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Climate change ambitions prove ‘futile’ as fossil fuel use reaches new highs: report

RIYADH: “Drastic and coordinated action” is needed to reduce global dependence on fossil fuels, the leader of a climate think tank has warned, after new analysis showed oil and coal use are at record levels.

Commenting on the latest edition of the Energy Institute’s Statistical Review of World Energy, co-authored by KPMG and Kearney, Romain Debarre, managing director of the Energy Transition Institute, stressed that green ambitions are “futile” without moves that directly impact global heating.

Countries around the world have committed to transforming their energy systems following global agreements such as the Paris Agreement and decisions made at COP28 in Dubai, which ended last December with a landmark agreement between 198 parties, signaling a new era of climate action.

Despite these promises, global primary energy consumption increased by 2 percent in 2023, exceeding the 10-year average and pre-pandemic levels, according to the report.

“COP28 and the rhetoric of world leaders on the energy transition show ambition to reduce the world’s dependence on fossil fuels. However, these ambitions are in vain if they are not accompanied by drastic and coordinated action that will make a real and immediate impact on climate change mitigation,” Debarre said.

The report noted that global oil consumption rose to unprecedented levels in 2023, largely due to China relaxing its stringent COVID-19 zero-emissions policy.

In addition to this, coal consumption has also reached new highs.

There have been some signs of the impact of climate policy: the share of renewable energy sources in total primary energy consumption has increased by 14.6 percent, and nuclear energy has increased the total share of low-carbon sources to over 18 percent.

Oil and gas

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The 73rd annual release explained that as supply chain issues eased, most markets have returned to pre-2019 trends, marking 2023 as a year of noticeable recovery.

“In the Asia-Pacific region, crude oil consumption rose more than 5 percent to 38 million barrels per day, while China’s refining capacity surpassed the United States for the first time in history, making it the largest oil refining market by capacity.” we read in the statement.

The Middle East, which has significant oil reserves, has seen increased activity, contributing to global oil consumption exceeding 100 million barrels per day for the first time. This rebound was particularly noticeable in the Asia-Pacific region, where oil demand increased by more than 5 percent to 38 million barrels per day.

While China’s energy sector saw remarkable growth, the United States maintained higher capacity with overall utilization at 86.6% compared to 81.7% in the Asian country.

Natural gas prices have seen a significant decline in Europe and Asia, falling 30 percent from their 2022 peaks. However, global gas production remained relatively stable. The United States became the largest exporter of liquefied natural gas, overtaking Qatar, with the Asia-Pacific region, especially China and India, driving increased demand.

The report indicates that in 2023 there will be a significant change in the European gas market. European gas demand fell by 7%, after a decline of 13%. in the previous year.

Russia’s share of EU gas imports fell to 15 percent, down from 45 percent in 2021, as LNG imports outpaced pipelined gas for the second year in a row.

The ongoing conflict in Ukraine, which prompted European countries to look for alternative energy sources, had a major impact on restoring the balance in gas supplies.

Fuel, renewable energy and electricity

According to the Energy Institute, KPMG and Kearney, renewable energy continues its rapid growth, exceeding the total primary energy consumption rate by six times.

The Middle East and Asia contributed to a 25 percent increase in global electricity demand. China’s grid battery electricity storage capacity, accounting for almost 50 percent of the world’s total capacity, exemplifies the region’s push for sustainable energy solutions.

Fossil fuel use appears to have peaked in developed economies. For the first time since the Industrial Revolution, energy consumption in Europe has fallen below 70 percent of primary energy, driven by reduced demand and the rise of renewable energy. In the US, fuel consumption has dropped to 80 percent of total primary energy.

EI CEO Nick Wayth noted that while progress in the transition is slow, diverse energy stories are emerging across regions.

“We are seeing signs of peak demand for fossil fuels in developed economies, in contrast to economies in the Global South, where economic development and improved quality of life continue to drive the growth of fossil fuels,” he said.

However, emerging economies face challenges in containing fuel price increases. In India, for example, fuel consumption has increased by 8 percent, which now accounts for 89 percent of total energy consumption.

For the first time, India consumed more coal than Europe and North America combined. In Africa, primary energy consumption decreased by 0.5%, with fossil fuels accounting for 90% of total consumption and renewable energy sources accounting for 6% of electricity.

China’s economic recovery from the Covid-19 pandemic has led to a 6% increase in fuel consumption, although China’s primary energy share has been declining since 2011, reaching 81.6% in 2023.

The Asian powerhouse also accounted for 55 percent of global renewable energy demand, surpassing Europe in energy per capita for the first time.

“We are seeing signs of peak demand for fossil fuels in developed economies, in contrast to economies in the Global South, where economic development and improved quality of life continue to drive the growth of fossil fuels,” Wayth said.

EI’s CEO added: “Transition progress is slow, but the bigger picture masks the diverse energy stories playing out in different geographies.”

EI’s World Energy Statistical Review has been a key source of information since 1952, providing comprehensive data on global energy markets.

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