IEA: surging gas demand threatens efforts to meet climate change

An expected resurgence in global gas demand over the next three years threatens global efforts to achieve a climate goal of achieving net zero emissions by 2050, according to the International Energy Agency (IEA).

More than 190 countries have signed the Paris agreement designed to limit global warming to 1.5 degrees Celsius, which will require a huge reduction in the use of fossil fuels such as coal and gas.

“Natural gas demand is set to rebound strongly in 2021 and will keep rising further if governments do not implement strong policies to move the world onto a path towards net-zero emissions by mid-century,” the IEA said in its latest gas outlook.

Gas demand in 2021 is expected to rise by 3.6% as global economies recover following a record fall in 2020 due to restrictions to limit the spread of the novel coronavirus.

From 2022-2024 demand growth is expected to average 1.7% per year, meaning gas demand would be too high to keep to the IEA’s roadmap towards meeting global net zero emissions by 2050.

However, new demand could be met by projects already approved or under development before the pandemic, the latest report said.

Global gas prices have soared to multi-year highs over the past month, with high temperatures driving demand for power generation in the northern hemisphere for air conditioning and as some regions such as Asia seek to boost stocks before winter.

The report said Europe’s benchmark Dutch gas prices are expected to average $9.5 per million British Thermal Units (MBtu) in 2021, their highest since 2013, while Asian spot LNG prices are expected to average $11/MBtu, the highest since 2014.

The IEA also urged the gas industry to increase efforts to reduce emissions such as addressing methane leaks.

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