusedinsectorswherecleanenergytechnologiesareleastfeasibleandcosteffective,forexample,oilaccountsforaround20%offueluseinaviationin2050intheNZEScenario.Theunabatedcombustionoffossilfuelsresultsin1.4GtCO2emissionsin2050whicharefullybalancedbyremovalofCO2fromtheatmospherethroughBECCSandDACS.ThesharpdeclineinfossilfueldemandintheNZEScenariomeansthatnonewconventionallongleadtimeoilandgasprojectsareapprovedfordevelopmentafter2023,andthattherearenonewcoalminesorcoalminelifetimeextensions.Thepaceofdeclineinoilandgasdemandinthe2030smayalsomeanthatanumberofhighcostprojectscometoanendbeforetheyreachtheendoftheirtechnicallifetimes.Investmentinexistingfossilfuelsupplyprojects,however,isstillneededintheNZEScenariotoensurethatsupplydoesnotfallfasterthanthedeclineindemand.Thisincludestheuseofin-filldrillingandimprovedmanagementofreservoirsaswellassomeenhancedoilrecoveryandtightoildrillingtoavoidasuddennear-termdropinsupply.Investmentisalsoundertakentoreducetheemissionsintensityofremainingfossilfueloperations,especiallytotacklemethaneemissionsandflaring.IntheNZEScenario,thisleadstoa50%reductionintheglobalaverageGHGemissionsintensityofoilandgasproductionbetween2021and2030,andtoalmostzeroemissionsfromoilandgasoperationssoonafter2040.AlargeandsustainedsurgeincleanenergyinvestmentiswhatremovestheneedfornewfossilfuelprojectsintheNZEScenario:reducingfossilfuelsupplyinvestmentinadvanceof,orinsteadof,policyactionandinvestmenttoreducedemandwouldnotleadtothesameoutcomes.Prolongedhighpriceswouldresultifthedeclineinfossilfuelinvestmentinthisscenarioweretoprecedetheexpansionofcleanenergyandtheactiontocutoverallenergydemandthatarealsosetoutinthisscenario.Thiswouldreducethechancesofanorderlytransitiontonetzeroemissionsby2050andunderlinestheimportanceofactiontosecurethekindofsurgeininvestmentincleanenergyandthedemandreductionsthatareseenintheNZEScenario.Whathaschangedsincethe2021NZEScenario?IEA.CCBY4.0.Naturalgasplayslessofaroleinthe2023NZEScenariothaninthe2021version.Naturalgasuseis10%lowerin2030and45%lowerin2050thaninthe2021version.Pricespikesin2022haveshakenconfidenceinnaturalgasasanaffordablealternativetocoaloroil,especiallyamongsomeimport-dependentemergingmarketanddevelopingeconomies.Muchless76InternationalEnergyAgencyNetZeroRoadmapnaturalgasisalsousedtoproducelow-emissionshydrogenthanwasthecaseinthe2021NZEScenario.Onthesupplyside,additionaloilandgasprojectsapprovedsincethe2021NZEScenarioarelikelytoaddaround4mb/dand170bcmofproductionin2030(mainlyintheMiddleEastandSouthAmerica).Thisadditionalsupplyandtheincreasedpaceofreductioninnatural2gasdemandintheNZEScenariointhe2030sand2040snowmeansthatsomeproductionisclosedbeforefieldshavereachedtheendoftheirtechnicallifetimes.Russia’sinvasionofUkraineisalsorelevanthere.ThedropinRussianproductiontodate(Russiannaturalgasproductionin2022was100bcmlowerthanin2021)issmallerthantheadditionalproductionfromnewprojectsthathaverecentlybeenapprovedfordevelopment.Governmentsarerightlyconcernedaboutenergysecurity,butnewconventionalfieldapprovalscannotprovideimmediaterelieffortightmarketsandmaywellmakethelaterstagesofthetransitionevenmorechallenging.Low-emissionsfuelsThesupplyoflow‐emissionsfuels,includingmodernbioenergy,hydrogenandhydrogen‐basedfuels,increasesrapidlyintheNZEScenario(Figure2.13).Theyplayanimportantroleinreducingemissions,notablythosefromlong-distancetransportandheavyindustry.IntheNZEScenario,demandforlow-emissionshydrogenandhydrogen-basedfuelsrisesfastest,albeitfromalowstartingpoint,withanaverageannualgrowthrateof80%to2030and9%between2030and2050.However,inabsoluteterms,solidbioenergyalsoincreasesitscontributiontocleanenergysupplysubstantially.Demandforsolidbioenergyincreasesby15EJby2030,equivalentto500Mtce.Figure2.13⊳Low-emissionsfueldemandintheNZEScenario,2010-2050LiquidGaseousSolid80EJ60IEA.CCBY4.0.4020201020502010205020102050ModernbioenergyH₂andH₂-basedfuelsTransformationlossesIEA.CCBY4.0.Gaseouslow-emissionsfuels–includinghydrogen–increaseatthefastestrateintheNZEScenario,butsolidfuelsincreasenearlyasmuchinabsolutetermsNotes:H2=hydrogen.Liquid,gaseousandsolidrefertothephaseofthefuelatthepointofuseorconversion.Transformationlossesarethoseincurredduringconversionfromonelow-emissionsfueltoanotherandexcludeupstreamenergylossesassociatedwithproducingtheconvertedfuel.Demandforhydrogenisinclusiveofwhatismetbycaptiveproductiononsiteatindustrialandrefiningfacilities.Chapter2Arenewedpathwaytonetzeroemissions77Modernsolidbioenergyismostlyusedtodayforindustrialpurposes.By2050,however,powergenerationaccountsfor40%ofthetotal,aheadofindustryat30%andinputstoliquidandsolidbiofuelsat20%.Around24EJor40%ofcurrentbioenergyconsumptioncomesfromthetraditionaluseofbiomass,butthisisphasedoutby2030intheNZEScenarioasfullaccesstomoderncookingtechnologiesisachieved(seeChapter3).Modernliquidbiofueldemand,includinggasoline,diesel,marineandaviationfuelsthatderivetheirenergycontentprimarilyfrombiogenicnon-electricitysources,increasesby200%beforepeakingaround2040.Afterwardsthecontinuedphase-outofinternalcombustionenginecarsmeansthatitislessindemandasablendingfuelforroadvehicles,andthisreductionindemandoutweighssteadyincreasesindemandformaritimeandaviationuses.Gaseousbioenergy,includingbiogasandbiomethane,becomesahighlyvaluablecomponentoftheenergysystemintheNZEScenarioby2030,notablyinthepowersector.Thisisinpartbecauseitisthemostcost-effectivedirectsubstitutefornaturalgas,anattributethathastakenonasignificantenergysecuritydimensionsincetheRussianinvasionofUkraineinearly2022.By2050,biogasfromanaerobicdigestorsandotherproductiontechniquestakeonawidevarietyofrolesbecauseitoffersoneofthecheapestwaystomeetrisingdemandforclean,gaseousfuelsforflexiblepowergeneration,industrialheat,hydrogenproductionand,potentially,maritimefuel.Inaddition,theyareabletoprovidesustainablecarboninputstohydrogen-basedfuels.However,theaccessibleresourcebaseforbiogasproductionislimited,whichineffectrationsitsuse.Low‐emissionshydrogenproductionincreasesfrom0.6Mt(75petajoules)todayto70Mtin2030and420Mtin2050.Ofthelow‐emissionshydrogenproducedin2050,80%isproducedviawaterelectrolysis,andnearlyalltheremainderfromfossilfuelsequippedwithCCUS.Fromaround1GWtoday,theinstalledcapacityofelectrolysersreaches590GWin2030,arateofgrowththatcouldbewithinreachifalltheprojectscurrentlyplannedaretakenforward,includingearlystageprojects.By2050,3300GWofelectrolysiscapacityand15000terawatt-hours(TWh)ofelectricityareusedtoproducelow-emissionshydrogen;theelectricityrequiredismorethanhalfoftoday’stotalglobalelectricitydemand.Around80%oftotalhydrogenandhydrogen‐basedfuelusein2050isforindustryandtransport,withroughlyonethirdoftotallow‐emissionshydrogenin2050beingconvertedtolow-emissionshydrogen‐basedtransportfuels.Synthetickeroseneproducedfromhydrogen(andcombinedwithanon‐fossilfuelsourceofCO2)providesaround40%ofenergyuseintheaviationsector,andammoniaandhydrogenprovidemorethan60%ofenergyuseinshipping.Whathaschangedsincethe2021NZEScenario?IEA.CCBY4.0.Overall,theleveloflow-emissionshydrogenin2050isbroadlysimilarinthe2023NZEScenariocomparedwiththe2021version,indicatingthatitretainsitscompetitivepositionasaleadingoptiontoreducefossilfueluseincertainsectors.However,assupportfromgovernmentsandpotentiallow-emissionshydrogenusershasnotrampedupatthepaceenvisagedbythe2021NZEScenario,thecorresponding2030levelhasbeenadjusted78InternationalEnergyAgencyNetZeroRoadmapdownwardstoreflectwhatcanstillbeachievedthisdecade.Inaddition,thesourcesoflow-emissionshydrogenhavebeensomewhatrebalanced:thesluggishnessofprogressonCCUSoutsideNorthAmerica,coupledwithahigheremphasisonreducingnaturalgasdemandinsomeregions,hasledtoareductionintheamountofhydrogenproducedwithfossilfuelsandCCUSintheNZEScenario.2.2.3Electricitygeneration2OverviewGlobalelectricitygenerationincreasesovertwo‐and‐a‐half‐timesintheNZEScenariofrom2022to2050,growingsignificantlyfasteroverthisperiod(3.5%peryear)thanoverthepastdecade(2.5%).Theelectrificationofend-usesrangingfromEVstospaceheatingtoindustrialproduction,combinedwitheconomicdevelopmentandpopulationgrowth,drivesthisgrowthandraisestheshareofelectricityinfinalconsumptionfrom20%in2022toalmost30%in2030andmorethan50%in2050.Inaddition,hydrogenproductionviaelectrolysisincreasesrapidlyintheNZEScenarioandaccountsforalmost20%ofglobalelectricitydemandin2050.Figure2.14⊳GlobalelectricitysectoremissionsandCO₂intensityofelectricitygenerationintheNZEScenario,2010-2050Emissions800CO2intensity16China12GtCO₂600gCO₂/kWh8400OtherEMDE4200Advancedeconomies201020302050202220302035204020452050Annualemissions:1GtCO2C-o4alNaturalgas-200OilBioenergywithCCUSNon-renewablewasteIEA.CCBY4.0.Electricitysectorreachesnetzeroemissionsinadvancedeconomiesinaggregatein2035,inChinaaround2040andgloballybefore2045Note:gCO2/kWh=grammesofcarbondioxideperkilowatt-hour;otherEMDE=emergingmarketanddevelopingeconomiesexcludingChina.Low‐emissionsourcesofelectricity–renewables,nuclear,fossilfuelswithCCUS,hydrogenIEA.CCBY4.0.andammonia–expandrapidlyintheNZEScenario,overtakingunabatedfossilfuelsjustafter2025andreaching71%oftotalgenerationby2030,almosttwicethesharein2022.Electricitysectorsinadvancedeconomies,inaggregate,reachnetzeroemissionsby2035inChapter2Arenewedpathwaytonetzeroemissions79theNZEScenario,around2040inChinaandby2045inotheremergingmarketanddevelopingeconomies(Figure2.14).Ineachcase,electricityisthefirstenergysectortoreachnetzeroemissions,creatingopportunitiesforelectrificationinothersectorstofurtherdrivedownemissions.ThefirstoffourkeymilestonesfortheelectricitysectorintheNZEScenarioisthetriplingofglobalrenewablescapacityby2030fromthelevelof3630GWin2022(Figure2.15).Thisleadstotheshareofrenewablesinelectricitygenerationrisingfrom30%in2022toabout60%in2030.By2050intheNZEScenario,thetotalinstalledcapacityofrenewablesiseight-timesthelevelin2022,anditgeneratesnearly90%ofglobalelectricitysupply.Figure2.15⊳KeymilestonesfortheelectricitysectorintheNZEScenario,2022-2050RenewablesGridsinvestmentFossilfuelsunabatedNuclear(thousandGW)(GW)30(BillionUSD2022,MER)(thousandTWh)x220120018900x3Oil10Naturalgas800x212600-95%4006300Coal2022203020402050202220302040205020222030204020502022203020402050IEA.CCBY4.0.Renewablescapacitytriplesandgridinvestmentdoublesby2030,unabatedcoalisphasedoutby2040intheNZEScenarioandnuclearcapacitymorethandoublesby2050Thesecondkeymilestonefortheelectricitysectoristhedoublingofgridinvestmentsby2030.IntheNZEScenario,electricitytransmissionanddistributiongridsexpandtomeetthegrowingdemandsofelectrification,connectthousandsofnewrenewableenergyprojects,andreinforcesystemsthatneedtoadapttochangingsystemdynamics.Globalannualinvestmentingridsto2030reachesUSD680billion,anditremainsatahighlevelthroughto2050.Closeto70%ofthisinvestmentisfordistributiongridswiththeaimofexpanding,strengtheninganddigitalisingnetworks.Inadditiontothescalingupofinvestment,regulatoryandpolicyreformsfacilitatetimelyandefficientdevelopmentandmodernisationofgridstosupportcleanenergytransitions.8Thethirdkeymilestonefortheelectricitysectorisa95%reductionby2040intheunabateduseoffossilfuelstogenerateelectricitywhichincludesthecompletephaseoutofunabated8ElectricityGridsandSecureEnergyTransitions,aforthcomingIEAreport,willbepublishedinlate2023.IEA.CCBY4.0.80InternationalEnergyAgencyNetZeroRoadmapcoal.Emissionsfromunabatedcoalwerenearly10GtCO2in2022,makingupalmost75%oftheelectricitysectortotaland27%oftotalenergysectoremissions.Despiteatemporaryboostfromtheenergycrisis,theshareofunabatedcoalinglobalelectricitygenerationfallsrapidlyintheNZEScenariofrom36%in2022to13%in2030,andtozeroby2040andbeyond.Coalphase-outsarealreadyunderway,andover90countriesrepresentingnearlyallcoal-firedpowerintheworldhaveeithercommittedtophaseoutunabatedcoal2specificallyorsetnetzeroemissionstargets(IEA,2022a).Low‐emissionssourcesofgenerationrisesorapidlythatnonewunabatedcoalplantsbeyondthe150GWunderconstructionatthestartof2023arebuiltintheNZEScenario.Emissionsfromunabatednaturalgasuseforelectricitygenerationwere2.8GtCO2in2022,contributingjustover20%ofelectricitysectoremissions,whileoiluseledtoafurther0.5Gtofemissions.Unabatednaturalgasdeclinesbyover80%by2040intheNZEScenario,andlarge-scaleoil-firedpowerplantsarefullyphasedoutbythen.Thefourthkeymilestonefortheelectricitysectorisfornuclearpowertomorethandoublefrom417GWin2022to916GWin2050.Despitethisgrowth,theshareofnuclearpoweringenerationdeclinesslightlyintheNZEScenariofrom9%in2022to8%in2050.Afterthreedecadesofmodestgrowth,achangingpolicylandscapeisopeningopportunitiesforanuclearcomeback.Asameansofpursuingemissionsreductionstargetsandaddressingenergysecurityconcerns,severalcountrieshaveannouncedstrategiesthatincludeasignificantrolefornuclearpower,includingCanada,China,France,India,Japan,Korea,Poland,UnitedKingdomandUnitedStates.Atthestartof2023,nuclearreactorstotalling64GWwereunderconstructionin18countriesaroundtheworld.Inthelongerterm,morethan30countrieswhichacceptnuclearpowertodayincreasetheiruseofnuclearpowerintheNZEScenario.Toachievetheoveralldoublingofnuclearcapacityby2050,anaverageof26GWofnewcapacitycomesonlineeveryyearfrom2023to2050intheNZEScenario,someofwhichisneededtooffsetretirements(Figure2.16).ThiscallsforaverageannualinvestmentofoverUSD100billion,whichistriplethelevelinrecentyears.Followingthecompletionofprojectsalreadyunderway,thepeakofexpansioncomesinthe2030s,whenanannualaverageof33GWofnewnuclearcapacitycomesonline,markinganewhighforthenuclearindustry.Chinaleadsthewayinnuclearpowerexpansion,accountingforone-thirdofallnewnuclearIEA.CCBY4.0.capacityto2050intheNZEScenario,withotheremergingmarketanddevelopingeconomiesaccountingforalmostanotherone-third.Inadvancedeconomies,wherereactorshavebeeninoperationonaverageforover35years,nuclearcapacityadditionsriseovertimelargelytooffsettheretirementofexistingreactors,thoughlifetimeextensionscontinuetoplayanindispensableroleaspartofacost-effectiveapproachtoachievingnetzeroemissionsby2050(IEA,2022b).Allregionsincreasinglydrawonadvancednucleartechnologies,includingnewlargereactordesigns(generationIII+andIV)andsmallmodularreactors.Whilethebiggestopportunityfornuclearpowerisintheelectricitysector,newnuclearpowerinthisscenariohelpstodecarboniseheatandtosupplylow-emissionshydrogen.Chapter2Arenewedpathwaytonetzeroemissions81Figure2.16⊳NuclearpowercapacityandaverageannualcapacityadditionsintheNZEScenario,1990-2050InstalledcapacityAverageannualcapacityadditions401000GW199080032200020106002420202030400162040205020081970s1980s1990s2000s2010s2020s2030s2040sAdvancedeconomiesChinaOtheremergingmarketanddevelopingeconomiesIEA.CCBY4.0.Nuclearpowercapacitymorethandoublestoover900GWby2050,withrecentpolicydecisionsopeningopportunitiesforanuclearcomebackSolarPVandwindaretheleadingmeansofcuttingelectricitysectoremissions:theirIEA.CCBY4.0.combinedglobalshareofelectricitygenerationincreasesfrom12%in2022to40%by2030and70%by2050.SolarPVadditionsexpandalmostfourfoldto820GWby2030,one-quarterofwhichisdedicatedtotheproductionofhydrogen.Windadditionsreach320GWby2030,morethan30%ofwhichisoffshore,andwithjustover10%ofallwinddedicatedtohydrogenproduction.SolarPVbecomesthelargestsourceofelectricityby2030andholdsthatpositionthroughto2050;windbecomesthesecond-largestsource(Figure2.17).RisingsharesofsolarPVandwindputapremiumonpowersystemflexibilityandstabilityintheNZEScenario.Hourlyflexibilityneedsquadruplebetweentodayand2050duetonewdemandpatternsandtothevariableoutputofsolarPVandwind.SeasonalvariabilityalsoincreasesinmanyregionsintheNZEScenario,callingonhydropower,low-emissionsthermalplantsandnewformsoflongdurationstorage,includinghydrogen.Inaddition,thehighsharesofinverter-basedresources,suchaswind,solarPVandbatteries,increasesystemstabilitychallenges.IntheNZEScenario,naturalgas‐firedgenerationpeaksinthemid-2020sbeforestartingalong‐termdecline.Evenasoutputfalls,however,naturalgas‐firedcapacityremainsacriticalsourceofpowersystemflexibilityinmanymarkets,particularlytoaddressseasonalflexibilityneeds.Capacityadditionsofhydropowerandotherdispatchablerenewablestripleby2030toover125GW,expandingthesupplyofbothlow-emissionselectricityandflexibility.Stationaryutility-scalebatterystorageisarelativelynewsourceofflexibility,anditexpands36‐foldintheNZEScenarioby2030.Batteriesarewellsuitedtoprovidepowersystem82InternationalEnergyAgencyNetZeroRoadmapflexibilityonthescaleofseconds,minutesorhours,andcanbolsterthestabilityandreliabilityofelectricitynetworksbyprovidingfastfrequencyresponse.By2030,globalutility-scalebatterycapacityreaches1000GWintheNZEScenarioandaccountsforabout15%ofalldispatchablepowercapacity.Pumpedhydroisalreadywellestablishedasanimportantformofstorage;otherformsofstorage,includingthermalandgravity‐basedsystems,arenowunderdevelopment.ExpandingfleetsofEVsandtheincreased2electrificationofend-usesalsoprovideincreasingscopefordemandresponsemeasurestoprovideflexibility.Alongsidethis,theNZEScenarioseesthedeploymentofexistingandnewtechnologiestosupportsystemstability:theseincludesynchronouscondensers,flexiblealternatingcurrent(AC)transmissionsystems,grid-forminginvertersandfastfrequencyresponsecapabilities.Figure2.17⊳TotalinstalledcapacityandelectricitygenerationbysourceintheNZEScenario,2010-2050InstalledcapacityElectricitygeneration4040ThousandGWThousandTWh30302020101020102023203020402050201020302050SolarPVWindHydroBioenergyandwasteOtherrenewablesNuclearHydrogenandammoniaFossilfuelswithCCUSCoalunabatedNaturalgasunabatedOilBatteriesIEA.CCBY4.0.SolarPVandwindleaddecarbonisationoftheelectricitysector,becomingthelargestsourcesofelectricityby2030,complementedbynuclearandotherlow-emissionssourcesWhatchangedcomparedto2021NZEScenario?IEA.CCBY4.0.The2023NZEScenarioincludesafasterandlargerincreaseinsolarPVthanthe2021version(Figure2.18).SolarPVcapacityadditionsin2030are30%higherthaninthe2021version,reflectingrecentmarketaccelerationandtherapidscalingupofmanufacturingcapabilities(seeChapter1).Nuclearpowerexpansionalsoproceedsmorevigorously,withalmost15%morecapacityin2050intheupdatedNZEScenariothaninthe2021version,reflectingstrengthenedpolicysupportinleadingmarketsandbrighterprospectsforsmallmodularreactors.Ontheotherhand,windpowerincreaseslessstronglyinthe2023NZEScenario,and2030capacityadditionsin2030are20%lowerthaninthe2021versionduetolimitedplansgloballytoexpandmanufacturingandchallengingfinancialconditionsacrosstheChapter2Arenewedpathwaytonetzeroemissions83supplychain.Hydrogenandammoniaalsoplayasmallerrolethaninthe2021versionasaresultofcontinuinghighcostsandcompetitionforpotentialend-uses.Theroleofcarboncaptureinreducingemissionsfromfossilfuelpowerplantshasalsodiminishedmainlyduetoalackofnewprojects.Figure2.18⊳Globalchangesinelectricitygenerationinthe2023NZEScenariorelativetothe2021version,2030and2050TWh10000Otherrenewables8000BioenergywithCCUS6000Wind4000SolarPV2000Nuclear0Hydrogenandammonia-2000FossilfuelswithCCUS-4000OilNaturalgasunabatedCoalunabated20302050IEA.CCBY4.0.Recentdevelopmentsingenerationareincludedinthe2023NZEScenariowithincreasesinsolarPVandnuclear,andlesswind,hydrogen,CCUSandBECCSthanthe2021version2.2.4FinalenergyconsumptionOverviewToday,globaltotalfinalenergyconsumptionis442EJ.Emergingmarketanddevelopingeconomiesaccountfor60%andadvancedeconomiesfor36%,withtheremainderusedinaircraftandshipsforinternationaltravelandseabornetrade.Fossilfuels,ledbyoil,accountfortwo-thirdsofglobaltotalfinalconsumption,electricityforafifthandbioenergy9foratenth.Theremainderisdistrictheat,solarthermal,geothermalandnon-renewablewastescombustedinindustrialprocesses.By2030,theshareoffossilfuelsinfinalconsumptionfalls9percentagepointsintheNZEScenario,althoughtheystillaccountformorethanhalfofthetotal(Figure2.19).Thedeclineoffossilfuelsisfastestinadvancedeconomies,wheretheirshareinfinalconsumptionfallsbymorethan15percentagepointsto2030inthelightofactiontoboostEVs,heatpumpsandmodernbioenergy,andtomoderateenergydemandthroughenergyefficiencyandbehaviourchange.9Includingrenewablewastes.InternationalEnergyAgencyNetZeroRoadmapIEA.CCBY4.0.84Figure2.19⊳TotalfinalenergyconsumptionbyfuelandregionintheNZEScenario,2020-2050AdvancedeconomiesEMDEInternationalbunkers150EJ2IEA.CCBY4.0.10050202020502020205020202050UnabatedfossilfuelsOtherfossilfuelsElectricityHydrogenandH₂-basedModernrenewablesTraditionaluseofbiomassIEA.CCBY4.0.Useofunabatedfossilfuelsandtraditionaluseofbiomassplummetsasmoreend-usesswitchtoprogressivelydecarbonisedelectricityandotherlow-emissionsfuelsNotes:EMDE=emergingmarketanddevelopingeconomies.OtherfossilfuelsincludefossilfuelsequippedwithCCUSandthoseusedfornon-combustionpurposes,suchasfeedstockforchemicalsproduction.Floorspaceinthebuildingssectorandthetotalroadvehiclefleetbothincreasemorethan15%globallyby2030,drivenbyemergingmarketanddevelopingeconomies.Thetransitionsthattakeplaceinend-usesectorsaresomewhatslowerinemergingmarketanddevelopingeconomies,withtheshareofunabatedfossilfuelsfallingby6percentagepointsby2030,comparedwithamorethan15percentagepointdropinadvancedeconomies.Universalaccesstocleancookingandelectricityisachievedby2030,and24EJofinefficientandpollutingtraditionalbiomassisreplacedbyelectricity,liquefiedpetroleumgasesandefficientcookstoves.After2030,unabatedfossilfuelsarerapidlyreplacedinallcountriesbyelectricity,thedirectuseofrenewables–e.g.modernbioenergy,solarthermalandgeothermal–andlow-emissionshydrogenandhydrogen-basedfuels.By2050,globaltotalfinalconsumptionreachesaround340EJ,ofwhichelectricityprovides53%.Electrificationoccursineverysectortoprovide,heating,coolingandmobility,topowermotorsandappliances,andtoproduceonsiteelectrolytichydrogenforheavyindustries.Mostofthesmallremainingquantitiesofunabatedfossilfuelsusedforcombustionapplications,around15EJgloballyin2050,areconsumedinlong-distancetransport,especiallyaviationandshipping,andinheavyindustries.Whatchangedcomparedto2021NZEScenario?Intheindustrysector,the2023NZEScenarioenvisagesasmallerroleforCCUSthanthe2021version(Figure2.20).DespitemultipleCCUSprojectannouncementsforspecificindustrialChapter2Arenewedpathwaytonetzeroemissions85applicationslikecement,theplantsinvolvedcollectivelyonlyaccountforasmallshareoftotalproduction(seeChapter3).Moreover,therehasbeenlittleprogressinCCUSintheironandsteelindustries.Incontrast,thenumberofprojectannouncementsforhydrogen-baseddirectreducediron(DRI)steelproductionincreasedsignificantlysince2021,whichisreflectedinthefourpercentagepointincreaseintheshareofironproductionin2035betweenthetwoversionsoftheNZEScenario.Figure2.20⊳Fuelmixchangesinfinalenergyconsumptionbysectorinthe2023NZEScenariorelativetothe2021version,2030and2050IndustryTransportBuildings8%4%0%-4%-8%203020502030205020302050Coal:withCCUSOil:unabatedCoal:unabatedNaturalgas:unabatedNaturalgas:withCCUSOil:withCCUSElectricityDistrictheatFossilfuels:non-energyuseTraditionaluseofbiomassModernbioenergyHydrogenandH₂-basedfuelsNon-renewablewasteOtherrenewablesIEA.CCBY4.0.Betterprospectsforheatpumps,EVsandhydrogen-basedsteelproductiondrivestrongerelectricitydemand,whilesyntheticfuels,liquidbiofuelsandCCUSarereducedNote:Wherelow-emissionshydrogenisproducedandconsumedonsiteatanindustrialfacility,thefuelinput,suchaselectricityornaturalgas,isreportedasfinalenergyconsumption,ratherthanthehydrogenoutput.Inthetransportsector,thekeychangecomparedtothe2021NZEScenarioversionisfasterIEA.CCBY4.0.growthinEVsales.Itreflectstheverystrongadvancesintermsofannualsales,announcedmanufacturingcapacityforbatteries,strategyannouncementsfromcarandtruckmakers,andtechnologyimprovements.Biofueluseintransport,however,hasnotadvancedinasimilarway,reflectingthatfoodandfertiliserpricesremainaconcern.EVtechnologiesandmanufacturerstrategieshaveadvancedintrucks,asegmentofthemarketthatisparticularlyconducivetotheuseofbiofuels,particularlyintheshortterm.Asaresult,the2023NZEScenarioseesadiminishedroleforbiofuelsintransportinboththenearandlongerterm.Asimilardownwardrevisionalsoappliesforhydrogenandhydrogen-basedfuels.Inthenear86InternationalEnergyAgencyNetZeroRoadmaptermthisresultsinaslightlyhighershareofoilintransportenergydemand,inthelongertermitleadstoevenhigherlevelsofEVsalesshareandtoasubstantiallyhighershareofelectricityintransportenergydemandby2050.Inthebuildingssector,themainchangeisafasterswitchfromnaturalgastoelectricitywhichprimarilyreflectsadvancesinheatpumptechnologyandconcernsaboutnaturalgassupply2inthewakeofRussia’sinvasionofUkraine.IndustryEnergyandmaterialsefficiencymeasuresareimportantleverstoreduceindustrialCO2emissionsintheshortterm.Examplesincludethedeploymentofbestavailabletechnologiestoreduceenergyconsumption,wasteheatrecoveryandprocessintegration,buildingandproductlifetimeextensions,recycling,andproductdesignsthatarelessmaterial-intensiveandthatfacilitatecomponentrepairandreuse.Thesemeasuresaregenerallyincrementalinimpact,andtherearepracticallimitstowhattheycandotomitigateemissions.Stepchangesintheemissionsintensityofproduction–particularlyofemissions-intensivebulkmaterialslikesteel,cementandprimarychemicals–arestillrequired,andtheseareachievedinlargepartbytheuseofhydrogen,CCUSanddirectelectrificationtechnologies.Figure2.21⊳Finalenergyconsumptionbyfuelinselectedindustrysub-sectors,2022-2050SteelCementChemicalsOtherindustry603EJGtCO2402201202220302050202220302050202220302050202220302050Coal:unabatedCoal:withCCUSOil:unabatedOil:withCCUSNaturalgas:unabatedNaturalgas:withCCUSFossilfuel:feedstockElectricityHeatHydrogenModernsolidbioenergyOtherrenewablesNon-renewablewasteEmissions(rightaxis)IEA.CCBY4.0.Netzeroemissionsinindustryreliesheavilyonelectricity,hydrogenandCCUS.Unabatedfossilfueluseplummetswhilepetrochemicalfeedstockdemanddecreasesmoreslowly.Notes:Wherelow-emissionshydrogenisproducedandconsumedonsiteatanindustrialfacility,thefuelinput,IEA.CCBY4.0.suchaselectricityornaturalgas,isreportedasfinalenergyconsumption,notthehydrogenoutput.Otherindustrycategoryincludeslightindustriesandnon‐specifiedindustry.CO2emissionsfromchemicalsdonotincludeCO2removalfromonsitedirectaircapture.Chapter2Arenewedpathwaytonetzeroemissions87Mostoftheremainingindustrysectorenergy-relatedemissionsareaddressedbyusingalternativestofossilfuelstoprovideheat.Chiefamongthesealternativesiselectricity,whichisusedprimarilytoprovidelow-temperatureheat,whichincreasesitsshareofindustrialenergyconsumptionfrom23%in2022to49%in2050(Figure2.21).HydrogenandbioenergyareusedintheNZEScenariotoprovidehigh-temperatureheat.TransportElectrificationisthemainleverforemissionsreductionsinroadtransportintheNZEScenario(Figure2.22).EVsalesaccountforaround65%ofthenewcarmarketby2030,andnonewinternalcombustionengine(ICE)carsaresoldafter2035.Electricandhydrogen-fuelledtrucksdisplaceICEmediumandheavytrucks:newfossil-fuelledICEtrucksalesendin2040inadvancedeconomiesandChina,andin2045intherestoftheworld.Batteryelectrictrucksmakesignificantadvances,particularlyinmedium-dutytrucksandothertruckswithrelativelyshortandregularroutes;fuelcellelectricpowertrainsaremostsuccessfulinlong-haul,heavy-dutytruckswherefastchargingofbatteryelectricversionsmayprovedifficult.Thesechangesmeanthatoildemandforroadtransport–thesinglelargestoilconsumingsectortoday–fallsatanaverage1.4mb/dperyearto2050.Figure2.22⊳Finalenergyconsumptionintransportbyfuelforselectedmodes,2022-2050LightdutyvehiclesHeavytrucksAviationShipping604.5EJGtCO2403.0201.5202220302050202220302050202220302050202220302050OilNaturalgasCoalElectricityBioenergyHydrogenEmissions(rightaxis)IEA.CCBY4.0.IEA.CCBY4.0.Roadtransportreliesstronglyonelectrificationtosubstituteitsoilthirst,whereasaviationandshippingoilsubstitutesaremainlyliquidbiofuels,hydrogenandsyntheticfuelsNotes:OnlydirectCO2emissionsareincluded.Hydrogenincludeshydrogen-basedfuels.Aviationseesstronggrowthinemergingmarketanddevelopingeconomies,buttrafficoptimisationmeasures,energyefficiencygains,behaviouralchangesandrapiddevelopmentofbio-basedSAFmeanthataviationoildemandpeaksinthemid-2020sintheNZEScenario.88InternationalEnergyAgencyNetZeroRoadmapAfter2030,oilusedecreasesrapidly–bymorethan0.2mb/dperyearonaverage–withthedevelopmentofsyntheticSAFandthedeploymentofthefirsthydrogenaircraftinthesecond-halfofthe2030s.Inshipping,efficiencyimprovementsincludingtheuseofwindassistanceandfuelswitchingcutoiluse.Ammoniaistheprimarylow-emissionsfuelusedtodecarboniseshipping,withthecontributionsfrombiofuelsandhydrogenlimitedinlargepartbytheirrelativelyhighcosts.2BuildingsMakingbuildingszero-carbon-ready10meansthatexistingbuildingsneedtoundergodeepretrofitsandthatnewbuildingsneedtomeetverystringentstandardsandbeequippedwithtechnologiesthatwillbefullydecarbonisedby2050.IntheNZEScenario,theglobalaverageretrofitratereaches2.5%peryearby2030andremainsataroundthatlevelthroughto2050.Thisleadstoaroundhalfofexistingbuildingsbeingretrofittedandbecomingzero-carbon-readyby2040.Thisinturnmorethanhalvesdemandforspaceheatingandcoolingbetweentodayand2050,despitea55%increaseintheamountoffloorspaceinthebuildingssector.Figure2.23⊳Finalenergyconsumptioninthebuildingssectorbyselectedend-use,2022-2050SpaceheatingCookingWaterheatingSpacecooling453EJGtCO2302151202220302050202220302050202220302050202220302050CoalNaturalgasOilTraditionaluseofbiomassElectricityHydrogenDistrictheatRenewablesEmissions(rightaxis)IEA.CCBY4.0.Deepretrofitsandefficientdeviceslowerenergyintensityinbuildingsby60%comparedtotoday;electricity,districtheatanddirectrenewablesdisplacefossilfuelsby2050Note:OnlydirectCO2emissionsareincluded.TheuseoffossilfuelsforheatingandcookingisrapidlyreducedintheNZEScenarioinfavourofelectricityandcleanenergyalternatives(Figure2.23).Inemergingmarketanddeveloping10Zero-carbon-readybuildingsbecomezero-carbonwithoutanyfurtherrenovationoncethepowerandIEA.CCBY4.0.naturalgasgridsthattheyrelyonarefullydecarbonised.Chapter2Arenewedpathwaytonetzeroemissions89economies,traditionaluseofbiomassisreplacedbymodernenergyuseasuniversalaccesstocleancookingisachievedby2030.From2025onwards,salesofnewcoalandoilboilerscometoanend(gasboilerscontinuetobeusedinaminorityofcases,fuelledbybiomethaneandhydrogen).Theyarelargelyreplacedbyheatpumpswith290milliondwellingsequippedwithheatpumpsby2030and875millionby2050.Solarwaterheatersarealsodeployedextensivelywith350milliondwellingsequippedwithsolarthermalforwaterheatingby2030andaroundabillionby2050.Theuseofbiomethaneinbuildingsreaches75bcmofnaturalgasequivalentby2050,anddistrictheatingisvirtuallyfullydecarbonisedby2050.2.3NetzeroemissionsguideOur2021NetZeroby2050reportincludednumeroustablespresentingmorethan400keymilestonesfordifferentsectorsandtechnologiesonthepathwaytoreachnetzeroemissionsfromtheglobalenergysectorby2050.Theseprovedtobehighlyusefulfornumerousstakeholders,includingactorsfromindustry,finance,andpolicymaking.Inthisyear’sedition,wehavebroughttogetherthesemilestonesinoneplaceasasetoffifteentechnologyandsector-specificdashboards.Thesearepresentedinthepagesthatfollow.Clarificatorynotestothedashboardsaregivenonpage106.90InternationalEnergyAgencyNetZeroRoadmapIEA.CCBY4.0.Low-emissionssourcesofelectricity34%Renewablescapacitytriplesby2030ledbysolarPVandwind,complementedbyOFCUMULATIVEgrowthinnuclearandothersources,raisingtheshareoflow-emissionssourcesinEMISSIONSelectricitygenerationfrom39%in2022to71%in2030andnearly100%in2050.REDUCTIONSLow-emissionselectricitygenerationcapacitybysourceThousandGW40Over70%ofelectricityfromwindandsolarPVNearly90%ofelectricityfromrenewables30Over65%increaseinnuclearpowercapacity2040%ofelectricityfromwindandsolarPVWindandsolaradditionsreach1140GW102010203020352050SolarPVWindOtherrenewablesNuclearFossilfuelswithCCUS,hydrogenandammoniaMilestones2022203020352050Totalelectricitygenerationfromlow-emissionssources(TWh)112812706143117766033416152472736254679SolarPVandwind51837284937713752Otherrenewables268239364952Nuclear6015Shareoflow-emissionssourcesintotalgeneration39%71%91%99.7%ShareofsolarPVandwindintotalgeneration12%40%58%Shareofrenewablesintotalgeneration30%59%77%71%Annualcapacityadditionsoflow-emissionssources(GW)3441301138289%SolarPV2208238781268Wind318350815Nuclear75352Averageannualinvestment(USDbillion2022,MER)83537Low-emissions20233020313521Renewables201722203650Nuclear50712021321466108011859734187511412193SolarPVandwindaccountfor65%oftheglobalScalingupinvestmentinelectricityinfrastructurepowersectorCO2emissionsreductionsby2050iscriticaltounlockcleanenergytransitions202520302035204020452050400Advancedeconomies200Transmission-7Distribution-14EmergingmarketandSolarPVWindOtherrenewablesNucleardevelopingeconomiesFossilfuelswithCCUS,hydrogenandammoniaGtCO2TransmissionBillionUSD(2022,MER)Distribution201016201723202430Chapter2Arenewedpathwaytonetzeroemissions91Unabatedfossilfuelsinelectricitygeneration95%Electricityoutputfromunabatedfossilfuelsfallsby40%to2030andvirtuallyREDUCTIONdisappearsby2050,asplantsarerunless,retired,retroittedwithCCUSorrepurposedBY2040touselow-emissionsfuels.UnabatedfossilfuelselectricitygenerationThousandTWh25Hydrogenandammoniastarttoco-irewithnaturalgasandcoalNonewunabatedcoalpowerPhaseoutofunabatedcoalinadvancedeconomiesplantsapprovedfordevelopmentPhaseoutofalllargeoil-iredpowerplants20PhaseoutofallunabatedcoalOilUnabatednaturalgasbelow5%ofgeneration15NearlyallremainingplantsretroittedwithCCUSUnabatednaturalgasorfullyconvertedtouselow-emissionsfuels105Unabatedcoal2010202320252030s20402050Milestones2022203020352050Totalelectricitygenerationfromunabatedfossilfuels(TWh)1763611066424115810427498813790Coal650059432834158NaturalgasShareofunabatedfossilfuelsintotalgeneration61%29%9%0.2%Coal36%13%3%0%Naturalgas22%16%6%Retroitsandblending0.2%CoalandgasplantsequippedwithCCUS(GW)Averageammoniablendinginglobalcoal‐iredgeneration(withoutCCUS)0.1250141241Averagehydrogenblendinginglobalgas‐iredgeneration(withoutCCUS)0%1%11%100%Averagebiomethaneblendinginglobalgas‐iredgeneration(withoutCCUS)0%5%16%Averageannualcapacityretirements(GW)0.1%1%1%79%Coal2017222023302031357%Naturalgas2711039812036508434346CCUSretroitsandblendinglow-emissionsfuelsReducingcoal-iredpowerinEMDEaccountsforenablecoal-andgas-iredpowerplantsto60%ofglobalpowersectoremissionsreductionscontributetoenergytransitions202520302035204020452050Advancedeconomies2500-7CoalNaturalgas1250OilElectricitygeneration(TWh)GtCO2EmergingmarketanddevelopingeconomiesCoalNaturalgasOil202320302050-14CCUSHydrogenBiomethaneAmmonia92InternationalEnergyAgencyNetZeroRoadmapRoadtransport16%RampingupelectriicationandbiofuelsplaysamajorroletodecarboniseroadtransportOFCUMULATIVEto2030.Thereafter,electriicationistheprominentlever,withelectricityrepresentingEMISSIONSthree-quartersofenergyconsumptioninroadtransportin2050.REDUCTIONSFuelsharesofroadenergyconsumptionCarsandvansBusesHeavytrucks100%50%201020222030205020102022203020502010202220302050SyntheticfuelsOilNaturalgasBiofuelsElectricityHydrogenMilestones2022203020352050Salesshareofplug-inhybrid,batteryandfuelcellelectricvehicles13%70%98%100%16%78%100%100%Two/three-wheelers13%67%100%100%Carsandvans4%56%90%100%Buses1%37%65%100%Heavytrucks5%20%36%93%Alternativefuelshares5%11%12%Biofuels0%8%22%3%Electricity0%1%2%74%Hydrogen16%FuellinginfrastructureElectricvehiclepublicchargingpoints(million)3171831Hydrogenrefuellingstations(thousand)1121546Investmentsinpublicchargersscalesup,irstforRoadtransportemissionsdropdramaticallycarsandvans,thenforheavytrucksandbusesto2030,particularlyinadvancedeconomies602.52.0301.5BillionUSD(2022,MER)1.0GtCO20.52022203020352050201020222050CarsandvansHeavytrucksandbusesAdvancedeconomiesEmergingmarketanddevelopingeconomiesChapter2Arenewedpathwaytonetzeroemissions93Shippingandaviation5%Bioenergy,hydrogenandhydrogen-basedfuelsrampupfromlessthan1%ofenergyOFCUMULATIVEconsumedtodayinshippingandaviationtoalmost15%in2030and80%by2050.EMISSIONSAlsoimportanttodecarbonisethesetransportmodesareenergyeiciencyimprovementsREDUCTIONSinshippingto2030andbehaviour-drivendemandreductioninaviationto2050.ShippingenergyconsumptionAviationenergyconsumption1525%1220%915%610%35%EJMtCO2201520202022203020402050201520202022203020402050FossilfuelsBiofuelsHydrogenAmmoniaMethanolSynthetickeroseneElectricityAvoidedconsumptionfrombehaviouralmeasures(rightaxis)Milestones2022203020352050ShippingInternationalshippingactivity(trilliontonne-kilometres)125145165265Shareininalenergyconsumption0%8%13%19%BiofuelsHydrogen0%4%7%19%AmmoniaMethanol0%6%15%44%AviationInternationalanddomesticaviationactivity(trillionpassenger-kilometres)0%1%1%3%AvoideddemandfrombehaviouralmeasuresShareininalenergyconsumption6.010.911.416.5BiofuelsSynthetichydrogen-basedfuels0%9%14%20%0%10%22%33%0%1%4%37%TechnologiesarebeingdevelopedtoenabletheuseCO2emissionsfromshippingandaviationdecreaseoflow-emissionsfuelsinshippingandaviationmorerapidlyinadvancedeconomies2020203020402045600AviationAmmoniaenginesforvessels300ShippingHydrogenbunkeringforvesselsBatteryelectricaircraftSynthetic20222050aviationfuelsSmallprototypeorconceptNZEEmergingmarketanddevelopingeconomiesLargeprototypeMarketuptakeAdvancedeconomies94InternationalEnergyAgencyNetZeroRoadmapSteelandaluminium6%Steel1%AluminiumEmissionsreductionsfromsteelandaluminiumproductionarechallengingduetoaheavyrelianceonfossilfuelstoday,processemissionsfromincumbentroutesOFCUMULATIVEandhightradeexposure.IncreasedscraprecyclingandmassdeploymentofEMISSIONSinnovativetechnologiesarekeyleversforreducingemissions.REDUCTIONSEmissionsreductionsbymitigationmeasureGtCO2SteelAluminium30.3+11%+13%+16%+12%2-27%0.2-27%10.1-90%2030-97%20222030205020222050ActivityincreaseMitigationmeasures:AvoideddemandEnergyeiciencyHydrogen-basedElectriicationOtherprocessesshiftsOtherfuelshiftsCCUSMilestones2022203020352050SteelCrudesteelproduction(Mt)1880197019701960Shareofscrapinmetallicinputs33%38%40%48%Shareofnearzeroemissionironproduction0%27%95%0%8%10%37%CCUS-equipped0%3%15%44%Electrolytichydrogen-based0%5%14%Ironoreelectrolysis10%2%399CO2captured(MtCO2)02713141Low-emissionshydrogendemand(Mt)17Aluminium6Aluminiumproduction(Mt)Shareofsecondaryproduction108120128146Shareofnearzeroemissionprimaryaluminiumproduction36%42%44%56%Shareoflow-emissionsthermalenergyinaluminaproduction19%96%0%7%39%99%0%16%Announcedprojectsmeet12%of2030nearzeroEmissionsintensitiesdrasticallyimproveandscrapemissionironproductionneeds;‘capable’capacitymetaluseincreasesneedscleardecarbonisationplans3100Ironproduction(Mt)DirecttCO2202220302040205050pertmaterialScrapshareofmetallicinputsNearzeroNearzeroGapwith75%emissionemissioncapableNZEScenarioAdvancedeconomies:SteelAluminiumEmergingmarketanddevelopingeconomies:EuropeNorthAmericaAsiaRestofworldTotalSteelAluminiumChapter2Arenewedpathwaytonetzeroemissions95Cement6%CuttingemissionsfromcementproductionisdiicultduetothepresentrelianceonOFCUMULATIVEcarbon-containingrawmaterialsandhigh-temperatureheatingrequirements.EnergyEMISSIONSandmaterialeiciency,andlow-emissionsfuelsarekeymeasuresinthenearterm.REDUCTIONSDeepreductionsrequireamassiverolloutofinnovativetechnologiessuchascementsmadewithalternativerawmaterialsandCCUS.GtCO2Emissionsreductionsbymitigationmeasure3+7%+7%2-26%1-96%202220302050ActivityincreaseBioenergyMitigationmeasuresEnergyeiciencyHydrogenElectriicationOtherfuelshiftsCCUSMaterialeiciencyMilestones2022203020352050Cementproduction(Mt)4160426041403930Clinker-to-cementratio(tonnepertonne)Kilnthermalenergyintensity(GJpertonneofclinker)0.710.650.610.57Shareofnearzeroemissionclinkerproduction3.63.43.32.9CO2captured(MtCO2)0%8%27%Shareoflow-emissionsfuelinthermalenergyuse17048093%049%1310BioenergywithoutCCUS5%30%17%86%BioenergywithCCUS5%15%8%Fossilfuelsandnon-renewablewastewithCCUS0%2%22%19%Hydrogen0%10%3%19%Electricity0%0%31%0%1%9%0%8%AnnouncedCCUSprojectsfallshortof2030targetAdvancedeconomiesmoveirst,butmostofthechallengeliesinemergingmarketanddevelopingeconomiesMtCO2captured2001.0EmtCO2pertclinker150100deveergin50lopinggmark0.5AdvanceconoetandedecmiesonomiesAnnouncedNZEAdvancedeconomies20102022203020402050Emergingmarketanddevelopingeconomies96InternationalEnergyAgencyNetZeroRoadmapPrimarychemicals3%IncreasesinplasticsrecyclingandmoreeicientfertiliserusedampenrisingdemandforOFCUMULATIVEprimarychemicalsandenergyconsumptionfortheirproduction.Electrolytichydrogen,EMISSIONSCCUSanddirectelectriicationtechnologiesarekeytodeliverthestepchangesinREDUCTIONSemissionsintensitiesneededforprimarychemicalproduction.EmissionsreductionsbymitigationmeasureGtCO21.0+7%+8%-21%0.5-96%202220302050ActivityincreaseMitigationmeasuresEnergyeiciencyHydrogenElectriicationOtherfuelshiftsCCUSAvoideddemandMilestones2022203020352050Primarychemicalsproduction(Mt)719861905878Shareofnearzeroemissionprimarychemicalsproduction2%17%39%93%8%22%56%CCUS-equipped0.5%7%13%28%Electrolytichydrogen-based0%2%4%9%Other1%52143344CO2captured(Mt)4535560Hydrogendemand(Mt)48PlasticsrecyclingShareofplasticswastecollected16%24%31%51%ShareofsecondaryproductionPrimarychemicalssavings(Mt)8%13%18%35%92542116AnnouncedprojectsfornetzeroemissionHigheruseofcoalinemergingmarketandproductionareincreasing,butmoreeortsaredevelopingeconomiesmakesthepathtonetzeroneededtoclosethegapwiththeNZEin2030morechallenging70235PrimarychemicalsdeEmerproduction(Mt)velogingpingemarktCO2/tprimarychemicals1AdvanceconoetandeconomiesmdiesExistingAnnouncedGapwithNZE2030201020222050Electrolytichydrogen-basedCCUS-equippedChapter2Arenewedpathwaytonetzeroemissions97Spaceheating4%Spaceheatingenergyconsumptioninbuildingsdecreasesbyalmost70%by2050evenOFCUMULATIVEwitha30%increaseinheatedloorareathankstozero-carbon-readybuildingsenergyEMISSIONScodesandincreasinglyeicientequipment.REDUCTIONSSpaceheatingenergyconsumption60EJ402020102015202220302050OtherEnergyconsumption:FossilfuelsDistrictheatElectricityModernbioenergySolarthermalAvoidedconsumption:EnergyeiciencyBehaviouralchangeMilestones2022203020352050Heatpumpsinstalledinbuildings(GW)1000300044006500ShareofspaceheatingservicedemandmetbyheatpumpsShareofbuildingsthatarezero-carbon-ready12%25%40%55%Innewbuildingsanddeeprenovations<1%100%100%100%InexistingbuildingstockRetroitrateinadvancedeconomies<5%20%35%80%Heatedloorarea(billionsquaremetres)<2%2.5%2.5%2.5%157170180200Shareofzero-carbon-readybuildingsexpandsGlobalheatpumpstocknears3000GWin2030,rapidlyandby2030thosestandardsaremetinallalmosttriplingtoday’scapacitynewbuildings3000Index(1=2010)Billionsquaremetres3001GW1500.51500Emergingmarckoentoamndiesdevelopinge2010201520222030AdvancedeconomiesNon-compliantCompliant:Non-ZCRBZCRB201020222030Heatingenergyintensity(rightaxis)98InternationalEnergyAgencyNetZeroRoadmapSpacecooling4%Spacecoolingenergyconsumptionissettomorethandoubleby2050withnoactionOFCUMULATIVEtaken.Passivedesigns,behaviouralchangeandmoreeicientequipmentarevitaltoENERGYSAVINGStemperdemandgrowthandreducethestrainonelectricitysystems.Spacecoolingenergyconsumption20BillionsquaremetresEJ10Index(2010=1)20102015202220302050Energyconsumption:AdvancedeconomiesEmergingmarketanddevelopingeconomiesAvoidedconsumption:EnergyeiciencyBehaviouralchangeMilestones2022203020352050Cooledloorareainbuildings(billionsquaremetres)105140170250Shareofhouseholdswithairconditioners36%45%50%60%Installedcapacityofspacecoolingequipment(GW)850Shareofspacecoolingininalelectricityconsumption9%140017502700Shareofbuildingsthatarezero-carbon-ready7%6%5%Innewbuildingsanddeeprenovations<1%100%100%100%Inexistingbuildingstock<5%20%35%80%Averageeiciencyofnewspacecoolingequipment(Watt-hour/Watt-hour)3.54.57.59.05.06.56.58.0Cooledloorareamorethandoublesby2050,withSpacecoolingenergyintensityfrom2022to2050additionsprincipallyoccurringinEMDEdecreasestwiceasfastasthelastdecade3001.0dEemveelrogingmarketpingeconomanieds1500.5Advan2010dEemveerlogpininggmeacrokneotmaniedscedeconomies2022Advancedeconomies201020222050Existing2050NewChapter2Arenewedpathwaytonetzeroemissions99Energyeiciencyandbehaviouralchange11%Scalingupenergyeiciency,behaviouralchangeandfuelswitchingarekeytoOFCUMULATIVEdoubletherateofenergyintensityimprovementsby2030,ascurrentmeasuresleadEMISSIONStoonlymarginalprogress.REDUCTIONSAverageannualrateoftotalenergyintensityreductionbycontributor5%Avoideddemand4%Fuelswitching3%CleancookingPowerBuildingsTechnicaleiciencyTransportIndustry2%Electriicationandrenewables1%20222030Milestones2022203020352050Annualenergyintensityimprovement2.0%4.9%3.6%1.8%Unitelectricityconsumptionofnewairconditioners(index2022=100)100705952Unitelectricityconsumptionofrefrigerators(index2022=100)100605341Fuelconsumptionofnewinternalcombustionenginetrucks(index2022=100)1008479Energyintensityofclinkerproduction(GJ/t)3.63.43.32.9Keybehaviouralchangesinbuildingsandtransport•Eco-drivingandmotorwayspeedlimitsof100km/hintroducedby2030•Useofinternalcombustionenginecarsphasedoutinlargecitiesby2030•Spaceheatingtemperaturesmoderatedto1920°Candspacecoolingtemperaturesto2425°Conaverageby2030•One-out-of-twolong-haulbusinesslightsareavoidedby2040Eiciencystandardscover90%ofenergyuseforReductionsofenergydemandfrombehaviouralkeyappliancesbutotheruseslagchangesarenearlyivetimeshigherpercapitain2030inadvancedeconomies100%EnergyusecoveredbyeiciencystandardsEmergingmarketandAdvancedeconomiesdevelopingeconomies50%-520102023GJ/capita-10RoadAviationBuildingsIndustryRefrigerationSpacecoolingRoadtransportIndustrialmotors100InternationalEnergyAgencyNetZeroRoadmapHydrogen4%Announcedlow-emissionshydrogenproductionprojects,ifrealised,represent55%ofOFCUMULATIVEthelevelintheNZEScenarioin2030.BoldpolicyactionisneededtocreatedemandforEMISSIONSlow-emissionshydrogeninordertostimulateinvestmentinproductionprojects.REDUCTIONSLow-emissionshydrogenproductionNZEAnnouncedprojectsElectrolysisFossilfuelswithCCUSGWMt41.528105118Mthydrogen2015202020252030Milestones2022203020352050Totalhydrogendemand9515021543042352610Reining(MtH2)537192139Industry(MtH2)01640193Transport(MtH2-eq,includinghydrogen-basedfuels)0224874Powergeneration(MtH2-eq,inlcludinghydrogen-basedfuels)061014Other(MtH2)0%1%1%1%Shareoftotalelectricitygeneration170150420Low-emissionshydrogenproduction(MtH2)051116327Fromlow-emissionselectricity1183489FromfossilfuelswithCCUS1590Cumulativeinstalledelectrolysiscapacity(GWelectricinput)1121513403300CumulativeCO2storageforhydrogenproduction(MtCO2)4101050Hydrogenpipelines(km)500019000209000Undergroundhydrogenstoragecapacity(TWh)0.570440001200240AnnouncedcumulativeelectrolysermanufacturingDemandforlow-emissionshydrogengrowsquicklycapacityoutput,iffullyrealised,wouldbe80%ofintheNZE,particularlyinheavyindustry,transporttheNZElevelin2030andtheproductionofhydrogen-basedfuelsNZEinstalledcapacity8060040IncludingpossibleexpansionsElectrolysermanufacturingoutput3002022202420262028203020222024202620282030ReiningUnitedStatesEuropeChinaIndiaAdvancedeconomiesIndustryTransportPowergenerationRestofworldEmergingmarketanddevelopingeconomiesOtherHydrogen-basedfuelsChapter2Arenewedpathwaytonetzeroemissions101Carboncapture,utilisationandstorage8%IfallannouncedCO2capturecapacityisrealisedandthecurrentgrowthtrendcontinues,OFCUMULATIVEglobalcapacitycouldreachNZElevelsby2030.Reducingprojectleadtimes,particularlyEMISSIONSrelatedtothedevelopmentofCO2storage,willbecriticaltoachievethoselevels.REDUCTIONSCapturecapacityMtCO2CO2captured1200intheNZE10002030800600400200201720182019202020212022AnnouncedcapturedcapacityOperationalcapturedcapacityMilestones2022203020352050TotalCO2captured(MtCO2)45102424216040CO2capturefromfossilfuelsandindustrialprocesses44171237361759Power4188568811Industry02477692152Merchanthydrogen38161285Otherfueltransformation116390756CO2capturefrombioenergy018550617Power044204Industry1231263Biofuelsproduction011477438Otherfueltransformation0213232Directaircapture15474TotalCO2removed(MtCO2)8013121234203Plannedstoragecapacityiscatchingupwith6321041plannedcapture1710500Two-thirdsoftotalCO2captureisintheemergingmarketanddevelopingeconomies250MtCO26000iesMtCO23000deconomdvanceAEmergingmarketanddevelopingeconomies2017201820192020202120222020203020402050OperationalAnnouncedcaptureAnnouncedstorage102InternationalEnergyAgencyNetZeroRoadmapBioenergy7%WhiletraditionaluseofbiomassisphasedoutintheNZEScenario,modernbioenergyuseOFCUMULATIVEmorethandoublesto2050,duetoitsabilitytobeusedasadirectdrop-insubstituteforEMISSIONSfossilfuels.Advancedfeedstocksupplygrowsconsiderably,supportedbyinvestmentsandREDUCTIONScommercialisationofadvancedconversiontechnologies.BioenergydemandBioenergysupply100EJEJ502010202220302040205020102022203020402050LiquidbiofuelsBiogasesModernsolidbioenergyConventionalbioenergycropsOrganicwastestreamsForestandwoodresiduesShort-rotationwoodycropsTraditionaluseofbiomassElectricityandheatForestryplantingsTraditionaluseofbiomassIndustryConversionlossesBuildingsandagricultureMilestones2022203020352050Totalbioenergysupply(EJ)67748999Shareofadvancedfeedstock45%80%85%90%Moderngaseousbioenergy(EJ)1791505610Biomethane4111311Modernliquidbioenergy(EJ)12%40%55%75%Shareofadvancedbiofuels35556573Modernsolidbioenergy(EJ)915213011151822Electricityandheat5986Industry24000Buildingsandagriculture000Traditionaluseofsolidbiomass(EJ)2049MillionpeopleusingtraditionalbiomassforcookingAdvancedbiofuelsarebeingdevelopedLiquidbiofuelproductionmustexpand150%totoenablenetzeroreachlevelsrequiredby2030intheNZE20202025203012tandiesHVOandHEFArkenomAlcohol-to-jetingmgaecomerglopinEdeveBio-FTwithoutCCUS6Bio-FTwithCCUSHistoricalNZEAdvancedeconomiesSmallprototypeorconceptLargeprototype201520222030DemonstrationMarketuptakeChapter2Arenewedpathwaytonetzeroemissions103Energyaccessandairpollution1.5GtCO2-eqAchievinguniversalmodernenergyaccessby2030,inlinewithSDG7,deliversSAVEDVIAsocioeconomicbeneitsandreducesgreenhousegasemissions.Inaddition,majorairENERGYACCESSpollutantemissionsarehalvedby2030whichreducesprematuredeathsby3.6million,predominatelyinemergingmarketanddevelopingeconomies.IN2030PopulationwithoutmodernenergyaccessAirpollutionemissions3250Cleancooking21ElectricityBillionpeople200PMMt1501002.5SO250NOX201520222030201520222050Milestones2022202520302050Shareofpopulationwithmodernenergyaccess90%93%100%100%Electricity72%80%100%100%Cleancooking-450-1500Netchangeingreenhousegasemissionsfromuniversalaccess(MtCO2-eq)Investmentneededtoachieveuniversalenergyaccess(billionUSD)3058Shareoftotalglobalenergyinvestment0.9%1.3%Prematuredeathsrelatedtoairpollution(million)Ambientairpollution4.44.32.72.9HouseholdairpollutionShareofpopulationexposedtohighlevelsofairpollution(>35µg/m3)3.22.50.70.833%29%7%7%AmixoftechnologiesisneededtoprovidemodernPeopleindevelopingeconomiesaremorelikelytoenergyaccesstoallby2030beexposedtohigherconcentrationsofPM2.5ElectricityCleancookingAdvancedeconomiesOn-grid2022BygridtypeByfuelLPGImproved2050Mini-O-gridgridcookstovesEmergingmarketanddevelopingeconomiesByfuelSolarPVFossilfuelsBiogasElectricity2022OtherOther2050clean2.4billionpeople880millionpeople0%100%<5μg/m535μg/m>35μg/m104InternationalEnergyAgencyNetZeroRoadmapFossilfuelsupply97%DeclinesinfossilfueldemandaresuicientlysteepthatthereisnoneedforREDUCTIONINnewlongleadtimeupstreamoilandgasconventionalprojects,norfromnewFOSSILFUELcoalminesormineextensions.GHGEMISSIONSTotalfossilfuelsupplyEJNaturalgasOil200kgCO2-eq/boeCoal150100GtCO2-eq50199020222050Milestones2022203020352050Fossilfuelsupply(EJ)5113622378818914811042Oil1441187732Naturalgas179955015CoalScope1and2emissions(GtCO2-eq)3.41.30.70.1OilNaturalgas1.70.60.30.03Scope3emissions(GtCO2-eq)Oil8.96.94.70.8NaturalgasCoal6.95.53.20.3Theemissionsintensityofglobaloilandgas15.38.23.50.2operationsfallsbymorethan50%to2030FossilfuelGHGemissionsfallby97%to2050;100nearly80%offossilfueldemandin2050isfornon-combustionapplicationsorusedwithCCUS5025502010202220502020203020402050AdvancedeconomiesCoalNaturalgasOilMethaneFlaringElectriicationandenergyeiciencyEmergingmarketanddevelopingeconomiesTransportHydrogenCCUSCoalNaturalgasOilChapter2Arenewedpathwaytonetzeroemissions105DashboardnotesIEA.CCBY4.0.SteelandaluminiumOtherprocessesshiftsincludeprocessemissionsreductionsfromincreasedscrap-basedandinertanodeproduction.Aluminiumproductionandshareofsecondaryproductionexcludesproductionbasedoninternallygeneratedscrap.Nearzeroemission=projectsthat,onceoperational,arenearzeroemissionfromthestart,accordingtothedefinitionsinIEA(2022c)AchievingNetZeroHeavyIndustrySectorsinG7Members.Nearzeroemissioncapable=projectsthatachievesubstantialemissionsreductionsfromthestart–butfallshortofnearzeroemissionsinitially–withplanstocontinuereducingemissionsovertimesuchthattheycouldlaterachievenearzeroemissionproductionwithoutadditionalcapitalinvestment.Productionfromannouncedprojectsshowninthedashboardexcludesnearzeroemissionsteelfromscrap.CementAnnouncedCCUSprojectsincludeallfacilitieswithacapacitylargerthan0.1MtCO2peryearasofJune2023,andprojectswithanannouncedoperationdateby2030.PrimarychemicalsNearzeroemissionprimarychemicalsproductioniscalculatedexcludingCCUforureainammoniaproductionandhighvaluechemicalsproducedinrefineries.CCUS-equippednearzeroemissionproductionexcludesCCUforureainammoniaproduction.EnergyefficiencyandbehaviouralchangeAvoideddemandincludesbehaviouralchange.The2030valueshowninthetopgraphofthedashboardreferstotheaverageannualrateofenergyintensityimprovementbetween2022and2030intheNZEScenario.Nonewinternalcombustionenginetrucksaresoldafter2040inadvancedeconomiesandafter2045intheemergingmarketanddevelopingeconomies.Carboncapture,utilisationandstorageAnnouncedcaptureandstoragecapacityincludeallfacilitieswithacapacitylargerthan0.1MtCO2peryearasofJune2023,andprojectswithanannouncedoperationdateby2030.Plannedcapturecapacityshowninthebottomgraphexcludescapacityforutilisation.BioenergyHVO=hydrotreatedvegetableoil.HEFA=hydrotreatedestersandfattyacids.Bio-FT=biomass-basedFischer-Tropschsynthesis.Moderngaseousbioenergyreferstobiogases,whichcomprisebiogasandbiomethane.Chapter2Arenewedpathwaytonetzeroemissions106Chapter3IEA.CCBY4.0.MakingtheNZEScenarioarealityWhatwillittake?SUMMARY•Increasingrenewablescapacitythreefoldisthesinglelargestdriverofemissionsreductionsto2030intheNetZeroEmissionsby2050Scenario(NZEScenario).AdvancedeconomiesandChinaareprojectedtoreacharound85%oftherequiredrenewablescapacityby2030withcurrentpolicies;morerobustpoliciesandinternationalsupportareneededinotherdevelopingcountries.•Doublingtherateofenergyintensityimprovementsmakesacriticalcontributiontoemissionsreductionsto2030andalsobolstersenergyaffordabilityandsecurity.ThisisachievedintheNZEScenariobyefficiencygainsfromfuelswitchingtoelectricity,improvementsintechnicalefficiency,andthemoreefficientuseofmaterialsandenergyincludingthroughbehaviouralchange.•Furtherelectrificationofend-usesmakesthethirdlargestcontributiontoemissionsreductionsby2030.Thecurrentgrowthrateofelectriccarssaleswouldbesufficienttomeetthe2030levelofdeploymentenvisagedintheNZEScenario,althoughfasteruptakeisneededintrucks.Installationsofheatpumpsneedtoexpandbyalmost20%peryearto2030,comparedwith11%in2022.•Cuttingenergysectormethaneemissionsalsobringshugeclimatebenefits.IntheNZEScenario,aroundUSD75billionincumulativespendingisrequiredto2030todeployallmethaneabatementmeasuresintheoilandgassector.Thisisequivalenttojust2%ofthenetincomereceivedbytheoilandgasindustryin2022.•Emergingtechnologiessuchashydrogenandcarboncapture,utilisationandstorage(CCUS)cutemissionsmainlyafter2030.Ifallannouncedprojectsforhydrogenelectrolysiscapacityarerealised,theywouldprovidearound70%ofwhatisrequiredintheNZEScenarioby2030.AnnouncedCCUSprojects,currentlymostlyinadvancedeconomies,wouldprovidenearly40%ofwhatisneededby2030globally.Astrongerpolicyfocusoncreatingdemandforlow-emissionsproductsandfuelsisneeded.•Anetzeroemissionsenergysystemrequiresmoreandvariedinfrastructure.Transmissionanddistributiongridsexpandbyaround2millionkmeachyearto2030,andaround30000to50000kmofCO2pipelinesneedtobeinstalledintheNZEScenario.Newhydrogeninfrastructureisalsonecessary.Deliveringtheneededinfrastructuredependsinpartonexpeditingplanningandpermittingprocesses.•Ifpolicyambitionisnotincreasedbefore2030,limitingtheincreaseinglobalaveragetemperatureto1.5°Cby2100willbecomemuchharder.MuchmoreCO2wouldneedtoberemovedfromtheatmosphereafter2050.TheDelayedActionCaseindicatesthatpostponingstrongeractionwouldcosttheworldanadditionalUSD1.3trillionperyear,50%morethanwasinvestedinfossilfuelsupplyin2022.Chapter3MakingtheNZEScenarioareality1073.1Achievingdeepemissionsreductionsby2030Gettingtonetzeroemissionsby2050requiresrapidanddeepcutsinemissionsofbothcarbondioxide(CO2)andothergreenhousegases(GHG),particularlymethane,by2030.Delayingthesecutswillmakeitallbutimpossibletoachievethenetzeroemissionsgoal.Emissionsreductionscanbedeliveredusingtechnologiesandmitigationoptionsthatarereadilyavailable.IntheNZEScenario,theyareachievedinparticularwithathreefoldincreaseinthecapacityofrenewables-basedelectricitygeneration,doublingtherateofenergyintensityimprovements,sharpincreasesinelectrification,andadropofthree‑quartersinenergysectormethaneemissions(Figure3.1).Thissectionanalyseshowthesemilestonescanbeachieved.Figure3.1⊳Globalrenewablespowercapacity,primaryenergyintensityimprovements,andenergysectormethaneemissionsintheNZEScenario,2022and2030RenewablesIntensityimprovementsMethaneemissions6%15012000GWMt80004%100x3x2-75%IEA.CCBY4.0.40002%50202220302022203020222030IEA.CCBY4.0.Renewables,energyefficiencyandmethaneemissionsreductionoptionsareavailabletodayandcrucialtoreducingnear-termemissionsNotes:GW=gigawatts;Mt=milliontonnes.Forenergyintensityimprovements,the2030valuereflectstheannualimprovementbetween2022and2030intheNZEScenario.3.1.1TriplerenewablescapacityTechnologyoptionsInstalledcapacityofrenewables-basedelectricitygenerationtriplesby2030tomakethesinglebiggestcontributiontoreducingglobalCO2emissionsby2030intheNZEScenario.Globalinstalledcapacityjumpsfrom3630gigawatts(GW)in2022to11000GWin2030,ledbysolarphotovoltaics(PV)andwind(Figure3.2).108InternationalEnergyAgencyNetZeroRoadmapIncreasingrenewablescapacitythreefoldrequirestheannualpaceofcapacityadditionstorisefrom336GWin2022toover1250GWby2030–anannualaverageincreaseof18%.Overthelastdecade,capacityadditionsmorethanquadrupled.Maintainingtherecentpaceofgrowthto2030wouldputthepowersectoroncoursetoachievewhatisneededintheNZEScenario.Theshareofelectricitygenerationthatcomesfromrenewablesrisesfrom30%in2022toalmost60%in2030intheNZEScenario,withthecombinedshareofsolarPVandwindincreasingfrom12%in2022to40%in2030.Theincreaseinrenewablesgenerationoutpaces3electricitydemandgrowth,whichcutsbackunabatedcoal-firedgenerationandreducesitsrelatedemissionsbyhalf.Intotal,electricitysectoremissionsfallbyabout6gigatonnesofcarbondioxide(GtCO2)between2022and2030,morethanthecurrentemissionsoftheelectricitysectorinChina.Figure3.2⊳Globalrenewablesinstalledcapacitybytechnology,2010-2030,andsolarPVandwindmanufacturingandcapacityadditionsintheNZEScenario,2022and203012000RenewablesinstalledcapacityManufacturingcapacityCapacityadditions1200GW8000800IEA.CCBY4.0.40004002010SolarPV2030SolarPVWindSolarPVWindHydroWindBioenergyOther2022Planned2030NZEIEA.CCBY4.0.Globalrenewablescapacitytriplesby2030ledbysolarPVandwind,underpinnedbyrapidexpansionofmanufacturingcapacitySolarPVandwindleadthewayintheNZEScenario,togetheraccountingforover90%oftheoverallincreaseinrenewablescapacityto2030and85%oftheincreaseinrenewableelectricitygeneration.SolarPVandwindarethecheapestnewsourcesofelectricityinmostmarketstoday,arewidelyavailable,rapidlyscalableandhavepolicysupportinover140countries.GlobalsolarPVcapacityadditionsincreasefrom220GWin2022to820GWin2030,ofwhichabout60%isutility-scaleprojectsandaround40%isdistributedsolarPVsuchasrooftoparraysonhousesandbusinesses.Windcapacityadditionsrisefrom75GWin2022to320GWin2030,withoffshorewindaccountingforaroundone-thirdofthetotal.TherapidexpansionofsolarPVandwindto2030wouldincreasetheamountoflandChapter3MakingtheNZEScenarioareality109occupiedbythesetechnologiesbyuptofourfoldfromtoday(Box3.1).Otherrenewableenergytechnologies,includinghydropower,bioenergy,geothermal,concentratingsolarandmarinepower,boostannualcapacityadditionswhichtogetherincreasefrom42GWin2022toabout125GWin2030.Theglobalcleanenergymanufacturingindustryisalreadygearinguptoprovideahugeincreaseinrenewablescapacity(seeChapter1).IfalltheprojectsformanufacturingsolarPVmodulesthathavebeenannouncedgoahead,thecapacitywouldbesufficienttomeettheneedsoftheNZEScenarioin2030.Thisiscauseforoptimism,butitcannotbetakenforgrantedthattheyallwillprogressasplanned.Theoutlookforglobalmanufacturingcapacityadditionsforwindismuchlessencouraging.Ifrenewablepowercapacityistotripleby2030,asenvisagedintheNZEScenario,strongerpoliciesareneededinalljurisdictionstofacilitatemorerapiddeploymentofrenewables,includingthroughsupportforwindmanufacturingcapacity.Inestablishedmarkets,actiontostreamlinepermittingandlandacquisitionprocesseswillbeanessentialelementofstrongerpolicypackages.Inlessdevelopedmarkets,particularlyintheemergingmarketanddevelopingeconomiesotherthanChina,actiontoboostincentivestoinvestandreducethecostsoffinancingwillbeparticularlyimportant(IEA,2023a).Inallmarkets,boostingtheflexibilityofpowersystems,gridsinparticular,willbecriticaltosuccessfullyintegraterisingsharesofsolarPVandwind(IEA,forthcoming).Thispointstotheneedforsignificantinvestmenttoexpandandstrengthenelectricitygrids(seesection3.2.4).PermittingandgridconnectionsIncreasingglobalrenewablescapacitythreefoldby2030intheNZEScenariodependsonexpeditingpermittingandgridconnections,andovercomingotherchallengesincludingsocialacceptanceandlimitationsonavailablesites.GenerationcostsofwindandsolarPVprojectsarealreadycompetitiveinmanycountries,butpermittingprocessesareslowingthepaceoftheirdeployment,asaredelaysinobtaininggridconnections.Thesizeandimportanceoftheissueunderlinethecaseforaction.InEurope,todayaround60GWofonshorewindcapacity–four-timesthecapacitycommissionedin2022–isheldupbyvariouspermittingprocedures.Globally,around3000GWofwindandsolarPVprojectsinlargerenewableenergymarketshaveappliedforgridconnections,whichisslightlylessthanhalftheadditionalrenewablescapacityprojectedintheNZEScenarioby2030(Figure3.3).Notalltheseprojectsareexpectedtocometofruition,buttheygiveanindicationofthescaleoftheissue.Thetimerequiredtoobtainpermitsrangesfromonetofiveyearsforground-mountedsolarprojects,threetonineyearsforonshorewind,andnineyearsforoffshorewind.Thetimerequiredtoobtaingridconnectionscanalsotakeseveralyearsandappearstobeincreasingratherthanshrinking.Thesetimescalesarehinderingcurrentprojectsandriskchokingoffnewones.110InternationalEnergyAgencyNetZeroRoadmapIEA.CCBY4.0.Figure3.3⊳GlobalgridconnectionqueuesforwindandsolarPVbyprojectstatus,2022GridconnectionqueuesProjectstatusGW3000WindSolarPVAdvanced200018%1000Earlystage350%Underreview32%InterconnectionTotalinstalledqueuescapacityIEA.CCBY4.0.AchievingthenetzeroemissionspathwayrequiresstreamliningofpermittingprocessesPolicyeffortstoimprovepermittingproceduresshouldbefocussedonthreeareas:simplifyingpermittingproceduresand/orsettingclearpermittingtimelines;identifyingpreferentialareasforrenewableenergyprojectstofasttrackpermitting;andremovingcertainpermittingrequirementsforsmallrenewablepowerprojectsand/orincreasingtheminimumcapacityrequirementforenvironmentalimpactassessments.Thesechangesaimtoreducepermitleadtimesandincreaseprojectbankability.Effortstospeedupgridconnectionsfornewrenewablescapacityshouldbefocussedonensuringthattherelevantauthoritiesviewtheprovisionofsuchconnectionsasahighpriorityandareresourcedtodeliverwhatisrequired.BoostingcapacityintheemergingmarketanddevelopingeconomiesChinaaloneaccountedforthree-quartersofrenewables-basedpowergenerationcapacityadditionsinemergingmarketanddevelopingeconomiesoverthelastdecade.CapacityadditionsinChinaduringthelastdecadeincludedthree-timesmoresolarPVandwindcapacitythanallotheremergingmarketanddevelopingeconomiescombined.Clearandambitioustargets,strongpolicysupport,maturelocalsupplychainsandlow-costfinancingwereallkeyfactorsinthisrapidexpansionofrenewables.ThisstrongfoundationhasenabledChinatoreduceunitcostsveryrapidly,anditisnowsettoachieveitscurrentNationallyDeterminedContribution’stargetforinstalledwindandsolarPVcapacityby2025,fiveyearsaheadofschedule.Chapter3MakingtheNZEScenarioareality111IEA.CCBY4.0.Figure3.4⊳InstalledrenewablescapacitybytechnologyandeconomicgroupingintheSTEPSandNZEScenario,2022and203010000AdvancedeconomiesandChina5000OtherEMDE8000x1.24000x1.8GW60003000GW400020002000100020222030STEPS2030NZE20222030STEPS2030NZESolarPVWindHydroBioenergyOtherIEA.CCBY4.0.EmergingmarketanddevelopingeconomiesotherthanChinarequirethelargestboostinthegrowthofrenewablesbeyondthecurrentpathwayNote:EMDE=emergingmarketanddevelopingeconomies;STEPS=StatedPoliciesScenario.OtheremergingmarketanddevelopingeconomiesalsohavesignificantpotentialtoexpandIEA.CCBY4.0.renewablescosteffectively.Theyquadrupletheirtotalrenewablecapacityby2030intheNZEScenario,withsolarPVandwindprovidingover80%oftheincrease(Figure3.4).ThisisovertwicetheincreaseprojectedintheStatedPoliciesScenario(STEPS).Oneofthemainbarrierstothisfastergrowthofrenewablescapacityisthehighcostoffinancingprojects,whichreflectsprojectriskassessmentsthattakeaccountofissuessuchaspolicyuncertainties,weakfinancialhealthofoff-takers,limitedgridinfrastructureandmacroeconomicfactors,includingcurrencyrisks.Theweightedaveragecostofcapital(WACC)forrenewablesinemergingmarketanddevelopingeconomiesremainatleastdoublethoseinadvancedeconomies(seeChapter4).Sinceevery1percentagepointincreaseintheWACCincreaseswindandsolarPVgenerationcostsbyatleast7%,thismakesanenormousdifferencetotheprospectsforrenewables.Appropriatepoliciesareneededtoaddresscausesofthehighcostofcapitalintheseeconomies.Clearnationaltargetswithanannualimplementationplan,forinstancethroughcompetitiveauctions,wouldbelikelytoincreaseinvestorconfidence.InIndia,forexample,anambitiousgovernmenttargetsetforrenewablescapacityhasbeenfollowedbycentralandprovincialauctionscheduleswithatransparentprocurementprocess.Therisksassociatedwiththefinancialhealthofoff-takerscouldbeaddressedthroughstandardisedpowerpurchasecontractsbackedbygovernmentguarantees,especiallyforpubliclyownedutilities.Indiaprovidesanexampleofpolicyactionheretoo:itscentralisedlarge-scaleauctionsconductedbytheSolarEnergyCorporationofIndia(SECI)helpedreduceproject112InternationalEnergyAgencyNetZeroRoadmaprisksandlowerthecostofcapitalforutility-scalesolarPVandwindplants.Policiesalongtheselinescouldalsofacilitatetheavailabilityofconcessionalfinancingfrominternationalandregionaldevelopmentbanks,andthiswouldfurtherreducethecostofcapital.IntegrationofvariablerenewablesWhilepowersystemshavealwayshadtoaccommodatethevariabilityofelectricitydemand,therapidexpansionofsolarPVandwind–bothvariablesourceswhoseoutputdependsonweatherconditions–meansthatpowersystemflexibilityneedswillincrease.SincesolarPV3andwinddonotcontributetogridstabilityinthesamewayasthefossilfuelswhichtheyincreasinglydisplaceintheNZEScenario,newwaystoensuregridstabilitywillalsobeneeded.Figure3.5⊳ShareoftotalelectricitygenerationfromwindandsolarPVbyselectedcountry/regionin2022andintheNZEScenarioin2030EuropeanUnionWindUnitedStatesSolarPVChina2030C&SAmericaWorldIndiaJapanSoutheastAsiaAfrica2022DenmarkIrelandGermanySpainEuropeanUnionUnitedStatesChinaC&SAmericaWorldIndiaJapanSoutheastAsiaAfrica20%40%60%80%IEA.CCBY4.0.IntegrationofsolarPVandwindiscriticaltotheNZEScenario,astheirshareintotalgenerationinmostregionsreacheslevelsin2030seenonlyinafewcountriestodayNote:C&SAmerica=CentralandSouthAmerica.IEA.CCBY4.0.Chapter3MakingtheNZEScenarioareality113TherapiddeploymentofsolarPVandwindintheNZEScenarioliftstheirshareofelectricitygenerationin2030tooverone-thirdinmostregionsoftheworld.Withouteffectiveactiontoensuresystemflexibility,thiscouldresultinrisingamountsofsurplussolarPVandwindattimeswhenoutputexceedsdemand.CountriesincludingDenmark,IrelandandSpainalreadyproduceone-thirdormoreoftheirelectricityfromrenewablesandhavemanagedthechallengesofintegration:othercountriesmaybeabletodrawonthelessonstheyhavelearned(Figure3.5).Risingsharesofvariablerenewablesmakeelectricitysupplymoreweatherdependentandleadstohigherneedsforflexibilityacrossalltimescales,rangingfromhourstoseasonsandyears.Varyingwindpatternsobservedoverweeksandseasons,forexample,cancontributesignificantlytotheincreaseofseasonalflexibilityneeds,whilesolarPVvariabilityhasthebiggestimpactontimescalesrangingfromhourstodays.SuccessfullyintegratingtheserisingsharesofsolarPVandwindinelectricitygenerationrequiresmakingthebestuseofexistingandnewsourcesofflexibility,andmarketandregulatoryframeworkshaveacrucialparttofacilitatethis.Existingpowerplants,includingnaturalgas-andcoal-firedstations,cancontributewhiletheyremaininoperationbyfocussingonflexibilityratherthanbulkelectricityproduction.Newsourcesofflexibilityincludeenergystoragetechnologiessuchasbatteriesanddemandresponsehelpinparticulartobalancedailypeaksandtroughs,andbetweenthemtheymeetmuchoftheshort-termflexibilityneedintheNZEScenario.Low-emissionsdispatchablethermalpowerplants,includingnuclearplants,reservoirandpumpedstoragehydro,grid-connectedelectrolysersandlong-durationhydrogenstorageallplayapartinthedeliveryoflongertermandseasonalflexibility.TransmissionanddistributiongridsneedtobemodernisedandexpandedtofacilitatetheintegrationofrisingsharesofsolarPVandwindandthedeploymentofallsourcesofflexibility.Thisshouldbedoneinawaythatfacilitatesdemandresponsemanagement,forexamplebyprovidingincentivestouseenergyattimesofhighsupplyofrenewableelectricity,includingthroughtime-of-usetariffs(seesection3.2.4).Interconnectionsbetweenregionsareanotheroptiontoprovideflexibility:theyallowforthepoolingofflexibilityresourcesandreducetheneedforadditionalpowersystemflexibilitybybalancingload,windandsolarproductionoverlargegeographicalareas.Measurestoensuresystemstabilityalsoneedtobeintegratedintoworktomoderniseandexpandgrids:theyincludethedeploymentofsynchronouscondensers,flexiblealternatingcurrenttransmissionsystems(FACTS),grid-forminginvertersandfastfrequencyresponse(FFR)capabilities.114InternationalEnergyAgencyNetZeroRoadmapIEA.CCBY4.0.Box3.1⊳DoestheworldhaveenoughspaceforallthesolarandwindintheNZEScenario?Basedonareviewofover100completedprojectsworldwide,weestimatethatalltheutility-scalesolarPVandonshorewindprojectsinoperationintheworldin2022coverlessthan0.2millionkm2oflandarea.SolarPVinstallationsinoronbuildingsarenotincludedinthisassessmentastheyrarelyrequireadditionalland.Wefoundthatautility-scalesolarPVprojectof100MWgenerallyoccupiesfrom1km2to3km2.Thisisinline3withotherpublishedestimates(NREL,2021;A.Arvesen,2018;Smil,2010;UNECE,2022).Wealsofoundthata100MWonshorewindturbineprojectgenerallycoversfrom5km2to30km2:heretooourfindingsareconsistentwithotherpublishedestimates(NREL,2021;EnevoldsenandJacobson,2021;Loveringetal.,2022).Windprojectsrequiremorelandthansolarprojectsperunitofcapacityinpartbecausethevastmajorityofutility‑scalePVtakestheformofsolarpanelarrays,wherepanelscanbeputclosetooneanother,whereaswindturbinesneedacertainamountofspacearoundthemtooptimisetheirperformance.Variationsinprojectsizereflectanumberoffactors,includingturbinedesignandtheshapeandgeographyofthesite.Figure3.6⊳TotalandannuallandrequirementsforsolarPVutilityandonshorewindintheNZEScenario,2022,2030and20501.6TotallandrequiredAnnuallandrequiredMillionkm²2.0%Shareofsuitableland80Thousandkm²1.21.5%600.81.0%400.40.5%2020222030205020222030205020222030SolarPVWindSolarPVandwindIEA.CCBY4.0.TherapidexpansionofsolarPVandwindrequiresupto2.0millionkm2oflandareaby2050intheNZEScenario,equivalenttoupto2.5%ofglobalsuitablelandNote:km2=squarekilometres.IntheNZEScenario,thetriplingofrenewablescapacityby2030increasesthegloballandIEA.CCBY4.0.arearequirementsforonshorewindandsolarPVtoupto0.8millionkm2,whichismorethanfourtimestheamountoflandtheyusetoday.Windpoweraccountsforthemajorityofthelandthatisneeded,thoughprojectrequirementsforagivenoutputvarywidelyChapter3MakingtheNZEScenarioareality115dependingonthetypeofturbineusedandonthenatureoftheprojectsite.By2050,totallandrequirementsforonshorewindandutility-scalesolarPVrisetoupto2.0millionkm2,ormorethantentimestheamountoflandusedtoday(Figure3.6).Onanannualbasis,thelandneededeachyearfornewsolarPVandonshorewindprojectsrisesfrom5-20thousandkm2in2022to20-75thousandkm2in2030.Achievingthisscalinguprequiresactiontoovercomechallengesrelatedtolandacquisition,permitting,localacceptanceandgriddevelopment.Therequirementforlandtotallingupto2.0millionkm2forsolarPVandwindintheNZEScenarioneedstobeputintocontext.Itismuchlessthantheglobalrequirementforlandforcropsin2020(12.2millionkm2)orforbuilt-upareasinthesameyear(about4.3millionkm2).ButitismoreusefultolookatsolarPVandwindrequirementsasaproportionofthelandthatissuitableforsuchprojects,andwehaveattemptedtodothis.Suitablelandinthisanalysisincludesgrasslands,shrub-coveredareas,sparselynaturallyvegetatedareas,terrestrialbarrenland.Italsoincludesmostagriculturallandonthebasisthatmanyprojectshavealreadydemonstratedthatfarmingactivitiescanco-existwithonshorewindprojects.However,itexcludesartificialsurfaces(includingurbanandassociatedareas),tree-coveredareas,woodycrops,mangroves,aquaticorregularlyfloodedareas,andpermanentsnowandglaciers.Thisanalysisresultsinaboutone-thirdofgloballandbeingruledoutasunsuitableforsolarPVandwind,leavingjustover80millionkm2assuitable,basedonavailablelandareadata(FAO,n.d.).IntheNZEScenario,theglobalshareofsuitablelandoccupiedbyonshorewindandsolarPVrisesfromabout0.2%in2022toupto0.9%in2030andupto2.5%in2050,thoughthesharevarieswidelybyregion.TheincreaseinthelandrequiredforsolarPVandwindintheNZEScenarioiscertainlysignificant,butitishardtoarguethattheworlddoesnothavethenecessaryspace.3.1.2DoubletherateofenergyintensityimprovementsIEA.CCBY4.0.Theannualrateofimprovementsinenergyintensity–theamountofprimaryenergyneededtoproduceadollarofeconomicoutput–averages4.1%throughto2030intheNZEScenario.Thisisdoubletherateachievedin2022,whichitselfwasnearlydoubletheaveragerateachievedoverthepreviousfiveyears.OneresultoftherateofimprovementachievedintheNZEScenarioisthatenergydemandin2030isnearly10%lowerthanin2022,evenastheeconomycontinuestogrow.Reducedconsumptionmeansreducedemissions.Italsobringsenergysecuritybenefitsandhelpstomakeenergymoreaffordable.TherearethreemainleversthatdoubletherateofimprovementsinprimaryenergyintensityintheNZEScenario,eachofwhichcontributesroughlyathirdofthegains(Figure3.7):Ashifttomoreefficientfuelsthroughelectrification,renewablesanduniversalaccesstocleancookingfuels.Technicalefficiencymeasuresinallsectors.116InternationalEnergyAgencyNetZeroRoadmapAvoidedenergydemandthroughmaterialandresourceefficiencygains,includingthroughbehaviouralchange.Figure3.7⊳RateofannualprimaryenergyintensityimprovementsbyleverintheNZEScenario5%Power4%3BuildingsTransportIndustry3%2%Fuelswitching1%2022ElectrificationCleanTechnicalAvoided2030andrenewablescookingefficiencydemandNZEIEA.CCBY4.0.Morerigorouspoliciestoboostfuelswitching,energyandresourceefficiency,andbehaviouralchangeareessentialtodoubletherateofimprovementinenergyintensityNotes:Avoideddemandincludesbehaviouralchange.2030NZEreferstotheaverageannualrateofenergyintensityimprovementsbetween2022and2030intheNZEScenario.Switchtomoreefficientfuels:RoleofelectrificationElectrificationisamajordriverofthesharpfallinenergyintensityintheNZEScenariobecauseelectricitycanbeconvertedintoenergyservicesmuchmoreefficientlythanincumbentfossilfuel-basedtechnologies.Electricvehicles(EVs)aretwo-tofour-timesmoreefficientthancurrentinternalcombustionengine(ICE)vehicles;heatpumpsarethree-tofive-timesmoreefficientthanfossilfuelboilers,andinductionstovesareabouttwiceasefficientasgasstoves.IntheNZEScenario,arapidshifttoelectricityacrosstheenergysystemresultsinenergysavings,reachingnearly20exajoules(EJ)by2030,closetothecombinedcurrentfinalconsumptionofJapanandKorea.ThemajorityofthesesavingsarerealisedthroughtherapiduptakeofEVsintransportandheatpumpsintheresidentialsector(Figure3.8).Boththesetechnologiesarealreadyinuseandaregainingground,buttheNZEScenariospeedsuptheiradoptionanddoublestheenergysavingsthattheybringintheSTEPSoutlook(seesection3.1.3).Chapter3MakingtheNZEScenarioareality117IEA.CCBY4.0.Figure3.8⊳AnnualenergysavingsfromelectrificationintheNZEScenarioTransportResidential-5-5ServicesIndustry-10Other-10AchievedunderSTEPS-15-15EJ-202030EJ20252030-202025IEA.CCBY4.0.Electrificationresultsinannualenergysavingsofnearly20EJby2030,equivalenttothecombinedcurrentfinalconsumptionofJapanandKoreaTechnicalefficiencymeasures:ImprovingtheefficiencyofappliancesinbuildingsImprovementsintheunitenergyconsumptionofappliancesinrecentdecadeshavebeenimpressive.Refrigeratorspurchasedtodayconsumelessthanhalfasmuchelectricityasmodelssold20yearsago;airconditionershavebecomeover40%moreefficientinthesametimeframe.Thesegainshavebeendrivenbyacombinationoftechnologyimprovementsandpolicymeasuresdesignedtodiffusethoseimprovements,notablythroughthewidespreadadoptionofstandardsandlabelling.Togethertheyhavereducedannualelectricityconsumptionbyaround15%inregionswithlong-standingpolicies.Atthesametime,appliancessubjecttostandardsandlabellingprogrammeshavebecomesignificantlylessexpensive(IEA,2021a).Appliancestandardsarenowinplaceinmorethan110countriesand,forexample,cover90%oftheenergyconsumptionbyrefrigeratorsworldwide.TheNZEScenariobuildsontheprogressofsuchprogrammesbutrequiresanincreasingfocusonbestavailabletechnologiesinallregions.1Thisisparticularlyimportantinemergingmarketanddevelopingeconomies,wheremostappliancesalesthroughto2030willbeconcentrated,andwhereefficiencypoliciesaregenerallylessstringenttodaythaninadvancedeconomies.Airconditionersareparticularlyimportantinthiscontext.Thestockofairconditionersinemergingmarketanddevelopingeconomiesissettodoublebytheendofthedecade1TheSuper-EfficientEquipmentandApplianceDeploymentInitiative,acollaborationoftheIEAwithmoreIEA.CCBY4.0.than20governmentsandotherpartners,supportsstandardsandlabellingeffortsbyhelpingpolicymakerssimplifyregulationsettingandcompliance.118InternationalEnergyAgencyNetZeroRoadmapreflectingrisingincomesandcoolingneeds.Thispresentsenormousscopetoincreasetheaverageefficiencyofairconditioners.Highlyefficientmodelsarealreadyavailable,butthosesoldtodayareonaveragejusthalfasefficientasthebestavailabletechnologyinmanymarkets.Thankstostandardsandlabellingprogrammes,averageairconditionerssoldintheemergingmarketanddevelopingeconomiesin2030intheNZEScenarioareatleast50%moreefficientthantoday(Figure3.9).Moreefficientmodelssometimescostslightlymorethanthealternatives,butthisisnotalwaysthecase,andtheysaveconsumersmoneyovertehnevierlolipfeetsim(Beoxdu3e.2)toaslowweellraosppearasstiivnegccooosltisn.gEsnterargteygeiefsficainedncbyeihmapviroouvreamlcehnatsngoefsbsuuicldhinags3higherairconditionertemperaturescanalsobringdownenergybillsandcurbgrowthinelectricitydemand.Figure3.9⊳AverageefficiencyandpurchasepriceofnewairconditionersinemergingmarketanddevelopingeconomiesAverageefficiency4000Purchaseprice2022/20238W/WUSD(2022,PPP)630004200021000202220222030LowMediumHighBATNZEefficiencyefficiencyefficiencyIEA.CCBY4.0.EfficiencyimprovementsarevitalintheNZEScenario,andefficientairconditionerstodayarenotsignificantlymoreexpensivethanthosewithlowerefficiencyNotes:W/W=WattofcoolingoutputperWattofelectricityinput;BAT=bestavailabletechnology;PPP=purchasingpowerparity.BasedondataforwallairconditionerscollectedfromArgentina,Brazil,Colombia,Ghana,Kenya,PanamaandVietnaminlate2022andearly2023.Purchasepricesarenormalisedtoacoolingcapacityof12000Britishthermalunitsperhour.Lowefficiency=below4W/W;mediumefficiency=4-5W/W;highefficiency=above5W/W.Box3.2⊳A(retro)fittingsolutiontodecarbonisebuildingsIEA.CCBY4.0.Retrofittingisoneofthemainleversfordecarbonisingthebuildingssector.Buildingsinadvancedeconomieshaverelativelylonglifetimes,about80yearsonaverage.Over90%ofthebuildingsthatwillbeinuseinthesecountriesin2030havealreadybeenbuilt.IntheNZEScenario,2.5%ofbuildingsinadvancedeconomiesareretrofittedeachyearfromChapter3MakingtheNZEScenarioareality1192030onwardsandallnewbuildingsarezero-carbon-ready.Buildingenergycodesandstrongretrofitpoliciesdrivethesedevelopments,whichtogetheraccountfor40%oftheemissionssavingsfromefficiencymeasuresinresidentialbuildings.Inthepastdecade,between2-14%ofbuildingsayearinatleastsomeadvancedeconomieshaveundergonesomekindofaretrofit,butfewerthan1.5%ofbuildingshavebeenretrofittedsufficientlyeachyeartolowerenergydemandby30%ormore(Figure3.10).Achievingbiggerenergysavingsfromeachretrofitwillrequireconsistentandrobustpolicysupportfromgovernments.Figure3.10⊳AnnualretrofitratesandspaceheatingenergyintensityofresidentialbuildingsinadvancedeconomiesRetrofitratesHeatingenergyintensityAdvancedeconomiesUnitedStatesandCanadaNordiccountriesEuropeanUnionUnitedKingdom1%2%3%501001502030NZEkWh/m2/yearAverageinthepastdecadeIEA.CCBY4.0.Annualresidentialbuildingretrofitratesinadvancedeconomiesaveragelessthan1.5%today;astepupto2.5%by2030isneededintheNZEScenarioEuropeanUnionhereexcludesDenmark,FinlandandSweden.TheseareincludedunderNordiccountries.Notes:kWh/m2/year=kilowatt-hourpersquaremetreperyear.Retrofitratesincludedhereyieldenergysavingsof30%ormore.TheNZEScenario2030targetshowsanaveragethatvariesdependingonregionalclimateconditionsandheatingneeds.Sources:EuropeanCommission(2019),Olgyay(2010),USEIA(2018),andZEBRA(2020).Costandconveniencearetheprimarybarrierstosteppinguptherateanddepthofretrofits.Thecostofinsulationmaterialshasincreasedinrecentyearsamidstsupplychaindisruptionsandinflation.RetrofittingtheaveragesizehomeinadvancedeconomiescancostthousandsofUSD,whichcanposeasignificantfinancialbarrierforlowerincomehouseholds(seeChapter4).Deeperretrofitsalsooftenrequireadditionaltimeandcauseextradisruptiontooccupants.120InternationalEnergyAgencyNetZeroRoadmapIEA.CCBY4.0.Inrecentyears,numerousgovernmentshaveofferedgrants,subsidiesandtaxcreditstoincentiviseretrofitsthroughprogrammessuchastheUSInflationReductionAct,theUKGreenerHomesGrant,andtheSuperbonusinItaly.Theyhaveboostedretrofitratessubstantially,butmanyincentiveshaveexpiredorareduetoexpiresoon.Anumberofgovernmentshaveputstrategiesinplacetostandardiserenovations,speedupretrofitsandlowercosts,andthesecouldbereplicatedoradaptedforuseinothercountries.Forexample,theDutchEnergiesprongprogrammereliesondigitalplanningandprefabricatedfacadestodeliverprojectsmorequickly,whiletheIrishNational3RetrofittingSchemeemphasisesone-stopshopssothathomeownerscanaccesscompleterenovationmanagementandfinancingservicesviaonecounterpart.Legislativemeasuresmayalsohaveaparttoplay.Forexample,theEuropeanUnionisconsideringlegislationtorequireretrofitsoftheleastenergy-efficientbuildingsinmemberstates(EuropeanParliament,2023).Avoidedenergydemand:ImpactofbehaviouralchangeIEA.CCBY4.0.AlthoughtechnicaloptionstoreduceenergyintensityaremaximisedintheNZEScenario,thepaceofturnoveroftheglobalstockofenergy-relatedassetsimposesconstraintsonwhatcanbeachievedby2030.Consequently,behaviouralchanges–actionsthatconsumerscantaketoreduceenergyconsumption–areneededtoaccelerateimprovementsinenergyintensity.Inthebuildingssector,theyincludeadjustingspaceheatingandcoolingtemperatures.Inthetransportsector,theyincludemorepublictransportandreducedcaruseincities,eco-drivingonhighwaysandswitchingfromplanestotrainsorvideoconferencing.Tobringaboutthesechanges,issuessuchasthehighcostoftraintravelneedtobeaddressed,andnewfinancialincentivesneedtobeintroducedsuchascongestionchargesincitiesandleviesonfrequentflyers(IEA,2023b).BehaviouralchangeintheNZEScenariohappensmorequicklyandtoalargerextentinadvancedeconomiesthanelsewhere.Forexample,demandforspacecoolingonapercapitabasisismorethanthree-timeshigherinadvancedeconomieseventhoughemergingmarketanddevelopingeconomieshavearoundthree-timesmorecoolingdegreedaysinatypicalyear.Thismeansthatraisingspacecoolingtemperaturesgeneratesfargreatersavingspercapitainadvancedeconomiesthaninemergingmarketanddevelopingeconomies.In2030,onapercapitabasis,theenergysavingsintheNZEScenariofrombehaviouralchangesinroadtransportandthebuildingssectorareaboutfive-timeshigherinadvancedeconomiesthaninemergingmarketanddevelopingeconomies;inaviationtheyareabouteight-timeshigher(Figure3.11).ThereductioninenergydemandfromsustainedbehaviouralchangesintheNZEScenarioissignificant,butitbuildsonthereductionsachievedasaresultofrecentpolicyinterventionsrelatedtotheCovid-19pandemicandenergycrisis.Forexample,teleworkingwasstillthree‑timesmoreprevalentin2022thanin2019(Parker,HorowitzandMinkin,2022).Theenergycrisisof2022ledtoanumberofmeasuresdesignedtochangebehaviour,includingChapter3MakingtheNZEScenarioareality121nationalenergysavingscampaignssuchasinDenmark,Germany,IrelandandSweden.AmongtheGroupof20(G20)nations,thenumberofpoliciessupportingbehaviouralchangeshasmorethandoubledsince2021,andtheG20forumhasrecognisedtheimportanceofbehaviouralchangewithadoptionoftheHigh-LevelPrinciplesforLifestylesforSustainableDevelopment.Figure3.11⊳ChangesinenergyconsumptionfrombehaviouralmeasuresintheNZEScenario,2030AdvancedEmergingmarketandRoadtransporteconomiesdevelopingeconomiesLowcarcities-1CarpoolingWorkingfromhome-2SpeedlimitsOtherfuel-efficiency-3FewerSUVs-4BuildingsSpaceheatingSpacecoolingEco-householdAviationAviationmeasuresGJpercapitaIEA.CCBY4.0.IEA.CCBY4.0.Behaviouralchangessavefive-timesmoreenergypercapitainadvancedeconomiesNotes:Lowcarcitiesrepresentanurbanmodelwhereplanningandinfrastructurereducethedependenceoncarstosubstantiallyimprovepublichealth,well-beingandliveability,includingahostofmeasuressuchasthephase-outofinternalcombustionenginecarsfromcitycentres,sharedmobilityormoderatingurbanspeedlimits.Otherfuelefficiencyincludesreducingairconditioningtemperaturesincarsandeco-drivingpractices.Spaceheating/coolingincludeslimitingheatingtemperaturesto19-20°Candcoolingtemperaturesto24-25°C.Eco-householdincludeslinedryingclothesinsteadofmachinedrying,reducinglaundrytemperatures,switchingofflightsinunoccupiedrooms,unpluggingappliancesnotinuseandreducingwaterheatingtemperatures.Aviationmeasuresincludeashiftfromshort-haulflightstohigh-speedrail,reductionofbusinessflightsandimpositionofalevyforfrequentflyers.Behaviouralchangeintheadvancedeconomiesreduceselectricitydemandinthebuildingssectorin2030bymorethan6%andnaturalgasdemandbyaround15%intheNZEScenario.Recentexperiencesuggeststhatthisisfeasible:inGermany,householdsandsmallbusinessescutnaturalgasconsumptionbyupto42%in2022inresponsetotheenergycrisisandpublicexhortationstosaveenergy(Hirth,2022).Similarly,drivinginICEcarsdropsbyupto14%from2022to2030withmoreuseofpublictransport,cyclingandwalking.Thereareencouragingprecedentsheretoo:forexample,London’scongestionchargebroughtaboutan18%dropincartraffic20yearsafteritsfirstadoption(TransportforLondon,2023).122InternationalEnergyAgencyNetZeroRoadmapSwitchingtomoreefficientfuels:RoleofaccesstomodernenergyAcceleratingaccesstomodernenergyhelpsdrivedownenergyintensitymorequicklyintheNZEScenario.Nearly2.3billionpeopleinaround130countries,mainlyinAsiaandsub-SaharanAfrica,lackaccesstocleancookingtoday,whilenearly780millionpeopleremainwithoutaccesstoelectricity.Inadditiontoitsotherbenefits,accesstomodernenergyimprovesenergyefficiency.Despiteconsiderablepopulationgrowth,universalaccesstocleancookingcutsresidentialfueldemandforcookinginemergingmarketanddevelopingeconomiesbynearly60%by2030intheNZEScenariocomparedwithtoday.3Thisismainlyduetoswitchingfromextremelyinefficienttraditionaluseofbiomasstoimprovedcookstoves(ICS).Thesestovesaremoreefficient,burnlesswoodandemitlesssmokethantraditionalcookstoves.Theyallowpoorhouseholdsinruralareastomakeafirststeptowardcleancookingwithoutchangingthefueltheyuse.Forthistohappen,investmentincleancookingstoves,equipmentandinfrastructureoverthisdecadeneedstoreachaboutUSD8billionannually–lessthan1%ofwhatgovernmentsspentin2022onmeasurestokeepenergyaffordablefortheircitizensamidsttheglobalenergycrisis.Figure3.12⊳EnergyuseforresidentialcookingandgainsinaccesstomodernfuelsinemergingmarketanddevelopingeconomiesintheNZEScenarioChangeinresidentialPeoplegainingaccesscookingdemandbyfuelbyregionandperiod40EJ1600Sub-SaharanAfricaMillionpeople30Modern1200OtherEMDEOtherdevelopingAsiaIEA.CCBY4.0.20800IndonesiaTraditional400ChinaIndia102022ICSBest10year2020-20302030improvementIEA.CCBY4.0.Universalaccesstocleancookingcutsresidentialfueldemandforcookinginemerginganddevelopingeconomiesbynearly60%by2030relativetotodayNotes:EJ=exajoules.ICS=improvedcookstovesthatusesolidbiomassasafuel.Modern=modernfuelssuchasliquefiedpetroleumgas,electricity,biogasandethanol.Traditional=traditionaluseofbiomass,coalandkerosene.Bestten-yearimprovementbarsreflectthesinglebesthistoricyearofprovidingcleancookingaccessforeachcountrybetween2000and2022,andassumesthisisrepeatedfortenyearsasarepresentativepointofcomparisonforthelevelofeffortrequiredtoreachSustainableDevelopmentGoal7.Achievinguniversalaccesstomodernenergywouldinvolveanaccelerateddeploymentofallavailabletechnologies,andanunprecedentedreversalofcurrenttrendsinsub-SaharanChapter3MakingtheNZEScenarioareality123Africa,wherethepopulationwithoutaccesshasclimbedcontinuouslyinmostcountries.IEA.CCBY4.0.However,progressinotherregionshasdemonstratedthatitispossibletoquicklyprovideaccesstocleancookingsolutions(Figure3.12).Forexample,inIndia,nearlyhalfabillionpeoplegainedaccesswithintenyearsthankstoacombinationofsubsidisedrefillsofliquefiedpetroleum(LPG)cylinders,deposit-freeLPGconnectionsandaschemeallowingwealthierhouseholdstovoluntarilyrenouncetheiraccesstoLPGsubsidies.SimilarsuccessstoriesfromChinaandIndonesiashowcasehowstrongnationaleffortscanmakeanimpact,witheachcountryproviding2-3%ofitspopulationwithcleancookingtechnologieseveryyear(IEA,2023c).3.1.3AccelerateelectrificationFrom2023to2030,aroundone-fifthoftheemissionsreductionsintheNZEScenarioresultfromelectrificationofend-usesthatwouldotherwisehaveusedfossilfuels.Intransport,mostofthegainscomefromthedeploymentofEVs.Inthebuildingssector,emissionsreductionsmostlycomefromtheinstallationofheatpumps.Inindustry,thereispotentialfortheelectrificationoflow-temperatureandsomemedium-temperatureheatapplicationsusinghighlyefficientindustrialheatpumps,withotherelectricheatingtechnologiesandthermalenergystoragefurtherextendingelectricity’sreach.Theelectrificationofheavyindustries–steel,cementandchemicals–iscriticaltotheachievementoftheNZEScenario,buttheseindustrialbranchesreachlowerlevelsofelectrificationto2030.Thisismainlyduetothetimeneededtodevelopmarket-readydirectelectrificationtechnologiesforcertainapplications,suchasprovidinghigh-temperatureheatincementandchemicalmanufacturing,andthechemicalreductionofironoreinthesteelmaking.ElectrificationintransportElectrificationrampsupmorequicklyintransportthaninotherend-usesectorsintheNZEScenario.Theshareoftransportenergyconsumptionaccountedforbyoilfallsfromabout90%todayto80%in2030;theshareofelectricityincreasesfrom1%toalmost8%overthesameperiod(Figure3.13).Morethan90%ofthisincreaseinelectricitydemandisattributabletotheswitchfromICEvehiclestoEVs,and50%ofthatinturnisattributablesolelytoelectriccars.ElectrificationprogressesintheSTEPStoo,reflectingrapidcostdeclinesinrecentyearsandstrongpolicysupportinmajormarkets,butitspaceissignificantlyfasterintheNZEScenario.Chinaandtheadvancedeconomiesareexpectedtoleadthewayintheelectrificationofvehiclefleets,inwhichEVsalesaccountfor80%oflight-dutyvehicles,85%ofbusesand55%ofheavytrucksin2030intheNZEScenario.Assalesincreaseandcostsdecline,electrificationfollowsintheotheremerginganddevelopingeconomies,whereEVsalesaccountfor40%oflight-dutyvehicles,40%ofbusesand7%ofheavytrucksin2030intheNZEScenario.Thisissupportedbyarapidroll-outofcharginginfrastructureandassociatedinvestmentinelectricitygrids.124InternationalEnergyAgencyNetZeroRoadmapFigure3.13⊳Globalelectricitydemandinroadtransportbyscenario,2022-2030,andEVsalessharesintheNZEScenario,2010-2030RoadtransportelectricitydemandEVsalesshareTWh140014%70%Cars120012%60%3100010%50%Heavytrucks8008%40%6006%30%4004%20%2002%10%PassengerFreight20102022203020222030STEPS2030NZEShareofelectricityinroadtransport(rightaxis)IEA.CCBY4.0.Electricitymeetsover10%ofenergydemandinpassengerroadtransportandelectriccarsareabout65%ofallcarssalesin2030intheNZEScenarioNote:TWh=terawatt-hour.Overthedecadepriorto2022,globalelectriccarsalesincreasedatanaverageannualrateIEA.CCBY4.0.ofover50%;intheNZEScenario,theyincreaseonaveragebyaround25%annuallybetween2023and2030,althoughfromahigherbase.Theirshareoftotalcarsalesreachesabout65%(comparedwith14%in2022).ThissuggeststhatelectriccarsalescouldmeetorexceedwhatiscalledforintheNZEScenarioby2030.Therearecurrentlyabout500electriccarmodelsavailableworldwide,andthisissettoincrease.Forexample,Volvoplanstosellonlyelectriccarsby2030andBYD,anautomakerinChina,hasalreadystoppedsellingICEvehicles.Investmentsinelectricvehiclebatterymanufacturingarealsopickingup,withcapacityincreasingbyalmost60%in2022;announcedexpansions,iftheyproceedasplanned,woulddeliverathroughputsufficienttomeetthedemandin2030intheNZEScenario(seeChapter1).Electrificationofheaviervehiclesegments,suchastrucksandbuses,needstoacceleratefastertodeliverwhatisrequiredintheNZEScenario.Electricbusesincreasetheirshareofsalesfrom4%in2022toover50%in2030intheNZEScenario,andelectricheavytrucksincreasefrom1%to33%share.Therearesomeencouragingsignsthatthepaceofprogressmayincrease.Truckandbusmanufacturersareincreasinglyofferingzeroemissionsvehicles.Electricbusesandtrucksarebecomingincreasinglycompetitiveonatotalcost-of-ownershipbasis.However,additionalelectricitydemandby2030intheSTEPSforheavytrucksandbusesisonlyone-thirdofthelevelintheNZEScenario,indicatingthatmoreneedstobedonetoaccelerateuptake.Chapter3MakingtheNZEScenarioareality125Currently,themostcommonpolicymeasurestosupportEVdeploymentarefuel-economyandCO2emissionstandards,bothforlight-andheavy-dutyvehicles,aswellasfinancialincentivessuchaspurchasesubsidiesandtaxcreditsthatmakeEVsmorecostcompetitivewithconventionalICEvehicles.GovernmentsarealsosupportingthedevelopmentofEVcharginginfrastructure,forexamplebyofferingfinancialincentivesforpublicaswellasprivatechargersandbystipulatinginfrastructurerequirementsinbuildingcodes.ElectrificationinbuildingsTheshareofelectricityinenergyuseinthebuildingssectorworldwiderisesfrom35%todaytonearly50%in2030intheNZEScenario,comparedwith40%intheSTEPS.Theshareofelectricityinspaceandwaterheatingincreasesbyaround7percentagepointsby2030,mainlyasaresultofincreaseddeploymentofheatpumps,whicharethree-tofour-timesmoreefficientthanelectricresistanceheaters.Heatpumpsmetaround10%ofglobalheatingneedsinbuildingsin2022,withmorethan1000GWofcapacityinoperationforspace(and/orwater)heating.Salesofheatpumpsareincreasingrapidly:theyroseby11%in2022,markingasecondyearofdouble-digitgrowth(IEA,2023d).GrowthisevenfasterintheNZEScenario,withthestockalmosttriplingby2030,bywhichtimeitmeetsoverone‑fifthofbuildingsectorheatingneeds.Thisimpliesaverageannualsalesgrowthofalmost20%between2023and2030(Figure3.14).IntheEuropeanUnion,theannualincreaseofheatpumpsaleshasbeenover35%since2021,implyingthatthegrowthratesrequiredintheNZEScenarioarefeasible.Figure3.14⊳Globalheatpumpsalesgrowthrateandshareofelectricityinbuildingsend-usesintheNZEScenario,2010-2030AverageannualgrowthinheatpumpsalesShareofelectricityinbuildingsend-uses20%60%15%45%Buildings10%30%Waterheating5%15%Spaceheating2010-2015-2020-2022-2010202020302015202020222030IEA.CCBY4.0.Salesofheatpumpshavesurgedsince2020,butneedfurthergrowthtoreach2030targets126InternationalEnergyAgencyNetZeroRoadmapIEA.CCBY4.0.Inmostmarkets,theupfrontcostofaresidentialheatpump(includinginstallation)isgenerallymuchhigherthanthatofafossilfuelboiler,thoughtheextentofthecostgapvarieswidelywithinandacrosscountries,evenforthesametechnology.Nonetheless,insomematuremarkets,suchasNorway,DenmarkandJapan,theleastexpensiveductlessair‐to‐airheatpumpmodelshavebecomecheaperthannaturalgasboilersfornewinstallationsinsmallhouses,thanksprimarilytoreducedpipingworkandinstallationcosts.Financialincentivesarecurrentlyavailableinover30countriesaroundtheworld,coveringmorethan70%oftoday’sheatingdemand(IEA,2022).Manyofthesegrants,taxrebatesand3low-interestloansforheatpumpsinnewbuildingsoraspartofbroaderbuildingsrenovationshavebeenintroducedorstrengthenedsincethebeginningoftheenergycrisis.Othermeasurestosupportamorerapiduptakeofheatpumps,asenvisagedintheNZEScenario,arenewheat-as-a-servicebusinessmodelsaswellasrevisedbuildingenergyperformanceandcleanheatstandards.Inaddition,energytariffsandtaxescanbestructuredtofavourcleanerandmoreefficientconsumerchoices.Addressingbarrierssuchasashortageofworkforcefortechnologyinstallationandrestrictionsorpracticalconstraintsfornewinstallationsbecomesevenmorepressingasupfrontcostscomedown.ElectrificationinindustryIEA.CCBY4.0.Theindustrysectorcurrentlyaccountsformorethan40%ofglobalelectricitydemand.Electricityisversatileandprovidesadiversearrayofenergyservicesinindustry,e.g.heating,cooling,lighting,electrochemicalprocessesandmotordrives.Theproductionofsteelrecycledscrapandprimaryaluminiumproductionalluseelectricityastheprincipalenergyinputtoday.IntheSTEPS,industrialelectricitydemandrisesbyaround15%by2030asdemandforindustrialoutputsexceedstherateofefficiencyimprovements.IntheNZEScenario,aconcertedpushtoelectrifyprocessesacrossallsub-sectorsleadstoamuchbiggerincreaseinindustrialelectricitydemandof4000TWh,or38%by2030,40%ofwhichisinheavyindustries(Figure3.15).Heatingapplicationsofferthelargestscopeforincreasingelectrificationintheindustrysector.Manyofthetechnologiesneededtosubstituteelectricityforfossilfuelsarealreadycommerciallyavailableforlow(<100°C)andmedium(100-400°C)temperatureheat.Inlightindustries,morethan90%oftotalheatdemandfallswithintheseranges.Heatpumps,electricboilersandresistanceheaters–orcombinationsofallthree–offeranefficientmeansofprovidingawiderangeoftemperaturesforbothdirectheatingandindirectheatingusingsteam.IntheNZEScenario,electrificationofheatingapplicationsaccountsfor45%oftheincreaseinelectricityconsumptioninlightindustriesto2030.Costisthekeypotentialbarriertoachievingthis.Fuelaccountsforthemajorityofthetotallifecyclecostofheatingequipment,andindustrialend-userpricesforfossilfuelstendtobesubstantiallylowerthanelectricitypricesinmostcountriestoday.Industrialheatpumps,whicharemoreefficientthanfossilfuelheatingunits,areabletobridgethecostgapinsomecases,especiallywhencomplementedwithcaptivesolarPVelectricitygeneration.ThermalChapter3MakingtheNZEScenarioareality127storagetechnologiesthatcandeliverheatdirectlytoindustrialprocessesathightemperaturesmaybeabletoextendthereachoflow-costvariablerenewableelectricityintheindustrysector,by-passingthegrid.Nevertheless,costremainsanobstacle.Figure3.15⊳Globalelectricitydemandinindustrybyscenario,2022-2030,andshareofelectricityintotalenergydemandbysub-sectorintheNZEScenario,2010-2030IndustrialelectricitydemandShareofelectricityintotalconsumption60%60%TWh6000400040%40%200020%20%LightindustryHeavyindustry2010203020222030STEPS2030NZELightindustryIronandsteelElectricityshare(rightaxis)CementChemicalsIEA.CCBY4.0.ElectrificationinindustrymustgofarbeyondwhatisprojectedundercurrentlyplannedpoliciestobeinlinewiththeNZEScenarioElectrifyingtheprovisionofhigh-temperatureheat(>400°C)inindustryismoredifficult.Electro-magneticheatingtechnologies,resistanceheatersandelectricarcfurnacesarecommerciallyavailableoptionsforspecificapplications.Formanykeyindustrialprocesses,however,directelectrificationtechnologiestodaygenerallyarestillatearlystagesofdevelopment.Examplesincludedirectelectrificationofheatingincementkilns,electricsteamcrackersandelectricironoreelectrolysis,thetechnologiesforwhichareallattheprototypestage(IEA,2023e).IntheNZEScenario,innovationeffortsrelatedtothesetechnologiesaccelerateoverthecomingfiveyears,withinstallationofthefirstcommercial-scaleplantsprojectedintheearly2030s.EnergyperformancestandardsandCO2pricingarethemostcommonpolicymechanismscurrentlyemployedtoreduceindustrysectoremissions.Theseandsimilarmeasurescanbeinstrumentaltoadjusttheoperationalcostbalanceinfavourofcommerciallyavailableelectrifiedequipment,notablyindustrialheatpumps.Variousformsofpolicysupportareneededtocommercialiseearlierstagetechnologiestoelectrifyprocessesinheavyindustries,suchasgrantsfordemonstrationprojectsandconcessionalfinanceforinitialdeployment.128InternationalEnergyAgencyNetZeroRoadmapIEA.CCBY4.0.3.1.4ReducemethaneemissionsRapidandsustainedreductionsinmethaneemissionsarekeytolimitnear-termglobalwarmingandtoimproveairquality.Methaneemissionshaveanoutsizedimpactonglobaltemperaturesintheshortterm,asmethaneisashort‐livedclimateforcerwithpowerfulwarmingpotential,albeitwithashortatmosphericlifetime.Therefore,cuttingmethaneemissionsquicklywouldmakeasignificantcontributiontolimitingthedurationandmagnitudeofthetemperatureovershootabove1.5°C.Methaneisresponsibleforaround30%oftheincreaseinglobaltemperaturessincethe3IndustrialRevolution.AfterCO2,cuttingmethaneemissionshasthesinglelargestimpactonlimitingthetemperatureriseto2050intheNZEScenario(IEA,2023f).Around150countrieshavejoinedtheGlobalMethanePledge,whichwaslaunchedattheConferenceoftheParties26in2021andaimstoreducemethaneemissionsfromhumanactivitybyatleast30%from2020levelsby2030.Theenergysectoraccountsforaround40%oftotalmethaneemissionsattributabletohumanactivity,secondonlytoagriculture,andithasthelargestpotentialforabatementinthenearterm.Figure3.16⊳MethaneemissionsfromfossilfueloperationsbyregionintheSTEPSandbyfuelintheNZEScenarioSTEPSNZE150150Mt100100CoalIEA.CCBY4.0.5050Oilandgas2010203020222030AsiaPacificEurasiaNorthAmericaMiddleEastAfricaC&SAmericaEuropeIEA.CCBY4.0.ThegapinmethaneemissionsbetweentheSTEPSandNZEScenarioreachesmorethan60Mtby2030Note:C&SAmerica=CentralandSouthAmerica.Weestimatethatfossilfuelswereresponsibleforaround125milliontonnes(Mt)ofmethaneemissionsin2022,aslightincreaseover2021(Figure3.16).Coal,oilandnaturalgaswereeachresponsibleforaround40Mtofemissionsduringproduction,processing,Chapter3MakingtheNZEScenarioareality129storageandtransportationoperations,andnearly5MtofmethanealsoleakedfromIEA.CCBY4.0.end‑useequipment.Chinaaccountsforover50%ofglobalcoalsupplyandasimilarshareofcoalminemethaneemissions.TheUnitedStatesandRussiaeachemitnearly14Mtofmethaneemissionsfromoilandgasoperations,oraround35%ofthetotalfromoilandgasoperationsbetweenthem.Manymajoremitters,suchasChinaandRussia,havenotyetpledgedtoactonmethane.Methaneemissionsfromfossilfueloperationsfallbyaround20%between2022and2030intheSTEPS,mostlyasaresultofincreasingpoliticalmomentumtotackletheseemissionsandvoluntaryindustryaction.Effortstocurtailemissionsarealreadyleadingtoareductionintheamountofmethanethatisemittedperunitofenergyproducedglobally.Emissionsfromverylargeleaksdetectedbysatellitefellbyalmost10%in2022fromthelevelsdetectedin2021andtherewasanearly5%reductioninnaturalgasflaringglobally.Weestimatethattheglobalaveragemethaneintensityofoilandgasproductionhasfallenbyaround5%since2019.Butthereisscopeformuchmoretobedone.Severalcountrieshavereleasedorareworkingonnationalmethaneactionplanstosupportreductions.Manyofthemhaverecentlypublishedlandmarkpoliciesonmethane,includingColombia,NigeriaandtheUnitedStates.CanadaandtheEuropeanUnionareexpectedtoissuenewmethaneregulationsin2023.Anumberofoilandgascompanieshavesettargetstolimitemissionsorreducetheiremissionsintensity.In2022,theOilandGasClimateInitiativelaunchedtheAimingforZeroMethaneEmissionsInitiative,acallfortheindustrytotreatmethaneemissionsasseriouslyasitalreadytreatssafetyandtoreachnearzeromethaneemissionsby2030.Methaneemissionsfromfossilfueloperationsfallbymorethan75%by2030intheNZEScenario,mainlyasaresultoftherapiddeploymentofemissionsreductionmeasuresandtechnologies(Figure3.17).Theseincludemeasuresthatputastoptoallnon-emergencyflaringandventing,anduniversaladoptionofmonthlyorcontinuousleakdetectionandrepairprogrammes.Afallindemandforfossilfuelsalsoplaysanimportantrole,particularlyindrivingdowncoalminemethaneemissions,thoughleaksfromclosedminesalsoneedtobeaddressed.By2030,allproducershaveanemissionsintensityprofilesimilartothatoftheworld’sbestoperatorstoday.By2050,thedropinmethaneemissionsfromfossilfuelsreaches98%asaresultoffurthertechnologydevelopmentanddemandreductions.Methaneabatementisverycosteffectiveintheoilandgassector.Basedonaveragenaturalgaspricesfrom2017to2021,weestimatethataround40%ofmethaneemissionsfromoilandgasoperationscouldbeavoidedatnonetcostbecausetheoutlaysfortheabatementmeasuresarelessthanthemarketvalueoftheadditionalgasthatiscaptured.Iftherecordnaturalgaspricesseenaroundtheworldin2022areusedforthecalculationsinstead,weestimatethatabout80%oftheoptionstoreduceemissionsfromoilandgasoperationsworldwidecouldbeimplementedatnonetcost.IntheNZEScenario,aroundUSD75billionincumulativespendingisrequiredto2030todeployallmethaneabatementmeasuresintheoilandgassector(IEA,2023g).Thisisequivalenttojust2%ofthenetincomereceivedby130InternationalEnergyAgencyNetZeroRoadmaptheoilandgasindustryin2022.Eveniftherewasnovaluetothecapturedgas,anemissionspriceofaboutUSD20/tonneCO2-equivalentwouldmakealmostallavailableabatementmeasurescosteffective.Figure3.17⊳MethaneemissionsfromfossilfueloperationsandreductionsintheNZEScenario,2022-20303125CoalNaturalgas100Oil755025Mt2022IntensityProduction2030IEA.CCBY4.0.IEA.CCBY4.0.By2030,allfossilfuelproducershaveanemissionsintensityprofilesimilartothatoftheworld’sbestoperatorstodayInthecoalsector,wholesalemethanereductionsaregenerallymorechallengingthanforoilandgasoperations.Aroundtwo-thirdsofthereductionsincoalminemethaneemissionsintheNZEScenarioto2030comefromadropincoalconsumption.Nonetheless,widespreaddeploymentofabatementmeasuresshouldstillbeapriority.Morethanhalfofmethaneemissionscouldbeabatedbymakingthemostofcoalminemethaneutilisation,orbyflaringoroxidationtechnologieswhenenergyrecoveryisnotviable.Mitigationactionisparticularlyimportantforcokingcoal,mainlyusedinsteelmaking,whichtendstocomefromundergroundmineswhereabatementismorefeasible.Tacklingemissionsfromfossilfuelsisnottheonlyopportunitytocutmethaneemissionsfromtheenergysector.Achievinguniversalaccesstocleancookingandmodernheatingwouldcutthemethaneemissionsthatarisefromtheincompletecombustionofbioenergyaswellasdelivernumerousbenefitsforhumanhealthandwell-being.Chapter3MakingtheNZEScenarioareality1313.2AcceleratelongleadtimeoptionsMtCO₂3.2.1Carboncapture,utilisationandstorageAfteryearsofunderperformance,CCUSmustnowshowitcandeliverCCUSisanimportanttechnologybecauseitcanreduceoreliminateemissionsinareaswhereotheroptionsarelimited,forexampleintheproductionofcementorsynthetickeroseneandintheremovalofCO2fromtheatmosphere.However,sofar,thehistoryofCCUShaslargelybeenoneofunmetexpectations.Progresshasbeenslowanddeploymentrelativelyflatforyears.ThecurrentlevelofannualCO2captureof45Mtrepresentsonly0.1%oftotalannualenergysectoremissions.ThislackofprogresshasledtoprogressivedownwardrevisionsintheroleofCCUSinclimatemitigationscenarios,includingthe2023NZEScenario.Figure3.18⊳GlobalannualCO2capturecapacitybystatusandsectorintheNZEScenario,2015-203010007505002502015OperationalPlannedNZE2016203020302017Hydrogen20182019IEA.CCBY4.0.2020202120222030OperationalcapturecapacityPowerIndustryAnnouncedcapturecapacityOtherfuelDACCO₂capturedintheNZEPlannedCCUSprojects,ifbroughttofruition,wouldincreasecapacityovereightfold,aboutone-thirdofneededrequirementsby2030Notes:MtCO2=milliontonnesofcarbondioxide;DAC=directaircapture.Includesallfacilitieswithacapacitylargerthan0.1MtCO2peryear.Plannedcapacityfor2030onlyincludesprojectswithanannouncedoperationdateby2030.Hydrogenincludeslow-emissionshydrogenproductionatdedicatedfacilities,includingforuseinammoniamanufacture.Captivelow-emissionshydrogenproductiononsiteatrefineriesandindustrialplantsareincludedinotherfuelandindustrycategories.Source:IEACCUSProjectsDatabase,(IEA,2023h).Since2018,momentumonCCUShasincreasedonthebackofstrongerpoliciesandimprovedIEA.CCBY4.0.marketconditions.Todayover45countrieshaveCCUSprojectsindevelopment.Ifallannouncedcaptureprojectsarebuilt,around400MtCO2couldbecapturedeveryyeargloballyby2030–morethaneight-timescurrentcapacity.Anumberofcaptureprojectsarebeingdevelopedfornovelapplicationsthatareparticularlyimportantforreachingnetzero132InternationalEnergyAgencyNetZeroRoadmapemissions.Basedonthecurrentprojectpipeline,around20%ofcapturecapacityin2030wouldbefordirectaircapture(DAC),20%forhydrogenproductionand8%forindustry(Figure3.18).PlannedcapacitiesforCO2transportandstoragehavealsoincreased.Basedonthecurrentprojectpipeline,CO2storagecapacitycouldreachover420MtCO2peryearby2030.However,onlyaround20commercialcaptureprojectsunderdevelopmenthadreachedthestageofafinalinvestmentdecision(FID)byJune2023;andevenifallannouncedprojectsproceed,theywouldprovidearound40%oftheannualCO2captureof1Gt/yearneededby2030intheNZEScenario.3Learningfromthepast,planningforthefutureCCUSappearedpoisedforamajorexpansionfollowingthe2008-2009globalfinancialcrisis,whenmorethanUSD8.5billionofpublicsupportwasmadeavailable.Ultimatelylessthan30%ofthefundingwasspent,andmanyCCUSprojectscouldnotadvancefastenoughtohitthenear-termspendingmilestonesrequiredbythesupportprogrammes.Limitedone-offcapitalgrants,theabsenceofmeasurestoaddresslong-termliabilityforstoredCO2,highoperatingcosts,limitedsocialacceptabilityandvulnerabilityoffundingprogrammestoexternalbudgetpressuresallcontributedtoprojectcancellations.IfCCUSistomakeprogressinlinewiththeNZEScenario,theindustryneedstoproveCCUSthatcanoperateatscale.Fortheirpart,governmentsshoulddevelopeffectivesupportpackagestohelpwithoperatingaswellascapitalcostsandfindrealisticwaysofmanagingthelong-termliabilitiesassociatedwithCO2storage.Achievingthe2030levelofglobaldeploymentofCCUSintheNZEScenarioalsohingesoncuttingprojectleadtimes,whichcurrentlyaverageaboutsixyears.2Adoptionofbestpracticescouldcompressleadtimestoaroundthreetofouryears,ifCO2transportandstorageinfrastructurearealreadyinplace.DevelopingCCUShubscouldalsohelpreduceleadtimes(Box3.3).Aleadtimeoffouryearsforbothcaptureandstoragewouldmeanthatreaching1GtCO2/yearofglobalcapturecapacityby2030inlinewiththeNZEScenariowouldrequireonaverage160MtCO2/yearofcapturecapacityand140MtCO2/yearofstoragecapacitytostarttheplanningstageeachyearbetween2023and2026.Projectannouncementsin2022werejustoverthislevelforcapturecapacityandwellaboveitforstorage,whichindicatesthatthelevelofglobalCO2captureandstoragecapacityrequiredintheNZEScenarioby2030isnotoutofreach,providedthatthenecessarystepsaretakentosupportit.UnlockingCCUSdeploymentinemergingmarketanddevelopingeconomiesTherearefewCCUSprojectsindevelopmentinemergingmarketanddevelopingeconomies(Figure3.19).ThisrepresentsanimportanthurdletoachievetheNZEScenario,giventhatemergingeconomieshavelargestocksofyoungemissions-intensivepowerplantsandfactories.2ProjectleadtimeisdefinedhereasthetotaltimerequiredbetweenconceptionandcommissioningofaIEA.CCBY4.0.facility.Chapter3MakingtheNZEScenarioareality133Figure3.19⊳CO2captureandstoragecapacitybyeconomicgroupingintheNZEScenario,2022and20301000Operational2022Planned2030NZE2030MtCO₂Unknown800Emergingmarketanddevelopingeconomies600Advancedeconomies400200CaptureStorageCaptureStorageCaptureStorageIEA.CCBY4.0.IEA.CCBY4.0.GapbetweenthelevelsofplannedCCUSdeploymentandwhatisneededby2030isthelargestinemergingeconomiesNote:Plannedcaptureandstoragecapacityincludeallfacilitieswithacapacitylargerthan0.1MtCO2peryearasofJune2023,andprojectswithanannouncedoperationdateby2030.Source:IEACCUSProjectsDatabase(IEA,2023h).SomeprogressinCCUShasbeenmadeinemergingmarketanddevelopingeconomies,e.g.around20newcapture,transportorstorageprojectswereannouncedin2022inAsiaandtheMiddleEast.Chinaproducesmorethanhalftheworld’scoal-firedpowergeneration,steelandcement,buthaslessthan5%oftheworld’sCCUSprojectscurrentlyunderdevelopment.Chinacommissionedthreeprojectsin2023andhasaprojectpipelineequivalenttoacapturecapacitypotentialofaround10MtCO2/year.IndonesiafinalisedalegalandregulatoryframeworkforCCUSinMarch2023–thefirstofitskindinAsia.TheMiddleEast,thelocationofover15%ofglobalnaturalgasproduction,hasuniqueopportunitytodeployCCUSforlow-emissionsfuelproduction,butcurrentlyaccountsforlessthan5%ofglobalplannedcaptureandstoragecapacityby2030.Takentogether,theannouncedprojectswouldonlymeetasmallfractionofwhatisneededby2030intheNZEScenario.MeetingNZElevelsofCCUSdeploymentinemergingmarketanddevelopingeconomiesrequiresaround130MtCO2/yearofadditionalcaptureandstoragecapacitytostarttheplanningstageannuallyfrom2023to2026.Sucharateofdeploymentisambitiousgiventhecurrentlownumberofprojectsinoperationinthoseregions,butnotunprecedentedwhencomparedtoothersectorssuchasunabatedcementproduction,coalpoweroroilandgassupply.EssentialrequirementsforfurtherprogressincludethedevelopmentoflegalandregulatoryframeworksandtheprovisionofincentivesforthedevelopmentofCCUS.134InternationalEnergyAgencyNetZeroRoadmapBox3.3⊳RoleofCCUShubstoachievenetzeroemissionsMostCCUSprojectscommissionedtodatehavebeenmanagedbyasingleoperatortotransportCO2fromonecapturefacilitytooneinjectionsite,whichconcentratesrisksandcostsononedeveloper.ButCCUSprojectsareincreasinglybeingdevelopedaspartofCCUShubs,whichconsistofsharedtransportandstorageinfrastructureconnectingmultipleemitters,oftenaspartofanindustrialcluster.Todaythereareover110storagehubsindevelopment,mainlyinEuropeandNorthAmerica,withplanstosequester3around280MtCO2peryearby2030.Figure3.20⊳CO2emissionsclustersandplannedCCUShubsinplanninginNorthAmerica,Europe,MiddleEast,andEastAsia,2022NorthAmericaEuropeMiddleEastEastAsiaIEA.CCBY4.0.IEA.CCBY4.0.Around80%ofglobalemissionsfrompowerplants,industrialfacilitiesandrefineriescouldbenefitfromsharedinfrastructureNotes:PointsourcesandCO2emissionsclustersincludesteel,cement,chemical,powergenerationandrefininginfacilitieswithtotalemissionslargerthan0.1MtCO2peryear.Sedimentarythickness(km)isusedtoindicatetheoreticalpotentialofCO2storagesites.Sources:AnalysisbasedonUSEPAOfficeofAtmosphericProtection(2021);EuropeanCommission(2021);Kearnsetal.,(2017);S&PGlobal(2022);GlobalEnergyMonitor,(2022);GlobalCement,(2022).Chapter3MakingtheNZEScenarioareality135TheCCUShubmodelspreadsinfrastructurecostsbetweenemittersandgenerateseconomiesofscale,allowingsmalleremittersandthoselocatedfarfromidentifiedCO2storagesitestoconnecttosharedinfrastructure.Mainstreamingthismodelcouldhelptoreduceleadtimes,asnewcapturefacilitiescouldconnecttoanexistingCCUShub.InChina,around90%ofemissionsfromsteel,cement,power,chemicalsfacilitiesandrefineriesarewithin30kmoflargeindustrialclusters3whichcouldbenefitfromsharedinfrastructure.IntheUnitedStatestheequivalentfigureisaround70%,andaround60%intheMiddleEastandEurope.3.2.2Hydrogenandhydrogen-basedfuelsTodayhydrogenproductionismoreofaclimateproblemthanaclimatesolution.Demandforhydrogenisrising,reaching95Mtin2022,butmostofitismetbyemissions-intensivesupply,resultinginmorethan0.9GtofdirectCO2emissionsin2022.Productionoflow-emissionshydrogenfromwaterelectrolysisorfromfossilfuelswithhighlevelsofCO2captureandstorageamountedtolessthan1Mtin2022(IEA,2023i).Therehasbeensignificantprogressonpolicyandinvestmentinlow-emissionshydrogensincethe2021versionoftheNZEScenario(IEA,2021b).Billionsofdollarsofsupportforprojectdevelopershavebeenbudgetedbygovernmentsinawiderangeofcountries,andtheworld’slargestinstalledelectrolyserfacilityismorethanten-timesbiggerthanthelargestoneatthestartof2021.ThereisnowenoughconfidenceinthemarkettosupportseveralinvestmentdecisionsofmorethanUSD0.5billionforlow-emissionshydrogenproductionprojects.Includedarethreeprojectsthattogetherwillproduceammoniafrom0.2Mtofhydrogenfromelectrolysisfrom2026(91%inSaudiaArabia,8%inOmanand1%intheUnitedStates).Despitethehighexpectationsthathavedevelopedaroundhydrogenrecently,moreactionisurgentlyneededfrompolicymakersandindustrytodelivertherequirementsoftheNZEScenario.Creatingdemandforlow-emissionshydrogenIntheabsenceofrobustdemandforlow-emissionshydrogen,thecurrentracetosecuremarketshareforequipmentsuchaselectrolyserswillhavenowinners.TheNZEScenarioseesdemandscaledupfirstinexistingapplicationswherelargequantitiesoflow-emissionshydrogencanbeintegratedwithminimalplantmodificationsandlittleneedfornewinfrastructure.Thisbuildsonrecentexperience:todate,mostoftheworld’slargestfinancedprojectsforhydrogenproductionfromelectrolysisorwithCCUShavebeendesignedtoserveexistingdemand,suchasforfertiliserplants.Butthelevelofdemandforlow-emissionshydrogeninexistingapplicationsisinsufficienttoreachthelevelcalledforby2030intheNZEScenario(Figure3.21).Newsourcesofdemandareneeded.Recently,somedevelopershavesecuredprovisionalagreementswithprospectivebuyers,butannouncedplansfor3Emittingatleast5MtCO2peryear.InternationalEnergyAgencyNetZeroRoadmapIEA.CCBY4.0.136productionoflow-emissionshydrogenindicatethatthereisariskofsupplycapacityoutstrippingdemand.Figure3.21⊳GlobalhydrogendemandintheNZEScenario,2022-2050FromunabatedfossilfuelsLow-emissionshydrogenMtH₂500NewusesOther400Roadtransport3Powergeneration300AviationandmarinefuelOtherindustryIronandsteel200ChemicalsExistinguses100IronandsteelChemicalsOilrefining20222030204020502022203020402050IEA.CCBY4.0.Useoflow-emissionshydrogenrisessignificantlyto70Mtby2030andextendstonewapplicationssuchasinaviationandshippingNotes:MtH2=milliontonnesofhydrogen.UnabatedfossilfuelsincludehydrogenproducedwithCO2captureforutilisationwithoutstorage,suchasinureasynthesis.Demandforaviationandmarinefuelandpowergenerationincludeshydrogenthatisconvertedtomakelow-emissionshydrogen-basedfuels.Newapplicationsrepresentmorethanfour-fifthsoflow-emissionsglobalhydrogendemandIEA.CCBY4.0.in2030intheNZEScenario.Theseareatearlystagesofdevelopmentordeploymenttodayyetaretargetedbytheexpandingpipelineofannouncedprojects.Thelargestsourcesofdemand,rankedbysize,arepowergeneration(includingstorage),low-emissionshydrogen-basedtransportfuels,andironandsteelproduction.Whilehydrogenandammoniaareusedinjust1%ofpowergenerationin2030,thesectorrepresentsasignificantsourceofdemandduetoitssheersizeandthehighvalueofclean,storableandflexiblefueltooccasionallybalancethegrid.Inthelongerterm,increasinguseoflow-emissionshydrogeninaviation,shippingandtoalesserextentheavytrucksmeansthattransportbecomesthelargestsourceofhydrogendemand,andindustryovertakespowergenerationasthesecond-largestsourceofdemand.Intheindustrysector,ironandsteelproductionrepresentsoneoftheimportantsourcesoflow-emissionshydrogendemanddespitetherebeingnosuchplantsinoperationtoday.IntheNZEScenario,hydrogen-baseddirectreductionofiron(DRI)–ameansofprocessingironorewithoutfossilfuels–leadstojustover4Mtoflow-emissionshydrogendemandby2030.Theattainabilityofthisscale-upissupportedbyanincreaseinnewprojectannouncementsforhydrogen-basedDRIsince2021,whenonlyonewasindevelopment.SomeofthesehaveChapter3MakingtheNZEScenarioareality137beensuccessfulinsecuringprovisionalagreementswithprospectivebuyers.Nonetheless,the2030levelintheNZEScenarioismorethansixtimestheimplieddemandofthecurrentprojectpipeline(Figure3.22).Figure3.22⊳Globallow-emissionshydrogendemandfromannouncedfuelandironandsteelprojectsintheNZEScenario,2022-2030H₂forDRIH₂forsynthetichydrocarbons5MtH₂NZEgap432NZEgap12022Announced20302022Announced2030IEA.CCBY4.0.Announcedprojectsthatstimulatedemandforlow-emissionshydrogenareexpandingrapidly,thoughtheyfallshortof2030needsintheNZEScenarioNotes:DRI=directreducediron.NZEgap=thedifferencebetweenthesumofannouncedprojectsanddeploymentneedsin2030oftheNZEScenario.Synthetichydrocarbonsincludelow-emissionshydrogen-basedfuelsthataredrop-inreplacementsforoilproducts.Inaviation,synthetickerosenederivedfromhydrogenandCO2hasconsiderablepotentialasIEA.CCBY4.0.adrop-infuel.Fromnegligiblequantitiesofproductionin2022,thisnewapplicationincreasesintheNZEScenariotomorethan2billionlitresperyearin2030(stilllessthan1%ofaviationdemand).Thiscreates1Mtofhydrogendemand.Announceddemandcommitmentsfromtheaviationindustrytopurchasevolumesofthisfuelfallfarshortofthelevelsprojectedinthescenario,inpartduetothelackofinstalledcapacity.Trialoperationofthefirstsynthetickeroseneplantisexpectedin2023,withfirstcommercial-scaleplantsduein2025.Theleadtimetobuildasynthetickeroseneplantistwotofouryears.Nevertheless,itwillbechallengingtobuildupcapacity,securesuppliesofcarbonneutralCO2andlow-emissionshydrogen,andestablishoff-takecommitmentsinlinewiththeNZEScenario.Inshipping,theuseofammoniaormethanolasfuelformaritimevesselsrequiresenginemodificationsandfuelsupplysystemdevelopment.Whiletodaytherearenocommercialshipsoperatingonammonia,enginemanufacturershavesuccessfullytestedthetechnology,andaround150ammonia-readyvesselswereonorderattheendof2022.Theseshipspresentanopportunitytorapidlydeveloptheassociatedsafetyprotocols.Inthe138InternationalEnergyAgencyNetZeroRoadmapNZEScenario,ordersofammonia-readyvesselsincreasefromthe2022levelonaveragebyabout20%peryearto2030,representingabout15%oftypicalannualvesselorders.Agreementsbetweenshippingoperatorsandammoniaandmethanolproducerswillbenecessarytobringsupplyanddemandintolineandtoenabletheuseoflow-emissionshydrogeninshippingtoriseasrapidlyasenvisagedintheNZEScenario.ScalingupproductionMeetingprojecteddemandforlow-emissionshydrogenintheNZEScenarioentailsarapid3changeinhowhydrogenisproducedandamassivescalingupofproductionfromthelessthan1Mtoflow-emissionhydrogenproducedin2022(Figure3.23).Thecurrentshortageofequipmentmanufacturingcapacity,productioncapacity,infrastructure,end-usersystemsandmarketstandardsrepresentaseriesofobstaclestoprogress,asdoesthechallengeofmatchingsupplytodemandduringaperiodofrapidgrowthinproduction.Therehavebeensomenotablestepsforwardsince2021,especiallyinrelationtowaterelectrolysis,butmuchremainstobedone.Figure3.23⊳GlobalhydrogensupplybysourceintheNZEScenario,2022-2050400UnabatedfossilfuelsMtH₂300By-productIEA.CCBY4.0.Low-emissions:fossilfuelwithCCUS200Low-emissions:electrolysis1002022203020402050IEA.CCBY4.0.Low-emissionshydrogenproductionrisesrapidlytoreach45%oftotalhydrogensupplyby2030Note:Othersourcesoflow-emissionshydrogen,includingfrombiomass,amounttolessthan1%ofthetotalandarenotshownhere.Thepipelineofprojectsforthedeploymentofelectrolysiscapacitylooksencouraging,thoughthereisstillalongwaytogo.Ifallannouncedprojectscometofruition,morethan400GWofelectrolysiscouldbeoperationalby2030,whichisaround70%ofwhatisrequiredintheNZEScenario.However,morethanhalfoftheannouncedcapacitycorrespondstoChapter3MakingtheNZEScenarioareality139projectsthatareatveryearlystagesofdevelopmentandlessthan4%areunderconstructionorhavereachedFID.Theavailabilityofrenewableelectricityisonepotentialconstraintthatcouldhindertherateatwhichprojectsstartconstruction.Therehavealsobeensomeencouragingsignsintheoutlookformanufacturingoftheelectrolysersonwhichtheincreaseinelectrolysiscapacitydepends(Figure3.24).Ifallannouncementsfromtheprivatesectorarerealisedontime,manufacturingcapacitycouldreach155GWperyearby2030,withcumulativeproductionbythisdateofmorethan450GWofelectrolysers.However,only8%oftheseannouncementsofelectrolysermanufacturingcapacityexpansionshavereachedaFIDandstartedconstruction.Ifpermittingprocessesrunsmoothly,asassumedintheNZEScenario,ittakestwotothreeyearstobuildagigawatt-scaleplantformanufacturingelectrolysersandafurtheryearortwotoinstalltheelectrolysers,soarapidincreaseinmanufacturingcapacityisnotoutofreach.Supportivegovernmentpolicieshavebeenbroadenedtoboostmanufacturingcapacityaswellaslow-emissionshydrogendemandanddeployment,includingtheUSInflationReductionAct,Europe’sImportantProjectsofCommonEuropeanInterestandtheEuropeanHydrogenBank,andtheUKLow-CarbonHydrogenBusinessModel.Figure3.24⊳Potentiallow-emissionshydrogensupplycapacityfromelectrolyserandCCUSprojectsandinvestmentsintheNZEScenario,2022and2030ElectrolysisCCUSInvestment400160GWH₂outputBillionUSD(2022)30012020080100402022ProjectsManuf.NZE2022ProjectsNZE2022NZEcapacityAdvancedstagesEarlystagesNZEOperationalandunderconstructionIEA.CCBY4.0.Announcedprojectsforelectrolysisdeploymentaccountforaround70%ofthe2030needsintheNZEScenario,butlessthan4%ofthemhavereachedafinalinvestmentdecisionNotes:ProjectsinthisfigurerepresentthecapacityofelectrolysisandCCUSthatcouldbeinstalledby2030ifIEA.CCBY4.0.alltheannouncedprojectstoproducelow-emissionshydrogenarerealisedontime.Manuf.Capacityrepresentsthemaximumcapacityofelectrolysisthatcouldbeinstalledby2030ifallannouncementstoexpandmanufacturingcapacityofelectrolysersarerealisedontime.TofacilitatecomparisonbetweenelectrolysisandCCUS-equippedcapacity,valuesareshowninGWofinstalledcapacityofhydrogenoutput,whichforelectrolysisis31%lowerin2030thantheequivalentvaluebasedonelectricityinput.140InternationalEnergyAgencyNetZeroRoadmapTherehasalsobeensomeprogresswithlow-emissionshydrogenproductionfromnaturalgaswithCCUS,buthereagainthereismuchfurthertogo.ThefiveplantsthathavestartedconstructioninNorthAmericasince2021betweenthemrepresentproductioncapacityof0.5Mteachyear,70%fromjusttwoprojectsthatarebothincorporatingover90%CO2captureandareequivalenttomorethanalltheelectrolysercapacitycurrentlyinoperation.However,slowerprogressinEurope,ChinaandtheAsiaPacifichasledtoadownwardrevisionofthecontributionoflow-emissionshydrogenfromfossilfuelswithCCUSinthe2re0p2r3esveenrtsiniognaonfatnhneuaNlZpEroSdcuecntaiorino.caItpasctiitllycoaflls17foMrtCtCoUrSe-eaqchuipFpIDedbyhyadrroougnedn2p0r2o6jefcotsr3operationby2030,whichrequiresanincreaseinthesizeofthecurrentpipelineaswellasfasterprogressofprojectsthroughtoFID.TheuseofhydrogenenvisagedintheNZEScenariodependsoninvestmentintheproduction,transmissionanddistributionoflow-emissionshydrogenandhydrogen-basedfuels.ThiscurrentlystandsataroundUSD1billionperyearandneedstoincreasetoUSD150billionby2030tomeetNZElevels,plusatleastUSD100billionindedicatedrenewableelectricitycapacity.Deliveringthisincreasedependsongettingtheregulatoryframeworkrightandoncreatingasmuchcertaintyaspossibleaboutfuturedemandgrowth.Stimulatinginvestmentinlow-emissionshydrogeninemergingmarketanddevelopingeconomiesislikelytobeespeciallychallenging.Thisgroupaccountsforaroundone-quarterofannouncedprojects,butthemajorityoftheirprojectsareatveryearlystagesofdevelopmentandarestrugglingtoaccessfinance.Multilateraldevelopmentbankshavestartedtoprovidefundingforhydrogenprojects,withprogrammeswortharoundUSD4billionannouncedin2023,butthisstillaccountsforjust3%oftheinvestmentneededby2030intheNZEScenario(IEA,2023j).Morewillneedtobedoneifemergingmarketanddevelopingeconomies(excludingChina)aretoaccountforaround40%ofcumulativeinvestmentinlow-emissionshydrogenbetweennowand2050,asenvisagedintheNZEScenario.3.2.3BioenergyIEA.CCBY4.0.RoleofmodernbioenergyModernbioenergyisoneofthepillarsofthecleanenergytransition,growingfrom6%oftotalenergysupplytodayto13%in2030and18%in2050intheNZEScenario.Alloftheincreasecomesfromsustainablesources,whichminimisesimpactsonbiodiversity,waterresourcesandsoilhealth,andhelpstosafeguardenergyaccessandaffordablepricesforagriculturaloutputs.Oneofthemainadvantagesisthatbioenergyiscompatiblewithexistinginfrastructure.Biomethaneforinstanceiscompatiblewithnaturalgasinfrastructure,whilesolidbioenergycanbeusedinindustriessuchascementandpowergenerationwithrelativelyfewmodifications.Inaddition,therawmaterialsusedtomakebioenergy,suchasagriculturalandforestryresidues,arebroadlydistributedacrosstheworld.MostofthegrowthinmodernbioenergyuseintheNZEScenariocomesfromtheemergingmarketanddevelopingeconomies,whereitalmostdoublesby2030,growingataratethatisaroundone-thirdfasterthaninadvancedeconomies(Figure3.25).ThemaindriveristheChapter3MakingtheNZEScenarioareality141growthinliquidbiofuelproduction,mostlyconsumedbythetransportsectorindevelopingeconomiesbutalsoexportedtoadvancedeconomies.Anotherkeydriveristhephase-outofthetraditionaluseofbiomassininefficientopencookstoves,whicharereplacedwithmodernenergyalternatives,includingbioenergyusedinmoreefficientcookstoves.Therichbiomassresourcepotentialinemergingeconomiesalsohelpsdrivegrowthinmodernbioenergyusesinindustryandtheelectricitysector.Whilebioenergyisusedinanumberofsectors,itplaysaparticularlyimportantroleinthetransportsector,whereitsshareofdemandforliquidfueltransportincreasesfromalmost4%todaytoover10%by2030.Thisisdrivenprimarilybydemandinpassengercars,heavy-dutytrucking,long-haulaviationandinternationalshipping.Figure3.25⊳PrimarybioenergyusebysectorandeconomicgroupingintheNZEScenario,2010-2050BioenergyusebysectorBioenergyusebyeconomytype10020%100EJ8016%80IEA.CCBY4.0.6012%60408%40204%202010202220302040205020102022203020402050ModernsolidbioenergyLiquidbiofuelsTraditionaluseofbiomassPowerandheatBiogasesEMDEIndustryConversionlossesAdvancedeconomiesBuildingsandagricultureTraditionaluseofbiomassShareinTES(rightaxis)IEA.CCBY4.0.Modernbioenergyuseinemergingmarketanddevelopingeconomiesalmostdoublesto2030,rising30%fasterthaninadvancedeconomiesNote:TES=totalenergysupply.EnsuringasustainablesupplyofbioenergyTheexpansionofmodernbioenergyinvolvestrade-offsbetweenbioenergysupply,sustainabledevelopmentgoalsandotherlanduses,notablyfoodandfeedproduction.ThemaximumlevelofbioenergyusedintheNZEScenario(100EJ)takesthesetrade-offsintoconsiderationandisbasedonassessmentsoftheglobalsustainablebioenergypotential(Creutzig,2015;Frank,2021;IPCC,2014;IPCC,2019;Wu,2019).142InternationalEnergyAgencyNetZeroRoadmapThereisashiftintheNZEScenariofromconventionalfeedstockstowardsadvancedbioenergyfeedstockstoavoidland-useconflicts.Advancedfeedstocksfromwasteandresiduessuchasagriculturalresidues,forestandwoodresiduesandtheorganicfractionofmunicipalsolidwastedonotrequirededicatedlanduse.From2030onwards,agrowingrelianceonadvancedfeedstocksmeansthatoverhalfofthetotalbiomassfeedstocksupplycomesfromsourceswithnodedicatedlanduse.Theremainingfeedstocks–forbothconventionalandadvancedbioenergy–dorequirededicatedlanduse,butcanstillbeproducedinasustainableway.Modellingdonein3collaborationwiththeInternationalInstituteforAppliedSystemsAnalysis4indicatesthattherequirementforbioenergycropsintheNZEScenariocouldbemetwithoutencroachingonforestedland,andthatby2050thereisnooverallincreaseincropland5useforbioenergyproductionfromcurrentlevels.TotallanduseforbioenergyintheNZEScenarioiswellbelowestimatedrangesofpotentiallandavailabilitythattakefullaccountofsustainabilityconstraints,includingtheneedtoprotectbiodiversityhotspotsandtomeettheUNSustainableDevelopmentGoal15onbiodiversityandlanduse.Thecertificationofbioenergyproductsandstrictcontrolofwhatlandcanbeconvertedtoexpandforestryplantationsandwoodyenergycropsneverthelessiscriticaltoavoidland‐useconflictissues.Short-rotationwoodyenergycropsprovideasteadilygrowingshareofbioenergysupplyintheNZEScenario,providingjustunder40EJofbioenergyin2050:thesecropsarecultivatedoncroplandpreviouslyusedforconventionalbiofuels,pasturelandandmarginallandsandcanproducetwiceasmuchbioenergyperhectareasmanyconventionalbioenergycrops.Theremainingmodernbioenergycomesfromsustainablymanagedforestplantationsandsustainabletreeplantingintegratedwithagriculturalproductionviaagroforestrysystems:thesedonotconflictwithfoodproductionorbiodiversity.Howquicklycantheuseofbiofuelsexpand?Theprospectsfordemandforliquidbiofuelsdependlargelyonpolicymandates.Mostbiofuelscanbeblendedathighrateswithrelativelyfewmodifications.Inthecaseofrenewablesdiesel,noblendingisrequiredasitcanbeusedinterchangeablywithconventional,oil-baseddiesel.However,inmostcountries,blendingratesarelow,duetothehighcostofliquidbiofuelsandlimitedpolicysupport.Morethan80%ofbiofuelsarecurrentlyusedintheUnitedStates,Brazil,EuropeandIndonesia,whereamixofregulations,financialincentivesandtechnicalstandardshavesupportedtheirexpansion.However,thesupportivepolicyframeworksintheseregionsneedtobestrengthenedtohelpexpanddemand,whichmorenearlytriplesby2030intheNZEScenario.Theyalsoneedtobereplicatedelsewhere,especiallyinemergingmarketanddevelopingeconomieswhere4IEAmodelresultshavebeencoupledwiththeInternationalInstituteforAppliedSystemsAnalysis(IIASA)IEA.CCBY4.0.GlobalBiosphereManagementModel(GLOBIOM)toprovidedataonlanduseandthegreenhousegasemissionsfrombioenergyproduction.5Croplandherereferstoagriculturallandusedforfood,animalfeedandbioenergyproductionbutexcludesshort-rotationwoodycropsnotestablishedonexistingagriculturalcropland.Chapter3MakingtheNZEScenarioareality143biofueldemandrapidlyincreasesintheNZEScenario.ThevolumetricshareofethanolingasolinejumpedinIndiafrom4%in2019tomorethan10%in2022,whichprovidesanexampleofwhatcanbedone.Globalliquidbiofuelproductionisnotcurrentlyontracktodeliverwhatisrequiredby2030intheNZEScenario,basedoncurrentmarkettrendsandpolicies.Outputhasincreasedonaverageby4%peryearoverthelastfiveyears,butitneedstoincreasebyanaverageof13%peryeartoreachthe11EJprojectedfor2030intheNZEScenario(Figure3.26).Biomass-baseddiesel,forinstance,hasexpandedatanaverageof9%worldwideforthepastfiveyears.Existingandannouncedprojectswouldcoverhalfoftheincreaseindemand,assumingtheyallgoahead,butnewfacilitiestakeonlyaroundtwotothreeyearstobuild,whichmeansthatthereisstilltimeforadditionalprojectstofillthegap.Figure3.26⊳LiquidbiofuelproductionbyeconomicgroupingintheNZEScenario,2018-2030AnnouncedNZE12EmergingmarketEJ10anddevelopingIEA.CCBY4.0.economies8Advancedeconomies6422018201920202021202220282030IEA.CCBY4.0.Liquidbiofueloutputinbotheconomicgroupingsmorethandoublesby2030ofwhichtheexistingprojectpipelinecouldcover50%Akeybarriertoraisingliquidbiofueloutputisthelimitedavailabilityofsustainablefeedstocks.Thetotalpotentialresourcebaseofallkindsofsustainablebioenergy(solid,liquidandgaseous)isestimatedataround100EJ,ofwhichonly10EJ(includingconversionlosses)iscurrentlyusedtomakebiofuels.However,thepaceandscaleofexpansionintheNZEScenarioiscontingentonproducingbiofuelsfromabroadersetoffeedstocksthanthoseusedtoday.In2030,40%ofproductionisbasedonwhatareknownasadvancedfeedstocks,i.e.materialsthatdonotcompetewithfoodandfeedproduction.Theseadvancedfeedstocksincludecropsgrownonmarginalland,agriculturalandforestryresiduesandresidueoils,fatsandgrease.By2050,theirshareoftotalproductionreaches75%.Advancedfeedstockstodaysupport12%ofbiofuelproductionandcomeprimarilyfromresidueoils,144InternationalEnergyAgencyNetZeroRoadmapfatsandgreasesuchasusedcookingoil.Buttheexistingprojectpipelinewouldusemorethan90%oftheestimatedsupplyoftheseresidues.AchievingtheincreasesinsupplyprojectedintheNZEScenariothereforerequireshigherrelianceonotherkindsofadvancedfeedstocks,inparticularagriculturalandforestryresidues.Box3.4⊳ExpandingaccesstofeedstocksiskeytoincreasingbiofuelsBiofuelproducersandgovernmentshaveanopportunitytoexpandthefeedstockbaseusedtomakeliquidbiofuels.Thisrequiresafocusonfivebroadareas:3Enhancelandproductivity:Intercropping,covercrops,growingcropsonmarginalIEA.CCBY4.0.landandimprovingcropyieldsallholdpotentialtoexpandsupplyoffeedstock.Forinstance,woodyshort-rotationcoppicecanproducetwiceasmuchbioenergyperhectareasconventionalbioenergycrops.Overthepasttwoyears,sevenmajorenergycompanies,includingExxonMobil,Eni,ChevronCorporationandBPhaveannouncedprojectsandpartnershipstodevelopthesefeedstocks.Improvewasteandresiduecollection:Anestimated20Mtofresidueoils,fatsandgreasearegeneratedeachyearthatarecompatiblewithcommercialbiodieselandrenewabledieselproductiontechnologies,andwhichcouldbedirectedtowardsbiofuelproduction.Companiesarealreadyworkingtogatherthesewastes.Additionaleffortsarealsoneededtoaccesswoodyresiduesfromagricultureandforestry.Collectioncanbefacilitatedbybuildingfacilitiesclosetosourcesofsupply,ascompaniesaredoingatsomesugarmillsinBrazilandIndia,andatsomeforestryplantationsintheUnitedStates.Improveddata,co-ordinationandbusinessmodelscanhelpwitheffortstocollectdispersedresiduefeedstocks.Deploytechnologiesthatcanprocessvariousfeedstocks:Globaleffortsareneededtocommercialiseandexpandtechnologiesthatcanconvertthefeedstockstobiofuelsatscale.Someeffortsareunderway.Forexample,BrazilandIndiaarebuildingsevencellulosicethanolprojectsthatuseagriculturalresiduestocreateethanol,whileaplantthatconvertsforestryresiduesintobiojetkeroseneisbeingbuiltintheUnitedStates.Reducethelifecycleemissionsintensityofbiofuels:CCUS,facilityimprovements,andtakingaccountofthelifecyclecarbonintensitiesofvariousfeedstocks(includingcarbonsequesteredinsoil)allofferpathwaystoreducegreenhousegasemissionsfromeverylitreofbiofuelsproduced.Forinstance,intheUnitedStatesCO2transportpipelinesareplannedthatwouldconnectaround30ethanolfacilitieswithCO2storage.Developandimplementperformance-basedsustainabilityframeworks:Effortstoexpandfeedstocksuppliesneedtobeaccompaniedbyperformance-basedsustainabilityframeworkswhichincludecarbonassessmentmethodologies.Thedevelopmentofsuchframeworkswillplayacriticalroletoensurethateffortstoexpandbiofuelsarebotheffectiveandsustainable.Chapter3MakingtheNZEScenarioareality1453.2.4InfrastructureRapidexpansionofexistinginfrastructureplusdevelopmentofnewinfrastructureforemergingtechnologiesarebothrequiredElectricitynetworks–thebackboneofpowersystems–arecentraltocleanenergytransitions.Increasingpopulation,risingincomesandelectrificationofmoreandmoreend-usesthatpreviouslyusedfossilfuelscombinetoconsiderablypushupdemandforelectricity.Rapidgrowthintheshareofelectricitygeneratedbyvariablerenewables,inparticularsolarPVandwind,bringnewchallengestoensurepowersystemflexibilityandstability.Significantelectricitygridchangesareneeded,particularlyasstoringelectricityischallengingandcostly.Newtransmissionanddistributionlineswillhavetobebuilt.In2022,thelengthofelectrictransmissionanddistributionlinesworldwidetotalledaround80millionkm.Thisneedstoexpand20%by2030intheNZEScenario(Figure3.27).Digitalization,smartsystemsandadvancedsemiconductortechnologieseachplayacrucialroletoensureandimprovecontrolandstabilityofpowerflows,andwillhavetobefactoredintoplansfornewlinesaswellastobeintegratedintoexistinggrids.Gridsalsoplayapivotalroleinenhancingtheflexibilityofthepowersystem,enablingtheintegrationofvariablerenewableanddistributedenergyresources(seesection3.1.1).Energytransitionscouldbestifledifthecurrentpaceofgriddevelopmentdoesnotaccelerate,slowingtheuptakeofrenewables,raisingfossilfueluseandassociatedCO2emissions(IEA,forthcoming).Figure3.27⊳Globalinfrastructureneedsforelectricity,hydrogenandCO2storageintheNZEScenario,2022and2030ElectricitygridsHydrogentankersCO₂pipelines10060060MillionkmNumberoftankers7545045Thousandkm50300302515015202220302022203020222030TransmissionDistributionLNGtodayLH₂NH₃CO₂IEA.CCBY4.0.Infrastructuretotransportandstoreelectricity,hydrogenandCO2isanoftenoverlookedbutcriticalenablerofcleanenergytransitionsNotes:LNG=liquefiednaturalgas;LH2=liquefiedhydrogen;NH3=ammonia.ThehatchedareaforCO2IEA.CCBY4.0.pipelinesrepresentstheNZEScenariorangeof30000-50000km.146InternationalEnergyAgencyNetZeroRoadmapTodayhydrogenismostlyproducedclosetowhereitisused.AsdemandincreasesintheNZEScenario,itislikelytobecomecheapertoproducesomelow-emissionshydrogeninareaswithgoodrenewableenergyresourcesandtransportittodemandcentres.Pipelinescantransportlargevolumesofhydrogenefficientlyoverhundredsofkilometres,andthesecouldincluderepurposednaturalgaspipelines.Forlongerdistances,hydrogenmayneedtobeconvertedintoadenserform,eitherthroughliquefaction(LH2)orconversionintoachemicalcarrierthatcanbeeasilyshipped,e.g.,ammonia,methanol,syntheticfuelsoraliquidorganichydrogencarrier.Increasingdemandforlow-emissionshydrogenmeansthatmorethan320000kmofpipelinesareneededby2030intheNZEScenario,comparedwith5000kmtoday,togetherwitharound25LH2tankers(160000m3),upfromzerotoday,andaround70newammoniatankers,upfromthecurrent40tankersthatcarryammoniayearround.CCUSdeploymentishinderedbyalackofavailableCO2storagesites.Assessinganddevelopingpotentialsites,includingsalineaquifersanddepletedoilandgasfields,isoftenatime-intensiveandexpensiveprocess,butitisvital:withoutappropriatestoragesitesitwillbemuchhardertodevelopotherpartsofthevaluechain,includingCO2pipelines.CO2storagecapacityexpandsintheNZEScenariofromlessthan50Mttodaytoaround1Gtby2030–amorethana20-foldincrease–whileCO2pipelineinfrastructureexpandsfromaround9500kmtodaytobetween30000-50000kmby2030.Howfeasibleistheramp-upofinfrastructureto2030intheNZEScenario?IEA.CCBY4.0.TherapidrampingupofinfrastructurerequirementsenvisionedintheNZEScenarioistechnicallyfeasible,butnonethelessrepresentsanenormousundertaking.Electricitygridsarealreadyaccelerating.Overthepastfiveyears,thetransmissionanddistributiongridsworldwideexpandedby1.9millionkmeachyear–arateofincreaseabout9%higherthanexperiencedinthe2013-2017period.ThepacepicksupintheNZEScenarioasgridsexpandbyaround2millionkmeachyearto2030(Figure3.28).ThedeploymentoftransportandstorageinfrastructureforhydrogenandCCUSdependsonanumberoffactors,includinghowquicklytechnologiesthatarestillatthedemonstrationstagecanachievecommercialisation,e.g.LH2shipping,ammoniacracking,aswellasdevelopmentofregulatoryframeworks,permittingrulesandpublicacceptance.IfleadtimesforhydrogenandCCUSinfrastructureprojectsareroughlyonaparwiththoseforpreviousnaturalgasinfrastructureprojects,infrastructuredevelopmentmayhindertheproductionanddemandprojectstowhichtheyarelinked.Repurposingexistingoilandgasassets,includingnaturalgasnetworks,shippingterminalsandoffshoreplatforms,couldhelptofasttrackthedeploymentofhydrogenandCO2infrastructure,reduceleadtimesandinvestmentcosts.Inthecaseofhydrogen,thefertiliserindustryalreadyshipsammoniaintankersdesignedtocarryliquefiedpetroleumgas(LPG),butdedicatedLH2tankersarenotyetcommerciallyavailable,andsomeinnovationwillberequiredtoovercometheadditionalchallengesofthelowerboilingpointofhydrogencomparedwithnaturalgas,andtheuseofhydrogenboil-offasfuel.TheprojectedpaceofglobalexpansioninLH2andammoniashippingintheChapter3MakingtheNZEScenarioareality147NZEScenarioissimilar(inenergyterms)tothespeedofLNGexpansionduringitsfirstdecadeofdevelopment.HowquicklyLH2tankerscanbedeployedisuncertain,asthetechnologyisnotmature,buttheNZEScenarioonlycallsforaround4LH2tankersby2030,aroundatenththenumberofLNGtankerdeliveriesinagivenyearwithasimilarsizeinvolumetricterms.InthecaseofCCUS,thereareamplepotentialglobalCO2storageresources,butfurtherresourceassessmentisrequiredtodevelopsites.Basedoncurrentprojectpipelines,CO2storagecapacitycouldreachmorethan420MtCO2peryearby2030,around40%ofwhatisrequiredintheNZEScenario.CO2pipelinescurrentlyunderdevelopmentwouldprovidearound30-50%ofwhatisneededintheNZEScenario,witharound15000kmunderdevelopmentworldwide.Thiscouldincreaseasprojectsmoveforwardsincenotallannouncedprojectshavespecifiedpipelinelengthsyet.Figure3.28⊳Annualglobaldeploymentofadditionalelectricitylines,hydrogentankersandCO2storageintheNZEScenariocomparedwithhistorictrendsAnnualgridnetadditionsAnnualtankerdeliveriesCO₂storage,20302.4801000MillionkmNumberoftankers1.860750MtCO₂1.2405000.6202502018-222026-30LNGLPGLH₂NH₃ProjectsNZE2015-192026-30IndevelopmentDistributionOperationalTransmissionIEA.CCBY4.0.Gridadditionsto2030areclosetohistoricrates;roll-outofliquefiedhydrogentankersandCO2storagereliesonemergingtechnologiesandavailableresourcesNotes:LNG=liquefiednaturalgas;LPG=liquefiedpetroleumgas;LH2=liquefiedhydrogen;NH3=ammonia;NZE=NetZeroScenario.CO2storageprojectcapacityin2030includesprojectscurrentlyinoperationplusthoseindevelopment.TheplanningandpermittingprocessesformajornewcleanenergyinfrastructuretypicallyIEA.CCBY4.0.takethreetoeightyearstocompletebeforeconstructioncanstartandcouldbelongerforfirst-of-a-kindprojects(Figure3.29).Inthecaseofelectricitylinesandpipelines,linerouteplansmayneedtobeassessedbyamultitudeofregulatoryauthorities,jurisdictionsandotherstakeholders.Wheninvolvingnewtypesofinfrastructure,suchasstoragesitesforCO2,itisnotalwaysclearwhichregulatorshouldbeinchargeofthepermittingprocess.Aslarge148InternationalEnergyAgencyNetZeroRoadmapinfrastructureprojectsoftencrossorimpactmultiplelandowners,earlyandfrequentstakeholderengagementandanappropriatecommunicationstrategyarerequiredtominimisepotentialincreasesinleadtimesduetopublicopposition.AshighlightedintheIEASpecialReportonGrids(forthcoming),thereisevidenceofpermittingbottlenecksforcingthedelayofsomelargeelectrictransmissionlineprojects.However,therearesomesignsofrecognitionoftheurgentneedtoexpeditepermittingofcleanenergyinfrastructure.3Figure3.29⊳TypicalleadtimesforselectedinfrastructureprojectsElectricitygridsUndergroundtransmissionlineOverheadtransmissionlineSubseatransmissioncableUndergrounddistributionlineOverheaddistributionlineCO₂HydrogenOnshorepipelineTerminalTankerCO₂storage24681012YearsPlanningandpermittingConstructionIEA.CCBY4.0.Onaverage,constructiontakesbetweenonetofouryears,whileplanningandpermittingmaytakethreetoeightyearsandcancreatebottlenecksandcausedelaysNotes:ElectricitygridleadtimesarebasedonaverageleadtimesinEuropeandUnitedStates.Transmissionreferstoextra-highvoltage,rangingfrom200-765kV.HydrogenterminalleadtimesarebasedonaverageleadtimesforLNGterminalsinEuropeandAsia.HydrogentankerleadtimesarebasedonleadtimesforanLNGtanker.3.3ConsequencesoffurtherdelaysforthecleanenergytransitionFailuretoacceleratethecleanenergytransitionalongthelinesofthepathwaydepictedintheNZEScenariowouldvirtuallyguaranteeahighovershootofthe1.5°Climit,6withseriousconsequencesforhumans,ecosystemsandclimatetippingpoints.Insuchcircumstances,returningtheglobalaveragetemperaturerisetobelow1.5°Cby2100wouldrequirealargeandcostlydeploymentofCO2removaltechnologiesandwouldnotavoidtheneedtoreducefossildemandsubstantiallyinthisdecade.Raisingclimateambitionsandensuringeffectiveimplementationmustremaincriticalpriorities.6Highovershootreferstoanincreaseinglobalaveragetemperatureabove1.6°Cbutbelow1.8°Cabovepre-IEA.CCBY4.0.industriallevelsandasubsequentfalltobelow1.5°C.(IPCC,2023).Chapter3MakingtheNZEScenarioareality1493.3.1TheworldhasalreadydelayedtoolongtoavoidhardchoicesTheNZEScenariocanonlybeachievedwithsubstantialchangestooperatingpatternsandtheearlyclosureofsomeexistingfossilfuel-basedinfrastructure.Ifcurrentenergysectorassetsweretobeoperateduntiltheendoftheirnormaltechnicalandeconomiclifetimes,andinthesamemannerinwhichtheyhavebeenoperated,theywouldgeneratefurthercumulativeemissionsofaround600GtCO2overtheperiod2023to2050(Figure3.30).ThisisfarmorethantheestimatedremainingCO2budgettoremainbelow1.5°C.ThishasimplicationsforChinagiventhatitaccountsfor45%(270GtCO2)oftheemissionsfromexistingassetsoverthisperiod,primarilyowingtoitslargefleetofrelativelyyoungcoal-firedpowerplantsandthesizeofitsindustrialbase,whichhasthecapacitytoproducemorethanhalftheglobaldemandforcrudesteelandcement.Italsohasimplicationsforthosecountries,includingIndiaamongothers,thathavesignificantadditionalemissions-intensivecapacityunderconstructionorplannedtocomeonlineinthenextfewyears.Butitisalsoanissuethatallcountriesworldwidewillneedtoconfrontiftheyintendcollectivelytogettoglobalnetzeroemissionsby2050.Onthesupplyside,therateofreductioninoilandgasdemandnecessarytoreachnetzeroemissionsby2050isnowsofastthatitmayimplytheearlyclosureofsomeexistingoilandgasfields.Figure3.30⊳GlobalenergysectorCO2emissionsfromexistingassetsbysub-sectorandregionassumingnoearlyretirementsormodifications40Emissions320Cumulativeemissions,2023-2050GtCO230240IEA.CCBY4.0.201601080201020222050AdvancedChinaIndiaRestofeconomiesworldCoalpowerOtherpowerSteelCementChemicalsOtherindustryOtherIEA.CCBY4.0.Absentearlyretirementormodificationsinoperations,existingassetswouldemit600GtCO2inthe2023-2050period,dashinganyhopeofstayingbelow1.5°CNote:AE=advancedeconomies.Furtherdelayingthehardchoicesnecessarytoreachglobalnetzeroemissionsby2050wouldmaketheproblemssubstantiallyworse,andmuchhardertosolve.Between2023and150InternationalEnergyAgencyNetZeroRoadmap2035,cumulativeinvestmentsinfossilfuelsupply,fossil-basedpowergenerationandend-usesarecurrentlyplannedtobeUSD3.6trillionhigherthanintheNZEScenario,despitecurrentnetzeroemissionspledges.Muchofthisinvestmentwouldbeforassetswithlonglivesinwhichoperationswouldneedtobecurtailedorlifetimesshortenedifthegoalofreturningthetemperatureincreasetobelow1.5°Cistobeachieved.3.3.2Implicationsofnotraisingclimateambitionsto2030Thenetzeroemissionspledgesthathavebeenannouncedbycountriesaroundtheworld–3eveniftheyareallimplementedinfullandontime–wouldmakeitimpossibletolimitglobalwarmingto1.5°Cwithouthighovershoot(seeChapter1).Thisraisesthequestionofwhetherglobalwarmingcouldbebroughtbacktobelow1.5°Cafterahighovershoot,andifso,atwhatcost.Inordertoexplorethisquestion,theIEAdevelopedtheDelayedActionCase.Itassumesthatallcountriesthathaveannouncednetzeroemissionspledgesimplementpoliciesintheperiodto2030thatenableachievementoftheirpledges.ThisisinlinewiththeIEAAnnouncedPledgesScenario(APS).Infact,thepoliciesthathavebeenputinplacearenotsufficienttoachievetheAPS,andmoreoverwecannotbesurethatallthepoliciesthathavebeenputinplacewillbemaintainedandfullyimplemented.Therefore,thestartingpointoftheDelayedActionCaseismoreoptimisticthancurrentpolicysettingsandNationallyDeterminedContributions.Thefindingsdiscussedinthissectionintermsofthechallengesofbringingglobalwarmingbackbelow1.5°Cneedtobeseeninthatcontext.IntheDelayedActionCase,countriesareassumedtoundertakeactionsthatgobeyondwhatiscurrentlyfactoredintotheAPSandacceleratetheirimplementationofmoreambitiousclimatepoliciesafter2030,particularlywheretheyhavesignificanttechnologicalandfinancialcapacities.ThisreducesglobalenergysectorCO2emissionsbyjustoverone-thirdby2035,relativetothe2022level.Thiscompareswiththenearlytwo-thirdsreductionprojectedintheNZEScenariooverthesameperiod.Althoughpoliciesbecomeincreasinglystringentovertime,thedelayedandunevenactionsacrosssectorsandregionsmeanthatenergysectorCO2emissionsreachnetzeroonlybythemiddleofthe2060s.Asaresult,theglobaltemperatureriseclimbstoapeakcloseto1.7°Caround2050.Afterthistime,thetemperaturefallsbyabout0.05°CperdecadeduetonetCO2removalsfromBECCSandDACS,cutstomethaneemissionsinthepreviousdecades,andareductioninatmosphericCO2duetonaturalprocesses(seeChapter2).Thisbringswarmingtobelow1.5°Cby2100(Figure3.31).TheriseintemperatureintheDelayedActionCaseexceeds1.6°Cforabout25yearsand1.5°Cforalmost50years,whichhasanumberofpotentiallyseriousconsequencesforvulnerablepopulations,ecosystemsandclimatetippingpoints.AccordingtotheIntergovernmentalPanelonClimateChange(IPCC),ifatemporaryovershootofthe1.5°Cthresholdoccurs,thenthereishighconfidence7that“…manyhumanandnaturalsystemswillfaceadditionalsevererisks,comparedtoremainingbelow1.5°C”.Theserisksaremainly7Highconfidence=80%chance.IEA.CCBY4.0.Chapter3MakingtheNZEScenarioareality151associatedwithirreversiblechangestoecosystemsandwiththereleaseofadditionalgreenhousegases(IPCC,2023).Figure3.31⊳MedianglobaltemperatureriseintheDelayedActionCaseandtheNZEScenario1.7DelayedActionCase1.6°C1.5IEA.CCBY4.0.NZE1.41.31.220202040206020802100IEA.CCBY4.0.Evenasmalldelayinstrongeractiontocutemissionsbeyondcurrentpledgeswouldcauseglobaltemperaturetoexceed1.5°Cforalmost50yearsSource:IEAanalysisbasedonoutputsofMAGICC7.5.3.Threatstoecosystemsandbiodiversityarelikelytopersistformanydecadesaftertemperaturesstarttodecline.Inmorethanone-quarterofgloballocationsthechancesthatanimalandplantspeciescanreturntopre-overshoot“normal”areeitheruncertainornon-existent(Meyeretal.,2022).Additionalglobalwarmingcomeswithheightenedrisksoftriggeringtippingpointsintheearthsystem,i.e.,largescale,irreversibleeventssuchasthemeltingoficesheetsortheabruptdiebackoftheAmazonrainforest(Wunderlingetal,2022).Therisksofpositivefeedbackloopsintheclimatesystem,combinedwithinherentuncertaintiesintheearth’sresponsetofuturegreenhousegasemissionsandnetCO2removals,meanthatthereisaone-thirdchanceofthetemperatureriseexceeding1.8°CintheDelayedActionCase.3.3.3Whatwouldittaketobringtemperaturesbackbelow1.5°C?IntheDelayedActionCase,bringingtheglobalincreaseinaveragetemperaturesbackdowntobelow1.5°CwouldrequirescalingupCO2removalfromtheatmospherethroughbioenergyequippedwithCCUS(BECCS)anddirectaircaptureandstorage(DACS)toover5GtCO2everyyearduringthesecond-halfofthiscentury(Figure3.32).ThisisequivalenttotheannualenergysectoremissionsoftheUnitedStatestodayandcompareswithprojected152InternationalEnergyAgencyNetZeroRoadmapremovalswhichreach1.7Gtin2050intheNZEScenario.TheDelayedActionCaseassumesthatthisrequirementissplitbetweenBECCS,whichdelivers2Gtayearin2100,andDACS,whichdelivers3.3Gtayearin2100.Figure3.32⊳GlobalgrossandnetenergysectorCO2emissionsintheDelayedActionCaseGtCO₂40Netemissions33020100Grossemissions206020802100BECCSandDACS-10IEA.CCBY4.0.20202040Delayingtheachievementofnetzeroemissionstoafter2060wouldmeanthatupto5GtperyearofCO2removalswouldbeneededtobringtemperaturestobelow1.5°CThe2GtCO2removaleachyearthroughBECCSrequiredintheDelayedActionCaseistwicetheamountrequiredintheNZEScenario.TheextenttowhichBECCScanbeincreasedisconstrainedbylimitsonsustainablebioenergysupplyaswellasbytheeconomicandlogisticalchallengesofdeployinginfrastructuretoconnectbioenergyfacilities,oftenverydispersed,withlarge-scaleCO2storagesites.Capturing2GtCO2peryearfrombioenergyfacilitieswouldrequiregathering,processing,combusting,capturing,transportingandstoringtheemissionsfrombioenergyproducedonroughly135millionhectares(Mha)8ofland–slightlylessthanthetotallandareaofPeru,the20thlargestcountryintheworld(Figure3.33).Assustainablebioenergyfeedstockisspreadthinlyandwidely,soarebioenergyfacilities,andconnectingthemwithCO2transportinfrastructureandsuitablestoragesiteswouldbeahugechallengeinlogisticalterms.WhilethedeploymentofDACSisnotrestrictedbytheavailabilityoffeedstockorsuitablesites,itismuchmoreenergyintensiveandcostlythanBECCS.ThisismostlyduetothelowconcentrationofCO2intheatmosphere,whichrequireshugevolumesofairtobetreated8EstimatedbyapplyingtheshareofbioenergyfeedstockusedinfacilitiesequippedwithCCStototalbioenergyIEA.CCBY4.0.landuse.Landuseforbioenergyincludescroplandforfirst-andsecond-generationenergycrops,andsustainablymanagedforestlandforbioenergyestimatedonaproratabasis(i.e.,theproportionoffeedstocksusedforbioenergyproductionoutoftotalforestharvest).Chapter3MakingtheNZEScenarioareality153forCO2separation.Capturingaround3.3GtCO2directlyfromtheatmosphereasrequiredintheDelayedActionCaseby2100wouldrequirefiltering0.1%oftheearth’satmosphereeveryyear.Atthisscale,DACSwouldconsumearound30EJofenergyannually,justbelowthancurrenttotalenergyconsumptionintheindustrysectorintheEuropeanUnion,JapanandUnitedStatescombined.IftheenergyrequiredforthedeploymentofDACSwasprovidedbysolarPV,thiswouldrequirearound4.5MhaoflandforsolarPVandDACSfacilities,whichisroughlyequivalenttothelandareaofDenmark.Whilethisisordersofmagnitudelowerthanthelandandwaterfootprintstypicallyassociatedwithbioenergyproduction,itwouldputfurtherstrainsonanalreadyresource-constrainedenergysystem.Figure3.33⊳Globalannualenergyuse,annualcarbonremovalcostsandlandrequirementsforcarbonremovaltechnologiesintheDelayedActionCase,2100Energyuse(EJ)Cost(TrillionUSD)BECCSfeedstockarea(Mha)401.6160302022industry1.22022fossilfuelPerulandareaenergydemandininvestment120EU,USandJapan0.88020100.440NZEDelayedNZEDelayedNZEDelayedScenarioActionCaseScenarioActionCaseScenarioActionCaseBECCSDACSIEA.CCBY4.0.HeavierrelianceonCarbonDioxideRemovalintheDelayedActionCasewouldhavehugeimplicationsforenergyuse,economiccostsandresourceuseNotes:EJ=exajoules;Mha=millionhectares;EU=EuropeanUnion;US=UnitedStates;BECCS=bioenergyequippedwithCCUS;DACS=directaircaptureandstorage.EnergyandcostsforBECCSareforthecarboncaptureunitonly.Costcorrespondstothelevelizedcostofcarboncapture.BECCSfeedstockareareferstothelandareafromwhichBECCSfeedstockmustbecollected.TheDelayedActionCaseassumesthattotalsustainablebioenergylimitdoesnotincreasefromtheNZEScenario(100EJ),buttheshareofbioenergycombinedwithCCUSincreases.Thereisalsothequestionofcosttoconsider.Removing2GtwithBECCSand3.3GtwithDACSeachyearbytheendofthecenturywouldcostaroundUSD1.3trillionperyear(in2022dollars),50%morethanwasinvestedinfossilfuelsupplyin2022.Organisingthisscaleofresourcemobilisationwouldbeamajorchallengerequiringcloseinternationalco-operation.154InternationalEnergyAgencyNetZeroRoadmapIEA.CCBY4.0.SPOTLIGHTIEA.CCBY4.0.StatusofdirectaircaptureandstoragetechnologyDirectaircaptureandstorageisapromisingtechnologyfornetzeroemissionspathways,butitcannotsubstitutefordeepreductionsinemissionsordelaysindevelopinganddeployingthetechnologiesthatcanreduceoravoidemissionsinthefirstplace.Theindustrial,infrastructureandcostchallengesofscalingupdirectaircaptureandstoragetaostphoessdibelgerebeyipnritohreitDiseinlagydeidreAccttrieodnuCcatisoenhsioghfleigmhitssthioennsefreodmtofomssinilimfuiesleciotsmubsuesatisonmaunchd3non-combustionapplicationsalike,asintheNZEScenario.EvenwiththeveryrapidemissionsreductionsbuiltintotheNZEScenario,DACSplaysanimportantroleinbalancingthelastremainingresidualemissions.ItalsoplaysanimportantroleincapturingCO2directlyfromtheatmospherethatprovidesthenecessaryandirreplaceableclimateneutralcarbonfeedstockforlow-emissionsfuelssuchassyntheticaviationkerosene(givenconstrainedsustainablebioenergyresources),whichplayavitalpartintheaviationsector.PolicymakersshouldsupportfasterinnovationinanddeploymentofDACtechnologies,evenastheyprioritisethedeploymentofcleantechnologiesacrosstheenergysystem.TwotechnologicalapproachesarecurrentlybeingusedtocaptureCO2fromtheair:solidDAC(S-DAC)andliquidDAC(L-DAC).SolidDACoperatesatambienttolowpressureandmediumtemperature(80-120°C),whileliquidDACoperatesathightemperature(300-900°C).Thesetechnologiesarecurrentlyattheprototype(L-DAC)anddemonstration(S-DAC)stagesandneedtobescaledupdramaticallytoplaytheroleenvisagedintheNZEScenario(seesection3.2.1).OtherinterestingDACtechnologiesareemergingsuchaselectro-swingadsorption,zeolitesandpassiveDAC.WhiletheseDACtechnologiesarenowatearlystagesofdevelopment,theyofferthepossibilityoflowercosts(passiveDACcouldcostlessthanUSD100/tCO2comparedwithUSD1000/tCO2fortheDACtechnologiesatamoredevelopedstagetoday),lowerenergyintensities(electro-swingDACneedsonlyaroundone-thirdoftheenergypertonneofCO2comparedwithmoredevelopedtechnologies)andabundantsorbentavailability(globalzeolitesproductionin2022wasequivalenttoaround1Mt).GrowingcommercialinterestintheL-DACandS-DACtechnologies,aswellastheinnovationpotentialofemergingDACtechnologies,suggeststhatDACtechnologiescouldbescaleduptothelevelsseenintheNZEScenario,providedthatappropriatepoliciesareinplace.Atthesametime,policymakersandindustryneedtoberealisticabouttherolethatDACSandothercarbondioxideremovaltechnologiescanplayinrobustnetzeroemissionsstrategies,andabouttherisksinvolvedinmakingassumptionsabouttheirfuturedevelopment.Timeisnotonourside.Evenwithsubstantialinnovationanddeployment,thesetechnologiesmustbeseenasawayofcomplementing,notreplacing,afocusonreducingemissions.Chapter3MakingtheNZEScenarioareality1553.3.4ImplicationsfortheoilandnaturalgasindustryWithcontinuinginvestmentinexistingandapprovedsourcesofsupply,butwithoutanynewconventionaloilandgasprojectapprovals,oilandgasproductionwoulddeclinebyaround2%eachyearonaverageto2030andby4-5%eachyearonaveragefrom2030to2050.IntheNZEScenario,arapidandsustainedsurgeincleanenergyinvestmentandavarietyofothermeasuresleadtoreductionsindemandforoilandgasthatbroadlymatchtheprojectedfallinproductionfromexistingsourcesofsupply.Asaresult,thereisnoneedfortheapprovalofanynewlongleadtimeupstreamconventionaloilandgasprojects.IntheDelayedActionCase,cleanenergyinvestmenttakesplacelessrapidlyandmeasuresdesignedtoreduceemissionsprogressmoreslowly.Asaresult,oilandnaturalgasdemandfallbyaround0.5%onaverageeachyearto2030.After2030,oilandgasdemanddeclinesataratecloserto4%peryearonaveragethroughto2050.Toensureasmoothmatchbetweensupplyanddemandtherewouldneedtobecontinuedinvestmentinexistingsourcesofoilandgassupply,andsomenewsourcesofsupplywouldneedtobeapprovedfordevelopmentoverthenextfewyears.However,acceleratingthedeclineindemandforoilandgasafter2030intheDelayedActionCasemeansthatnonewlongleadtimeoilprojectswouldneedtobeapprovedfordevelopmentfromthelate2020sonwards,andthisinturnmeansthatthereisnoneedtoexplorefornewoilandgasfieldsfromnowon.Theprojectsthataredevelopedoverthisperiodwouldhavetoprioritiselow-emissionstechnologiesacrossthefullsupplychain.Thismeansminimisingmethaneleaksandflaring,electrifyingfacilitiesusinglow-emissionselectricityandintegratingtheuseofCCUSwherefeasible.Afterthelate2020s,oilandgasinvestmentgloballywouldshiftentirelytomaintainingproductionatexistingfieldsandminimisingtheemissionsintensityofoperations.156InternationalEnergyAgencyNetZeroRoadmapIEA.CCBY4.0.Chapter4Secure,equitableandco-operativetransitionsFastertogetherSUMMARY•Thecleanenergytransitionbringsnewenergysecurityrisks.Althoughcapitalspendingoncriticalmineralssawa30%increasein2022andexplorationspendingroseby20%,announcedcriticalmineralminingprojectsarenotsufficienttomeettheneedsoftheNetZeroby2050Scenario(NZEScenario)in2030.Bridgingthisgaprequiresafocusoninvestment,recycling,technologyinnovationandbehaviouralchange.•Moretraditionalenergysecurityrisksdonotdisappear.GlobaloilandgasmarketsreduceinvolumetermsintheNZEScenario,butproductionbecomesconcentratedinasmallnumberofproducers,withtheshareoftheMiddleEastrisingfrom25%todayto40%in2050.•TheNZEScenarioseesahugeincreaseincleanenergyinvestmentandarapiddecreaseinfossilfuelinvestment.Ensuringasmoothtransitionrequiresthetwotobecarefullysynchronised.IntheNZEScenario,thekeyrequirementisamassiveandrapidincreaseincleanenergyinvestment.•Todaymorethan80%ofcleanenergyinvestmentistakingplaceinadvancedeconomiesandChina;moreisneededinemerginganddevelopingeconomies.TheNZEScenarioseescleanenergyinvestmentincreasingnearlythreefoldfromthecurrentlevelby2030,butfivefoldinemergingmarketanddevelopingeconomiesotherthanChina.AroundUSD80-100billioninannualconcessionalfundingisneededbytheearly2030stolowerthecostoffinanceandmobiliseprivatecapitalinlowerincomecountries.•Affordabilityofenergyisakeyconcern.Apeople-centredtransitionrequiresmeasurestoensurethattheleastwell-offinallsocietiesareabletobenefitfromtheloweroperatingcostsofcleanandenergy-efficienttechnologies.Inoverallterms,cleanenergyinvestmentintheNZEScenarioisoutweighedbydeclinesinspendingonfossilfuels,withworldwidenetenergyspendingsavingsequallingUSD12trillionto2050.•TheGlobalStocktakeneedstoprovideaclearsignalabouttheambitionandurgencywithwhichcountriesarepreparingtheirnewNationallyDeterminedContributions–thekeyvehicleforcollectiveactionundertheParisAgreement.•Internationalco-operationiscentraltodevelopagreedstandards,todiversifycleanenergysupplychainsinawaythatavoidsunderminingthebenefitsofglobalsupplychains,toensurethatrapidscaleupcanbeachieved,andtosharelessonslearnedfromcleanenergydemonstrationprojectstoaccelerateinnovation.Chapter4Secure,equitableandco-operativetransitions157IEA.CCBY4.0.4.1IntroductionTheIEANetZeroby2050:ARoadmapfortheGlobalEnergySectorin2021concludedthatwithoutfairandeffectiveinternationalco-operationthetransitiontonetzeroemissionswouldbedelayedbydecades(IEA,2021a).Today,theworldfacessharpergeopoliticalfractures,heightenedconcernsaboutenergysecurity,moreintensecompetitionforcleanenergysupplychainsandtechnologies,andtighterfinancialandfiscalconditionsparticularlyinmanyemergingmarketanddevelopingeconomies.Theseconditionsmaymakeinternationalco-operationmoredifficult,butitisjustasimportantnowasin2021.AchievingtheoutcomessetoutintheNZEScenariorequiresinternationalco-operationinseveralareas.Energysecurityisanimportantconcernforallcountriesandneedstobeactivelymanagedbothwithinandbetweengovernments,whetheritisaquestionofatraditionalissuesuchasthesecurityofoilandgassuppliesoranemergingissuesuchastheadequacyandsecurityofcriticalmineralssupplies(section4.2).Today,emergingmarketanddevelopingeconomies,otherthanChina,arelaggingsignificantlybehindinthedeploymentofcleanenergytechnologies.Reversingthisimbalanceandensuringthatthebenefitsandcostsofthecleanenergytransitionaredistributedfairlymustbeacriticalfocus(section4.3).Amongotherissues,thisentailsaddressingtheinvestmentgapincleanenergytechnologiesacrossemergingmarketanddevelopingeconomies,includingthroughtheprovisionofmoreconcessionalfinancetomobiliseprivatecapital(section4.4).TheGlobalStocktakeundertheParisAgreementneedstoprovideaclearsignalabouttheambitionandurgencywithwhichallcountriesarepreparingtheirnextroundofNationallyDeterminedContributions–thekeyvehicleforcollectiveactionundertheParisAgreement.InnovationinnovelcleanenergytechnologiesneedstoacceleratetosupportprogresstowardsthegoalsoftheParisAgreement,andinternationalco-operationhasaroletoplayhereinrespectofissuessuchascross-borderinfrastructureandthedevelopmentofinternationalstandards(section4.4).4.2EnergysecurityIEA.CCBY4.0.Managingtraditionalsecurityrisksrelatedtofossilfuelsupplywillremainimportantduringthetransitiontocleanenergysystems.However,asthetransitionadvances,newrisksarise,includingsomerelatedtothesupplyofcriticalmineralsneededforcleanenergytechnologies,andothersthatrelatetotheadequacyandreliabilityofelectricitysystemsthatwillformthebackboneofthenewenergyeconomy.Thissectionlooksatbothnewandtraditionalrisksandconsiderswhatapproachescanreduceormitigatethem.4.2.1BridgingthegapbetweencriticalmineralsupplyanddemandTherapiddeploymentofcleanenergytechnologiesputsstrainsonsupplychains,notablyforcriticalminerals.Thedevelopmentofcleanenergytechnologysupplychainshasmadeimpressiveprogresssince2015.However,theexpectedpaceofgrowthincriticalmineralsuppliesdoesnotyetmatchthatofmanufacturingcapacityadditionsforcleanenergy158InternationalEnergyAgencyNetZeroRoadmaptechnologies,posingchallengesforscalingupcleanenergydeploymentattherequiredpacetosupportnetzeroemissionstransitions.Demandforcriticalmineralsforcleanenergyapplicationsquadruplesbetween2022and2030intheNZEScenario.Electricvehicles(EVs)andbatterystoragearethemaindriversofdemandgrowth,butdemandfromlow-emissionspowergenerationandelectricitynetworksalsoincreases.Asdemandforcleanenergyapplicationsrisesfasterthanitdoesforotheruses,theshareofcleanenergyintotaldemandforkeymineralsincreasesconsiderably.Forexample,thecleanenergysectorrepresentsnearly90%oftotallithiumdemandby2030intheNZEScenario,upfrom60%today,andcleanenergytechnologiesovertakestainlesssteelasthelargestconsumerofnickelaround2030.4Figure4.1⊳AnticipatedsupplyandprojecteddemandforselectedmineralsintheNZEScenario,2030Copper(Mt)Nickel(Mt)Lithium(kt)Cobalt(kt)4088004003066003002044002001022001002022supplyAnticipatedprimarysupplyin2030Secondarysupplyin2030TotalNZEdemandin2030IEA.CCBY4.0.Whileinvestmentsinnewprojectsareincreasing,meetingrequirementsoftheNZEScenariorequiresfurthereffortstoboostinvestment,recyclingandtechnologyinnovationNotes:Mt=milliontonnes;NZE=NetZeroScenario.Anticipatedsupplyisexpectedfutureproductionbasedonassessmentofannouncedprojects.Secondarysupplyreferstosupplyfromrecycledmaterials.Despiteincreasesinrecentyears,theanticipatedsupplyfromthecurrentprojectpipelineIEA.CCBY4.0.stillfallsshortoftherequirementsintheNZEScenario(Figure4.1).Expandinginvestmentinnewminingandrefiningfacilitiesiscrucialtoavoidtheriskofsupplyshortagesslowingenergytransitionsorraisingtheircost.Encouragingly,manycountrieshaverecentlyintroducednewpoliciestoboostinvestmentinnewsupplies.Ourlatestassessmentindicatesthatcapitalspendingforcriticalmineralsdevelopmentrose20%in2021andbyafurther30%in2022(IEA,2023a).Explorationspendingalsoroseby20%in2022,drivenbyrecordgrowthinlithiumexploration.Butmoreneedstobedone,andthelackofprogressondiversifyingsupplysourcesremainsaconcern.Theshareofthetop-threeproducersofsomecriticalmineralsinglobalsupplyremainsveryhighandhasnotchangedfrom2019levels,Chapter4Secure,equitableandco-operativetransitions159notablyfornickelandcobalt.Forrefiningandprocessingoperationsinparticular,mostplannedprojectsarebeingdevelopedinincumbentproducers,withChinaholdinghalfofplannedlithiumrefiningprojectsandIndonesiarepresentingnearly90%ofplannednickelsmeltingfacilities.Anincreaseinrecyclingrateswouldhelptoreducethepressureonprimarysupplyandwouldalsobringenergysecuritybenefits,especiallytoregionswithhigherdeploymentofcleanenergytechnologiesandlimitedresourceendowments.Forbulkmaterialssuchassteelandaluminium,recyclingpracticesarerelativelywellestablished,butthisisnotyetthecaseformanyenergytransitionmineralssuchaslithiumandnickel.Wasteregulationsshouldbeupdatedtoensurethattheycoveremergingwastestreamsfromnewcleanenergytechnologies,backedbysupportfortheconstructionofnewrecyclingfacilities.IntheNZEScenario,secondarysupplyfromrecyclingmeets10-20%oftotaldemandforkeyenergytransitionmineralsin2030,andthereisscopeforthissharetoincreasesignificantlyastheamountofequipmentreachingitsendoflifeexpandsinthelongerterm.Technologyadvancesalsohaveamajorroletoalleviatepotentialsupplystrains.Forexample,significantreductionsintheuseofsilverandsiliconinsolarcellsoverthepastdecadehavecontributedtoaspectacularriseindeploymentofsolarphotovoltaics(PV).Embracingahighershareofhigh-voltagedirectcurrenttransmissionlinesinelectricitynetworkshasthepotentialtocurtailtheirmaterialdemandby3%in2030and10%in2050,andawideradoptionoflithium-ironphosphatechemistriesandsodium-ionbatteriescouldreducemineraldemandforEVbatteriesby7%in2030andalmost20%in2050.Figure4.2⊳ImpactsoftechnologyandbehaviouralchangesonmaterialdemandintheNZEScenario,2030and20505%Impactsin20300%Nickel-5%Aluminium-10%Graphite-15%Manganese-20%Lithium-25%CobaltCopperImpactsin2050WideradoptionofSmallerEVHighershareofLFPDCsystemsingridbatterysizeandsodium-ioninnetworksbatteriesIEA.CCBY4.0.TechnologyinnovationandconsumerbehaviourprovidescopetoalleviatepotentialsupplystrainsbyreducingdemandNote:DC=directcurrent;LFP=Lithium-ironphosphate.IEA.CCBY4.0.160InternationalEnergyAgencyNetZeroRoadmapChangesinconsumerbehaviouralsoplayapart.TheNZEScenarioassumes,forexample,thattargetedmeasuresreducetheappetiteforsportutilityandotherlargevehicles,cuttingmineraldemandforEVbatteriesby18%in2030andaround20%in2050(Figure4.2).Addressingthepotentialgapsbetweensupplyanddemandisasignificantchallenge,butrecenttrendssuchasincreasedcapitalinvestmentinnewsupplies,increasedrecyclingfacilitiesandtheemergenceofnewtechnologyoptionsprovidegroundsforcautiousoptimism.Tosustainthismomentum,itisimperativetobolsterinternationalco-operationinordertostimulateinvestment,fostertechnologyinnovationandpromoterecyclingpractices.Thisshouldbeaccompaniedbyincreasedinternationalco-operationonthesocialastnadndenarvdirsoannmdesnttraelnigmthpeanctinsgodfamtiancinoglletoctiimonpraonvderpeeprofrotrinmgamnceec,hfaonriesmxasm.plebyharmonising4WhilethedemandforcriticalmineralsincreasessignificantlyintheNZEScenario,cleanenergytransitionsrequiresignificantlyfewerextractiveresourcesinaggregatethantoday’senergysystem.Decarbonisationmeansamajorreductionintheoverallmaterialsintensityoftheenergysystem,giventhatincreaseddemandforcriticalmineralsisaccompaniedbyamassivedecreaseinextractionoffossilfuels.Thenetresultisthatforeveryunitofenergydeliveredin2050,theenergysystemconsumestwo-thirdslessinmaterials(fossilfuelsandcriticalmineralscombined)thanitdoestoday(Figure4.3).Figure4.3⊳MaterialintensityoftheglobalenergysystemintheNZEScenario,2010-2050MaterialintensityIntensitybycategory30600Kt/PJIndex(2022=100)-68%IEA.CCBY4.0.20400102002010202220302040205020102022203020402050FossilfuelsCritialmineralsIEA.CCBY4.0.Overallintensityofmaterialstosupporttheglobalenergysystemdropsbymorethantwo-thirdsby2050Notes:Kt/PJ=thousandtonnesperpetajoule.Criticalmineralsdonotincludesteelandaluminium.Theintensityforcriticalmineralsdoesnotincludetheamountofwasterockthatoccursduringminingactivities.Chapter4Secure,equitableandco-operativetransitions1614.2.2ScalingupcleanenergytechnologiesandscalingbackfossilfuelsneedtobewellsynchronisedEffortstoensureenergysecurityhavesofarfocussedonaddingnewinfrastructuretoensureuninterruptedaccesstoenergysupplies.However,netzeroemissionstransitionsrequireawindingdownofhighcarbonenergysystemsalongsidemajorinvestmentinnewcleanenergyinfrastructure.Ensuringasmoothtransitionrequiresthesetwomovementstobecarefullysynchronised.Figure4.4⊳GlobalinvestmentincleanenergyandfossilfuelsintheNZEScenario,2023-2030612CleanenergyTrillionUSD(2022,MER)Efficiencyandend-useIEA.CCBY4.0.PowerandfuelsFossilfuels48OilNaturalgasCoal24Ratioofcleanenergytofossilfuels(rightaxis)2023e2030IEA.CCBY4.0.Amassivescaleupincleanenergyinvestmentiskeytoensuresmoothtransitions,buttheshiftinenergyinvestmentneedstobecarefullysynchronisedNotes:MER=marketexchangerate.Powerandfuelsalsoincludesinvestmenttoreduceemissionsfromfossilfuelsupply.Globalinvestmentincleanenergyissettooutstripinvestmentinfossilenergybyafactorof1.8to1in2023.Thisratiorisesto10to1in2030intheNZEScenario,whenaroundUSD2.5trillionisinvestedincleanelectricityandlow-emissionsfuelsandaroundUSD1.8trillioninenergyefficiencyandend-uses,whileinvestmentinfossilfuelsupplyfallstoaroundUSD0.4trillion(Figure4.4).Thesequencingoftheshiftinenergyinvestmentisimportant.Runningaheadonscalingbackfossilfuelinvestmentbeforecleanenergyinvestmentrampsupwouldpushuppricesandriskpricespikes,andthiswouldnotnecessarilyadvancesecuretransitions.ThekeyrequirementfortheachievementoftheNZEScenarioisamassiveandsustainedincreaseincleanenergyinvestment.Thefastercleanenergyinvestmentanddeploymenttakesplace,thefasterthetransitionawayfromfossilfuelswillbe.162InternationalEnergyAgencyNetZeroRoadmapEvenwiththeambitiousandrapidcleanenergytransitionintheNZEScenario,someelementsoffossilfuelinfrastructurecontinuetocontributetothesecureoperationoftheoverallenergysystemformanyyearstocome.Theroleofgas-firedpowerplantsinpowersystemreliability,orofrefineriesinprovidingfortheresidualfuelneedsoftheinternalcombustionengine(ICE)fleet,arecasesinpoint.Unplannedorprematureretirementofthisinfrastructurecouldhavenegativeconsequencesforenergysecurity.Thereisalsoscopetoreuseorrepurposesomeexistinginfrastructure.Forexample,somepartsofnaturalgasnetworkscouldbeusedtotransportlow-emissionsfuelssuchasbiomethaneandhydrogen,refineriescouldbeconvertedtoproducebiofuels,andnaturalgasstoragefacilitiescouldberepurposedtostorehydrogen.44.2.3Fossilfuelmarketsshrink,butvigilanceisstillneededAchievingnetzeroemissionsgoalsbringsenergysecuritybenefitsasrelianceonfossilfuelsdecreases,butconcernsaboutthesecurityofoilandgassuppliesdonotdisappearintheNZEScenario.Giventhedemandtrajectory,therisksinthisscenariodonotrelatetotheadequacyofinvestment:globaldemandfallssufficientlyfastthatnonewoilorgasfielddevelopmentsareneeded,althoughcontinuedinvestmentinexistingfieldsisstillrequired.Butasenergytransitionsprogressanddemandfalls,oilandgassuppliesbecomeincreasinglyconcentratedinasmallnumberoflowcostproducers,andtheOrganizationofthePetroleumExportingCountries(OPEC)shareofworldoilproductionrisesfrom36%in2022to52%in2050–alevelhigherthanatanypointinthehistoryofoilmarketssincethefirstoilshock.1Oilimportdependencyalsoremainshighformanycountries,notablyinemergingAsianeconomies.TheMiddleEastplaysanoutsizedroleinservingtheseimportneeds,withitsshareintotalcrudeoilexportsrisingfrom45%in2022to65%in2050(Figure4.5).ImportdependencyinAsiaalsorisesfornaturalgasfrom27%in2022to45%in2050.IntheNZEScenario,importersthereforeremainexposedtorisksarisingfromgeopoliticaleventsandphysicaldisruptionsintheMiddleEastoraccidentsneartradechokepoints,evenasthetotalvolumeofimportsandthesizeoftheoilandgasmarketfalls.Themajorhydrocarbonproducers,notablyintheMiddleEast,arealsosettofaceeconomicchallengesasrevenuesfromoilandgassalesdeclinewiththeshifttowardscleanenergy.IntheNZEScenario,governmentsinnetexportingregionscollectUSD380billionfromtheproductionofoilandgasin2030,around50%belowtheaveragebetween2017-2021,andthisfallsfurthertolessthanUSD90billionby2050.Whileproducereconomieshavetakenstepstodiversifytheireconomicstructure,progresshasbeenlimitedinmostcases.Producereconomieshavealsomadelimitedprogressindiversifyingtheirenergysectorawayfromfossilfuelsandtheshareoflow-emissionssourcesintheirenergysystemsisamongthelowestintheworld.1SupplytrajectoriesandsensitivitiesfortheNZEScenarioareexaminedinmoredetailinaforthcomingWEOIEA.CCBY4.0.specialreportontheOilandGasIndustryinNetZeroTransitions,whichwillbereleasedinNovember2023.Chapter4Secure,equitableandco-operativetransitions163Figure4.5⊳MiddleEastshareofglobaloilandgasproduction,andoilandgasnetimportsinAsiaintheNZEScenario,2022-2050ProductionNetimports400100%80100%EJEJ30075%6075%IEA.CCBY4.0.20050%4050%10025%2025%20222030204020502022203020402050MiddleEastChinaIndiaRestofworldJapanandKoreaSoutheastAsiaShareofMiddleEast(rightaxis)OtherAsiaDependency(rightaxis)IEA.CCBY4.0.Oilandgassuppliesareincreasinglyconcentratedinasmallnumberoflowcostproducers;Asia’simportdependencycontinuestoriseNote:EJ=exajoules.TheNZEScenariochartsanorderlyprocessofchange,butthisisfarfromguaranteedinpractice.Someimportingcountriesmightlooktoconcludenewsupplyarrangementsintheinterestofenergysecurity,evenwhileseekingtoreducedomesticfossilfueluse.Exportersorpotentialexportersmightalsobekeentoexploituntappedoilandgasresourcesandsomelarge,lowcostproducersmightchoosetoexpandproductiontocaptureabiggermarketshare,evenifthatpushespricesdown;othersmightseektorestrictproductiontokeeppriceshigh.Alltheseoptionswouldcomewithrisks.Newprojectswouldrisklockinginemissionsthatpushtheworldoverthe1.5°Cthreshold.TheywouldalsofacemajoreconomicandfinancialrisksiftheworldissuccessfulatscalingupcleanenergyinlinewiththeNZEScenario.Ahigherdegreeofsupplyconcentrationamongasmallnumberofcountrieswouldmeanincreasedimportdependencyrisksforimportingregions,andrestrictionsonproductionbyexportingcountriestokeeppriceshighcouldposefinancialstrainsonimporters.Netzerotransitionsaremorelikelytoproceedsmoothlyifcountriesworktogetherconstructivelytominimisetheserisks.Thatiseasiersaidthandone,ofcourse,buttherearevariouswaysinwhichexportingandimportingcountriescouldbuildupsharedintereststoavoidpitfalls.Forexample,theycouldworktogetherontechnologydemonstrationandjointR&Dprojectstoharnessthepotentialforlow-emissionsenergyinproducereconomies;co-operatetofacilitateinvestmentinlow-emissionsfueltrade;andstrengthenbilateralandmultilateralengagementonavarietyofenergy-relatedissues.Itisultimatelyineveryone’sintereststhatthetransitiontocleanenergysystemsshouldbeasmoothone.164InternationalEnergyAgencyNetZeroRoadmap4.3EquityAchievingnetzeroemissionsby2050requireseverycountry,everyorganisationandeveryindividualaroundtheworldtocontributetothecleanenergytransition.Yettoday,thepaceofdeploymentofcleantechnologiesremainshighlyuneven,withadvancedeconomiesandChinapullingfaraheadwhileotheremergingmarketanddevelopingeconomieslagbehind.Withinsocieties,thereisariskthatthelesswell-offwillseefewerbenefitsfromthetransitionunlesssupportivepoliciesareputinplaceforapeople-centredtransition.Thissectionexploresthedriversofdisparitiesincleanenergydeploymentandwaysforwardforbringingcleanenergytoall(section4.3.1),theaffordabilityofenergyintheNZEScenario(esmecptliooynm4e.3n.t2()s,eacntdiotnhe4.b3e.3st).waystomanagetheimpactofarapidtransitiononenergysector44.3.1AcceleratingcleanenergydeploymentinemergingmarketanddevelopingeconomiesEnergyconsumptionpercapitaishighlyunequalacrosscountries,andcleanenergyconsumptionevenmoreso.AmongthecountriesforwhichIEAhascomprehensiveenergystatistics,thecurrentGinicoefficient2ofenergyinequalityis0.39forallsourcesofenergyconsumptionand0.46forcleanenergy.Halfofallthecleanenergysuppliedisusedby15%oftheglobalpopulation,themajorityofwhomliveinadvancedeconomies(Figure4.6).Figure4.6⊳Distributionoftotalfinalandcleanenergyconsumptionacross100%theglobalpopulation,202275%50%CumulativeenergyTotalfinalconsumptionCleanenergyIEA.CCBY4.0.Perfectequality25%0%25%50%75%100%CumulativepopulationIEA.CCBY4.0.Energyusepercapitaishighlyunequalacrosscountries,andcleanenergyconsumptionevenmoreso,reflectingdifferencesinincomeandwealthNotes:ThefigureshowsLorenzcurves;thecloserthecurveistothe45-degreeline,themoreequalvaluesareamongcountries.Cleanenergyexcludesthetraditionaluseofbiomass.2TheGinicoefficientisameasureofinequalitytypicallyusedtomeasureincomeinequality,whichhasbeenadoptedinthissectiontoevaluateinequalityinenergyconsumption.1indicatesperfectinequality(whereonegrouporoneindividualconsumesorreceivesalltheresources)while0indicatesperfectequality.Chapter4Secure,equitableandco-operativetransitions165Figure4.7⊳Cleanenergytechnologydeploymentnormalisedforpopulationandhouseholdsbyregion,20221.00EuropeanUnionSolarPVandwindcapacity(GWpermillionpeople)0.75UnitedStatesChinaOtherAE0.50C&SAmericaMENA0.25EurasiaOtherdevelopingAsiaSub-SaharanAfricaPopulationElectriccarownership(Unitsperthousandhouseholds)40EuropeanChinaUnitedUnionStates3020OtherAEMENA10EurasiaC&SAmericaSub-SaharanOtherdevelopingAsiaAfricaHouseholds600UnitedStatesBATappliancesownership(Unitsperthousandhouseholds)European450UnionOtherAEEurasia300ChinaMENAC&SAmerica150OtherdevelopingSub-SaharanAsiaAfricaHouseholdsIEA.CCBY4.0.IEA.CCBY4.0.CleanenergytechnologiesaredeployedatahigherrateinadvancedeconomiesandChinathaninotheremergingmarketanddevelopingeconomiesNote:BAT=bestavailabletechnologies;AE=Advancedeconomies;C&SAmerica=CentralandSouthAmerica;MENA=MiddleEastandNorthAfrica.Differencesinaccesstocleanenergyvarymarkedlyacrosstechnologies.Today,advancedeconomiesandChinacombinedhavenearly2.5-timesmoresolarPVandwindcapacityinoperationperpersonthantheglobalaverage(Figure4.7).Windandsolardeploymentper166InternationalEnergyAgencyNetZeroRoadmapcapitaareparticularlylowinAfrica.In2022,theNetherlandshadmoresolarPVcapacityinstalledthanthewholeofAfrica,forexample.Morecapital-intensiveandlessmaturetechnologiessuchasbatterystoragearethemostunevenlydeployedacrossregions.Lesscapital-intensivetechnologiessuchasbest-in-classefficientappliancesandlight-emittingdiode(LED)lightingsystemsaremoreevenlydeployed.Thedisparitiesarenotonlyalegacyoftheearlierstartinthedeploymentofcleanenergytechnologiesbyadvancedeconomies:similarlystrongdisparitiesareseeninrecentcapacityadditionsandnewsales.Concertedactionatinternationalandnationallevelsisneededtoaddressthesedisparities.Themainbarriersinclude:Accesstofinance:Capitalcostsforrenewables-basedprojectsinemergingmarketand4developingeconomiesremainatleastdoublethoseinadvancedeconomies(Figure4.8).Thisreflectstherelativelackofexperiencewithcleanenergytechnologyinthoseeconomiesandtheirconstrainedpolicyandregulatorycapacityincomparisonwithadvancedeconomies.Italsoreflectswiderrealorperceivedmacroeconomicrisks.Thehigherfinancingcoststhattheseeconomiesfaceperpetuatesalackofexperiencewithcleanenergytechnologies,whichcreatesaviciouscircleofunderdeployment.Financialsupport,forexamplethroughJustEnergyTransitionPartnerships,willbenecessary,butisnotsufficienttohelpovercomethesebarriers.(Concessionalfinance,de-riskinginstrumentsandothersolutionsarediscussedinsection4.4.1.)Figure4.8⊳WeightedaveragecostofcapitalforrenewablesandrenewablescapacitypercapitaversusGDPpercapita,20229%900MWpermillionpeople6%6003%300<1010-1920-2930-3940-49>50GDPpercapita(ThousandUSD,[2015MER])WACCforrenewablesNormalisedrenewablescapacity(rightaxis)IEA.CCBY4.0.Thecostoffinancingforrenewablesismorethantwo-timeshigherinthelowestincomecountriesthaninhighincomecountries,correlatingwithlowerdeploymentpercapitaNote:WACC=weightedaveragecostofcapital;MER=marketexchangerates.IEA.CCBY4.0.Source:IEAanalysisbasedonIRENA(2023).Chapter4Secure,equitableandco-operativetransitions167Policyenvironment:Supportivepoliciesarevitaltoexpandcleanenergy.Economicandregulatoryinstrumentssuchasstandardsandcodeshavebeenshowntoboosttheadoptionandutilisationofcleanenergysolutions(Nepaletal.,2018;PfeifferandMulder,2013),andwell-designedgovernmentpoliciesplayacentralroleinalteringincentivestructuresforprivateactorsandencouragingtheuptakeofnewtechnologies.Manyemergingmarketanddevelopingeconomieshavebeenlessabletomoveforwardintheseareasthanadvancedeconomies,oftenbecauseofcompetingpoliticalprioritiesincludingeconomicdevelopmentandpovertyalleviation,andthisgapisvisibleinthedifferentambitionlevelssetoutintheirNationallyDeterminedContributions(section4.4.2).Innovationecosystems:Sofar,fewcleanenergyinnovationshaveoriginatedindevelopingeconomies.EmergingmarketanddevelopingeconomiesotherthanChinaaccountedforonly5%ofglobalpublicenergyR&Dfunding,3%ofcorporateenergyR&Dfundingand5%ofenergyventurecapitalfundingin2022(IEA,2023b),while90%ofpatentsforlow-emissionsenergybetween2000and2020werefromadvancedeconomiesandanother8%fromChina(IEA,2021b).Althoughenergytechnologiesdiffuseacrosscountrybordersovertime,therecanbedelaysofoveradecadebetweenearlyandlateadopters,andmuchlongerinsomecases(Figure4.9).Loweringbarrierstotradeandforeigndirectinvestmentcanhelptofostertechnologydiffusion,ascanincreasedengagementbetweencountriesinearly-stagetechnologies(section4.4.3).Figure4.9⊳Shareofcountriesadoptingselectedtechnologies,1970-2022AdvancedeconomiesEmergingmarketanddevelopingeconomies100%100%75%75%50%50%25%25%197019801990200020102020197019801990200020102020NuclearSteel:blastoxygenfurnaceSteel:electricarcfurnaceIEA.CCBY4.0.WindSolarPVFirstadoptionofenergytechnologiesinemergingmarketanddevelopingeconomiesinsomecaseshaslaggedoveradecadebehindadvancedeconomiesNote:Powertechnologiesarecountedasadoptedwhenatleast10MWofcapacityhavebeeninstalled.168InternationalEnergyAgencyNetZeroRoadmapIEA.CCBY4.0.Marketsizeandconditions:Incountrieswheremarketsizeislimited,economiesofscalearedifficulttoachieveandtechnologycostsmayremainhigh.Incountrieswheresocietalawarenessanddemandfromconsumersforcleanenergyislesspronounced,companieshavefewerincentivestoinvestinorswitchtocleanertechnologies(Suzuki,2015;Zengetal.,2022).4.3.2EnhancingcleanenergyaffordabilityDomestictrendsmirrordisparitiesattheinternationallevel.Evenincountriesthathaveachievedrelativelyhighratesofcleantechnologydeployment,thereremainlargegroupsofpeoplewhocannotaffordtheupfrontpremiumofsomecleanenergytechnologies.Although4technologypurchasecostsdeclineovertimeastheirscaleofdeploymentincreases–ashasbeenthecaseinChina,whereEVsarenowoftencheaperthanICEcars–thereoftenremainsasignificant“greenpremium”evenforrelativelymaturetechnologies,andthatcanbeprohibitiveforlowerincomeorevenmedianincomehouseholds(Figure4.10).Asanexample,forChineseorUShouseholdsinthe25thpercentile,adeepbuildingretrofit–anintegratedsetofenergyconservationmeasurestosignificantlyimproveoverallbuildingperformance–ofanaveragesizehomecancostfourtoninemonthsofincome,comparedwithonetotwomonthsforhouseholdsinthe75thpercentile.Inadvancedeconomies,thecostpremiumofbuyingaheatpumpasopposedtoafossilfuelboilerisuptofourmonthsofincomeforhouseholdsinthe25thpercentile.Figure4.10⊳Purchasecostpremiumforcleanenergytechnologiesinmonthsofhouseholdincomeinselectedcountries,202225thpercentile75thpercentile99Monthsofincome66IEA.CCBY4.0.33UnitedFranceUnitedJapanChinaUnitedFranceUnitedJapanChinaStatesKingdomStatesKingdomElectriccarvsICEcarBuildingretrofitvsnoneHeatpumpvsfossilfuelboilerIEA.CCBY4.0.Whileoftenaffordablefortherich,thecostpremiumoflow-emissionsefficienttechnologiescanbeequivalenttoseveralmonthsofincomeforlowerincomehouseholdsNotes:Subsidiesarenotaccountedforhere.Costsareshownforaveragesizecars,residentialdwellingsandheatpumps.InChina,electriccarsonaveragearecost-competitivewithICEcars.Sources:IEAanalysisbasedonWorldInequality,(2022)forincome;JATO,(2021)forvehiclecosts.Chapter4Secure,equitableandco-operativetransitions169Thisgreenpremiumcanpreventlowincomehouseholdsfrombenefitingfromtheloweroperatingcoststhatcomewithcleanandenergy-efficienttechnologyoptions.Forexample,heatpumpsarethree-tofive-timesmoreefficientthanfossilfuelboilers,whileinductionstovesaretwo-tothree-timesmoreefficientthangasstoves,andahouseholdretrofitwhichisdeepenoughtoreduceenergyconsumptionforspaceheatingandcoolingby50%canlowerannualenergybillsbymorethan25%foranaveragefamilyintheUnitedStates.Thepooresthouseholdswouldbenefitmostfromthesesavingsonoperatingcostsbecausetheyspendmoreoftheirincomeonenergythanricherhouseholds,eventhoughtheiremissionsfootprintsaremuchsmaller:thepoorest10%oftheglobalpopulationareresponsibleforamere0.2%ofenergysectorCO2emissions,whiletherichest10%areresponsiblefornearlyhalf(IEA,2022a).Poorerhouseholdsneedtobegivencarefulconsiderationascleantechnologiesarerolledoutifcountriesaretoachievejusttransitions,andifnationaldecarbonisationtargetsarenottobeatriskfromlackofbroadsocietalsupport.Tohelpthepooresthouseholdsaffordefficientlow-emissionstechnologies,governmentscanbuildmeasurestoaddressinequalitiesintothedesignofclimatepolicies.Forexample,grantsandfiscalsupportforcleantechnologiescanbemeans-testedbyincome(Table4.1).Table4.1⊳Means-testedcleantechnologyhouseholdgrantprogrammesCountryProgrammeTechnologytargetMeanstestingcriteriaCanadaOiltoHeatPumpsIrelandAffordabilityProgramResidentialheatpumpsPost-taxhouseholdincomemustbeatFullyfundedenergyorbelownationalmedian.FranceupgradesResidentialefficiencyHouseholdsreceivingwelfarepaymentsUnitedVehicleconversionimprovementsincludingareeligible.KingdompremiumimprovedinsulationUnitedMaPrimeRénovStatesLowercarbon,moreForhouseholdswithincomebelowHomeUpgradeGrantefficientvehiclesEUR22983.InflationReductionActResidentialefficiencyTheamountofthegrantisscaledbasedCleanVehicleCreditimprovementsonincome.WeatherizationEnergyefficiencyupgradesFundingisonlyavailableforlowincomeAssistanceProgramforoff-gas-gridhomeshouseholds.NewelectricvehiclesHouseholdincomemustbebelowUSD300000forcouplesorUSD150000forindividuals.ResidentialenergyHouseholdsmustbeatorbelow200%efficiencyimprovementsoftheUSpovertyincomeguideline.Thecostsofthecleanenergytransitionareunderstandablyaconcernforallcountries.InIEA.CCBY4.0.advancedeconomies,technologyupgradesandenergyefficiencyretrofitstranslateintosubstantialsavingsonenergybills.Inemergingmarketanddevelopingeconomies,householdsalsobenefitfromthemoreefficientuseofenergy,thoughmodernenergyconsumptionincreasesasrisingincomesallowforlargerresidencesandmoreappliances.Newappliancesneedtomeetambitiousenergyefficiencystandardsinemergingmarketand170InternationalEnergyAgencyNetZeroRoadmapdevelopingeconomies,wherethecoverageandstringencyofthesepoliciesislowertodaythaninadvancedeconomies.IntheNZEScenario,overabillionpeoplegainaccesstomodernenergyby2030,particularlyinsub-SaharanAfrica.Whilethisresultsinnewexpenditureonelectricityandothermodernfuels,itsavestimepreviouslyspentonfuelwoodcollectioninruralareasandmoneypreviouslyspentonexpensivecharcoalincities.Carbonpricingpoliciesandthephase-outoffossilfuelsubsidiesraisefuelcosts.Thesepolicychangesneedtobecarefullydesignedandimplementedtolimitimpactsonhouseholdbudgetsandtosustainsupportforthecleanenergytransition.Fossilfuelsubsidiesreachedrecordlevelsin2022butarelargelyremovedby2030intheNZEScenario(Figure4.11).ThisPhoaslictiheesbSceenneafirtioof(SloTwEPeSr)i,ngantdhedbouersdneontopnregvoevnetrnthmeenptrobvuisdigoentsofcotamrgpeatreeddswuipthpothrtefSotratthede4energycostsoflowincomehouseholdsthroughdirectpaymentschemesorothermeans.Targetedmeasurescostmuchlessthanacross-the-boardsubsidies,notleastbecausewealthierhouseholdsconsumemoreenergythanpooreronesandthereforebenefitdisproportionatelyfromsubsidyschemes.Newandexpandedcarbontaxandemissionstradingsystemsprovideimportantadditionalsourcesofrevenueasthecleanenergytransitionprogresses:thesecouldbeusedinparttohelplowincomehouseholdstoaffordcleanandmoreenergy-efficienttechnologyoptionsandreducetheirenergybills.Figure4.11⊳AnnualcostofresidentialenergyperhouseholdinemergingmarketanddevelopingeconomiesintheSTEPSandNZEScenario,2022and2030800USD(2022,MER)SubsidiesIEA.CCBY4.0.CarbonpricingEnergyspending60040020020222030STEPS2030NZEIEA.CCBY4.0.PhasingoutenergysubsidiesandcarbonpricingpoliciesinemergingeconomiesneedtobecarefullydesignedandimplementedtoavoidnegativeimpactsonconsumersNote:Energyspendingincludesothertaxesandleviesonfuelsinadditiontocarbonpricingandexcludestransportfuelspending.Chapter4Secure,equitableandco-operativetransitions1714.3.3ManagingtheemploymenttransitionThechangesbetweennowand2030intheNZEScenarioimplyarapidtransformationinenergyemployment,withthedemandforworkersincleansectorsrisingmuchfasterthanthefallinfossilfuel-relatedjobs.Today,around65millionpeopleworkinenergyorkeyenergy-relatedsectorssuchasenergyefficiencyandvehiclemanufacturing,andhalfofthesejobsarealreadyfocussedoncleanenergy.3IntheNZEScenario,30millionnewcleanenergyjobsareaddedby2030whilecloseto13millionjobsinfossilfuel-relatedindustriesarelost,meaningthataroundtwocleanenergyjobsarecreatedforeveryfossilfuel-relatedjoblost(Figure4.12).Figure4.12⊳EnergyemploymentchangesbysectorintheNZEScenario,2022-2030100MillionworkersCriticalmineralsIEA.CCBY4.0.Low-emissionsfuels80GridsandstorageLow-emissionspower60End-useefficiencyEVsandbatteries40ICEvehiclesOilandgassupply20CoalsupplyUnabatedfossilfuelpower2022GainsLosses2030IEA.CCBY4.0.Approximatelytwocleanenergyjobsarecreatedforeveryfossilfuel-relatedjoblostbetweentodayand2030Note:ICE=internalcombustionengine;EVs=electricvehicles.Employmentinlow-emissionselectricityseessubstantialgrowthintheNZEScenario,withsolarPVandwindpoweraddingaround3millionjobseachandemployingacombined11.5millionworkersby2030.Thebetter-establishedend-useefficiencyandelectricitygridlabourforcesalsocontinuetoexpandthroughoutthedecade,employingaround14millionand11.5millionpeoplerespectivelyin2030,whereasemergingtechnologiessuchaslow‑emissionshydrogenproductionorconcentratingsolarpowerseejobopportunitiesincreasesharplyby2030.3SeeIEAWorldEnergyEmploymentReport2023,(forthcoming)formoredetailedinformationonenergyemploymentbysectorandregion.172InternationalEnergyAgencyNetZeroRoadmapThesectorslikelytoseelargerjoblosses,includingfossilfuelsupplyandICEvehiclemanufacturing,needtocarefullyplanforthechangesahead.Thismagnitudeofjoblossesisnotunprecedented–inChina,thenumberofcoalminingworkershasnearlyhalvedoverthelasttwodecadesduetolabourproductivityimprovements(IEA,2022b).Insomecases,workersinactivitiesthatstandtolosejobsalreadypossessskillsandknow-howthatoverlapwithgrowingenergysectors.Coalminershavemanyoftheskillsneededfortheextractionandprocessingofcriticalminerals,forexample,whilepeopleworkinginconventionalvehiclemanufacturingcanapplytheirexperiencetoEVmanufacturingandbatteryassembly.Workersleavingtheoilandgasworkforcearealreadyhighlysought-afterbythechemicalindustryandothers.Inmanycases,however,thejobscreatedbytheenergytransitionwillnotbeinthesameplace,requirethesameskills,orpaythesamewagesasthejobslost,such4thatpoliciescouldplayaroletosupporttheworkersandcommunitieswhoselivelihoodsmaybeaffected.4.4Internationalco-operationTheIEA’s2021NetZeroby2050reportconcludedthatalackoffairandeffectiveinternationalco-operationwouldpushbackthedatebywhichglobalnetzeroemissionsareachievedbydecades(IEA,2021a).ThereportincludedtheLowInternationalCo-operationCasewhichexploredtheimplicationsoffailingtoco-operateonfinance,tradeandsupplychains,technologyinnovationandCO2removal.Thissectionbuildsonthiscaseandexploresseveralareasinwhichinternationalco-operationneedstobestrengthened.4.4.1AddressingfinancingbarriersinemergingeconomiesIEA.CCBY4.0.InvestmentneedsfornetzeroemissionsRecenttrendsincleanenergyspendingprovidesomeencouragingsignsatthegloballevel.Investmentincleanenergyoutpacesinvestmentinfossilfuels:foreachUSD1investedinfossilfuelsin2023,weestimatethatUSD1.8willbeinvestedincleanenergy.CleanenergyinvestmenttodayisdominatedbytheadvancedeconomiesandChina.SomelargeeconomiessuchasIndiaandBrazilhaverecentlyseenstronggrowthincleanenergyinvestment,butitcontinuestolaginvestmentinfossilfuelsinotheremergingmarketanddevelopingeconomies,withanestimatedUSD250billionsettobeinvestedincleanenergyin2023comparedtonearlyUSD450billioninvestedinfossilfuels.Whiletherecentglobalshiftininvestmenttowardscleanenergyshowsthatthetransitioniswellandtrulyunderway,amuchfastershiftisneededtogetontrackfornetzeroemissionsby2050,withanaverageofUSD10needingtobeinvestedincleanenergyforeachUSD1investedinfossilfuelsby2030.Intotal,annualcleanenergyinvestmentreachesUSD4.5trillionbytheearly2030sandUSD4.7trillionby2050intheNZEScenario,comparedwithUSD1.6trillionin2022(Figure4.13).Mostoftheincreaseincleaninvestmentisintheemergingmarketanddevelopingeconomies(otherthanChina),whereitrisesfivefoldinthesecondhalfofthecurrentdecadecomparedwith2022,andmorethansevenfoldinthesecondhalfofthe2040s.Chapter4Secure,equitableandco-operativetransitions173Figure4.13⊳Cleanenergyinvestmentneedsbyregion/countryintheNZEScenario,2022-2050OtherEMDEChinaAdvancedeconomiesLow-emissionsfuels2.0TrillionUSD(2022,MER)1.5GridandstorageLow-emissions1.0powerEnergyefficiencyandend-use0.520222026-302046-5020222026-302046-5020222026-302046-50IEA.CCBY4.0.Thebulkofincreasedinvestmentincleanenergyisneededinemergingeconomies,otherthanChina;itrisesmorethansevenfoldinthesecondhalfofthe2040srelativeto2022InChinaandadvancedeconomies,investmentinlow-emissionspowerhasbeenrisingIEA.CCBY4.0.stronglybecauseofsupportivegovernmentpoliciesandrapidcostdeclinesinsolarPVandwindwhichhavemadethosetechnologiesattractivetoinvestors.Investmentinelectricitynetworksandstoragehasnotrisenasquickly,andnowneedstoaccelerateinordertomeetrisingdemand,modernisesystemsandensurereliableservice.Raisingthelevelofinvestmentisatougherundertakinginmanydevelopingeconomies,wherestate-ownedutilitiesarestrugglingtoraiseaffordablecapitalasaresultofrisinginterestrates,highlevelsofexistingdebtandcashflowpressuresrelatedtoelectricitysubsidies.Risksassociatedwithtimelygridconnectionsandcurtailmentareoftencitedbyinvestorsasbarrierstodevelopingnewrenewablesprojectsinthesecountries.Theintroductionofcost-reflectivetariffswouldbeparticularlyhelpfulinthiscontext.GlobalinvestmentspendingoncleanenergypeaksintheNZEScenarioatUSD4.8trillionperyearbetween2036and2040.Thisveryhighlevelofinvestmentleadstosignificantsavingsinfuelpurchases,whichfallfromanaverageofaboutUSD8.2trillionperyearin2018-2022toUSD7.5trillionin2050(athirdlowerthanintheSTEPS)(Figure4.14).TotalfuelandinvestmentspendingasashareofGDPpeaksduringthe2026-2030periodat11.2%beforefallingto6.4%in2050.Cumulativesavingsonfuelspendingexceedadditionalcapitalinvestmentby40%from2031through2050,withnetundiscountedsavingsequallingUSD12trillion.Thebenefitsofcleanenergytransitionswouldbeevenhigherifthebenefitsassociatedwithimprovedairqualityandlowerfrequencyofextremeclimateeventswerealsotakenintoconsideration.174InternationalEnergyAgencyNetZeroRoadmapFigure4.14⊳GlobalenergyinvestmentandspendingonfuelsintheSTEPSandtheNZEScenario,2018-20502018-222026-302046-5015TrillionUSD(2022,MER)15%FuelspendingOtherenergy1010%investmentspendingCleanenergyinvestmentspendingTotalinvestmentasa55%shareofGDP(rightaxis)4STEPSNZESTEPSNZEIEA.CCBY4.0.HighercapitalinvestmentincleanenergyintheNZEScenariomorethanpaysoffinreducedfuelspendingwithnetundiscountedsavingsequallingUSD12trillionInternationalco-operationtoscalefinanceforcleanenergyManyemergingmarketanddevelopingeconomiesstruggletofinancenewprojectsduetorisingdebtlevelsandtighteningfiscalconditions.Somehaveseenaccesstoexternalfinancingclosedoff.LargeemergingeconomiessuchasBrazil,India,Indonesia,MexicoandSouthAfricacanraisecapital,butitcoststwo-tothree-timesmorethaninadvancedeconomies(Figure4.15).Closingthefinancinggapwillrequireincreasedinternationalco-operationbetweencountriesandmoreactiveengagementwithfinancialstakeholderstobetterunderstandthebarriersfacedbyemergingmarketanddevelopingeconomiesandtheimpactonthecostofcapitaloftherisksthatinvestorsaremostconcernedby.Thiswouldhelptobettertargetpolicyinterventionsandinformthedesignandprioritisationofblendedfinance–thestrategicuseofdevelopmentfinanceandphilanthropicfundstomobiliseprivatecapitalflowstoemergingmarketanddevelopingeconomies.Theknowledgeandexperiencegainedfromsuccessfulprojectscouldalsobesharedmorewidelywiththeaimofhelpingothercountries,whilemorestandardisationinprojectstructuringandpreparationwouldfacilitatethedevelopmentofnewprojectsandeaseduediligenceprocesses.Strongereffortswillalsobeneededtoimprovetheavailabilityandqualityofdatanecessaryforfinancialinvestorstobetterassessandhencemanagerisks.Theprovisionofcapacitybuildingsupportbytheinternationalcommunitywouldhelp.Closingthegapwillalsorequiretheappropriatepackageofsupport.TherearetwoimportantIEA.CCBY4.0.pointshere.First,thereisnosingleinstrumentonwhichtorely;amixofconcessionalfinance(belowmarketrateloans),grantsforprojectstructuringandprojectpreparation,Chapter4Secure,equitableandco-operativetransitions175guaranteesandotherde-riskinginstruments(includingtolowerthecostofcurrencyhedging)isneeded.4Second,reachingscalewillrequireashiftfromdirectfinancingofprojectstowardsmoreprojectde-riskingwiththeaimofleveragingmuchhighermultiplesofprivatefinanceandmaximisingtheuseoflimitedpublicfunds.Internationalco-operationandengagementwithinvestorswillbevitalinthiscontext.Figure4.15⊳CostofcapitalforvarioussolarPVprojectsinselectedcountries,2019and202120%WACC16%12%8%Rangeforthe4%EuropeanUnionUnitedStatesandChina2018201290192020202120212022BrazilSouthAfricaMedianIndiaIndonesiaMexicoIEA.CCBY4.0.Costofcapitalforlargeemergingeconomiesistwo-tothree-timeshigherthaninadvancedeconomies,underminingthefinancialviabilityofnewprojectsNotes:WACC=weightedaveragecostofcapital.Eachdotcorrespondstoindividualutility-scaleprojects.Ofcourse,thereisalsothequestionofhowmuchsupportisneeded.AnalysisundertakenbytheIEAwiththeInternationalFinanceCorporationestimatesthattheNZEScenariowouldrequireUSD80to100billioninannualconcessionalfundingbytheearly2030stoimproveriskadjustedreturnstomobiliseprivatecapitalatscaleforcleanenergyinvestment(IEAandIFC,2023).Thisislessthanafifthofwhatwasspentin2022bygovernmentsinadvancedeconomiesonmeasurestolowerenergybillsduringtheenergycrisis(IEA,2023c).Africawouldrequirethelargestshareofsupport,accountingfor45%ofestimatedconcessionalfundingneeds,followedbyIndiaandLatinAmerica,whichwouldeachaccountforabout15%(Figure4.16).Halfofallconcessionalfundswouldsupportinvestmentinlow-emissionspower,andathirdwouldsupportinvestmentinend-useenergyefficiencyandelectrification.Low-emissionshydrogen,bioenergyandcarboncaptureandstorage(CCUS)togetheraccountfor14%,oralmosttwicetheirshareinoverallinvestment,reflectingdifficultiesin4Notallinvestmentwillrequireconcessionalfinance,norwillblendedfinancestructuresbeappropriateinallIEA.CCBY4.0.cases.CleanenergytechnologiessuchassolarPVandonshorewindalreadycanbefinancedcommerciallyinseveralemergingeconomies.176InternationalEnergyAgencyNetZeroRoadmapobtainingcommercialfinancingforsuchlarge-scaleimmaturetechnologies.Electricitynetworksandstorageaccountforjust4%,whichislessthantheirshareinoverallinvestment,reflectingthefactthatsomestate-ownedutilitieswithhighdebtlevelsand/orlowcreditratingsfacesignificantdifficultiestoaccessprivatecapital.Figure4.16⊳ConcessionalfundingneedsforcleanenergyinselectedemergingmarketanddevelopingeconomiesandbysectorintheNZEScenarioByregionBysector,2026-301204EuropeandEurasia80BillionUSD(2022,MER)LatinAmericaLow-emissions40IEA.CCBY4.0.OtherAsiafuels14%SoutheastAsiaIndiaEfficiencyLow-emissionsAfricaandend-usepower50%MiddleEast32%2026-302031-35Gridsandstorage4%IEA.CCBY4.0.Africarequiresthelargestshareofconcessionalfunding;low-emissionspoweraccountsforhalfofallconcessionalfundingneedsNote:Low-emissionsfuelsincludebioenergy,low-emissionshydrogenandCCUS.AttheConferenceoftheParties(COP)15in2009,developedcountriescommittedtoacollectivegoalofmobilisingUSD100billionperyearby2020(extendedto2025atCOP21)tosupportclimateactionindevelopingcountries.In2020,publicclimatefinanceforenergy,transportandindustryreachedUSD31billionandmobilisedUSD9billioninprivatecapital(OECD,2022).In2020,eachUSD1ofpublicclimatefinanceinthesectorleveragedjustUSD0.3ofprivatefinance.AverageleverageratiosforprivatecapitalmobilisationneedtoreachUSD6-7bytheearly2030sintheNZEScenario.Therefore,muchmoreisneededtodeliveronthecommitmentmadeatCOP15andtoprovidewhatisneededintheNZEScenariotoputtheworldoncoursetoglobalnetzeroemissionsby2050.Moreover,considerableadditionalfundingwillbeneededsothatstate-ownedenterprisesthatcannotatpresentaccesscommercialcapitalareabletofundprojectssuchaselectricitynetworkupgradesorenergyefficiencyimprovementsinpublicbuildings.Anewcollectivequantifiedgoalonclimatefinance(NCQG),isintendedtobeagreedby2024andtosupersedetheUSD100billiontargetagreedatCOP15.WhateverisagreedwillhaveChapter4Secure,equitableandco-operativetransitions177majorimplicationsforthejourneytowardsglobalnetzeroemissionsby2050.NegotiationsontheNCQGshouldtakeaccountoftheneedtorapidlyscaleuptheamountofpublicclimatefinanceprovidedtoemergingmarketanddevelopingeconomiesandtheneedtoincreasetheamountofprivatecapitalmobilised.Carboncreditfinancingcouldcomplementothersources(Box4.1).Itwillalsobeimportantforproviderstocarefullyconsiderhowbesttoallocateandtargettheircontributions.Box4.1⊳Howcancarbonmarketscontributetoscalingupnascentcleanenergytechnologies?Nascenttechnologiesandfuelssuchasdirectaircaptureandstorage(DACS),sustainableaviationfuelsandlow-emissionshydrogenplayanimportantroleintheNZEScenario.However,securingfinancingfordemonstrationandfirst-of-a-kindprojectsishinderedbytheirhighinitialcosts.Initialprojectsmaynotoffertheprospectofashort-termcommercialreturn,buttheyareneededtobringdowncoststhroughlearningandeconomiesofscale,andthustoacceleratedeployment.Policysupportforthesetechnologiesintheformoftaxcredits,advancedmarketcommitments,concessionalloansandloanguaranteesisgainingmomentum.Thatsupportisessential,butitmaybeinsufficienttoguaranteethatplannedprojectsareimplementedandnewprojectscomeforward.Privatecapitalisalsoneeded.Carboncreditmarketsofferapotentialmeansofprovidingit.AnexampleisDACSforwhichthecurrentpriceofremovingonetonneofCO2isintherangeUSD600-2500,butitisclearlyanimportanttechnologyforthefutureanditscostswillcomedownaslessonsarelearnedfrominitialprojects.TodayvoluntarycarbonmarketsareunderpinningmostDACSprojects,withgrowingpurchasesofDACScreditsbyfirmsandadvancepurchasecommitmentsbydemandaggregatorssuchasFrontier.5Sustainableaviationfuels(SAF)offerasecondexample.ProducersofSAFtodayrelymainlyonoff-takeagreementsfortheirrevenues,butdemandhasbeenlowbecauseSAFpricesarethree-tofour-timeshigherthanthoseofconventionaljetfuel.SAFcreditscouldhelptobridgethepricegappremium,andastartonthisisbeingmade.Forinstance,apilotprojectwaslaunchedinJuly2022byGenZero,aninvestmentcompany,SingaporeAirlinesandtheCivilAviationAuthorityofSingaporetoadvancetheuseofSAF.Atotalof1000SAFcreditsweremadeavailableforsale,generatedfromthe1000tonnesofSAFtobeusedatSingaporeChangiAirport.EachcreditpurchasedwillreduceCO2emissionsby2.5tonnes.IntheEuropeanUnion,thereareplanstomakeavailable20millionallowancesundertheEUEmissionTradingSystem,withamarket5Frontier,ademandaggregator,isanadvancemarketcommitmenttoacceleratethedevelopmentofcarbonIEA.CCBY4.0.removaltechnologiessetupinearly2023byaconsortiumcomprisingStripe,Alphabet,Shopify,MetaandMcKinseySustainability.InJune2023,itannounceditsfirstpurchasesfromsixprojectsonbehalfofStripeworthuptoUSD7.8million(Frontier,2022).178InternationalEnergyAgencyNetZeroRoadmapvaluearoundEUR2billion,tocoversomeorallofthepricegapbetweenfossilkeroseneandSAFfortheperiod2024-2030.AclearframeworktoaccountfortheoverlapofdirectGHGemissionsfromfuelcombustionofairlines(orScope1emissions)withindirectGHGemissionsfromprivateandbusinesstravel(orScope3emissions)wouldbeimportantforensuringthatSAFcreditsareusedcrediblytoeffectivelyreduceemissionsfromairtravel.Carboncreditscouldcomplementothersourcesoffinancingoflow-emissionshydrogenprojects.Thecomplexityofthesupplychainsinvolvedmeansthatithasnotyetprovenpossibletoestablishsuchcredits,buttheHydrogenforNetZero(H2NZ)Initiativeiscurrentlyseekingtodevelopnewcreditingmethodologiesforthevoluntarycarbon4marketaimedatunlockingcarbonfinanceforhydrogenprojects(SouthPole,2023).Thecredibilityofcarboncreditshassufferedinrecentyearsasaresultofmarketdesignimperfectionsandsomecasesofabuse.Itisessentialtoensurethatcarboncreditsaregeneratedfromreal,verified,additionalandpermanentemissionsreductionsorremovals.ApplyingindustryguidelinessuchasthoseoftheIntegrityCouncilfortheVoluntaryCarbonMarketsCoreCarbonPrinciples6andfollowingguidanceunderArticle6oftheParisAgreementshouldhelpinthisrespect.Therealsoneedstobemoretransparencyontheactionstakenbycorporationsinpursuitoftheirnetzeroemissionsstrategiesandotherpledges,includingtheiruseofcarboncredits,andmoreguidanceonhowtoformulateaCO2removalstrategy.TheVoluntaryCarbonMarketsIntegrityInitiative7couldbehelpfulhere:amongotherthings,itsClaimsCodeofPracticeshouldhelpreduceinstancesofgreenwashing.4.4.2EnhancingambitionsthroughtheUnitedNationsFrameworkConventiononClimateChangeandGlobalStocktakeUnderthe2015ParisAgreement,countriesagreedtoco-operatetocollectivelylimittheglobalincreaseintemperaturetowellbelow2°Candtopursueeffortstolimititto1.5°Cabovepre-industriallevels.ProgressivestrengtheningofnationalclimategoalsandcollectiveactioniscentraltotheParisAgreement.ItsratchetmechanismrequiresPartiestocommunicateneworupdatedNationallyDeterminedContributions(NDCs)ofincreasingambitioneveryfiveyearsfrom2020,basedonthecapabilityandcapacityofeachcountry,andinformedbytheGlobalStocktakeofprogressbetweencycles(Figure4.17).Thefive-yearcyclebetweeneachroundofNDCsubmissionsisintendedtostrikeabalancebetweentheneedtogivetimetocountriestoformulate,implementandlearnfromtheirNDCs,andtheneedforthelevelofambitiontobeincreasedinthelightoftheurgentrequirementtotackleclimatechange.Thisurgencyisreflectedinthedecisionstakenat6https://icvcm.org/the-core-carbon-principlesIEA.CCBY4.0.7https://vcmintegrity.org/Chapter4Secure,equitableandco-operativetransitions179COP26in2021andCOP27in2022,whichinvitedcountriestostrengthentheircurrentNDCs,ratherthanwaitforthefirstGlobalStocktakein2023beforedoingso,asrequestedintheParisAgreement.TheresponsetothesecallstostrengthenambitionsofexistingNDCswasunderwhelming(seeChapter1).ItisthereforecriticalthatthenextroundofNDCsshouldrepresentatruestep-changeinambitionandthatakeyoutcomeoftheGlobalStocktakeshouldbearequirementforallcountriestosubmitmoreambitiousNDCsforthenextcycle.Figure4.17⊳TimelineofNationallyDeterminedContributionsubmissions,2015-202680COP2160NumberofsubmissionsParisAgreemententryCOP26COP28COP30intoforceIEA.CCBY4.0.FirstGlobalStocktake40SecondNDCsINDCsRevisedNDCs20FirstNDCs201520162017201820192020202120222023202420252026IEA.CCBY4.0.168NDCs,representing195countries,hadbeensubmittedtotheUNFCCCbySeptember2023,ofwhichnearly90%hadbeenrevisedNote:INDCs=IntendedNationallyDeterminedContributions;NDCs=NationallyDeterminedContributions;COP=ConferenceoftheParties.Transparencyisalsoanimportantcomponentoftheco-operativeframeworkoftheParisAgreement.BeforeCOP21,fewerthan80%ofdraftNDCscontainedaquantifiedmitigationtarget.AsofSeptember2023,thissharehadincreasedto91%inrevisedNDCs,significantlyfacilitatingtheassessmentofcollectiveprogress.TheParisAgreementrequestsdevelopedcountriestoadoptabsoluteemissionsreductiontargets,whiledevelopingcountriesareonlyencouragedtodosoinrecognitionofthefactthatformanyofthem,theNDCprocesswasthefirsttimetheymayhavesetmitigationtargets.Todate,mostNDCsfromdevelopingcountriesuseeitherbaselinescenariotargets,whichmitigateemissionsagainstaforward-lookingcounterfactualbusiness-as-usualbaseline,oremissionsintensitytargets,whicharerelativetoaneconomicoroperationalvariablesuchasGDP.AsofSeptember2023,countrieswithlowtomediumincomepercapitahavemostlysetbaselinescenariotargets,whereascountrieswithhigherincomepercapita180InternationalEnergyAgencyNetZeroRoadmaphavemostlyadoptedabsoluteemissionsreductionstargets(Figure4.18).However,anumberofhigherincomecountrieshaveeithernotelaboratedNDCsatallorhaveadoptedintensityorbaselineNDCsthatarenotcommensuratewiththeirlevelofdevelopment.InthenextroundofNDCs,itishardtoseeagoodreasonwhyanyhigh-emitting,higherincomecountryshouldfailtoadoptanabsolutereductiontarget.Figure4.18⊳MitigationtargettypesofcurrentNDCsbycountrydevelopmentlevel100%100ThousandsUSD(2022,PPP)Notdefined75%Intensity475Baselinescenario50%50AbsoluteemissionsreductionsAverageGDPper25%25capita(rightaxis)12345678910IEA.CCBY4.0.IEA.CCBY4.0.Mosthighincomecountrieshavesetabsoluteemissionsreductionstargets;forthesecond-roundofNDCs,allhigh-emitting,highincomecountriesshoulddoso4.4.3AcceleratingcleanenergytechnologydeploymentInternationalco-operationwillneedtoplayamajorroleinacceleratingthedevelopmentanddiffusionofcleanenergytechnologiesaroundtheworld.Wehighlighttheimportanceofco-operationinthreekeyareas:setstandardsfornearzeroandlow-emissionsmaterialsandfuels;diversifycleanenergytechnologysupplychains;andstepupcleanenergydemonstrationprojects.DefinitionsandstandardsforcleanproductsandfuelsDefinitionsandstandardsembodyingmeasurementprotocolsandenvironmentalperformancethresholdscanhelptoestablishacommonviewofthewayforwardforvarioustechnologiesandsectors.Forheavyindustryandlong-distancetransport,theyareneededinparticulartounderpinpoliciesdesignedtotacklehard-to-abateemissions.Apackageofpolicymeasuresmayinclude“demandpull”measures,forexampletoestablishdifferentiatedmarketsforproductsandfuelsproducedwithsubstantiallyfeweremissionsChapter4Secure,equitableandco-operativetransitions181thanthoseproducedwithincumbenttechnologies,todevelopcleanpublicprocurement8protocols,andtodefinecleantechnologymandates.Allofthesedependontheexistenceofagreedstandards.Itmayalsoinclude“supplypush”measures,forexampletomakeitpossibletoevaluatethroughtheuseofagreedstandardswhetheragiventechnologyormeasuretoreduceemissionsdeservesfinancialsupport,andifsotowhatextent.Onceemissionshavebeenmeasured,thresholdscanbeusedtodifferentiateproduction,productsandfuelsaccordingtotheirenvironmentalfootprint.Suchthresholdsshouldbedesignedtobestable,absoluteandsufficientlyambitioustobecompatiblewithatrajectoryfortheglobalenergysystemthatreachesnetzeroemissionsbymid-century.Theyalsoneedtotakeaccountofthespecificcharacteristicsofeachsector,materialandfuel,suchasthelimitedavailabilityofcertaininputslikescrapmetalforrecycling.Interimmeasuresthatsubstantiallyloweremissionsintensitybutfallshortofdesiredhigherperformancethresholdsshouldberecognised,butonlyinthecontextoflongertermplanstoreachthosehigherthresholds.TheIEAhasrecentlyputforward,asinputstoministerialdiscussionsamongtheGroupof7(G7)members,commondefinitionsfornearzeroemissionssteelandcementproductionaswellasframeworksformeasuringandcollectingdataonlow-emissionshydrogen(IEA,2022c;IEA,2023d).Severalregulatoryframeworksandcertificationsystemsdefiningtheenvironmentalperformanceoffuelsandmaterialsarecurrentlybeingdevelopedinparallel(Figure4.19);betweenwhichthereareinconsistenciesofapproach.Thereisasignificantriskthatalackofco-ordinationmayleadtoaproliferationofvaryingstandards,resultinginmarketfragmentation,excessiveadministrativeburdenforcompanies,andaconfusinglandscapeforcustomersandsuppliers.TheIEAhasproposednetzeroprinciplesforemissionsmeasurementmethodologiesformaterialsproductionthataimtoguiderevisionstoexistingmethodologiesandpromoteconvergenceandinteroperabilityinthemediumterm(IEA,2023e).Theseprinciplesstipulatethatanemissionsmeasurementmethodologyshouldallowforcomparisonbetweenproductionfromallfacilities.Emissionsboundariesandscopeshouldcoverallmajorcontributionstoproductionandproductemissions.Accountingrulesforemissionscreditsandco-productsshouldbecompatiblewithanetzeroemissionsenergysystem.Inaddition,methodologiesshouldincentivise,whereverpossible,theuseofsite-andproduct-specificauditable,measureddata,asopposedtogenericemissionsestimatesorfactors.Strongerinternationalco-operationisvitaltolimittheproliferationofmultiple,competingstandardsthatriskslowingthecleanenergytransition.Byaligningstandards,countriescanhelpcreatelarger,sharedmarketsforloweremissionsfuelsandmaterials,thusacceleratingcostreductions.ThenewlyestablishedIEAWorkingPartyonIndustrialDecarbonisation,theInternationalPartnershipforHydrogenandFuelCellsintheEconomy,andtheCleanEnergyMinisterialHydrogenInitiativearerelevantforainwhichgovernmentscancollaborateonthistopic.8CleanprocuremententailstheprocurementofgoodsandcommoditiesthatareproducedanddeliveredinIEA.CCBY4.0.waysthatarecompatiblewithcleanenergytransitions.Thetermgreenprocurementisoftenused.182InternationalEnergyAgencyNetZeroRoadmapFigure4.19⊳Emissionsintensitythresholdsfornearzeroandlow-emissionssteelproductionasafunctionoftheproportionofscrapusedkgCO₂-eq/tofcrudesteel400FirstMoversCoalitionResponsibleSteel300SSABGSCC205020010040%20%40%60%80%100%ScrapshareofmetallicsinputIEA.CCBY4.0.Whiletherearesignificantdifferencesbetweentheemissionsintensitythresholdsproposedbyvariousinstitutions,theirlong-termambitionsareverysimilarNotes:kgCO2-eq/t=kilogrammeofcarbondioxideequivalentpertonne.GSCC2050referstothe2050valueoftheSteelClimateStandardproducedbytheGlobalSteelClimateCouncil,anassociationofsteelproducers.Theotherthresholdsarestaticovertimeandthusarenotassociatedtoaparticularyear.TheycorrespondtotheSSABfossil-freestandarddevelopedbythesteelproducerSSAB,theResponsibleSteelInternationalStandarddevelopedbythenon-profitmultistakeholdercertificationinitiativeResponsibleSteel(thethresholdisequivalenttoandconstitutesapublicendorsementofthethresholdputforwardbytheIEAtotheG7Ministersin2022),andtheprocurementrequirementsoutlinedbytheFirstMoversCoalition,aninitiativethatpromotesprivateprocurementinsupportofcleanenergytechnologies.Sources:ResponsibleSteel(2022);FirstMoversCoalition(2022);SSAB(2023);GSCC(2023).Recommendedpolicyactionstoadvanceinternationalco-operationinsettingstandardsandIEA.CCBY4.0.definitionsinclude(IEA,2022c;IEA,2023c;IEA,2023d):Avoidthecreationofnewemissionsmeasurementmethodologiesformaterialsandfuelsemissionsintensityandfocuseffortstotailorexistinginternationalprotocols.Engageintheamendmentandrevisionprocessesforexistingemissionsmeasurementmethodologieswhereverpossible.Engageininclusivetechnicaldialoguesandco-ordinationactivitiesformeasurementmethodologiesanddatacollectionfortheemissionsfrommaterialsandfuelsproduction.Engageinconstructivedialogueaboutdefinitionsthatdifferentiateaccordingtoemissionsperformancetoidentifyareasofcommonunderstandingandestablishwaystomakedefinitionsinteroperable,aswellastoshareknowledgeontheirpotentialuseinpolicyinstruments.Chapter4Secure,equitableandco-operativetransitions183DiversifycleantechnologysupplychainsManysupplychainsforcleanenergytechnologiesarecharacterisedbyahighdegreeofconcentration,andthisentailsmajorrisksforsecurityofsupply.Concentrationatanypointalongasupplychainmakestheentirechainvulnerabletodisruptionarisingfromindividualcountrypolicychoices,companydecisions,naturaldisastersortechnicalfailures.Disruptionofthiskindisverylikelytodriveuppricesofintermediateandfinalproductsandhampercleanenergytransitions.Cleanenergytechnologysupplychainstodayaregenerallymoregeographicallyconcentratedthanthoseoffossilfuels.Todayjustthreecountriesaccountforabout90%ofgloballithiumminingoutput;theequivalentfiguresforcobalt,nickelandcopperare75%,65%and45%respectively.Whenitcomestoproductionofkeycleanenergymass-manufacturedtechnologies–solarPVmodules,windturbinenacelles,EVbatteriesandelectrolysers–justthreecountriesaccountfor80-90%ofglobalcapacity(Figure4.20)(IEA,2023f).InthecaseofsolarPV,someindividualmanufacturingplantsinChinacanproducemoremodulesthanentirecountries.Forinstance,theLONGiplantinTaizhou–thelargestoperatingplantinChina–couldhavesuppliedhalfofthecapacityadditionsofsolarPVmodulesintheEuropeanUnionin2022(38GW).Figure4.20⊳Currentandprojectedgeographicalconcentrationofmanufacturingoperationsforselectedcleanenergytechnologies100%SolarPVWindBatteriesElectrolysersHeatpumps75%50%OtherUnitedStatesEuropeanUnionIndiaVietNamChina25%CurrentPipelineCurrentPipelineCurrentPipelineCurrentPipelineCurrentPipelineIEA.CCBY4.0.IEA.CCBY4.0.Announcedprojects–ifallrealised–willaltertheglobaldistributionofmanufacturingcapacityforbatteries,electrolysersandheatpumpsNotes:Windreferstoonshorewindnacellesinthisfigure.Forelectrolysers,itonlyincludesprojectsforwhichlocationdatawereavailable.Sharesarebasedonmanufacturingcapacity.Currentreferstoinstalledcapacitydatafor2022andfirstquarter2023whereavailable.Pipelinereferstothesumofcurrentinstalledcapacityandallannouncedmanufacturingcapacityadditions(asofendoffirstquarter2023)throughto2030.Otherreferstotheaggregateofallcapacitybesidesthatofthetop-threecountries/regionsforeachtechnologyandtimeframe.SeeTheStateofCleanTechnologyManufacturing(IEA,2023f)formoredetails.184InternationalEnergyAgencyNetZeroRoadmapThepipelineofannouncedprojectsformassmanufacturingofcleanenergytechnologiespointstoalimitedfallingeographicalconcentrationofsomebutnotallcleantechnologiesinthecomingyears.IfallsolarPVandwindprojectsthathavebeenannouncedcometofruition,concentrationamongthetop-threeproducerswouldremainsimilartocurrentlevelsby2030(85-90%),withChina’sshareremainingvirtuallyunchanged(80%forsolar,65%forwind).Bycontrast,ifallannouncedmanufacturingprojectsforbatteries,electrolysersandheatpumpscometofruition,thesharesofthetop-threeproducerswouldchange,thoughChinawouldstillmaintainastrongposition.Forexample,theshareofglobalbatterymanufacturingcapacityinChinawouldfalltoaroundtwo-thirds,whilethatoftheUnitedStateswouldjumpto15%andtheEuropeanUnionto11%.Policymakersneedtobalancetheneedtoaddressoverdependenceonalimitedrangeof4sourcesofmaterialsandtechnologiesontheonehandwiththebenefitsofanopeninternationaltradingsystemontheother.Dominanceofcleanenergytechnologysupplychainsbyahandfulofcountriespresentsobvioussecurityconcernsandwillinevitablyinvitepolicyreactionsfromothercountries.Atthesametime,overzealousmovestode-riskorlocalisesupplychainsriskunderminesthebenefitsofglobalsupplychains,raisescostsandhindersthecleanenergytransition.AttheirsummitinMay2023,G7countriesexpressedtheimportanceofbuildingresilient,secureandsustainablesupplychainstoacceleratethecleanenergytransitionandtoreducevulnerabilitiesassociatedwithunduedependencies(G7MinistersofClimate,2023).Countriescanaddressrisksatthedomesticlevelbydevelopingdedicatedindustrialstrategiesandmakingthemostoftheircompetitiveadvantages.Internationalco-operationwillremaincrucialtosharelessonslearnedandtobuildpartnershipsaswellaseffortstoensurethesmoothoperationofregionalandglobalsupplychains.Recommendedpolicyactionstoenhancesupplychaindiversityinclude:Identifythemajorcleanenergytechnologysupplychainrisksthatcoulddelayordisruptdeploymentandhinderresilienceincaseofdisruption.Whilemuchattentioncurrentlyfocusesonthesecurityofsupplyofcriticalminerals,otherelementscouldbeproblematicaswell.Buildstrategicpartnershipswhereitisnotrealisticorefficienttocompeteinasupplychainorsupplychainsegment.Identifyingrelativestrengthsandseekingcomplementarypartnershipsshouldbecentraltoindustrialstrategiesforcleantechnologymanufacturing.Facilitateinvestmentinemergingmarketanddevelopingeconomiesthroughpooledinvestments,knowledge-sharingandotherstrategiesdesignedtoreducerisksforcapital-intensivecomponentsofsupplychainsandspreadthebenefitsofthenewcleanenergyeconomy.Fundingprovisionsforspecificprojectsinappropriatecasesshouldbedependentonadequateenvironmental,socialandgovernanceregulationsbeinginplace.Chapter4Secure,equitableandco-operativetransitions185IEA.CCBY4.0.Promotetechnologiesandstrategiestoenhanceresourceefficiency,therebyincreasingtheresilienceofcleantechnologysupplychains.Amongothers,manufacturingprocessesthatminimisematerialuse,technologydesignsthatallowfortheuseofsubstitutematerialswhensecurityofsupplyisinquestion,andproductdesignsthatfacilitatereuse,repairabilityandrecyclabilityshouldbepromotedthroughinnovationpolicy.StepupcleanenergytechnologydemonstrationprojectsIEA.CCBY4.0.Acceleratinginnovationcyclesforearlystagecleanenergytechnologiesisvitaltomeetnetzeroemissionsgoals.Bringingcleanenergytechnologiesunderdevelopmenttodaytomarketby2030requiresadvancingfromprototypetomarketsignificantlyfasteronaveragethansomeofthequickestenergytechnologydevelopmentsinthepast.Suchanaccelerationwouldrequiredemonstratingtechnologiesnotyetavailableonthemarketquickly,atscale,inmultipletechnicalconfigurationsandinvariouslocationsandsituations.InmostcasesintheNZEScenario,thesedemonstrationsruninparallel,incontrastwithusualpracticewherebylearningistransferredacrossconsecutiveprojectsindifferentcontextstobuildconfidencebeforewidespreaddeploymentbegins.Governmentsupportforcleanenergydemonstrationsiscrucial,particularlyinsectorswhereeconomiesofscalefavourlargeinstallations.Privatefinancingisoftenhardtoputinplacewhenlargeinstallationsarenecessarybecauseoftheverysignificantsumsofmoneyinvolved(sometimesoverUSD1billion).Thisismuchlessofanissuewithmass-manufacturedequipmentordigitalconsumergoods,whereexperimentationatcommercialscalecanusuallybecarriedoutatmuchlowercost.In2022,16governmentstogethercommittedUSD94billionby2026forcleanenergydemonstrationprojects(USDepartmentofEnergy,2022).ThesizeofthiscommitmentisbroadlyinlinewiththeamountthattheIEAcalculatedwasneededtwoyearsago(IEA,2021a).Ifallthisfundingisforthcoming,itwillgiveatremendousboosttothecommercialisationofemergingtechnologies.Whileitistooearlytomatchrecentgovernmentpledgeswithnewprojects,IEAtrackingsuggeststhatprogressisunderwayinseveralcriticalareas(IEA,2023g).Theseincludelarge-scalesolidoxideelectrolysersforhydrogenproduction,industrial-scalehydrogen-basedsteelmakingthroughdirectreducediron,carboncapturedemonstrationsincementproduction,first-of-a-kinddirectaircapture,smallelectricplanes,low-emissionsjetfuelsproduction,novelfoundationsforfloatingoffshorewindturbinesandsmallmodularnuclearreactors.Nearly80%ofaround200recentdemonstrationprogrammesareinadvancedeconomies,primarilyinEurope(55%)andNorthAmerica(15%),withabout10%inChinaand10%inotheremergingmarketanddevelopingeconomies.Whenassessingtheneedforcleanenergydemonstrations,weassumeahighlevelofinternationalco-operation.Thesharingofknowledgeandlearningamongstakeholdersandprojectsiscriticaltotheprocessofmakingtechnologicaladvances,andthatremainstrueevenwhenprojectsfail.Informationsharingamonggovernmentspromotesmoreinformedpolicymakingandhelpsensurethatnewprojectscomplementotherstakingplace186InternationalEnergyAgencyNetZeroRoadmapelsewhere.Withoutsuchco-operation,thenumberofprojectswouldcertainlybeunnecessarilylargerandtheportfoliomorecostly.Internationalco-operationalsoincreasesthechancesthatdemonstrationprojectswilltakeplaceinthebestlocationsforthoseprojects,andthatsupplychainswilloperatesmoothlytothebenefitofthosedemonstrationprojects.Recommendedpolicyactionstoboostcleanenergydemonstrationinclude:Increaseengagementwithemergingmarketanddevelopingeconomiesoncleanenergydemonstrations.Technologieswillgenerallybemorecommerciallysuccessfulinemergingmarketanddevelopingeconomiesiftheyaretestedintherelevantclimatic,regulatoryandmarketconditions.4Setupinternationaltrackingmechanismstomeasureprogressandadjustprioritiesovertime.Suchmechanismscanhelptoensurethatinvestmentsarefocussedincriticalareas,tosharelearningswithinternationalpartnersandtobuildevidence-basedsupportforcleanenergyprojects.Tapintoexistingmultilateralinitiatives.ExistingforasuchastheIEATechnologyCollaborationProgrammesandMissionInnovationcanhelpsharetechnologyandpolicybestpracticeacrossborders,whilemultilateralfinancialinstitutionsanddevelopmentbankshaveexpertknowledgeofhowtoshareinvestmentrisksforlarge-scaleprojects.Sharefinancingrisksduringtheearlystagesofnewtechnologydeploymentandsendcleardemandsignalsthereafter.Evenaftertheyhavebeendemonstratedsuccessfully,newtechnologiesoftenfacemorerisksthanincumbenttechnologies.Instrumentslikegrants,publicdebtguaranteesandconcessionalfinancecanhelptomitigatetheserisks,therebyincreasingthelikelihoodofthesetechnologiesbeingabletosecureprivatesectorinvestment.Earlysignalsthattherewillbeabroadermarketinwhichtoparticipatecanalsoincreasetheincentivestoinvestindemonstrationprojectsandinitialdeployment.Chapter4Secure,equitableandco-operativetransitions187IEA.CCBY4.0.IEA.CCBY4.0.IEA.CCBY4.0.ANNEXESIEA.CCBY4.0.AnnexATablesforscenarioprojectionsGeneralnotetothetablesThisannexincludesglobalhistoricalandprojecteddatafortheNetZeroEmissionsby2050(NZE)Scenarioforthefollowingdatasets:A.1:EnergysupplyA.2:TotalfinalenergyconsumptionA.3:Electricitysector:grosselectricitygenerationandelectricalcapacityA.4:CO₂emissions:carbondioxide(CO2)emissionsfromfossilfuelcombustionandindustrialprocessesA.5:Indicatorsandactivity:selectedeconomicandactivityindicatorsDefinitionsforregions,fuelsandsectorsareoutlinedinAnnexB.Abbreviations/acronymsusedinthetablesinclude:CAAGR=compoundaverageannualgrowthrate;CCUS=carboncapture,utilisationandstorage;EJ=exajoule;GJ=gigajoule;GW=gigawatt;MtCO₂=milliontonnesofcarbondioxide;TWh=terawatt-hour.UseoffossilfuelsinfacilitieswithoutCCUSisclassifiedas“unabated”.Bothinthetextofthisreportandintheseannextables,roundingmayleadtominordifferencesbetweentotalsandthesumoftheirindividualcomponents.Growthratesarecalculatedonacompoundaverageannualbasisandaremarked“n.a.”whenthebaseyeariszeroorthevalueexceeds200%.Nilvaluesaremarked“-”.ThetablesforscenarioprojectionswillbeavailablefordownloadaspartoftheWorldEnergyOutlook2023freedatasettobereleasedattheendofOctober2023:https://iea.li/weo-dataDatasourcesTheGlobalEnergyandClimate(GEC)Modelisaverydata-intensivemodelcoveringthewholeglobalenergysystem.DetailedreferencesondatabasesandpublicationsusedinthemodellingandanalysismaybefoundinAnnexEoftheWorldEnergyOutlook20231.Theformalbaseyearforthisyear’sprojectionsis2021,asthisisthelastyearforwhichacompletepictureofenergydemandandproductionisinplace.However,wehaveusedmorerecentdatawhereveravailable,andweincludeour2022estimatesforenergyproductionanddemandinthisannex(TablesA.1toA.3).Estimatesfortheyear2022arebasedontheIEACO2Emissionsin2022reportwhicharederivedfromanumberofsources,includingthelatestmonthlydatasubmissionstotheIEAEnergyDataCentre,otherstatisticalreleasesfromnationaladministrations,andrecentmarketdatafromtheIEAMarketReportSeriesthatcovercoal,oil,naturalgas,renewablesandpower.Investmentestimatesincludetheyear2022,basedontheIEAWorldEnergyInvestment2023report.1TheWorldEnergyOutlook2023willbereleasedattheendofOctober2023.IEA.CCBY4.0.AnnexATablesforscenarioprojections191Historicaldataforgrosspowergenerationcapacity(TableA.3)aredrawnfromtheS&PIEA.CCBY4.0.GlobalMarketIntelligenceWorldElectricPowerPlantsDatabase(March2023version)andtheInternationalAtomicEnergyAgencyPRISdatabase.Definitionalnote:A.1Table:EnergysupplyandtransformationTotalenergysupply(TES)isequivalenttoelectricityandheatgenerationplustheotherenergysector,excludingelectricity,heatandhydrogen,plustotalfinalconsumption,excludingelectricity,heatandhydrogen.TESdoesnotincludeambientheatfromheatpumpsorelectricitytrade.SolarinTESincludessolarphotovoltaic(PV)generation,concentratingsolarpower(CSP)andfinalconsumptionofsolarthermal.Biofuelsconversionlossesaretheconversionlossestoproducebiofuels(mainlyfrommodernsolidbioenergy)usedintheenergysector.Low‐emissionshydrogenproductionismerchantlow‐emissionshydrogenproduction(excludingonsiteproductionatindustrialfacilitiesandrefineries),withinputsreferringtototalfuelinputsandoutputstoproducedhydrogen.Whilenotitemisedseparately,geothermalandmarine(tidalandwave)energyareincludedintherenewablesitemofTESandelectricityandheatsectors.Whilenotitemisedseparately,non-renewablewasteandothersourcesareincludedinTES.Definitionalnote:A.2Table:EnergydemandSectorscomprisingtotalfinalconsumption(TFC)includeindustry(energyuseandfeedstock),transportandbuildings(residential,servicesandnon-specifiedother).Whilenotitemisedseparately,agricultureandothernon-energyuseareincludedinTFC.Whilenotitemisedseparately,non-renewablewaste,solarthermalandgeothermalenergyareincludedinbuildings,industryandTFC.Aviationandnavigationincludebothdomesticandinternationalenergydemand.Energydemandfrominternationalmarineandaviationbunkersareincludedinglobaltransporttotals,andTFC.Definitionalnote:A.3Table:ElectricityElectricitygenerationexpressedinterawatt-hours(TWh)andinstalledelectricalcapacitydataexpressedingigawatts(GW)arebothprovidedonagrossbasis,i.e.includesownusebythegenerator.Projectedgrosselectricalcapacityisthesumofexistingcapacityandadditions,lessretirements.Whilenotitemisedseparately,othersourcesareincludedintotalelectricitygeneration.Installedcapacityforhydrogenandammoniareferstofullconversiononly,notincludingco-firingwithnaturalgasorcoal.Definitionalnote:A.4Table:CO2emissionsTotalCO2includescarbondioxideemissions:fromthecombustionoffossilfuelsandnon-renewablewastes;fromindustrialandfueltransformationprocesses(processemissions);andCO2emissionsfromflaringandCO2removal.CO2removalincludes:capturedandstoredemissionsfromthecombustionofbioenergyandrenewablewastes;frombiofuelsproduction;andfromdirectaircapture(DAC).192InternationalEnergyAgencyNetZeroRoadmapThefirsttwoentriesareoftenreportedasbioenergywithcarboncaptureandstorage(BECCS).NotethatsomeoftheCO2capturedfrombiofuelsproductionanddirectaircaptureisusedtoproducesyntheticfuels,whichisnotincludedasCO2removal.TotalCO2capturedincludesthecarbondioxidecapturedfromCCUSfacilities,suchaselectricitygenerationorindustry,andatmosphericCO2capturedthroughdirectaircapture,butexcludesthatcapturedandusedforureaproduction.Aviationandnavigationincludebothdomesticandinternationalemissions.Definitionalnote:A.5Table:EconomicandactivityindicatorsTheemissionintensityexpressedinkilogrammesofcarbondioxideperkilowatt‐hour(kgCO2perkWh)iscalculatedbasedonelectricity‐onlyplantsandtheelectricitycomponentofcombinedheatandpower(CHP)plants2.Primarychemicalsincludeethylene,propylene,aromatics,methanolandammonia.Industrialproductiondataforaluminiumexcludesproductionbasedoninternallygeneratedscrap.Heavy-dutytrucksactivityincludesfreightactivityofmediumfreighttrucksandheavyfreighttrucks.Aviationactivityincludesbothdomesticandinternationalflightactivity.Shippingactivityreferstointernationalshippingactivity.Abbreviationsusedinclude:GDP=grossdomesticproduct;GJ=gigajoules;m2=squaremetresMt=milliontonnes;pkm=passenger‐kilometres;PPP=purchasingpowerparity;tkm=tonnes‐kilometres.AnnexAlicencingSubjecttotheIEA’sNoticeforCC-licencedContent,thisAnnexAtoNetZeroEmissionsby2050:ARoadmapfortheGlobalEnergySector–2023UpdateislicensedunderaCreativeCommonsAttribution-NonCommercial-ShareAlike4.0InternationalLicence.A2Toderivetheassociatedelectricity‐onlyemissionsfromCHPplants,weassumethattheheatproductionofIEA.CCBY4.0.aCHPplantis90%efficientandtheremainderofthefuelinputisallocatedtoelectricitygeneration.AnnexATablesforscenarioprojections193TableA.1:WorldenergysupplyNetZeroEmissionsby2050Scenario(EJ)Shares(%)CAAGR(%)2022to:201020212022203020352040205020222030205054120302050Totalenergysupply5416246325735355283851001001007175166241306138-1.2-0.6Renewables4384122971106.057356697302311Solar178254361731626169.01516202427112.92.3Wind133355565711514165.82.644111313-133.3Hydro1211791167235229.0242414n.a.n.a.Modernsolidbioenergy233129---18610135.03.014614443556342Modernliquidbioenergy211112684030122-3.0-8.1182187691333513Moderngaseousbioenergy131321481107912013167170353433393-2.8-5.2Traditionaluseofbiomass25009343163064--1.3-0.12442472710112-7.3-14Nuclear303941256277319845812872745103167228300.41.7Unabatednaturalgas115782956803623203127.4151625436162612NaturalgaswithCCUS0992024272013169.0--172430672.92.3Oil173--1302687.34.931292453n.a.n.a.Non-energyuse2557571220566n.a.n.a.--435563-5.03.0Unabatedcoal15388492511727161-1.7-1310811002278n.a.n.a.CoalwithCCUS-00210002-17-2364655316012-8.9n.a.Electricityandheatsectors200256100100100102295664647054-0.20.7Renewables203917407814161617112.6SolarPV021129Wind131021Hydro12688Bioenergy4469Hydrogen--12Ammonia--01Nuclear30121717Unabatednaturalgas4723190NaturalgaswithCCUS--01Oil11310Unabatedcoal914521-CoalwithCCUS-012Otherenergysector50100100100Biofuelsconversionlosses-100100100Low-emissionshydrogen(offsite)Productioninputs-0092033100100100n.a.n.a.10010010014438Productionoutputs-0061423-3143n.a.n.a.Forhydrogen-basedfuels---2510194InternationalEnergyAgencyNetZeroRoadmapIEA.CCBY4.0.TableA.2:WorldfinalenergyconsumptionNetZeroEmissionsby2050Scenario(EJ)Shares(%)CAAGR(%)2022to:Totalfinalconsumption2010202120222030203520402050202220302050Electricity38343644240637936034310010010020302050Liquidfuels1131331541832853-1.1-0.9648789150120203.02.6Biofuels1541681729462393718-1.7-3.6Ammonia1113131133Syntheticoil24412101133.3Oil---0124-02n.a.n.a.Gaseousfuels---26-n.a.n.a.Biomethane1511641681381047641383412-2.4-4.9Hydrogen58727161524541161512-1.8-2.0Syntheticmethane000466804213Naturalgas-002581601211333Solidfuels--------15n.a.n.a.Solidbioenergy5772705441291516---3.2-5.3Coal9592936354453521134-4.8-3.4Heat3839402426262891510-6.1-1.2Industry56525238271871268-3.9-6.9Electricity121515121196392-2.1-3.2Liquidfuels143167167169159100320.6-0.2Oil2737381751737079231001004.22.7Gaseousfuels293332526229241930490.7-1.0Biomethane293332343228231919150.5-1.2Hydrogen24313034312521181914-0.1-1.3Unabatednaturalgas000302834017134315NaturalgaswithCCUS-00124501313736Solidfuels243130121661813-1.5-5.3Modernsolidbioenergy-0027213501544618Unabatedcoal5858591238293513-1.5-2.5CoalwithCCUS8101152452022730184.22.5Heat494747151815228914-3.5-10Chemicals-0036244502017125Ironandsteel5771231403-3.9-6.1Cement38484854555129311.60.2Aluminium31373554553026213132-0.6-1.0912123432111071917-0.4-0.7577121165476-0.4-1.17643AnnexATablesforscenarioprojectionsAIEA.CCBY4.0.195TableA.2:Worldfinalenergyconsumption(continued)NetZeroEmissionsby2050Scenario(EJ)Shares(%)CAAGR(%)2022to:Transport2010202120222030203520402050202220302050Electricity10211211610589797610010010020302050Liquidfuels15253851-1.3-1.5112869492618Biofuels9710611092121189488352312Oil10553381011-2.2-5.0Gaseousfuels24481451147710Biomethane9510210500091415122.6Hydrogen524105-3.3-8.9Naturalgas4550210000-1.92.7Road00016052470114Passengercars-00322171543185.1Heavy-dutytrucks45574262422767109832Aviation76878932141415383062-5.6-11Shipping38444527101010232620-2.2-2.2Buildings21262715928989101429-4.1-3.7Electricity11911115155621011200.2-0.8Liquidfuels101111100531100100133.51.2Biofuels1171311334800035481000.1-0.4Oil354546953110970-3.4-1.4Gaseousfuels131313015105010.51.1Biomethane---9333-9-5.1-8.5Hydrogen1313132200010220n.a.n.a.Naturalgas273131211502321-5.2-9.5Solidfuels0000866005-4.1-6.5Modernsolidbioenergy---198661935314Traditionaluseofbiomass2631309----90n.a.n.a.Coal35323280002380-5.8-22Heat444-66524-6-14-6.0Residential2524241595758168.41.0Services644733313137-n.a.n.a.6776518650-14-2683939335355-0.5-1.7343839365-4.4-1.7535-1.3-0.87129196InternationalEnergyAgencyNetZeroRoadmapIEA.CCBY4.0.TableA.3:WorldelectricitysectorNetZeroEmissionsby2050Scenario(TWh)Shares(%)CAAGR(%)2022to:Totalgeneration2010202120222030203520402050202220302050Renewables2153328346290333820747427591117683810010010020302050420979648599225323673950459684303059893.53.5SolarPV154392224131237137.7Wind32102312918177119231682623442421412612Hydro34218652125707071931169.0Bioenergy34564299437855076530743582251514112.92.3ofwhichBECCS309131318852396305628.45.5CSP666687-34n.a.n.a.Geothermal---653004716440013118Marine21394148311486002157.9Nuclear6815163065086620114419Hydrogenandammonia1961018629004.92.9FossilfuelswithCCUS2756193967123-108n.a.n.a.CoalwithCCUS-11393649525583601501210530NaturalgaswithCCUS-28102682102811610119728Unabatedfossilfuels-373745996-01n.a.n.a.Coal---2206818476446100-5.7-15Naturalgas144791115645554735336290-8.8n.a.Oil8669112263011582213--1.1-124847--64424111212160-19-23Totalcapacity9631745617636110661379-00Renewables10247104272834-1586526650049881119SolarPV6837095943281Wind2Hydro135BioenergyofwhichBECCSNetZeroEmissionsby2050Scenario(GW)Shares(%)CAAGR(%)CSP2022to:Geothermal2010202120222030203520402050202220302050Marine5187823086431618023067293543695610010010020302050Nuclear133332923629110081746023331302754268828.25.3Hydrogenandammonia11456101104301430318753133851157.9FossilfuelswithCCUS3992527424322579776161017212311CoalwithCCUS18182790217652054231326121611157.9NaturalgaswithCCUS10271360139273.02.3Unabatedfossilfuels1592964265416882227.35.2Coal74168155987114-00n.a.n.a.Naturalgas---484270012716Oil16748134251129000168.0Batterystorage15878990003416101151627485323.32.904131541916-11n.a.n.a.-12968881342700111331403041736744724100010429-0-50141203153-00n.a.n.a.--03613152212-3.5-5.6-448001495892691-5.2-7.6-2200-3423467289222112-0.9-3.91854145724531710242510-7.8-8.2343942645351746910611161148181614272236220140254813891875101814110883919494199436423751452841IEA.CCBY4.0.AAnnexATablesforscenarioprojections197TableA.4:WorldCO2emissionsNetZeroEmissionsby2050Scenario(MtCO2)CAAGR(%)2022to:2010202120222030203520402050203020503693024030133756471-TotalCO232877365893404221958120175820-5.2n.a.Combustionactivities(+)3062433634153301200655138461510410963817335413219171-5.3-13Coal10545106837499791053251780824Oil57953327-379358-7.6-15Naturalgas60527577251-176-698Bioenergyandwaste181269280523933-4.0-8.8Otherremovals(-)-12167348227312Biofuelsproduction-1-186295621-3.2-10Directaircapture--981621482269411-275-13n.a.108762854422181131545230782559651567832014560467211351401-257-3741492781-138-198n.a.n.a.15541081088Electricityandheatsectors125111459820293413226241-7.3n.a.Coal8946106464352782103501142138Oil8289815151872989711-8.9-20Naturalgas26235743500298319711036173Bioenergyandwaste114322773984993-205-17-23Otherenergysector143810225431718-93440Finalconsumption151899843322245-1.7-12Coal18668153013307158-26233Oil46992019126231150511152179-15n.a.Naturalgas90874355241821181032Bioenergyandwaste2842955219118508-8.2n.a.Industry66356626521815848755788324787459921343107236-3.6-9.9Chemicals1201118596442132430Ironandsteel2083918529751752172149137-4.6-12Cement19161329181216104062403178Aluminium18527339322718856208-3.5-9.0Transport70142514792695554112Road5216855174191631354-3.9-10260926129791189128446348Passengercars148975991997552326-10n.a.Heavy-dutytrucks75458479837441376Aviation7972930234495-2.8-10Shipping28911766210249719951710Buildings19614267537246040-1.8-11Residential929661296Services827-2.6-8.3297363220132421-2.9-12959-2.4-12-3.4-8.9-4.2-11-6.4-14-1.5-8.02.0-4.7-2.6-7.0-6.5-13-6.3-12-7.0-16TotalCO2removals-28528TotalCO2captured15414919Includesindustrialprocessandflaringemissions.Includesindustrialprocessemissions.198InternationalEnergyAgencyNetZeroRoadmapIEA.CCBY4.0.TableA.5:EconomicandactivityindicatorsNetZeroEmissionsby2050ScenarioCAAGR(%)2022to:20102021202220302035204020502030205069679681Indicators114463788479508520885391613392730.90.7Population(million)1642915850516373420728223806627005035044GDP(USD2022billion,PPP)20104205962432926892294793.02.6GDPpercapita(USD2022,PPP)4.71.6TES/GDP(GJperUSD1000,PPP)3.23.93.92.82.32.01.02.11.9TFC/GDP(GJperUSD1000,PPP)2.62.61.91.51.3528-4-4.1-3.1CO₂intensityofelectricity464460186483generation(kgCO₂perkWh)515879-3.9-3.3Industrialproduction(Mt)14351957Primarychemicals32803934-11n.a.SteelCement627137198639069171462.30.7Aluminium19601878197319661958Transport1898443744158426441404022416380.60.1Passengercars(billionpkm)2336460335Heavy-dutytrucks(billiontkm)105108120128136109590.3-0.2Aviation(billionpkm)-265253Shipping(billiontkm)771011.41.1Buildings2963Households(million)179825679265352860830355338413101090.91.6Residentialfloorarea(millionm²)1532192948230479380374334149036Servicesfloorarea(millionm²)442262.82.539262136034536692723783191158301242721450871650731887568.64.22.02.7217522082439257927151.21.11946911980902270392472622681301.71.65341554624519565014148180-0.6-0.8AnnexATablesforscenarioprojectionsAIEA.CCBY4.0.199IEA.CCBY4.0.AnnexBDefinitionsThisannexprovidesgeneralinformationonterminologyusedthroughoutthisreportincluding:unitsandgeneralconversionfactors;definitionsoffuels,processesandsectors;regionalandcountrygroupings;andabbreviationsandacronyms.Unitskm2squarekilometreMhamillionhectaresAreaBatteriesWh/kgwatthoursperkilogrammeCoalDistanceMtcemilliontonnesofcoalequivalent(equals0.7Mtoe)EmissionskmkilometreEnergyppmpartspermillion(byvolume)GastCO2tonnesofcarbondioxideMassGtCO2-eqgigatonnesofcarbon-dioxideequivalent(using100-yearglobalwarmingpotentialsfordifferentgreenhousegases)kgCO2-eqkilogrammesofcarbon-dioxideequivalentIEA.CCBY4.0.gCO2/kmgrammesofcarbondioxideperkilometregCO2/kWhgrammesofcarbondioxideperkilowatt-hourkgCO2/kWhkilogrammesofcarbondioxideperkilowatt-hourEJexajoule(1joulex1018)PJpetajoule(1joulex1015)TJterajoule(1joulex1012)GJgigajoule(1joulex109)MJmegajoule(1joulex106)boebarrelofoilequivalenttoetonneofoilequivalentktoethousandtonnesofoilequivalentMtoemilliontonnesofoilequivalentbcmebillioncubicmetresofnaturalgasequivalentMBtumillionBritishthermalunitskWhkilowatt-hourMWhmegawatt-hourGWhgigawatt-hourTWhterawatt-hourGcalgigacaloriebcmbillioncubicmetrestcmtrillioncubicmetreskgkilogrammettonne(1tonne=1000kg)ktkilotonnes(1tonnex103)Mtmilliontonnes(1tonnex106)Gtgigatonnes(1tonnex109)AnnexBDefinitions201MonetaryUSDmillion1USdollarx106OilUSDbillion1USdollarx109PowerUSDtrillion1USdollarx1012USD/tCO2USdollarspertonneofcarbondioxidekb/dthousandbarrelsperdaymb/dmillionbarrelsperdaymboe/dmillionbarrelsofoilequivalentperdayWwatt(1joulepersecond)kWkilowatt(1wattx103)MWmegawatt(1wattx106)GWgigawatt(1wattx109)TWterawatt(1wattx1012)GeneralconversionfactorsforenergyMultipliertoconvertto:EJGcalMtoeMBtubcmeGWh12.388x10827.782.778x105EJ4.1868x10-923.889.478x1081.163x10-71.163x10-3Gcal4.1868x10-211.163Mtoe1.0551x10-910710-73.9682.932x10-811630Convertfrom:MBtu0.0360.2522.931x10-4bcme3.6x10-68.60x10613.968x1071IEA.CCBY4.0.GWh8601x10-499992.52x10-8110.863.41x1078.6x10-53412Note:Thereisnogenerallyaccepteddefinitionofboe;typically,theconversionfactorsusedvaryfrom7.15to7.40boepertoe.Naturalgasisattributedalowheatingvalueof1MJper44.1kg.Conversionstoandfrombillioncubicmetresofnaturalgasequivalent(bcme)aregivenasrepresentativemultipliersbutmaydifferfromtheaveragevaluesobtainedbyconvertingnaturalgasvolumesbetweenIEAbalancesduetotheuseofcountry-specificenergydensities.Lowerheatingvalues(LHV)areusedthroughout.DefinitionsAdvancedbioenergy:Sustainablefuelsproducedfromnon‐foodcropfeedstocks,whicharecapableofdeliveringsignificantlifecyclegreenhousegasemissionssavingscomparedwithfossilfuelalternatives,andwhichdonotdirectlycompetewithfoodandfeedcropsforagriculturallandorcauseadversesustainabilityimpacts.Thisdefinitiondiffersfromtheoneusedfor“advancedbiofuels”inUSlegislation,whichisbasedonaminimum50%lifecyclegreenhousegasreductionand,therefore,includessugarcaneethanol.Agriculture:Includesallenergyusedonfarms,inforestryandforfishing.Agriculture,forestryandotherlanduse(AFOLU)emissions:Includesgreenhousegasemissionsfromagriculture,forestryandotherlanduse.202InternationalEnergyAgencyNetZeroRoadmapAmmonia(NH3):Isacompoundofnitrogenandhydrogen.ItcanbeusedasafeedstockinIEA.CCBY4.0.thechemicalsector,asafuelindirectcombustionprocessesorinfuelcells,andasahydrogencarrier.Tobeconsideredalow‐emissionsfuel,ammoniamustbeproducedfromlow-emissionshydrogen.Producedinsuchaway,ammoniaisconsideredalow‐emissionshydrogen‐basedliquidfuel.Aviation:Thistransportmodeincludesbothdomesticandinternationalflightsandtheiruseofaviationfuels.Domesticaviationcoversflightsthatdepartandlandinthesamecountry;flightsformilitarypurposesareincluded.Internationalaviationincludesflightsthatlandinacountryotherthanthedeparturelocation.Back-upgenerationcapacity:Householdsandbusinessesconnectedtoamainpowergridmayalsohaveasourceofback‐uppowergenerationcapacitythat,intheeventofdisruption,canprovideelectricity.Back‐upgeneratorsaretypicallyfuelledwithdieselorgasolineorbasedonsolarPVandbatterytechnologies.Capacitycanbeaslittleasafewkilowatts.Suchcapacityisdistinctfrommini‐gridandoff‐gridsystemsthatarenotconnectedtoamainpowergrid.Batterystorage:Energystoragetechnologythatusesreversiblechemicalreactionstoabsorbandreleaseelectricityondemand.Biodiesel:Diesel‐equivalentfuelmadefromthetransesterification(achemicalprocessthatconvertstriglyceridesinoils)ofvegetableoilsandanimalfats.Bioenergy:Energycontentinsolid,liquidandgaseousproductsderivedfrombiomassfeedstocksandbiogas.Itincludessolidbioenergy,liquidbiofuelsandbiogases.Biogas:Amixtureofmethane,CO2andsmallquantitiesofothergasesproducedbyanaerobicdigestionoforganicmatterinanoxygen‐freeenvironment.Biogases:Includesbiogasandbiomethane.Biomethane:Biomethaneisanear‐puresourceofmethaneproducedeitherby“upgrading”biogas(aprocessthatremovesanycarbondioxideandothercontaminantspresentinthebiogas)orthroughthegasificationofsolidbiomassfollowedbymethanation.Itisalsoknownasrenewablenaturalgas.Blendedfinance:Abroadcategoryofdevelopmentfinancearrangementsthatblendrelativelysmallamountsofconcessionaldonorfundsintoinvestmentsinordertomitigatespecificinvestmentrisks.Thiscancatalyseimportantinvestmentthatwouldotherwisebeunabletoproceedunderconventionalcommercialterms.Thesearrangementscanbestructuredasdebt,equity,risk-sharingorguaranteeproducts.Specifictermsofthesearrangements,suchasinterestrates,tenor,securityorrank,canvaryacrossscenarios.Buildings:Thebuildingssectorincludesenergyusedinresidentialandservicesbuildings.Sbeurilvdicinegssb.uBiuldilidnignsgienncelurdgeyucosemimncelrucdiaelsasnpdacienshteitauttiinognaalnbducilodoinlignsg,awndatoetrhheerantionng‐,slpigehctifiinegd,Bappliancesandcookingequipment.AnnexBDefinitions203Bunkers:IncludesbothinternationalmarinebunkerfuelsandinternationalaviationbunkerIEA.CCBY4.0.fuels.Capacitycredit:Proportionoftheinstalledcapacitythatcanbereliablyexpectedtogenerateelectricityduringtimesofpeakdemandinthegridtowhichitisconnected.Capitalcosts:Coststodevelopandconstructafixedassetsuchasapowerplantandgridinfrastructureorexecuteaproject,excludingfinancingcosts.Forpowergenerationassets,capitalcostsincluderefurbishmentanddecommissioningcosts.Carboncapture,utilisationandstorage(CCUS):Theprocessofcapturingcarbondioxideemissionsfromfuelcombustion,industrialprocessesordirectlyfromtheatmosphere.CapturedCO2emissionscanbestoredinundergroundgeologicalformations,onshoreoroffshore,orusedasaninputorfeedstockinmanufacturing.Cars:Includepassengercars,sportutilityvehiclesandlighttrucks.Cleancookingsystems,fuels,stovesandtechnologies:Cookingsolutionsthatreleaselessharmfulpollutants,aremoreefficientandenvironmentallysustainablethantraditionalcookingoptionsthatmakeuseofsolidbiomass(suchasathree‐stonefire),coalorkerosene.Thisreferstoimprovedbiomasscookstoves,biogas/biodigestersystems,electriccookingdevicesandliquefiedpetroleumgas,naturalgasorethanolfuelledstoves.Cleanenergy:Inpower,cleanenergyincludesgenerationfromrenewablesources,nuclear,fossilfuelsfittedwithCCUS,batterystorage,andelectricitygrids.Inefficiency,cleanenergyincludesenergyefficiencyinbuildings,industry,andtransportexcludingaviationbunkersanddomesticnavigation.Inend‐useapplications,cleanenergyincludesdirectuseofrenewables;electricvehicles;electrificationinbuildings,industryandinternationalmarinetransport;CCUSinindustryanddirectaircapture.Infuelsupply,cleanenergyincludeslow‐emissionsfuels.Coal:Includesbothprimarycoal(includinglignite,cokingandsteamcoal)andderivedfuels(includingpatentfuel,brown-coalbriquettes,coke-ovencoke,gascoke,gas-worksgas,coke-ovengas,blastfurnacegasandoxygensteelfurnacegas).Peatisalsoincluded.Coalbedmethane:Categoryofunconventionalnaturalgasthatreferstomethanefoundincoalseams.Concentratingsolarpower(CSP):Thermalpowergenerationtechnologythatcollectsandconcentratessunlighttoproducehightemperatureheattogenerateelectricity.Concessionalfinancing:Resourcesextendedattermsmorefavourablethanthoseavailableonthemarket.Thiscanbeachievedthroughoneoracombinationofthefollowingfactors:interestratesbelowthoseavailableonthemarket;maturity,graceperiod,security,rankorback-weightedrepaymentprofilethatwouldnotbeaccepted/extendedbyacommercialfinancialinstitution;and/orbyprovidingfinancingtotherecipientotherwisenotservedbycommercialfinancing.204InternationalEnergyAgencyNetZeroRoadmapConventionalliquidbiofuels:Fuelsproducedfromfoodcropfeedstocks.Commonlyreferredtoasfirstgenerationbiofuelsandincludesugarcaneethanol,starch‐basedethanol,fattyacidmethylester(FAME),straightvegetableoil(SVO)andhydrotreatedvegetableoil(HVO)producedfrompalm,rapeseedorsoybeanoil.Criticalminerals:Awiderangeofmineralsandmetalsthatareessentialincleanenergytechnologiesandothermoderntechnologiesandhavesupplychainsthatarevulnerabletodisruption.Althoughtheexactdefinitionandcriteriadifferamongcountries,criticalmineralsforcleanenergytechnologiestypicallyincludechromium,cobalt,copper,graphite,lithium,manganese,molybdenum,nickel,platinumgroupmetals,zinc,rareearthelementsandothercommodities,aslistedintheAnnexoftheIEAspecialreportontheRoleofCriticalMineralsinCleanEnergyTransitionsavailableat:https://www.iea.org/reports/the‐role‐of‐critical‐minerals‐in‐clean‐energy‐transitions.Debt:Bondsorloansissuedortakenoutbyacompanytofinanceitsgrowthandoperations.Decompositionanalysis:Statisticalapproachthatdecomposesanaggregateindicatortoquantifytherelativecontributionofasetofpre‐definedfactorsleadingtoachangeintheaggregateindicator.TheWorldEnergyOutlookusesanadditiveindexdecompositionofthetypeLogarithmicMeanDivisiaIndex(LMDI).Demand-sideintegration(DSI):Consistsoftwotypesofmeasures:actionsthatinfluenceloadshapesuchasenergyefficiencyandelectrification;andactionsthatmanageloadsuchasdemand‐sideresponsemeasures.Demand-sideresponse(DSR):Describesactionswhichcaninfluencetheloadprofilesuchasshiftingtheloadcurveintimewithoutaffectingtotalelectricitydemand,orloadsheddingsuchasinterruptingdemandforashortdurationoradjustingtheintensityofdemandforacertainamountoftime.Directaircapture(DAC):TechnologytocaptureCO2directlyfromtheatmosphereusingliquidsolventsorsolidsorbents.ItisgenerallycoupledwithpermanentstorageoftheCO2indeepgeologicalformationsoritsuseintheproductionoffuels,chemicals,buildingmaterialsorotherproducts.WhencoupledwithpermanentgeologicalCO2storage,DACisacarbonremovaltechnology.Directaircaptureandstorage(DACS):Theprocessofcapturingcarbondioxideemissionsdirectlyfromtheatmosphere.Emissionsarethenstoredinundergroundgeologicalformations,onshoreoroffshore,orusedasaninputorfeedstockinmanufacturing.Dispatchablegeneration:Referstotechnologieswhosepoweroutputcanbereadilycontrolled,i.e.increasedtomaximumratedcapacityordecreasedtozeroinordertomatchsupplywithdemandatanytimeexceptincasesoftechnicalmalfunction.Electricitydemand:Definedastotalgrosselectricitygenerationlessownusegeneration,plusnettrade(importslessexports),lesstransmissionsanddistributionlosses.BAnnexBDefinitions205IEA.CCBY4.0.Energyefficiencyinvestment:Incrementalspendingonnewenergy-efficientequipmentorIEA.CCBY4.0.thefullcostofrefurbishmentthatreducesenergyuse.Theintentionistocapturespendingthatleadstoreducedenergyconsumption.Underconventionalaccounting,partofthisiscategorisedasconsumptionratherthaninvestment.Electricitygeneration:Definedasthetotalamountofelectricitygeneratedbypoweronlyorcombinedheatandpowerplantsincludinggenerationrequiredforownuse.Thisisalsoreferredtoasgrossgeneration.Electricvehicles:Includesbatteryelectricvehiclesandplug-inhybridelectricvehicles.End-useinvestment:Includesinvestmentinthreecategoriesonthedemandside:energyefficiency,end-userenewablesandotherend-uses.End-usesectors:Includeindustry,transport,buildingsandothers,i.e.agricultureandothernon-energyuse.EnergysectorCO2emissions:CO2emissionsfromfossilfuelcombustion,industrialprocesses,andfugitiveandflaringCO2fromfossilfuelextraction.Energysectorgreenhousegasemissions:Energy‐relatedandindustrialprocessCO2emissionsplusfugitiveandventedmethane(CH4)andnitrousoxide(N2O)emissionsfromtheenergyandindustrysectors.Energyservices:Seeusefulenergy.Ethanol:Referstobioethanolonly.Ethanolisproducedfromfermentinganybiomasshighincarbohydrates.Currently,ethanolismadefromstarchesandsugars,butsecond‐generationtechnologieswillallowittobemadefromcelluloseandhemicellulose,thefibrousmaterialthatmakesupthebulkofmostplantmatter.Fossilfuels:Includecoal,naturalgasandoil.Gaseousfuels:Includenaturalgas,biogases,syntheticmethaneandhydrogen.Geothermal:Geothermalenergyisheatfromthesub‐surfaceoftheearth.Waterand/orsteamcarrythegeothermalenergytothesurface.Dependingonitscharacteristics,geothermalenergycanbeusedforheatingandcoolingpurposesorbeharnessedtogeneratecleanelectricityifthetemperatureisadequate.Heat(end-use):Canbeobtainedfromthecombustionoffossilorrenewablefuels,directgeothermalorsolarheatsystems,exothermicchemicalprocessesandelectricity(throughresistanceheatingorheatpumpswhichcanextractitfromambientairandliquids).Thiscategoryreferstothewiderangeofend-uses,includingspaceandwaterheating,andcookinginbuildings,desalinationandprocessapplicationsinindustry.Itdoesnotincludecoolingapplications.Heat(supply):Obtainedfromthecombustionoffuels,nuclearreactors,geothermalresourcesorthecaptureofsunlight.Itmaybeusedforheating,cooling,orconvertedinto206InternationalEnergyAgencyNetZeroRoadmapmechanicalenergyfortransportorelectricitygeneration.Commercialheatsoldisreportedundertotalfinalconsumptionwiththefuelinputsallocatedunderpowergeneration.Heavytrucks:Includecommercialvehicles:mediumfreighttrucks(grossvehicleweightbetween3.5and15tonnes);andheavyfreighttrucks(>15tonnes).Hydrogen:Hydrogenisusedasarawmaterialinindustryandrefining,intheenergysystemasanenergycarrieroriscombinedwithotherinputstoproducehydrogen‐basedfuels.Unlessotherwisestated,hydrogeninthisreportreferstolow‐emissionshydrogen.Hydrogen-basedfuels:Seelow‐emissionshydrogen‐basedfuels.Hydropower:Energycontentoftheelectricityproducedinhydropowerplants,assuming100%efficiency.Itexcludesoutputfrompumpedstorageandmarine(tidalandwave)plants.Improvedcookstoves:Intermediateandadvancedimprovedbiomasscookstoves(ISOtier>2).Itexcludesbasicimprovedcookstoves(ISOtier0-2).Industry:Thesectorincludesfuelusedwithinthemanufacturingandconstructionindustries.Keyindustrybranchesincludeironandsteel,chemicalandpetrochemical,cement,aluminium,andpulpandpaper.Usebyindustriesforthetransformationofenergyintoanotherformorfortheproductionoffuelsisexcludedandreportedseparatelyunderotherenergysector.Thereisanexceptionforfueltransformationinblastfurnacesandcokeovens,whicharereportedwithinironandsteel.Consumptionoffuelsforthetransportofgoodsisreportedaspartofthetransportsector,whileconsumptionbyoff‐roadvehiclesisreportedunderindustry.Internationalaviationbunkers:Includesthedeliveriesofaviationfuelstoaircraftforinternationalaviation.Fuelsusedbyairlinesfortheirroadvehiclesareexcluded.Thedomestic/internationalsplitisdeterminedonthebasisofdepartureandlandinglocationsandnotbythenationalityoftheairline.Formanycountriesthisincorrectlyexcludesfuelsusedbydomesticallyownedcarriersfortheirinternationaldepartures.Internationalmarinebunkers:Includesthequantitiesdeliveredtoshipsofallflagsthatareengagedininternationalnavigation.Theinternationalnavigationmaytakeplaceatsea,oninlandlakesandwaterways,andincoastalwaters.Consumptionbyshipsengagedindomesticnavigationisexcluded.Thedomestic/internationalsplitisdeterminedonthebasisofportofdepartureandportofarrival,andnotbytheflagornationalityoftheship.Consumptionbyfishingvesselsandbymilitaryforcesisexcludedandinsteadincludedintheresidential,servicesandagriculturecategory.Investment:Investmentisthecapitalexpenditureinenergysupply,infrastructure,end‐useandefficiency.Fuelsupplyinvestmentincludestheproduction,transformationandtransportofoil,gas,coalandlow‐emissionsfuels.Powersectorinvestmentincludesnewconstructionandrefurbishmentofgeneration,electricitygrids(transmission,distributionandpublicelectricvehiclechargers)andbatterystorage.EnergyefficiencyinvestmentincludesBefficiencyimprovementsinbuildings,industryandtransport.Otherend‐useinvestmentIEA.CCBY4.0.AnnexBDefinitions207includesthepurchaseofequipmentforthedirectuseofrenewables,electricvehicles,IEA.CCBY4.0.electrificationinbuildings,industryandinternationalmarinetransport,equipmentfortheuseoflow‐emissionsfuels,andCCUSinindustryanddirectaircapture.Dataandprojectionsreflectspendingoverthelifetimeofprojectsandarepresentedinrealtermsinyear‐2022USdollarsconvertedatmarketexchangeratesunlessotherwisestated.Totalinvestmentreportedforayearreflectstheamountspentinthatyear.Light-dutyvehicles(LDVs):Includepassengercarsandlightcommercialvehicles(grossvehicleweight<3.5tonnes).Liquidbiofuels:Includeliquidfuelsderivedfrombiomassorwastefeedstock,e.g.ethanol,biodieselandbiojetfuels.Theycanbeclassifiedasconventionalandadvancedbiofuelsaccordingtothecombinationoffeedstockandtechnologiesusedtoproducethemandtheirrespectivematurity.Unlessotherwisestated,biofuelsareexpressedinenergy‐equivalentvolumesofgasoline,dieselandkerosene.Liquidfuels:Includeoil,liquidbiofuels(expressedinenergy‐equivalentvolumesofgasolineanddiesel),syntheticoilandammonia.Low-emissionselectricity:Includesrenewableenergytechnologies,low‐emissionshydrogen‐basedgeneration,low‐emissionshydrogen‐basedfuelgeneration,nuclearpowerandfossilfuelpowerplantsequippedwithcarboncapture,utilisationandstorage.Low-emissionsfuels:Includemodernbioenergy,low‐emissionshydrogenandlow‐emissionshydrogen‐basedfuels.Low-emissionshydrogen:Hydrogenwhichisproducedthroughwaterelectrolysiswithelectricitygeneratedfromalow-emissionssourcesuchasrenewablesornuclear,orbiomassorfromfossilfuelsequippedwithCCUStechnology.ProductionfromfossilfuelswithCCUSisincludedonlyifupstreamemissionsaresufficientlylow,ifcapture,athighrates,isappliedtoallCO2streamsassociatedwiththeproductionroute,andifallCO2ispermanentlystoredtopreventitsreleasetotheatmosphere.Low-emissionshydrogen-basedfuels:Includeammoniaandsynthetichydrocarbonsproducedfromlow-emissionshydrogen.Inthecaseofsynthetichydrocarbons,theyareproducedfromlow-emissionshydrogenandasustainablecarbonsource(ofbiogenicoriginordirectlycapturedfromtheatmosphere).Low-emissionsmaterialproduction:Productionthatachievessubstantialemissionsreductionsbutfallsshortofachievingnearzeroemissions.TheIEAhasproposedgreenhousegasemissionsintensitythresholdsandacontinuousscaleofevaluationforlow-emissionsproduction,withthequantitybeingproportionaltothereductioninemissionsintensityachievedforsteelandcementintheAchievingNetZeroHeavyIndustrySectorsinG7Members(IEA,2022).Thethresholdsdependonthescrapshareofmetallicsinputforsteelandtheclinker-to-cementratioforcement.Forotherenergy-intensivecommoditiessuchasaluminium,fertilisersandplastics,reductionsinemissionsintensityandthecontinuousscaleevaluationwouldbeequivalenttotheconsiderationsforlow-emissionssteelandcement.208InternationalEnergyAgencyNetZeroRoadmapMarineenergy:Representsthemechanicalenergyderivedfromtidalmovement,wavemotionoroceancurrentandexploitedforelectricitygeneration.Mini-grids:Smallgridsystemslinkinganumberofhouseholdsorotherconsumers.Modernbioenergyandrenewablewaste:Referstobioenergyexcludingtraditionaluseofbiomassandrenewablewaste.Modernenergyaccess:Includeshouseholdaccesstoaminimumlevelofelectricity;householdaccesstosaferandmoresustainablecookingandheatingfuels,andcleancookingstoves;accessthatenablesproductiveeconomicactivity;andaccessforpublicservices.Modernliquidbioenergy:Includesbiogasoline,biodiesel,biojetkeroseneandotherliquidbiofuels.Modernrenewables:Includesallusesofrenewableenergywiththeexceptionoftraditionaluseofsolidbiomass.Modernsolidbioenergy:Includesallsolidbioenergyproducts(seesolidbioenergydefinition)exceptthetraditionaluseofbiomass.Italsoincludestheuseofsolidbioenergyinintermediateandadvancedimprovedbiomasscookstoves(ISOtier≥3)requiringfueltobecutinsmallpiecesoroftenusingprocessedbiomasssuchaspellets.Naturalgas:Includesgasoccurringindeposits,whetherliquefiedorgaseous,consistingmainlyofmethane.Itincludesbothnon‐associatedgasesoriginatingfromfieldsproducinghydrocarbonsonlyingaseousform,andassociatedgasproducedinassociationwithcrudeoilproductionaswellasmethanerecoveredfromcoalmines(collierygas).Naturalgasliquids,manufacturedgas(producedfrommunicipalorindustrialwaste,orsewage)andquantitiesventedorflaredarenotincluded.Gasdataincubicmetresareexpressedonagrosscalorificvaluebasisandaremeasuredat15°Candat760mmHg(StandardConditions).Gasdataexpressedintonnesofoilequivalent,mainlyforcomparisonreasonswithotherfuels,areonanetcalorificbasis.Thedifferencebetweenthenetandthegrosscalorificvalueisthelatentheatofvaporisationofthewatervapourproducedduringcombustionofthefuel(forgasthenetcalorificvalueis10%lowerthanthegrosscalorificvalue).Nearzeroemissioncapablematerialproductioncapacity:capacitythatwillachievesubstantialemissionsreductionsfromthestart–butfallshortofnearzeroemissionmaterialproduction(seefollowingdefinition)initially–withplanstocontinuereducingemissionsovertimesuchthattheycouldlaterachievenearzeroemissionproductionwithoutadditionalcapitalinvestment.Nearzeroemissionmaterialproduction:forsteelandcement,productionthatachievesthenearzeroemissionGHGemissionsintensitythresholdsdefinedintheIEA’s‘AchievingNetZeroHeavyIndustrySectorsinG7Members’(2022);thethresholdsdependonthescrapshareofmetallicsinputforsteelandtheclinker-to-cementratioforcement.ForotherBenergy-intensivecommoditieslikealuminium,fertilisersandplastics,productionthatIEA.CCBY4.0.AnnexBDefinitions209achievesreductionsinemissionsintensityequivalenttotheconsiderationsfornearzeroemissionsteelandcement.Nearzeroemissionmaterialproductioncapacity:capacitythat,onceoperational,willachievenearzeroemissionmaterialproduction(seeprecedingdefinition)fromthestart.Networkgases:Includesnaturalgas,biomethane,syntheticmethaneandhydrogenblendedinagasnetwork.Non-energyuse:Theuseoffuelsasfeedstocksforchemicalproductsthatarenotusedinenergyapplications.Examplesofresultingproductsarelubricants,paraffinwaxes,asphalt,bitumen,coaltarsandtimberpreservativeoils.Nuclear:Referstotheprimaryenergyequivalentoftheelectricityproducedbyanuclearpowerplant,assuminganaverageconversionefficiencyof33%.Off-gridsystems:Mini‐gridsandstand‐alonesystemsforindividualhouseholdsorgroupsofconsumersnotconnectedtoamaingrid.Offshorewind:Referstoelectricityproducedbywindturbinesthatareinstalledinopenwater,usuallyintheocean.Oil:Oilproductionincludesbothconventionalandunconventionaloil.Petroleumproductsincluderefinerygas,ethane,liquidpetroleumgas,aviationgasoline,motorgasoline,jetfuels,kerosene,gas/dieseloil,heavyfueloil,naphtha,whitespirit,lubricants,bitumen,paraffin,waxesandpetroleumcoke.Otherenergysector:Coverstheuseofenergybytransformationindustriesandtheenergylossesinconvertingprimaryenergyintoaformthatcanbeusedinthefinalconsumingsectors.Itincludeslossesinlow‐emissionshydrogenandhydrogen‐basedfuelsproduction,bioenergyprocessing,gasworks,petroleumrefineries,coalandgastransformationandliquefaction.Italsoincludesenergyownuseincoalmines,inoilandgasextractionandinelectricityandheatproduction.Transfersandstatisticaldifferencesarealsoincludedinthiscategory.Fueltransformationinblastfurnacesandcokeovensarenotaccountedforintheotherenergysectorcategory.Powergeneration:Referstofueluseinelectricitygenerationplants,heatplants,andcombinedheatandpowerplants.Bothmainactivityproducerplantsandsmallplantsthatproducefuelfortheirownuse(auto‐producers)areincluded.Productiveuses:Energyusedtowardsaneconomicpurpose:agriculture,industry,servicesandnon‐energyuse.Someenergydemandfromthetransportsector,forexamplefreight,couldbeconsideredasproductive,butistreatedseparately.Renewables:Includesbioenergy,renewablewaste,geothermal,hydropower,solarphotovoltaics(PV),concentratingsolarpower(CSP),windandmarine(tideandwave)energyforelectricityandheatgeneration.210InternationalEnergyAgencyNetZeroRoadmapIEA.CCBY4.0.Residential:Energyusedbyhouseholdsincludingspaceheatingandcooling,waterheating,lighting,appliances,electronicdevicesandcooking.Roadtransport:Includesallroadvehicletypes(passengercars,two/three-wheelers.Lightcommercialvehicles,busesandmediumandheavytrucks).Services:Energyusedincommercialfacilitiessuchasoffices,shops,hotels,andrestaurants,andininstitutionalbuildingssuchasschools,hospitalsandpublicoffices.Energyuseinservicesincludesspaceheatingandcooling,waterheating,lighting,appliances,cookinganddesalination.Shipping/navigation:Thistransportsub-sectorincludesbothdomesticandinternationalnavigationandtheiruseofmarinefuels.Domesticnavigationcoversthetransportofgoodsorpersonsoninlandwaterwaysandfornationalseavoyages(startsandendsinthesamecountrywithoutanyintermediateforeignport).Internationalnavigationincludesquantitiesoffuelsdeliveredtomerchantships(includingpassengerships)ofanynationalityforconsumptionduringinternationalvoyagestransportinggoodsorpassengers.Solarphotovoltaics(PV):Electricityproducedfromsolarphotovoltaiccells.Solidbioenergy:Includescharcoal,fuelwood,dung,agriculturalresidues,woodwasteandothersolidbiogenicwastes.Steamcoal:Atypeofcoalthatismainlyusedforheatproductionorsteam‐raisinginpowerplantsand,toalesserextent,inindustry.Typically,steamcoalisnotofsufficientqualityforsteelmaking.Coalofthisqualityisalsocommonlyknownasthermalcoal.Syntheticfuel:Includessynthetichydrocarbonfuelssuchasmethaneandoilproducts,e.g.dieselorkerosene.Syntheticmethane:Methanefromsourcesotherthannaturalgas,includingcoal‐to‐gasandlow‐emissionssyntheticmethane.Totalenergysupply(TES):Representsdomesticdemandonlyandisbrokendownintoelectricityandheatgeneration,otherenergysectorandtotalfinalconsumption.Totalfinalconsumption(TFC):Isthesumofconsumptionbythevariousend‐usesectors.TFCisbrokendownintoenergydemandinthefollowingsectors:industry(includingmanufacturing,mining,chemicalsproduction,blastfurnacesandcokeovens),transport,buildings(includingresidentialandservices)andother(includingagricultureandothernon‐energyuse).Itexcludesinternationalmarineandaviationbunkers,exceptatworldlevelwhereitisincludedinthetransportsector.Totalfinalenergyconsumption(TFEC):Isavariabledefinedprimarilyfortrackingprogresstowardstarget7.2oftheUnitedNationsSustainableDevelopmentGoals(SDG).Itincorporatestotalfinalconsumptionbyend‐usesectors,butexcludesnon‐energyuse.Itexcludesinternationalmarineandaviationbunkers,exceptatworldlevel.Typically,thisisBusedinthecontextofcalculatingtherenewableenergyshareintotalfinalenergyIEA.CCBY4.0.consumption(indicatorSDG7.2.1),whereTFECisthedenominator.AnnexBDefinitions211Totalprimaryenergydemand(TPED):Seetotalenergysupply.Traditionaluseofbiomass:Referstotheuseofsolidbiomasswithbasictechnologies,suchasathree‐stonefireorbasiccookstoves(ISOtier0‐2),oftenwithnoorpoorlyoperatingchimneys.Formsofbiomassusedincludewood,woodwaste,charcoalagriculturalresiduesandotherbio‐sourcedfuelssuchasanimaldung.Transport:Fuelsandelectricityusedinthetransportofgoodsorpeoplewithinthenationalterritoryirrespectiveoftheeconomicsectorwithinwhichtheactivityoccurs.Thisincludesfuelandelectricitydeliveredtovehiclesusingpublicroadsorforuseinrailvehicles;fueldeliveredtovesselsfordomesticnavigation;fueldeliveredtoaircraftfordomesticaviation;andenergyconsumedinthedeliveryoffuelsthroughpipelines.Fueldeliveredtointernationalmarineandaviationbunkersispresentedonlyattheworldlevelandisexcludedfromthetransportsectoratadomesticlevel.Trucks:Includesallsizecategoriesofcommercialvehicles:lighttrucks(grossvehicleweightlessthan3.5tonnes);mediumfreighttrucks(grossvehicleweight3.5‐15tonnes);andheavyfreighttrucks(>15tonnes).Unabatedfossilfueluse:CombustionoffossilfuelsinfacilitieswithoutCCUS.Usefulenergy:Referstotheenergythatisavailabletoend‐userstosatisfytheirneeds.Thisisalsoreferredtoasenergyservicesdemand.Asresultoftransformationlossesatthepointofuse,theamountofusefulenergyislowerthanthecorrespondingfinalenergydemandformosttechnologies.Equipmentusingelectricityoftenhashigherconversionefficiencythanequipmentusingotherfuels,meaningthatforaunitofenergyconsumed,electricitycanprovidemoreenergyservices.Wind:Electricityproducedbywindturbinesfromthekineticenergyofwind.Woodyenergycrops:Short-rotationplantingsofwoodybiomassforbioenergyproduction,suchascoppicedwillowandmiscanthus.Vans:Includescommercialvehiclesandlighttrucks(grossvehicleweight>3.5tonnes).Variablerenewableenergy(VRE):Referstopowergeneratingtechnologiesinwhichmaximumoutputatanytimedependsontheavailabilityoffluctuatingrenewableenergyresources.VREincludesabroadarrayoftechnologiessuchaswindpower,solarPV,run-of-riverhydro,concentratingsolarpower(wherenothermalstorageisincluded)andmarine(tidalandwave).Zero-carbon-readybuildings:Azero-carbon-readybuildingishighlyenergyefficientandeitherusesrenewableenergydirectly,oranenergysupplythatcanbefullydecarbonised,suchaselectricityordistrictheat.212InternationalEnergyAgencyNetZeroRoadmapIEA.CCBY4.0.RegionalandcountrygroupingsAdvancedeconomies:OECDregionalgroupingandBulgaria,Croatia,Cyprus1,2,MaltaandRomania.Africa:NorthAfricaandsub-SaharanAfricaregionalgroupings.AsiaPacific:SoutheastAsiaregionalgroupingandAustralia,Bangladesh,China,India,Japan,Korea,DemocraticPeople’sRepublicofKorea,Mongolia,Nepal,NewZealand,Pakistan,SriLanka,ChineseTaipei,andotherAsiaPacificcountriesandterritories.3Caspian:Armenia,Azerbaijan,Georgia,Kazakhstan,Kyrgyzstan,Tajikistan,TurkmenistanandUzbekistan.CentralandSouthAmerica:Argentina,PlurinationalStateofBolivia(Bolivia),Brazil,Chile,Colombia,CostaRica,Cuba,Curaçao,DominicanRepublic,Ecuador,ElSalvador,Guatemala,Haiti,Honduras,Jamaica,Nicaragua,Panama,Paraguay,Peru,Suriname,TrinidadandTobago,Uruguay,BolivarianRepublicofVenezuela(Venezuela),andotherCentralandSouthAmericancountriesandterritories.4China:Includes(thePeople'sRepublicof)ChinaandHongKong,China.DevelopingAsia:AsiaPacificregionalgroupingexcludingAustralia,Japan,KoreaandNewZealand.Emergingmarketanddevelopingeconomies:Allothercountriesnotincludedintheadvancedeconomiesregionalgrouping.FigureC.1⊳MaincountrygroupingsNote:Thismapiswithoutprejudicetothestatusoforsovereigntyoveranyterritory,tothedelimitationofinternationalfrontiersandboundariesBandtothenameofanyterritory,cityorarea.AnnexBDefinitions213IEA.CCBY4.0.Eurasia:CaspianregionalgroupingandtheRussianFederation(Russia).Europe:EuropeanUnionregionalgroupingandAlbania,Belarus,BosniaandHerzegovina,NorthMacedonia,Gibraltar,Iceland,Israel5,Kosovo,Montenegro,Norway,RepublicofMoldova,Serbia,Switzerland,Türkiye,UkraineandUnitedKingdom.EuropeanUnion:Austria,Belgium,Bulgaria,Croatia,Cyprus1,2,CzechRepublic,Denmark,Estonia,Finland,France,Germany,Greece,Hungary,Ireland,Italy,Latvia,Lithuania,Luxembourg,Malta,Netherlands,Poland,Portugal,Romania,SlovakRepublic,Slovenia,SpainandSweden.IEA(InternationalEnergyAgency):OECDregionalgroupingexcludingChile,Colombia,Iceland,Israel,Latvia,andSlovenia.LatinAmerica:CentralandSouthAmericaregionalgroupingandMexico.MiddleEast:Bahrain,IslamicRepublicofIran(Iran),Iraq,Jordan,Kuwait,Lebanon,Oman,Qatar,SaudiArabia,SyrianArabRepublic(Syria),UnitedArabEmiratesandYemen.Non-OECD:AllothercountriesnotincludedintheOECDregionalgrouping.Non-OPEC:AllothercountriesnotincludedintheOPECregionalgrouping.NorthAfrica:Algeria,Egypt,Libya,MoroccoandTunisia.NorthAmerica:Canada,MexicoandUnitedStates.OECD(OrganisationforEconomicCo-operationandDevelopment):Australia,Austria,Belgium,Canada,Chile,Colombia,CzechRepublic,Denmark,Estonia,Finland,France,Germany,Greece,Hungary,Iceland,Ireland,Israel,Italy,Japan,Korea,Latvia,Lithuania,Luxembourg,Mexico,Netherlands,NewZealand,Norway,Poland,Portugal,SlovakRepublic,Slovenia,Spain,Sweden,Switzerland,Türkiye,UnitedKingdomandUnitedStates.OPEC(OrganisationofthePetroleumExportingCountries):Algeria,Angola,RepublicoftheCongo(Congo),EquatorialGuinea,Gabon,theIslamicRepublicofIran(Iran),Iraq,Kuwait,Libya,Nigeria,SaudiArabia,UnitedArabEmiratesandBolivarianRepublicofVenezuela(Venezuela).SoutheastAsia:BruneiDarussalam,Cambodia,Indonesia,LaoPeople’sDemocraticRepublic(LaoPDR),Malaysia,Myanmar,Philippines,Singapore,ThailandandVietNam.ThesecountriesareallmembersoftheAssociationofSoutheastAsianNations(ASEAN).Sub-SaharanAfrica:Angola,Benin,Botswana,Cameroon,RepublicoftheCongo(Congo),Côted’Ivoire,DemocraticRepublicoftheCongo,Eritrea,Ethiopia,Gabon,Ghana,Kenya,Mauritius,Mozambique,Namibia,Niger,Nigeria,Senegal,SouthAfrica,SouthSudan,Sudan,UnitedRepublicofTanzania(Tanzania),Togo,Zambia,ZimbabweandotherAfricancountriesandterritories.6214InternationalEnergyAgencyNetZeroRoadmapIEA.CCBY4.0.Countrynotes1NotebyRepublicofTürkiye:Theinformationinthisdocumentwithreferenceto“Cyprus”relatestothesouthernpartoftheisland.ThereisnosingleauthorityrepresentingbothTurkishandGreekCypriotpeopleontheisland.TürkiyerecognisestheTurkishRepublicofNorthernCyprus(TRNC).UntilalastingandequitablesolutionisfoundwithinthecontextoftheUnitedNations,Turkeyshallpreserveitspositionconcerningthe“Cyprusissue”.2NotebyalltheEuropeanUnionMemberStatesoftheOECDandtheEuropeanUnion:TheRepublicofCyprusisrecognisedbyallmembersoftheUnitedNationswiththeexceptionofTürkiye.TheinformationinthisdocumentrelatestotheareaundertheeffectivecontroloftheGovernmentoftheRepublicofCyprus.3Individualdataarenotavailableandareestimatedinaggregatefor:Afghanistan,Bhutan,CookIslands,Fiji,FrenchPolynesia,Kiribati,Macau(China),Maldives,NewCaledonia,Palau,PapuaNewGuinea,Samoa,SolomonIslands,Timor-LesteandTongaandVanuatu.4Individualdataarenotavailableandareestimatedinaggregatefor:Anguilla,AntiguaandBarbuda,Aruba,Bahamas,Barbados,Belize,Bermuda,Bonaire,BritishVirginIslands,CaymanIslands,Dominica,FalklandIslands(Malvinas),FrenchGuiana,Grenada,Guadeloupe,Guyana,Martinique,Montserrat,Saba,SaintEustatius,SaintKittsandNevis,SaintLucia,SaintPierreandMiquelon,SaintVincentandGrenadines,SaintMaarten,TurksandCaicosIslands.5ThestatisticaldataforIsraelaresuppliedbyandundertheresponsibilityoftherelevantIsraeliauthorities.TheuseofsuchdatabytheOECDand/ortheIEAiswithoutprejudicetothestatusoftheGolanHeights,EastJerusalemandIsraelisettlementsintheWestBankunderthetermsofinternationallaw.6Individualdataarenotavailableandareestimatedinaggregatefor:BurkinaFaso,Burundi,CaboVerde,CentralAfricanRepublic,Chad,Comoros,Djibouti,KingdomofEswatini,Gambia,Guinea,Guinea-Bissau,Lesotho,Liberia,Madagascar,Malawi,Mali,Mauritania,Réunion,Rwanda,SaoTomeandPrincipe,Seychelles,SierraLeone,SomaliaandUganda.AbbreviationsandacronymsACalternatingcurrentAFOLUagriculture,forestryandotherlanduseAPSAnnouncedPledgesScenarioBECCSbioenergyequippedwithCCUSCCUScarboncapture,utilisationandstorageCDRcarbondioxideremovalCH4methaneCO2carbondioxideCO2-eqcarbon-dioxideequivalentCOPConferenceofParties(UNFCCC)CSPconcentratingsolarpowerDACdirectaircaptureDCdirectcurrentDERdistributedenergyresourcesDSIdemand-sideintegrationDSRdemand-sideresponseEAFelectricarcfurnacesEMDEemergingmarketanddevelopingeconomiesEUEuropeanUnionBEVelectricvehicleIEA.CCBY4.0.AnnexBDefinitions215FIDfinalinvestmentdecisionIEA.CCBY4.0.GDPgrossdomesticproductGHGgreenhousegasesICEinternalcombustionengineIEAInternationalEnergyAgencyIIASAInternationalInstituteforAppliedSystemsAnalysisIMFInternationalMonetaryFundIPCCIntergovernmentalPanelonClimateChangeLDVslight-dutyvehiclesLEDlight-emittingdiodeLNGliquefiednaturalgasLPGliquefiedpetroleumgasMERmarketexchangerateNDCsNationallyDeterminedContributionsNOXnitrogenoxidesN2OnitrousoxideNZENetZeroEmissionsby2050ScenarioOECDOrganisationforEconomicCo-operationandDevelopmentOPECOrganizationofthePetroleumExportingCountriesPPPpurchasingpowerparityPVphotovoltaicsR&DresearchanddevelopmentRD&Dresearch,developmentanddemonstrationSAFsustainableaviationfuelSDGSustainableDevelopmentGoals(UnitedNations)SR1.5IPCCSpecialReportontheimpactsofglobalwarmingof1.5°Cabovepre-industriallevelsSTEPSStatedPoliciesScenarioT&DtransmissionanddistributionTEStotalenergysupplyTFCtotalfinalconsumptionTFECtotalfinalenergyconsumptionTPEDtotalprimaryenergydemandUNUnitedNationsUNDPUNDevelopmentProgrammeUNEPUNEnvironmentProgrammeUNFCCCUNFrameworkConventiononClimateChangeUKUnitedKingdomUSUnitedStatesVREvari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