Emissions to hit a peak by 2025, demand for fossil fuel to reduce: IEA

British oil giant Shell on Thursday reported $9.45 billion as profit in the third quarter: down nearly $2 billion from the previous quarter but still the company’s second-highest number as a report said that the "energy world is shifting dramatically".

Global greenhouse emissions will peak in 2025 as the world goes through a "profound reorientation" in terms of energy use, said the 'World Energy Outlook 2022' report released by the Paris-based International Energy Agency (IEA).

Efforts to shift to cleaner energy alternatives have accelerated due to the energy crisis stemming from the war in Ukraine. "Energy markets and policies have changed as a result of Russia’s invasion of Ukraine, not just for the time being, but for decades to come," said IEA executive director Fatih Birol at the report’s public release.

"Even with today’s policy settings, the energy world is shifting dramatically before our eyes. Government responses around the world promise to make this a historic and definitive turning point towards a cleaner, more affordable and more secure energy system."

Demand for coal is expected to fall back "within the next few years" and the demand for natural gas will peak by 2030 and remain flat till 2050.

High fossil fuel prices will, however, continue to benefit producers, the report said. "Today’s high fossil fuel prices have generated an unprecedented windfall for producers. Net income for the world’s oil and gas producers...is set to double in 2022 to an unprecedented $4 trillion."

To reverse the change, new investors need to be brought in, especially in developing nations. By 2030, investment in clean energy is expected to rise to $2 trillion. This, according to the report, needs to be doubled.

"It would need to double over the coming decade to get the world on track for a 1.5 °C stabilisation in global average temperatures," it said.

In a report this week, the United Nations (UN) said that the current climate plans set by various governments, including in the 2015 Paris Agreement, are not enough to keep global warming below 1.5-degree Celsius.

'India to see the largest increase in energy demand'

The IEA report said India is expected to become the world’s most populous country by 2025 and it would see the largest increase in energy demand of any country. Due to the "sheer scale" of India's development, the import bill of fossil fuel will double over the next two decades. Oil will remain its largest component.  

"Coal generation is projected to continue to expand in absolute terms...peaking around 2030, though its share of electricity generation falls from just below 75 per cent to 55 per cent over this period," the report said.

On the other hand, government programmes, such as the Gati Shakti National Master Plan and the Self‐Reliant India scheme, and strong economics underpin "robust growth" in renewables and electric mobility, notably for two/three‐wheelers in India.

Renewables are expected to meet more than 60 per cent of the growth in demand for power and account for 35 per cent of the electricity mix by 2030. In this, 15 per cent will alone be met by solar energy.

Ahead of COP27

The report has been released just days ahead of the upcoming COP27 summit November 6 and 18 at Sharm el-Sheikh, Egypt.

In COP26, organised in Glasgow in 2021, Prime Minister Narendra Modi said that India will meet the net zero emissions target by 2070. China pledged carbon neutrality by 2060 and the US and EU aimed to do so by 2050.