Net Zero by 2050 - A Roadmap for the Global Energy Sector

Net Zero

by 2050

A Roadmap for the

Global Energy

Sector

Net Zero

by 2050

A Roadmap for the

Global Energy Sector

Net Zero by 2050 Interactive

iea.li/nzeroadmap

Net Zero by 2050 Data

iea.li/nzedata

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corrections

Foreword 3

Foreword

Weareapproachingadecisivemomentforinternationaleffortstotackletheclimatecrisis–

agreatchallengeofourtimes.Thenumberofcountriesthathavepledgedtoreachnet‐zero

emissionsbymid‐centuryorsoonaftercontinuestogrow,butsodoglobalgreenhousegas

emissions.Thisgapbetweenrhetoricandactionneedstocloseifwearetohaveafighting

chanceofreachingnetzeroby2050andlimitingtheriseinglobaltemperaturesto1.5°C.

Doingsorequiresnothingshortofatotaltransformationoftheenergysystemsthatunderpin

oureconomies.Weareinacriticalyearatthestartofacriticaldecadefortheseefforts.The

26thConferenceoftheParties(COP26)oftheUnitedNationsFrameworkConventionon

ClimateChangeinNovemberisthefocalpointforstrengtheningglobalambitionsandaction

onclimatebybuildingonthefoundationsofthe2015ParisAgreement.TheInternational

Energy Agency (IEA) has been working hard to support the UK government’s COP26

Presidencytohelpmakeitthesuccesstheworldneeds.Iwasdelightedtoco‐hosttheIEA‐

COP26NetZeroSummitwithCOP26PresidentAlokSharmainMarch,wheretopenergyand

climateleadersfrommorethan40countrieshighlightedtheglobalmomentumbehindclean

energytransitions.

Thediscussions atthat event fed intothis special report, notablythroughtheSevenKey

PrinciplesforImplementingNetZerothattheIEApresentedattheSummit,whichhavebeen

backedby22ofourmembergovernmentstodate.Thisreportmapsout howtheglobal

energysectorcanreachnetzeroby2050.Ibelievethereport–NetZeroby2050:Aroadmap

fortheglobalenergysystem–isoneofthemostimportantandchallengingundertakingsin

theIEA’shistory.TheRoadmapistheculminationoftheIEA’spioneeringworkonenergy

datamodelling,combiningforthefirsttimethecomplexmodelsofourtwoflagshipseries,

theWorldEnergyOutlookandEnergyTechnologyPerspectives.ItwillguidetheIEA’swork

andwillbeanintegralpartofboththoseseriesgoingforward.

Despitethecurrentgapbetweenrhetoricandrealityonemissions,ourRoadmapshowsthat

therearestillpathwaystoreachnetzeroby2050.Theoneonwhichwefocusis–inour

analysis–themosttechnicallyfeasible,cost‐effectiveandsociallyacceptable.Evenso,that

pathway remains narrow and extremely challenging, requiring allstakeholders–

governments,businesses,investorsandcitizens–totakeactionthisyearandeveryyear

aftersothatthegoaldoesnotslipoutofreach.

This report sets out clear milestones – more than 400 in total, spanning all sectors and

technologies–forwhatneedstohappen,andwhen,totransformtheglobaleconomyfrom

onedominatedbyfossilfuelsintoonepoweredpredominantlyby renewableenergylike

solarandwind.Ourpathwayrequiresvastamountsofinvestment,innovation,skilfulpolicy

designandimplementation,technologydeployment,infrastructurebuilding,international

co‐operationandeffortsacrossmanyotherareas.

SincetheIEA’sfoundingin1974,oneofitscoremissionshasbeentopromotesecureand

affordableenergysuppliestofostereconomicgrowth.Thishasremainedakeyconcernof

ourRoadmap,drawingonspecialanalysiscarriedoutwiththeInternationalMonetaryFund

and the International Institute for Applied Systems Analysis. It shows that the enormous



4 International Energy Agency | Special Report

challengeoftransformingourenergysystemsisalsoahugeopportunityforoureconomies,

withthepotentialtocreatemillionsofnewjobsandboosteconomicgrowth.

AnotherguidingprincipleoftheRoadmapisthatcleanenergytransitionsmustbefairand

inclusive,leavingnobodybehind.Wehavetoensurethatdevelopingeconomiesreceivethe

financingandtechnologicalknow‐howtheyneedtocontinuebuildingtheirenergysystems

tomeettheneedsoftheirexpandingpopulationsandeconomiesinasustainableway.Itis

amoralimperativetobringelectricitytothehundredsofmillionsofpeoplewhocurrently

aredeprivedofaccesstoit,themajorityinoftheminAfrica.

Thetransitiontonetzeroisforandaboutpeople.Itisparamounttoremainawarethatnot

everyworkerinthefossilfuelindustrycaneaseintoacleanenergyjob,sogovernments

needtopromotetraininganddevoteresources tofacilitatingnewopportunities.Citizens

mustbeactiveparticipantsintheentireprocess,makingthemfeelpartofthetransitionand

notsimplysubjecttoit.Thesethemesareamongthosebeingexplored by the Global

CommissiononPeople‐CentredCleanEnergyTransitions,whichIconvenedatthestartof

2021 to examine how to enable citizens to benefit from the opportunities and navigate

the disruptions of the shift to a clean energy economy. Headed byPrimeMinister

MetteFrederiksen of Denmark and composed of government leaders, ministers and

prominentthinkers,theGlobalCommissionwillmakepublicitskeyrecommendationsahead

ofCOP26inNovember.

ThepathwaylaidoutinourRoadmapisglobalinscope,buteachcountrywillneedtodesign

itsownstrategy,takingintoaccountitsspecificcircumstances.Thereisnoone‐size‐fits‐all

approach to clean energy transitions. Plans need to reflect countries’ differing stages of

economicdevelopment:inourpathway,advancedeconomiesreachnet zero before

developingeconomiesdo.Astheworld’sleadingenergyauthority,theIEAstandsreadyto

provide governments with support and advice as they design and implement their own

roadmaps,andtoencouragetheinternationalco‐operationacrosssectorsthatissoessential

toreachingnetzeroby2050.

Thislandmarkreportwouldnothavebeenpossiblewithouttheextraordinarydedicationof

theIEAcolleagueswhohaveworkedsotirelesslyandrigorouslyonit.Iwouldliketothank

the entire team under the outstanding leadership of my colleagues LauraCozzi and

TimurGül.

The world has a huge challenge ahead of it to move net zero by 2050 from a narrow

possibility to a practical reality. Global carbon dioxide emissions are already rebounding

sharplyaseconomiesrecoverfromlastyear’spandemic‐inducedshock.Itispasttimefor

governmentstoact,andactdecisivelytoacceleratethecleanenergytransformation.

Asthisreportshows,weattheIEAarefullycommittedtoleadingthoseefforts.

DrFatihBirol

ExecutiveDirector

InternationalEnergyAgency



Acknowledgements 5

Acknowledgements

Thisstudy,across‐agencyeffort,waspreparedbytheWorldEnergyOutlookteamandthe

EnergyTechnologyPerspectivesteam.ThestudywasdesignedanddirectedbyLauraCozzi,

ChiefEnergyModellerandHeadofDivisionforEnergyDemandOutlook, and TimurGül,

HeadofDivisionforEnergyTechnologyPolicy.

The lead authors and co‐ordinators were: StéphanieBouckaert, AraceliFernandezPales,

ChristopheMcGlade, UweRemme and BrentWanner. LaszloVarro, Chief Economist,

DavideD’AmbrosioandThomasSpencerwerealsopartofthecoreteam.

The other main authors were: ThibautAbergel (buildings), YasmineArsalane (economic

outlook,electricity),PraveenBains(biofuels),JoseMiguelBermudezMenendez(hydrogen),

ElizabethConnelly (transport), DanielCrow (behaviour), AmritaDasgupta (innovation),

ChiaraDelmastro (buildings), TimothyGoodson (buildings, bioenergy), AlexandreGouy

(industry), PaulHugues (industry), LillyLee (transport), PeterLevi (industry),

HanaMandova (industry), ArianeMillot (buildings), PawełOlejarnik (fossil fuel supply),

LeonardoPaoli (innovation, transport), FaidonPapadimoulis(datamanagement),

SebastianPapapanagiotou (electricity networks), FrancescoPavan (hydrogen),

ApostolosPetropoulos (transport), RyszardPośpiech(datamanagement),LeonieStaas

(behaviour, industry), JacopoTattini (transport), JacobTeter (transport), GianlucaTonolo

(energyaccess),TiffanyVass(industry)andDanielWetzel(jobs).

Other contributors were: Lucila Arboleya Sarazola, Simon Bennett, Cyril Cassisa, Arthur

Contejean, Musa Erdogan, Enrique Gutierrez Tavarez, Taku Hasegawa,ShaiHassid,Zoe

Hungerford, Tae‐Yoon Kim, Vanessa Koh, Luca Lo Re, Christopher Lowans, Raimund

Malischek,MariachiaraPolisenaandPerAndersWidell.

CarolineAbettan,TeresaCoon,MarinaDosSantos,MarieFournier‐S’niehotta,RekaKoczka

andDianaLouis



providedessentialsupport.

EdmundHoskercarriededitorialresponsibilityandDebraJustuswasthecopy‐editor.

The International Monetary Fund (IMF), in particular BenjaminHunt, FlorenceJaumotte,

JaredThomasBebee and SusannaMursula, partnered with the IEA toprovidethe

macroeconomicanalysis.TheInternationalInstituteforAppliedSystemsAnalysis(IIASA),in

particularPeterRafaj,GregorKiesewetter,WolfgangSchöpp,ChrisHeyes,ZbigniewKlimont,

PallavPurohit,LauraWarnecke,BinhNguyen,NicklasForsell,StefanFrank,PetrHavlikand

MykolaGusti, partnered with the IEA to provide analysis and related indicators on air

pollutionandgreenhousegasemissionsfromlanduse.

Valuable comments and feedback were provided by other senior management and

numerous other colleagues within the International Energy Agency. In particular

KeisukeSadamori, MechthildWörsdörfer, AmosBromhead, DanDorner, NickJohnstone,

PascalLaffont, TorilBosoni, PeterFraser, PaoloFrankl, TimGould, TomHowes,

BrianMotherway, Aad van Bohemen, César Alejandro Hernández, Samantha McCulloch,

SaraMoarif, HeymiBahar, AdamBaylin‐Stern, NielsBerghout, SaraBudinis,

Jean‐BaptisteDubreuil, Carlos Fernández Alvarez,Ilkka Hannula , Jeremy Moorhouse and

StefanLorenczik.



6 International Energy Agency | Special Report

Valuableinputtotheanalysiswasprovidedby:TrevorMorgan(independentconsultant)and

DavidWilkinson(independentconsultant).

ThanksgototheIEACommunicationsandDigitalOffice(CDO),particularlytoJadMouawad,

HeadofCDO,andtoAstridDumond,JonCuster,TanyaDyhin,MerveErdil,GraceGordon,

ChristopherGully,JethroMullen,JuliePuech,RobStone,GregoryViscusi,ThereseWalshand

WonjikYangfortheirhelpinproducingandpromotingthereportandwebsitematerials.

Finally,thankstoIvoLetraoftheIEAInformationSystemsUnitforhisessentialsupportin

theproductionprocess,andtotheIEA’sOfficeofLegalCounsel,OfficeofManagementand

Administration, and EnergyData Centre forthe assistance eachprovided throughoutthe

preparationofthisreport.

Peerreviewers

Manysenior government officialsand international experts providedinput and reviewed

preliminarydraftsofthereport.Theircommentsandsuggestionswereofgreatvalue.They

include:

AimeeAguilarJaber OrganisationforEconomicCo‐operationandDevelopment(OECD)

KeigoAkimoto ResearchInstituteofInnovativeTechnologyfortheEarth,Japan

DougArent NationalRenewableEnergyLaboratory(NREL),UnitedStates

DanielBalog PermanentDelegationofHungarytotheOECD

GeorgBäuml Volkswagen

HarmeetBawa HitachiABBPowerGrids

PeteBetts GranthamResearchInstituteonClimateChangeandthe

Environment,UnitedKingdom

SamaBilbaoyLeon WorldNuclearAssociation

DianeCameron NuclearEnergyAgency

RebeccaCollyer EuropeanClimateFoundation

RussellConklin USDepartmentofEnergy

FrançoisDassa EDF

JeltedeJong MinistryofEconomicAffairsandClimatePolicy,TheNetherlands

CarldeMaré ArcelorMittal

GuillaumeDeSmedt AirLiquide

AgustinDelgado Iberdrola

JohannaFiksdahl PermanentDelegationofNorwaytotheOECD

AlanFinkel SpecialAdvisortotheAustralianGovernmentonLowEmissions

Technology

NiklasForsell InternationalInstituteforAppliedSystemsAnalysis(IIASA)

JamesFoster UKDepartmentforBusiness,EnergyandIndustrialStrategy

HiroyukiFukui Toyota

RosannaFusco Eni

LiGao MinistryofEcologyandEnvironmentofthePeople’sRepublicof

China



Acknowledgements 7

FrançoisGautier PermanentDelegationofFrancetotheOECD

OliverGeden GermanInstituteforInternationalandSecurityAffairs

DolfGielen InternationalRenewableEnergyAgency(IRENA)

FrancescaGostinelli Enel

JaeH.Jung MinistryofForeignAffairs,RepublicofKorea

MichaelHackethal MinistryforEconomicAffairsandIndustry,Germany

PeterWood Shell

SelwinHart UnitedNations

DavidHawkings NaturalResourcesDefenseCouncil

JacobHerbers USDepartmentofEnergy

TakashiHongo Mitsui&Co.GlobalStrategicStudiesInstitute,Japan

ChristinaHood CompassClimate,NewZealand

MichaelKelly WorldLPGAssociation

SirDavidKing CambridgeUniversity

KenKoyama TheInstituteofEnergyEconomics,Japan

FabienKreuzer DGEnergy,EuropeanCommission

JoyceLee GlobalWindEnergyCouncil(GWEC)

ChenLinhao MinistryofScienceandTechnologyofthePeople’sRepublicof

China

ToddLitman VictoriaTransportPolicyInstitute,Canada

ClaudeLorea GlobalCementandConcreteAssociation

RituMathur TheEnergyandResourcesInstitute(TERI)

VincentMinier SchneiderElectric

SteveNadel AmericanCouncilforanEnergy‐EfficientEconomy

StefanNowak TechnologyCollaborationProgrammeonPhotovoltaicPower

Systems(PVPSTCP)

BrianÓGallachóir MaREI,SFIResearchCentreforEnergy,ClimateandMarine,

UniversityCollegeCork

HenriPaillère InternationalAtomicEnergyAgency(IAEA)

YongdukPak KoreaEnergyEconomicsInstitute(KEEI)

AlessandraPastorelli PermanentDelegationofItalytotheOECD

JonathanPershing USStateDepartment

GlenPeters CentreforInternationalClimateandEnvironmentalResearch

(CICERO)

StephaniePfeifer InstitutionalInvestorsGrouponClimateChange(IIGCC)

CédricPhilibert Independentconsultant

LynnPrice LawrenceBerkeleyNationalLaboratory,UnitedStates

AndrewPurvis WorldSteel

JuliaReinaud BreakthroughEnergy

YaminaSaheb OpenEXP

IgnacioSantelices SustainableEnergyAgency,Chile

AndreasSchäfer UniversityCollegeLondon

VivianScott TheUniversityofEdinburgh

8 International Energy Agency | Special Report

SimonSharpe CabinetOffice,UnitedKingdom

AdnanShihabEldin FormerlyKuwaitFoundationfortheAdvancementofSciences

ToshiyukiShirai MinistryofEconomy,TradeandIndustry,Japan

AdamSieminski KAPSARC

StephanSinger ClimateActionNetwork

VarunSivaram USStateDepartment

JimSkea ImperialCollegeLondon

JeffStehm TaskForceonClimate‐RelatedFinancialDisclosures

JonathanStern OxfordInstituteforEnergyStudies

WimThomas Independentconsultant

DavidTurk USDepartmentofEnergy

FritjofUnander ResearchCouncilofNorway

RobvanderMeer TheEuropeanCementAssociation(CEMBUREAU)

NoévanHulst InternationalPartnershipforHydrogenandFuelCellsinthe

Economy

TomvanIerland DGforClimateAction,EuropeanCommission

DavidVictor UniversityofCalifornia,SanDiego

AmandaWilson NaturalResourcesCanada

HaraldWinkler UniversityofCapeTown

MarkusWolf ElectricPowerResearchInstitute(EPRI),UnitedStates

MarkusWråke SwedishEnergyResearchCentre

WilliamZimmern BP

Theindividualsandorganisationsthatcontributedtothisstudyarenotresponsibleforany

opinionsorjudgmentsitcontains.Allerrorsandomissionsaresolelytheresponsibilityofthe

IEA.

This document 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.

Commentsandquestionsarewelcomeandshouldbeaddressedto:

LauraCozziandTimurGül

DirectorateofSustainability,TechnologyandOutlooks

InternationalEnergyAgency

9,ruedelaFédération

75739ParisCedex15

France

E‐mail:IEAN[email protected]

Web:www.iea.org



Table of Contents 9

TableofContents



Foreword...........................................................................................................................3

Acknowledgements...........................................................................................................5

Executivesummary.........................................................................................................13

Announcednetzeropledgesandtheenergysector 29

1.1 Introduction...................................................................................................30

1.2 Emissionsreductiontargetsandnetzeropledges........................................31

1.2.1 NationallyDeterminedContributions...............................................31

1.2.2 Net‐zeroemissionspledges...............................................................32

1.3 OutlookforemissionsandenergyintheSTEPS............................................36

1.3.1 CO

emissions....................................................................................36

1.3.2 Totalenergysupply,totalfinalconsumptionandelectricity

generation.........................................................................................37

1.3.3 Emissionsfromexistingassets..........................................................39

1.4 AnnouncedPledgesCase...............................................................................40

1.4.1 CO

emissions....................................................................................41

1.4.2 Totalenergysupply...........................................................................43

1.4.3 Totalfinalconsumption.....................................................................44

1.4.4 Electricitygeneration.........................................................................45

Aglobalpathwaytonet‐zeroCO₂emissionsin2050 47

2.1 Introduction...................................................................................................48

2.2 Scenariodesign..............................................................................................48

2.2.1 PopulationandGDP...........................................................................50

2.2.2 EnergyandCO

prices........................................................................51

2.3 CO

emissions................................................................................................53

2.4 Totalenergysupplyandtotalfinalconsumption..........................................56

2.4.1 Totalenergysupply...........................................................................56

2.4.2 Totalfinalconsumption.....................................................................60

2.5 Keypillarsofdecarbonisation.......................................................................64

2.5.1 Energyefficiency................................................................................65

2.5.2 Behaviouralchange...........................................................................67

2.5.3 Electrification.....................................................................................70

1

2



10 International Energy Agency | Special Report

2.5.4 Renewables.......................................................................................73

2.5.5 Hydrogenandhydrogen‐basedfuels.................................................75

2.5.6 Bioenergy...........................................................................................77

2.5.7 Carboncapture,utilisationandstorage............................................79

2.6 Investment....................................................................................................81

2.7 Keyuncertainties...........................................................................................83

2.7.1 Behaviouralchange...........................................................................84

2.7.2 Bioenergyandland‐usechange.........................................................90

2.7.3 CCUSappliedtoemissionsfromfossilfuels......................................94

Sectoralpathwaystonet‐zeroemissionsby2050 99

3.1 Introduction.................................................................................................100

3.2 Fossilfuelsupply.........................................................................................100

3.2.1 EnergytrendsintheNet‐ZeroEmissionsScenario..........................100

3.2.2 Investmentinoilandgas.................................................................103

3.2.3 Emissionsfromfossilfuelproduction..............................................104

3.3 Low‐emissionsfuelsupply...........................................................................105

3.3.1 EnergytrendsintheNet‐ZeroEmissionsScenario..........................105

3.3.2 Biofuels............................................................................................106

3.3.3 Hydrogenandhydrogen‐basedfuels...............................................108

3.3.4 Keymilestonesanddecisionpoints.................................................111

3.4 Electricitysector..........................................................................................113

3.4.1 EnergyandemissionstrendsintheNet‐ZeroEmissionsScenario..113

3.4.2 Keymilestonesanddecisionpoints.................................................117

3.5 Industry.......................................................................................................121

3.5.1 EnergyandemissiontrendsintheNet‐ZeroEmissionsScenario....121

3.5.2 Keymilestonesanddecisionpoints.................................................129

3.6 Transport.....................................................................................................131

3.6.1 EnergyandemissiontrendsintheNet‐ZeroEmissionsScenario....131

3.6.2 Keymilestonesanddecisionpoints.................................................138

3.7 Buildings......................................................................................................141

3.7.1 EnergyandemissiontrendsintheNet‐ZeroEmissionsScenario....141

3.7.2 Keymilestonesanddecisionpoints.................................................147

3



Table of Contents 11

Widerimplicationsofachievingnet‐zeroemissions 151

4.1 Introduction.................................................................................................152

4.2 Economy......................................................................................................153

4.2.1 Investmentandfinancing................................................................153

4.2.2 Economicactivity.............................................................................155

4.2.3 Employment....................................................................................157

4.3 Energyindustry............................................................................................160

4.3.1 Oilandgas.......................................................................................160

4.3.2 Coal..................................................................................................162

4.3.3 Electricity.........................................................................................163

4.3.4 Energy‐consumingindustries..........................................................165

4.4 Citizens........................................................................................................167

4.4.1 Energy‐relatedSustainableDevelopmentGoals.............................167

4.4.2 Affordability.....................................................................................170

4.4.3 Behaviouralchanges........................................................................173

4.5 Governments...............................................................................................175

4.5.1 Energysecurity................................................................................175

4.5.2 Infrastructure...................................................................................180

4.5.3 Taxrevenuesfromretailenergysales.............................................183

4.5.4 Innovation........................................................................................184

4.5.5 Internationalco‐operation..............................................................187



Annexes 191

AnnexA.Tablesforscenarioprojections.......................................................................193

AnnexB.Technologycosts............................................................................................201

AnnexC.Definitions......................................................................................................203

AnnexD.References.....................................................................................................217

4



Summary for policy makers 13

Summaryforpolicymakers

The energy sector is the source of around three‐quarters of greenhouse gas emissions

today and holds the key to averting the worst effects of climate change, perhaps the

greatestchallengehumankindhasfaced.Reducingglobalcarbondioxide(CO

)emissionsto

netzeroby2050isconsistentwitheffortstolimitthelong‐termincreaseinaverageglobal

temperaturesto1.5°C.Thiscallsfornothinglessthanacompletetransformationofhowwe

produce,transportandconsumeenergy.Thegrowingpoliticalconsensusonreachingnet

zeroiscausefor considerableoptimismabout theprogressthe world canmake,butthe

changesrequiredtoreachnet‐zeroemissionsgloballyby2050arepoorlyunderstood.Ahuge

amountofworkisneededtoturntoday’simpressiveambitionsintoreality,especiallygiven

therangeofdifferentsituationsamongcountriesandtheirdifferingcapacitiestomakethe

necessarychanges.ThisspecialIEAreportsetsoutapathwayforachievingthisgoal,resulting

inacleanandresilientenergysystemthatwouldbringmajorbenefitsforhumanprosperity

andwell‐being.

The global pathway to net‐zero emissions by 2050 detailed in this report requires all

governmentstosignificantlystrengthenandthensuccessfullyimplementtheirenergyand

climate policies.Commitmentsmadetodatefallfarshortofwhatisrequiredbythat

pathway. The number of countries that have pledged to achieve net‐zero emissions has

grownrapidlyoverthelastyearandnowcoversaround70%ofglobalemissionsofCO

.This

isahugestepforward.However,mostpledgesarenotyetunderpinnedbynear‐termpolicies

andmeasures.Moreover,evenifsuccessfullyfulfilled,thepledgestodatewouldstillleave

around22billiontonnesofCO

emissionsworldwidein2050.Thecontinuationofthattrend

wouldbeconsistentwithatemperaturerisein2100ofaround2.1°C.Globalemissionsfell

in2020becauseof the Covid‐19 crisisbutarealready reboundingstronglyaseconomies

recover.Furtherdelayinactingtoreversethattrendwillputnetzeroby2050outofreach.

InthisSummaryforPolicyMakers,weoutlinetheessentialconditionsfortheglobalenergy

sector to reach net‐zero CO

emissions by 2050.The pathway described indepthinthis

reportachievesthisobjectivewithnooffsetsfromoutsidetheenergysector,andwithlow

relianceonnegativeemissionstechnologies.Itisdesignedtomaximisetechnicalfeasibility,

cost‐effectiveness and social acceptance while ensuring continued economic growth and

secureenergysupplies.Wehighlightthepriorityactionsthatareneededtodaytoensurethe

opportunityofnetzeroby2050–narrowbutstillachievable–isnotlost.Thereportprovides

a global view, but countries do not start in the same place or finish at the same time:

advanced economies have to reachnetzerobeforeemergingmarkets and developing

economies,andassistothersingettingthere.Wealsorecognisethattheroutemappedout

hereisapath,notnecessarilythepath,andsoweexaminesomekeyuncertainties,notably

concerningtherolesplayedbybioenergy,carboncaptureandbehaviouralchanges.Getting

tonetzerowillinvolvecountlessdecisionsbypeopleacrosstheworld,butourprimaryaim

istoinformthedecisionsmadebypolicymakers,whohavethegreatestscopetomovethe

worldclosertoitsclimategoals.



14 International Energy Agency | Special Report

Netzeroby2050hingesonanunprecedentedcleantechnologypushto2030

Thepathtonet‐zeroemissionsisnarrow:stayingonitrequiresimmediateandmassive

deployment of all available clean and efficient energy technologies. In the net‐zero

emissionspathwaypresentedinthisreport,theworldeconomyin2030issome40%larger

thantodaybutuses7%lessenergy.Amajorworldwidepushtoincreaseenergyefficiencyis

an essential part of these efforts, resulting in the annual rate of energy intensity

improvementsaveraging4%to2030–aboutthree‐timestheaveragerateachievedoverthe

lasttwodecades.EmissionsreductionsfromtheenergysectorarenotlimitedtoCO

:inour

pathway,methaneemissionsfromfossilfuelsupplyfallby75%overthenexttenyearsasa

result of a global, concerted effort to deploy all available abatement measures and

technologies.

Ever‐cheaperrenewableenergytechnologiesgiveelectricitytheedgeintheracetozero.

Ourpathwaycallsforscalingupsolarandwindrapidlythisdecade,reachingannualadditions

of630gigawatts(GW)ofsolarphotovoltaics(PV)and390GWofwindby2030,four‐times

therecordlevelssetin2020.ForsolarPV,thisisequivalenttoinstallingtheworld’scurrent

largestsolarparkroughlyeveryday.Hydropowerandnuclear,thetwolargestsourcesof

low‐carbon electricity today, provide an essential foundation for transitions. As the

electricitysectorbecomescleaner,electrificationemergesasacrucialeconomy‐widetool

forreducingemissions.Electricvehicles(EVs)gofromaround5%ofglobalcarsalestomore

than60%by2030.

Make the 2020s the decade of massive clean energy expansion

Allthetechnologiesneededtoachievethenecessarydeepcutsinglobalemissionsby

2030alreadyexist,andthepoliciesthatcandrivetheirdeploymentarealreadyproven.

AstheworldcontinuestograpplewiththeimpactsoftheCovid‐19 pandemic, it is

essential that the resulting wave of investment and spending to support economic

recoveryisalignedwiththenetzeropathway.Policiesshouldbestrengthenedtospeed

thedeploymentofcleanandefficientenergytechnologies.Mandatesandstandardsare

vital to drive consumer spending and industry investment into the most efficient

technologies.Targetsandcompetitiveauctionscanenablewindandsolartoaccelerate

theelectricitysectortransition.Fossilfuelsubsidyphase‐outs,carbonpricingandother

market reforms can ensure appropriate price signals. Policies should limit or provide

disincentivesfortheuseofcertainfuelsandtechnologies,suchasunabatedcoal‐fired

power stations, gas boilers and conventional internal combustion engine vehicles.

Governments must lead the planning and incentivising of the massive infrastructure

investment,includinginsmarttransmissionanddistributiongrids.

PRIORITYACTION



Summary for policy makers 15

Key clean technologies ramp up by 2030 in the net zero pathway

Note:MJ=megajoules;GDP=grossdomesticproductinpurchasingpowerparity.

Netzeroby2050requireshugeleapsincleanenergyinnovation

Reachingnetzeroby2050requiresfurtherrapiddeploymentofavailabletechnologiesas

wellaswidespreaduseoftechnologiesthatarenotonthemarketyet.Majorinnovation

effortsmustoccuroverthisdecadeinordertobringthesenewtechnologiestomarketin

time.MostoftheglobalreductionsinCO

emissionsthrough2030inourpathwaycomefrom

technologies readily available today. But in 2050, almost half the reductions come from

technologiesthatarecurrentlyatthedemonstrationorprototypephase.Inheavyindustry

andlong‐distancetransport,theshareofemissionsreductionsfromtechnologiesthatare

stillunderdevelopmenttodayisevenhigher.

Thebiggestinnovationopportunitiesconcernadvancedbatteries,hydrogenelectrolysers,

and direct air capture and storage.Together,thesethreetechnologyareasmakevital

contributions the reductions in CO

 emissions between 2030 and 2050 in our pathway.

Innovationoverthenexttenyears–notonlythroughresearchanddevelopment(R&D)and

demonstrationbutalsothroughdeployment–needstobeaccompaniedbythelarge‐scale

constructionoftheinfrastructurethetechnologieswillneed.Thisincludesnewpipelinesto

transportcapturedCO

emissionsandsystemstomovehydrogenaroundandbetweenports

andindustrialzones.



10

20

30

40

50

60

2020 2030

x18

200

400

600

800

1000

1200

2020 2030

x4

SolarPV

Wind

Capacity additions

(GW)

Electriccarsales

(millions)

Energy intensityofGD

(MJperUSDppp)

1

2

3

4

5

2020 2030

4% per

year



16 International Energy Agency | Special Report

Prepare for the next phase of the transition by boosting innovation

Clean energy innovation must accelerate rapidly, with governments putting R&D,

demonstrationanddeploymentatthecoreofenergyandclimatepolicy.

GovernmentR&Dspendingneedstobeincreasedandreprioritised.Criticalareassuchas

electrification,hydrogen,bioenergyandcarboncapture,utilisationandstorage(CCUS)

today receive only around one‐third of the level of public R&D funding of the more

established low‐carbon electricity generation and energy efficiency technologies.

Supportisalsoneededtoacceleratetheroll‐outofdemonstrationprojects,toleverage

privateinvestmentinR&D,andtoboostoveralldeploymentlevelstohelpreducecosts.

AroundUSD90billionofpublicmoneyneedstobemobilisedgloballyassoonaspossible

tocompleteaportfolioofdemonstrationprojectsbefore2030.Currently,onlyroughly

USD25billionisbudgetedforthatperiod.Developinganddeployingthesetechnologies

would create major new industries, as well as commercial and employment

opportunities.

Annual CO

emissions savings in the net zero pathway, relative to 2020



20% 40% 60% 80% 100%

2030

2050

Behaviourchanges Technologiesinthemarket Technologiesunderdevelopment

PRIORITYACTION



Summary for policy makers 17

Thetransitiontonetzeroisforandaboutpeople

Atransitionofthescaleandspeeddescribedbythenetzeropathwaycannotbeachieved

withoutsustainedsupportandparticipationfromcitizens.Thechangeswillaffectmultiple

aspectsofpeople’slives–fromtransport,heatingandcookingtourbanplanningandjobs.

Weestimatethataround55%ofthecumulativeemissionsreductionsinthepathwayare

linked to consumer choices such as purchasing an EV, retrofittingahousewithenergy‐

efficient technologies or installing a heat pump. Behavioural changes, particularly in

advancedeconomies–suchasreplacingcartripswithwalking,cyclingorpublictransport,

or foregoing a long‐haul flight – also provide around 4% of the cumulative emissions

reductions.

Providingelectricitytoaround785millionpeoplethathavenoaccessandcleancooking

solutionsto2.6billionpeoplethatlackthoseoptionsisanintegralpartofourpathway.

Emissionsreductionshavetogohand‐in‐handwitheffortstoensureenergyaccessforallby

2030.ThiscostsaroundUSD40billionayear,equaltoaround1%ofaverageannualenergy

sectorinvestment,whilealsobringingmajorco‐benefitsfromreducedindoorairpollution.

Someofthechangesbroughtbythecleanenergytransformationmaybechallengingto

implement,sodecisionsmustbetransparent,justandcost‐effective.Governmentsneed

toensurethatcleanenergytransitionsarepeople‐centredandinclusive.Householdenergy

expenditureasashareofdisposableincome–includingpurchasesofefficientappliances

andfuelbills–risesmodestlyinemergingmarketanddevelopingeconomiesinournetzero

pathway as more people gain access to energy and demand for modern energy services

increases rapidly. Ensuring the affordability of energy for households demands close

attention:policytoolsthatcandirectsupporttothepoorestincludetaxcredits,loansand

targetedsubsidies.

Clean energy jobs will grow strongly but must be spread widely

Energy transitions have to take account of the social and economic impacts on

individualsandcommunities,andtreatpeopleasactiveparticipants.

Thetransitionto net zerobringssubstantial new opportunitiesforemployment,with

14millionjobscreatedby2030inourpathwaythankstonewactivitiesandinvestment

incleanenergy.Spendingonmoreefficientappliances,electricandfuelcellvehicles,and

building retrofits and energy‐efficient construction wouldrequire a further 16 million

workers.Buttheseopportunitiesareoftenindifferentlocations,skillsetsandsectors

thanthejobsthatwillbelostasfossilfuelsdecline.Inourpathway,around5millionjobs

arelost.Mostofthosejobsarelocatedclosetofossilfuelresources,andmanyarewell

paid,meaningstructuralchangescancauseshocksforcommunitieswithimpactsthat

persist over time. This requires careful policy attention to address the employment

PRIORITYACTION



18 International Energy Agency | Special Report

losses.Itwillbevitaltominimisehardshipsassociatedwiththesedisruptions,suchasby

retrainingworkers,locatingnewcleanenergyfacilitiesinheavilyaffectedareaswherever

possible,andprovidingregionalaid.

Global employment in energy supply in the net zero pathway, 2019-2030



Anenergysectordominatedbyrenewables

Inthenetzeropathway,globalenergydemandin2050isaround8%smallerthantoday,

but it serves an economy more than twice as big and a population with 2 billion more

people.Moreefficientuseofenergy,resourceefficiencyandbehaviouralchangescombine

tooffsetincreasesindemandforenergyservicesastheworldeconomygrowsandaccessto

energyisextendedtoall.

Insteadoffossilfuels,theenergysectorisbasedlargelyonrenewableenergy.Two‐thirds

oftotalenergysupplyin2050isfromwind,solar,bioenergy,geothermalandhydroenergy.

Solar becomes the largest source, accounting for one‐fifth of energy supplies. Solar PV

capacityincreases20‐foldbetweennowand2050,andwindpower11‐fold.

Netzeromeansahugedeclineintheuseoffossilfuels.Theyfallfromalmostfour‐fifthsof

totalenergysupplytodaytoslightlyoverone‐fifthby2050.Fossilfuelsthatremainin2050

areusedingoodswherethecarbonisembodiedintheproductsuchasplastics,infacilities

fittedwithCCUS,andinsectorswherelow‐emissionstechnologyoptionsarescarce.

Electricityaccountsforalmost50%oftotalenergyconsumptionin2050.Itplaysakeyrole

acrossallsectors–fromtransportandbuildingstoindustry–andisessentialtoproducelow‐

emissionsfuelssuchashydrogen.Toachievethis,totalelectricitygenerationincreasesover

20

40

60

2019 2030

Millionjobs

Bioenergy

Electricity

Coal

Oilandgas

Losses

Growth



Summary for policy makers 19

two‐and‐a‐half‐timesbetweentodayand2050.Atthesametime,noadditionalnewfinal

investmentdecisionsshouldbetakenfornewunabatedcoalplants,theleastefficientcoal

plants are phased out by 2030, and the remaining coal plants still in use by 2040 are

retrofitted.By2050,almost90%ofelectricitygenerationcomesfromrenewablesources,

withwindandsolarPVtogetheraccountingfornearly70%.Mostoftheremaindercomes

fromnuclear.

Emissionsfromindustry,transportandbuildingstakelongertoreduce.Cuttingindustry

emissionsby95%by2050involvesmajoreffortstobuildnewinfrastructure.Afterrapid

innovationprogressthroughR&D,demonstrationandinitialdeploymentbetweennowand

2030tobringnewcleantechnologiestomarket,theworldthenhastoputthemintoaction.

Everymonthfrom2030onwards,tenheavyindustrialplantsareequippedwithCCUS,three

newhydrogen‐basedindustrialplantsarebuilt,and2GWofelectrolysercapacityareadded

atindustrialsites.Policiesthatendsalesofnewinternalcombustionenginecarsby2035and

boostelectrificationunderpinthemassivereductionintransportemissions.In2050,carson

theroadworldwiderunonelectricityorfuelcells.Low‐emissionsfuelsareessentialwhere

energyneedscannoteasilyoreconomicallybemetbyelectricity.Forexample,aviationrelies

largelyonbiofuelsandsyntheticfuels,andammoniaisvitalforshipping.Inbuildings,bans

onnewfossilfuelboilersneedtostartbeingintroducedgloballyin2025,drivingupsalesof

electricheatpumps.Mostoldbuildingsandallnewonescomplywithzero‐carbon‐ready

buildingenergycodes.



Set near-term milestones to get on track for long-term targets

Governmentsneedtoprovidecrediblestep‐by‐stepplanstoreachtheirnetzerogoals,

buildingconfidenceamonginvestors,industry,citizensandothercountries.

Governments must put inplacelong‐term policyframeworks to allow all branchesof

governmentandstakeholderstoplanforchangeandfacilitatean orderly transition.

Long‐termnationallow‐emissionsstrategies,calledforbytheParisAgreement,canset

outavisionfornationaltransitions,asthisreporthasdoneonagloballevel.Theselong‐

termobjectivesneedtobelinkedtomeasurableshort‐termtargetsand policies.Our

pathwaydetailsmorethan400sectoralandtechnologymilestonestoguidetheglobal

journeytonetzeroby2050.

 

Azero‐carbon‐readybuildingishighlyenergyefficientandeitherusesrenewableenergydirectlyorusesan

energysupplythatwillbefullydecarbonisedby2050,suchaselectricityordistrictheat.

PRIORITYACTION

20 International Energy Agency | Special Report

Key milestones in the pathway to net zero

‐5

2020 2025 2030 2035 2040 2045 2050

GtCO₂

Buildings Transport Industry Electricityandheat Other

2045

150 Mtlow‐carbonhydrogen

850GWelectrolysers

435Mtlow‐carbonhydrogen

3000GWelectrolysers

4GtCO

captured

Phase‐outof

unabatedcoalin

advancedeconomies

2030

Universalenergyaccess

60%ofglobalcar

salesareelectric

1020GWannualsolar

andwindadditions

Allnewbuildingsare

zero‐carbon‐ready

Mostnewclean

technologiesin

heavyindustry

demonstrated

atscale

Allindustrial

electricmotorsales

arebestinclass

NonewICEcarsales

2035

Overallnet‐zero

emissionselectricity

inadvanced

economies

Mostappliancesand

coolingsystemssold

arebestinclass

50%ofheavytruck

salesareelectric

7.6GtCO

captured

Nonewunabated

coalplantsapproved

fordevelopment

2021

2025

Nonewsalesof

fossilfuelboilers

2040

Morethan90%of

heavyindustrial

productionis

low‐emissions

2050

Almost70%of

electricitygeneration

globallyfromsolarPV

andwind

Morethan85%

ofbuildingsare

zero‐carbon‐ready

50%ofheatingdemand

metbyheatpumps

Phase‐outofall

unabatedcoalandoil

powerplants

Net‐zeroemissions

electricityglobally

50%offuelsused

inaviationare

low‐emissions

Around90%of

existingcapacityin

heavyindustries

reachesendof

investmentcycle

50%ofexisting

buildingsretrofitted

tozero‐carbon‐ready

levels

Nonewoilandgas

fieldsapprovedfor

development;no

newcoalminesor

mineextensions

Summary for policy makers 21

Thereisnoneedforinvestmentinnewfossilfuelsupplyinournetzero

pathway

Beyond projects already committed as of 2021, there are no new oil and gas fields

approvedfordevelopmentinourpathway,andnonewcoalminesormineextensionsare

required.Theunwaveringpolicyfocusonclimatechangeinthenetzeropathwayresultsin

a sharp decline in fossil fuel demand, meaning that the focus for oil and gas producers

switches entirely to output – and emissions reductions – from the operation of existing

assets.Unabatedcoaldemanddeclinesby98%tojustless than 1%oftotalenergy

usein2050.Gasdemanddeclinesby55%to1750billioncubicmetresandoildeclinesby

75%to24millionbarrelsperday(mb/d),fromaround90mb/din2020.

Cleanelectricitygeneration,networkinfrastructureandend‐usesectorsarekeyareasfor

increasedinvestment.Enablinginfrastructureandtechnologiesarevitalfortransforming

theenergysystem.Annualinvestmentintransmissionanddistributiongridsexpandsfrom

USD260billiontodaytoUSD820billionin2030.Thenumberofpublicchargingpointsfor

EVsrisesfromaround1milliontodayto40millionin2030,requiringannualinvestmentof

almostUSD90billionin2030.AnnualbatteryproductionforEVsleapsfrom160gigawatt‐

hours(GWh)todayto6600GWhin2030–theequivalentofaddingalmost20gigafactories



eachyearforthenexttenyears.Andtherequiredroll‐outofhydrogenandCCUSafter2030

means laying the groundwork now: annual investment in CO

 pipelines and hydrogen‐

enablinginfrastructureincreasesfromUSD1billiontodaytoaroundUSD40billionin2030.

Drive a historic surge in clean energy investment

Policiesneedtobedesignedtosendmarketsignalsthatunlocknewbusinessmodels

andmobiliseprivatespending,especiallyinemergingeconomies.

Accelerateddeliveryofinternationalpublicfinancewillbecriticaltoenergytransitions,

especiallyindevelopingeconomies,butultimatelytheprivatesectorwillneedtofinance

most of the extra investment required. Mobilising the capital for large‐scale

infrastructurecallsforcloserco‐operation between developers, investors, public

financialinstitutionsandgovernments.Reducingrisksforinvestorswillbeessentialto

ensuresuccessfulandaffordablecleanenergytransitions.Manyemergingmarketand

developingeconomies,whichrelymainlyonpublicfundingfornewenergyprojectsand

industrialfacilities,willneedtoreformtheirpolicyandregulatoryframeworkstoattract

moreprivatefinance.Internationalflowsoflong‐termcapitaltotheseeconomieswillbe

needed to support the development of both existing and emergingcleanenergy

technologies.

Batterygigafactorycapacityassumption=35gigawatt‐hoursperyear.

PRIORITYACTION



22 International Energy Agency | Special Report

Clean energy investment in the net zero pathway



Anunparalleledcleanenergyinvestmentboomliftsglobaleconomicgrowth

Total annual energy investment surges to USD 5 trillion by 2030, adding an extra

0.4percentagepointayeartoannualglobalGDPgrowth,basedonourjointanalysiswith

the International Monetary Fund. This unparalleled increase – with investment in clean

energy and energy infrastructure morethantriplingalreadyby2030 – brings significant

economicbenefitsastheworldemergesfromtheCovid‐19crisis.Thejumpinprivateand

governmentspendingcreatesmillionsofjobsincleanenergy,includingenergyefficiency,as

wellasintheengineering,manufacturingandconstructionindustries.Allofthisputsglobal

GDP4%higherin2030thanitwouldbebasedoncurrenttrends.

Governments have a key role in enabling investment‐led growth and ensuring that the

benefitsaresharedbyall.Therearelargedifferencesinmacroeconomicimpactsbetween

regions. But government investment and public policies are essential to attract large

amountsofprivatecapitalandtohelpoffsetthedeclinesinfossilfuelincomethatmany

countrieswillexperience.Themajorinnovationeffortsneededtobringnewcleanenergy

technologies to market could boost productivity and create entirely new industries,

providingopportunitiestolocatetheminareasthatseejoblossesinincumbentindustries.

Improvementsinairqualityprovidemajorhealthbenefits,with2millionfewerpremature

deathsglobally fromairpollution in2030 than todayinour netzeropathway.Achieving

universalenergyaccessby2030wouldprovideamajorboosttowell‐beingandproductivity

indevelopingeconomies.

1

2

3

4

5

2016‐20 2030 2050

TrillionUSD(2019)

End‐use

Energyinfrastructure

Electricitygeneration

Low‐emissionsfuels



Summary for policy makers 23

Newenergysecurityconcernsemerge,andoldonesremain

Thecontractionofoilandnaturalgasproductionwillhavefar‐reachingimplicationsforall

thecountriesandcompaniesthatproducethesefuels.Nonewoilandnaturalgasfieldsare

neededinourpathway,andoilandnaturalgassuppliesbecomeincreasinglyconcentrated

inasmallnumberoflow‐costproducers.Foroil,theOPECshareofamuch‐reducedglobal

oilsupplyincreasesfromaround37%inrecentyearsto52%in2050,alevelhigherthanat

anypointinthehistoryofoilmarkets.Yetannualpercapitaincomefromoilandnaturalgas

inproducereconomiesfallsbyabout75%,fromUSD1800inrecentyearstoUSD450bythe

2030s,whichcouldhaveknock‐onsocietaleffects.Structuralreformsandnewsourcesof

revenueareneeded,eventhoughtheseareunlikelytocompensatefullyforthedropinoil

andgasincome.Whiletraditionalsupplyactivitiesdecline,theexpertiseoftheoilandnatural

gasindustryfitswellwithtechnologiessuchashydrogen,CCUSandoffshorewindthatare

neededtotackleemissionsinsectorswherereductionsarelikelytobemostchallenging.

Theenergytransitionrequiressubstantialquantitiesofcriticalminerals,andtheirsupply

emergesasasignificantgrowtharea.Thetotalmarketsizeofcriticalmineralslikecopper,

cobalt,manganeseandvariousrareearthmetalsgrowsalmostsevenfoldbetween2020and

2030inthenetzeropathway.Revenuesfromthosemineralsarelargerthanrevenuesfrom

coalwellbefore2030.Thiscreatessubstantialnewopportunitiesforminingcompanies.It

alsocreatesnewenergysecurityconcerns,includingpricevolatilityandadditionalcostsfor

transitions,ifsupplycannotkeepupwithburgeoningdemand.

The rapid electrification of all sectors makes electricity even more central to energy

securityaroundtheworldthanitistoday.Electricitysystemflexibility–neededtobalance

windandsolarwithevolvingdemandpatterns–quadruplesby2050evenasretirementsof

fossilfuelcapacityreduceconventionalsourcesofflexibility.Thetransitioncallsformajor

increases in all sources of flexibility: batteries, demand response and low‐carbonflexible

powerplants,supportedbysmarterandmoredigitalelectricitynetworks.Theresilienceof

electricitysystemstocyberattacksandotheremergingthreatsneedstobeenhanced.

Address emerging energy security risks now

Ensuring uninterrupted and reliable supplies of energy and critical energy‐related

commoditiesataffordablepriceswillonlyriseinimportanceonthewaytonetzero.

Thefocusofenergysecuritywillevolveasrelianceonrenewableelectricitygrowsand

the role of oil and gas diminishes. Potential vulnerabilities from the increasing

importance of electricity include the variability of supply andcybersecurityrisks.

Governmentsneedtocreatemarketsforinvestmentinbatteries,digitalsolutionsand

electricity grids that reward flexibility and enable adequate and reliable supplies of

electricity.Thegrowingdependenceoncriticalmineralsrequiredforkeycleanenergy

technologies calls for new international mechanisms to ensure both the timely

PRIORITYACTION



24 International Energy Agency | Special Report

availabilityofsuppliesandsustainableproduction.Atthesametime,traditionalenergy

securityconcernswillnotdisappear,asoilproductionwillbecomemoreconcentrated.

Global energy security indicators in the net zero pathway

Note:mb/d=millionbarrelsperday;Mt=milliontonnes.

Internationalco‐operationispivotalforachievingnet‐zeroemissionsby2050

Making net‐zero emissions a reality hinges on a singular, unwavering focus from all

governments – working togetherwith one another, and with businesses, investors and

citizens.Allstakeholdersneedtoplaytheirpart.Thewide‐rangingmeasures adopted by

governmentsatalllevelsinthenetzeropathwayhelptoframe,influenceandincentivise

the purchase by consumers and investment by businesses. This includes how energy

companiesinvestinnewwaysofproducingandsupplyingenergyservices,howbusinesses

investinequipment,andhowconsumerscoolandheattheirhomes,powertheirdevicesand

travel.

Underpinningallthesechangesarepolicydecisionsmadebygovernments.Devisingcost‐

effectivenationalandregionalnetzeroroadmapsdemandsco‐operationamongallpartsof

governmentthatbreaksdownsilosandintegratesenergyintoeverycountry’spolicymaking

onfinance,labour,taxation,transportandindustry.Energyorenvironmentministriesalone

cannotcarryoutthepolicyactionsneededtoreachnetzeroby2050.

Changesinenergyconsumptionresultinasignificantdeclineinfossilfueltaxrevenues.In

manycountriestoday, taxes ondiesel,gasolineand other fossilfuelconsumptionarean

importantsourceofpublicrevenues,providingasmuchas10%insomecases.Inthenetzero

pathway,taxrevenuefromoilandgasretailsalesfallsbyabout40%between2020and2030.

Managingthisdeclinewillrequirelong‐termfiscalplanningandbudgetreforms.

10

20

30

40

50

2020 2050

20%

40%

60%

80%

100%

2020 2050

20

40

60

80

100

2020 2050

Oilsupply

(mb/d)

Shareofsolar PVandwind

inelectricitygeneration

Criticalmineralsdemand

(Mt)

52%

OPECshare

34%

Summary for policy makers 25

The net zero pathway relies on unprecedented international co‐operation among

governments,especiallyon innovationandinvestment.TheIEAstandsreadyto support

governmentsinpreparingnationalandregionalnetzeroroadmaps,toprovideguidanceand

assistanceinimplementingthem,andtopromoteinternationalco‐operationtoaccelerate

theenergytransitionworldwide.

Take international co-operation to new heights

Thisisnotsimplyamatterofallgovernmentsseekingtobringtheirnationalemissions

tonetzero–itmeanstacklingglobalchallengesthroughco‐ordinatedactions.

Governmentsmustworktogetherinaneffectiveandmutuallybeneficial manner to

implement coherent measures that cross borders. This includes carefully managing

domesticjobcreationandlocalcommercialadvantageswiththecollectiveglobalneed

for clean energy technology deployment. Accelerating innovation, developing

international standards and co‐ordinating to scale up clean technologies needs to be

doneinawaythatlinksnationalmarkets.Co‐operationmustrecognisedifferencesinthe

stagesofdevelopmentofdifferentcountriesandthevaryingsituationsofdifferentparts

ofsociety.Formanyrichcountries,achievingnet‐zeroemissionswillbemoredifficult

and costly without international co‐operation. For many developing countries, the

pathwaytonetzerowithoutinternationalassistanceisnotclear.Technicalandfinancial

supportisneededtoensuredeploymentofkeytechnologiesandinfrastructure.Without

greaterinternationalco‐operation,globalCO

emissionswillnotfalltonetzeroby2050.

Global energy-related CO

emissions in the net zero pathway and

Low International Co-operation Case

Note:Gt=gigatonnes.

10

20

30

40

2010 2030 2050 2070 2090

GtCO

NZE

LowInternationalCooperation Case

PRIORITYACTION

Net Zero Emissions by 2050 Interactive iea.li/nzeroadmap

2035

2020

2030

Industry

Other

Power

Transport

Unabated coal, natural gas

and oil account for over 60%

of total electricity generation

Solar PV and wind

accounts for almost

10% of total electricity

generation

Retroit rates below

1% globally

Fossil fuels account for

almost 80% of TES

40 Mt CO

captured

5% of global car

sales are electric

33.9

Total CO

emissions (Gt)

Buildings

2.9Gt

8.5Gt

1.9Gt

13.5Gt

7.2Gt

From 2021:

No new oil and gas

ields approved for

development;

no new coal mines

or mine extensions

From 2021:

No new unabated

coal plants approved

for development

Most new clean

technologies in heavy

industry demonstrated

at scale

60% of global car

sales are electric

150 Mt low-carbon

hydrogen; 850 GW

electrolysers

All new buildings are

zero-carbon-ready

Universal

energy access

1 020 GW annual

solar and wind

additions

Phase-out of unabated coal

in advanced economies

Industry

Other

Power

Transport

Buildings

1.8Gt

6.9Gt

0.9Gt

5.8Gt

5.7Gt

21.1

Total CO

emissions (Gt)

All industrial electric

motor sales are

best in class

Virtually all heavy industry

capacity additions are

innovative low-emissions

routes

No new internal

combustion

engine car sales

50% of heavy truck

sales are electric

4 Gt CO

captured

Overall net-zero emissions

electricity in advanced

economies

Most appliances and

cooling systems sold

are best in class

Capacity itted with

CCUS or co-iring

hydrogen-based

fuels reaches 6% of

total generation

Industry

Other

Power

Transport

Buildings

1.2Gt

5.2Gt

0.1Gt

2.1Gt

4.1Gt

12.8

Total CO

emissions (Gt)

2040

2050

Net Zero Emissions by 2050 Interactive iea.li/nzeroadmap

50% of existing

buildings retroitted to

zero-carbon-ready levels

Around 90% of

existing capacity in

heavy industries reaches

end of investment cycle

50% of fuels used

in aviation are

low-emissions

Oil demand is 50%

of 2020 level

Net-zero emissions

electricity globally

Phase-out of all

unabated coal and

oil power plants

Electrolyser capacity

reaches 2 400 GW

Industry

Other

Power

Transport

Buildings

0.7Gt

3.5Gt

-0.5Gt

-0.1Gt

2.7Gt

6.3

Total CO

emissions (Gt)

33.9

Total CO

emissions (Gt)

More than 90% of heavy

industrial production

is low-emissions

More than 85%

of buildings are

zero-carbon-ready

7.6 Gt CO

captured

Renewables reach

almost 90% of total

electricity generation

Almost 70% of

electricity generation

globally from solar PV

and wind

520 Mt

low-carbon

hydrogen

Industry

Other

Power

Transport

Buildings

0.1Gt

0.5Gt

-1Gt

-0.4Gt

0.7Gt

Total CO

emissions (Gt)



Chapter 1 | Announced net zero pledges and the energy sector 29

Chapter1

Announced net zero pledges and the energy sector

 Therehasbeena rapid increaseoverthelastyearin thenumber of governments

pledgingtoreducegreenhousegasemissionstonetzero.Netzeropledgestodate

coveraround70%ofglobalGDPandCO

emissions.However,fewerthanaquarter

of announced net zero pledges are fixed in domestic legislation and few are yet

underpinnedbyspecificmeasuresorpoliciestodelivertheminfullandontime.

 TheStatedPoliciesScenario(STEPS)takesaccountonlyofspecificpoliciesthatarein

placeorhavebeenannouncedbygovernments.Annualenergy‐relatedandindustrial

processCO

emissionsrisefrom34Gtin2020to36Gtin2030andremainaround

thisleveluntil2050.Ifemissionscontinueonthistrajectory,withsimilarchangesin

non‐energy‐relatedGHGemissions,thiswouldleadtoatemperatureriseofaround

2.7°Cby2100(witha50%probability). Renewablesprovide almost 55%ofglobal

electricitygenerationin2050(upfrom29%in2020),butcleanenergytransitionslag

inothersectors.Globalcoalusefallsby15%between2020and2050;oilusein2050

is15%higherthanin2020;andnaturalgasuseisalmost50%higher.

 The Announced Pledges Case (APC) assumes that all announced national net zero

pledges are achieved in full and on time, whether or not they are currently

underpinned by specific policies. Global energy‐related and industrial process CO



emissions fall to 30Gt in 2030 and 22Gt in 2050. Extending thistrajectory,with

similaractiononnon‐energy‐relatedGHGemissions,wouldleadtoatemperaturerise

in2100ofaround2.1°C(witha50%probability).Globalelectricitygenerationnearly

doubles to exceed 50000TWh in 2050. The share of renewables in electricity

generationrisestonearly70%in2050.Oildemanddoesnotreturntoits2019peak

and falls about 10% from 2020 to 80mb/d in 2050. Coal use drops by 50% to

2600Mtcein2050,whilenaturalgasuseexpandsby10%to4350bcmin2025and

remainsaboutthatlevelto2050.

 Efficiency, electrification and the replacement of coal by low‐emissions sources in

electricity generation play a central role in achieving net zerogoalsintheAPC,

especiallyovertheperiodto2030.Therelativecontributionsofnuclear,hydrogen,

bioenergyandCCUSvaryacrosscountries,dependingontheircircumstances.

 ThedivergenceintrendsbetweentheAPCandtheSTEPSshowsthedifferencethat

currentnetzeropledgescouldmake,whileunderliningatthesametimetheneedfor

concretepoliciesandshort‐termplansthat areconsistentwithlong‐termnetzero

pledges.However,theAPCalsostarklyhighlightsthatexistingnetzeropledges,even

ifdeliveredinfull,fallwellshortofwhatisnecessarytoreach global net‐zero

emissionsby2050.

SUMMARY



30 International Energy Agency | Special Report

1.1 Introduction

November2021willseethemostimportantUNFrameworkConventiononClimateChange

(UNFCCC)ConferenceoftheParties(COP26)sincetheParisAgreementwassignedin2015.

AsCOP26approaches,anincreasingnumberofcountrieshaveannouncedlong‐termgoals

to achieve net‐zero greenhouse gas (GHG) emissions over the coming decades. On

31March2021, the International Energy Agency(IEA) hosted a Net Zero Summit to take

stockofthegrowinglistofcommitmentsfromcountriesandcompaniestoreachthegoals

oftheParisAgreement,andtofocusontheactionsnecessarytostartturningthosenetzero

goalsintoreality.

Achievingthosegoalswillbedemanding.TheCovid‐19pandemicdeliveredamajorshockto

theworldeconomy,resultinginanunprecedented5.8%declineinCO

emissionsin2020.

However,ourmonthlydatashowthatglobalenergy‐relatedCO

emissionsstartedtoclimb

againinDecember2020,andweestimatethattheywillreboundtoaround33gigatonnesof

carbondioxide(GtCO

)in2021,only1.2%belowthelevelin2019(IEA,2021).Sustainable

economicrecoverypackages

offeredauniqueopportunitytomake2019thedefinitivepeak

inglobalemissions,buttheevidencesofarpointstoareboundinemissionsinparallelwith

renewedeconomicgrowth,atleastinthenearterm(IEA,2020a).

RecentIEAanalysesexaminedthetechnologiesandpoliciesneededforcountriesand

regions to achieve net‐zero emissions energy systems. The World Energy Outlook 2020

examinedwhatwouldbeneededovertheperiodto2030toputtheworldonapathtowards

net‐zero emissions by 2050 in the context of the pandemic‐related economic recovery

(IEA,2020b).TheFasterInnovationCaseinEnergyTechnologyPerspectives2020explored

whethernet‐zeroemissionscouldbeachievedgloballyby2050throughacceleratedenergy

technologydevelopmentanddeploymentalone:itshowedthat,relativetobaselinetrends,

almost half of the emissions savings needed in 2050 to reach net‐zero emissions rely on

technologiesthatarenotyetcommerciallyavailable(IEA,2020c).

Thisspecialreport,preparedattherequestoftheUKPresidentoftheCOP26,incorporates

theinsightsandlessonslearnedfrombothreportstocreateacomprehensiveanddetailed

pathway, or roadmap, to achieve net‐zero energy‐related and industrial process CO



emissionsgloballyby2050.Itassessesthecostsofachievingthisgoal,thelikelyimpactson

employmentandtheeconomy,andthewiderimplicationsfortheworld.Italsohighlights

thekeymilestonesfortechnologies,infrastructure,investmentandpolicythatareneeded

alongtheroadto2050.

Thisreportissetoutinfourchapters:

 Chapter 1 explores the outlook for global CO

2

emissions and energy supply and use

basedonexistingpoliciesandpledges.Itsetsoutprojectionsofglobalenergyuseand

emissionsbasedontheStatedPoliciesScenario(STEPS),whichincludesonlythefirm

policies that are in placeor havebeen announced bycountries, including Nationally



Chapter 1 | Announced net zero pledges and the energy sector 31

1

Determined Contributions. It also examines the Announced Pledges Case (APC), a

variantoftheSTEPSthatassumesthatallofthenetzerotargetsannouncedbycountries

aroundtheworldtodatearemetinfull.

 Chapter2presentstheNet‐ZeroEmissionsby2050Scenario(NZE),whichdescribes

howenergydemandandtheenergymixwillneedtoevolveiftheworldistoachieve

net‐zeroemissionsby2050.Italsoassessesthecorrespondinginvestmentneedsand

exploreskeyuncertaintiessurroundingtechnologyandconsumerbehaviour.

 Chapter3examinestheimplicationsoftheNZEforvarioussectors,coveringfossilfuel

supply, the supply of low‐emissions fuels (such as hydrogen, ammonia, biofuels,

syntheticfuelsandbiomethane)andtheelectricity,transport,industryandbuildings

sectors.Ithighlightsthekeychangesrequiredtoachievenet‐zeroemissionsintheNZE

andthemajormilestonesthatareneededalongtheway.

 Chapter4explorestheimplicationsoftheNZEfortheeconomy,theenergyindustry,

citizensandgovernments.

1.2 Emissionsreductiontargetsandnetzeropledges

1.2.1 NationallyDeterminedContributions

Under the Paris Agreement, Parties

are required to submit Nationally Determined

Contributions(NDCs)totheUNFCCCandtoimplementpolicieswiththeaimofachieving

theirstatedobjectives.Theprocessisdynamic;itrequiresPartiestoupdatetheirNDCsevery

fiveyearsinaprogressivemannertoreflectthehighestpossibleambition.Thefirstroundof

NDCs, submitted by 191countries, covers more than 90% of global energy‐related and

industrial process CO

2

emissions.

The first NDCs included some targets that were

unconditional and others that were conditional on international support for finance,

technologyandothermeansofimplementation.

As of 23 April 2021, 80countries have submitted new or updatedNDCstotheUNFCCC,

coveringjustover40%ofglobalCO

 emissions (Figure1.1).

Many of the updated NDCs

include more stringent targets than in the initial round of NDCs, or targets for a larger

number of sectors or for a broader coverage of GHGs. In addition, 27countries and the

EuropeanUnionhavecommunicatedlong‐termlowGHGemissionsdevelopmentstrategies

totheUNFCCC,asrequestedbytheParisAgreement.Someofthesestrategiesincorporate

anetzeropledge.

Partiesreferstothe197membersoftheUNFCCCwhichincludesallUnitedNationsmemberstates,United

NationsGeneralAssemblyObserverStateofPalestine,UNnon‐memberstatesNiueandtheCookIslandsand

theEuropeanUnion.

Unless otherwise stated, CO

 emissions in this report refer to energy‐related and industrial process CO



emissions.

SeveralcountrieshaveindicatedthattheyintendtosubmitneworupdatedNDCslaterin2021orin2022.



32 International Energy Agency | Special Report

Figure 1.1 ⊳ Number of countries with NDCs, long-term strategies and net

zero pledges, and their shares of 2020 global CO

emissions

IEA.Allrightsreserved.

Around 40% of countries that have ratified the Paris Agreement have updated their NDCs,

but net zero pledges cover around 70% of global CO

emissions

1.2.2 Net‐zeroemissionspledges

Therehasbeenarapidincreaseinthenumberofgovernmentsmakingpledgestoreduce

GHGemissionstonetzero(Figure1.2).IntheParisAgreement,countriesagreedto“achieve

abalancebetweenanthropogenicemissionsbysourcesandremovalsbysinksofgreenhouse

gasesinthesecond‐halfofthecentury”.TheIntergovernmentalPanelonClimateChange

(IPCC)SpecialReport onGlobalWarming of1.5°Chighlightedtheimportanceofreaching

net‐zero CO

 emissions globally by mid‐century or sooner to avoid the worstimpactsof

climatechange(IPCC,2018).

Net‐zeroemissionspledgeshavebeen announced by national governments, subnational

jurisdictions, coalitions

and a large number of corporate entities (see Spotlight). As of

23April2021, 44countries and the European Union have pledged to meet a net‐zero

emissions target:in total they account for around 70% of global CO

 emissions and GDP

(Figure1.3). Of these, ten countries have made meeting their net zero target a legal

obligation,eightareproposingtomakeitalegalobligation,andtheremainderhavemade

theirpledgesinofficialpolicydocuments.

Examplesinclude:theUN‐ledClimateAmbitionAllianceinwhichsignatoriessignaltheyareworkingtowards

achievingnet‐zeroemissionsby2050;andtheCarbonNeutralityCoalitionlaunchedattheUNClimateSummit

in2017,inwhichsignatoriescommittodeveloplong‐termlowGHGemissionsstrategiesinlinewithlimiting

temperaturerisesto1.5°C.

25%

50%

75%

100%

50

100

150

200

First

NDC

Neworupdated

NDC

NZEpledges Long‐term

strategy

NZEtargetsin

law

Numberofcountries

Shareofglobal2020CO₂emissions(rightaxis)



Chapter 1 | Announced net zero pledges and the energy sector 33

1

Figure 1.2 ⊳ Number of national net zero pledges and share of global CO

emissions covered



IEA.Allrightsreserved.

There has been a significant acceleration in net-zero emissions pledges

announced by governments, with an increasing number enshrined in law

Notes:Inlaw=anetzeropledgehasbeenapprovedbyparliamentandislegallybinding.Proposed=anet

zeropledgehasbeenproposedtoparliamenttobevotedintolaw.Inpolicydocument=anetzeropledgehas

beenproposedbutdoesnothavelegallybindingstatus.

Figure 1.3 ⊳ Coverage of announced national net zero pledges

IEA.Allrightsreserved.

Countries accounting for around 70% of global CO

emissions and GDP have set net zero

pledges in law, or proposed legislation or in an official policy document

Note:GDP=grossdomesticproductatpurchasingpowerparity.

20%

40%

60%

80%

100%

10

20

30

40

50

2015 2016 2017 2018 2019 2020 2021

ShareofCO₂emissions

Countrieswithpledges

Inlaw Proposed Inpolicydocuments GlobalCO₂covered(rightaxis)

20% 40% 60% 80% 100%

GDP

CO₂emissions

Population

Countries

Advancedeconomies Emergingmarketanddevelopingeconomies Notcovered



34 International Energy Agency | Special Report

IncontrasttosomeoftheshortertermcommitmentscontainedwithinNDCs,fewnetzero

pledges are supported by detailed policies and firm routes to implementation. Net‐zero

emissionspledgesalsovaryconsiderablyintheirtimescaleandscope.Somekeydifferences

include:

 GHGcoverage.MostpledgescoverallGHGemissions,butsomeincludeexemptionsor

differentrulesforcertaintypesofemissions.Forexample,New Zealand’s net zero

pledgecoversallGHGsexceptbiogenicmethane,whichhasaseparatereductiontarget.

 Sectoralboundaries.Somepledgesexcludeemissionsfromspecificsectorsoractivities.

For example, the Netherlands aims to achieve net‐zero GHG emissions only in its

electricitysector(aspartofanoverallaimtoreducetotalGHGemissionsby95%),and

somecountries,includingFrance,PortugalandSweden,excludeinternationalaviation

andshipping.

 Useofcarbondioxideremoval(CDR).Pledgestakevaryingapproachestoaccountfor

CDRwithinacountry’ssovereignterritory.CDRoptionsincludenaturalCO

sinks,such

as forests and soils, as well as technological solutions, such as direct air capture or

bioenergy with carbon capture and storage. For example, Uruguayhasstatedthat

naturalCO

sinkswillbeusedtohelpitreachnet‐zeroemissions,whileSwitzerlandplans

touseCDRtechnologiestobalanceapartofitsresidualemissionsin2050.

 Use of international mitigation transfers.SomepledgesallowGHGmitigationthat

occursoutsideacountry’sborderstobecountedtowardsthenetzerotarget,suchas

throughthetransferofcarboncredits,whileothersdonot.Forexample,Norwayallows

thepotentialuseofinternationaltransfers,whileFranceexplicitlyrulesthemout.Some

countries,suchasSweden,allowsuchtransfersbutspecifyanupperlimittotheiruse.

 Timeframe.Themajorityofpledges,covering35%ofglobalCO

 emissions in 2020,

targetnet‐zeroemissionsby2050,butFinlandaimstoreachthatgoalby2035,Austria

andIcelandby2040andSwedenby2045.Amongothers,thePeople’sRepublicofChina

(hereafterChina)andUkrainehavesetatargetdateafter2050.

How are businesses responding to the need

to reach net-zero emissions?

Therehasbeenarapid rise in net‐zero emissionsannouncements from companiesin

recentyears:asofFebruary2021,around110companiesthatconsumelargeamounts

of energy directly or produce energy‐consuming goods have announced net‐zero

emissionsgoalsortargets.

Around60‐70%ofglobalproductionofheatingandcoolingequipment,roadvehicles,

electricity and cement is from companies that have announced net‐zero emissions

targets (Figure1.4). Nearly 60% of gross revenue in the technology sector is also

generated by companies with net‐zeroemissiontargets.Inother sectors, net zero

SPOTLIGHT



Chapter 1 | Announced net zero pledges and the energy sector 35

1

pledgescover30‐40%ofairandshippingoperations,15%oftransportlogisticsand10%

of construction.



Allthese shares are likely to keepgrowingasmorecompaniesmake

pledges.

Figure 1.4 ⊳ Sectoral activity of large energy-related companies with

announced pledges to reach net-zero emissions by 2050

IEA.Allrightsreserved.

Some sectors are more advanced in terms of the extent

of net zero targets by companies active in the sector

Notes:Scope1=directemissionsfromenergyandothersourcesownedorcontrolled.Scope2=indirect

emissionsfromtheproductionofelectricityandheat,andfuelspurchasedandused.Scope3=indirect

emissionsfromsourcesnotownedordirectlycontrolledbutrelatedtotheiractivities(suchasemployee

travel, extraction, transport and production of purchased materials and fuels, and end‐use of fuels,

productsandservices).PartialvaluechainincludesScope1and2emissionsandScope3emissionsin

specificgeographiclocationsorsectionsofacompany’svaluechain.

Source:IEAanalysisbasedoncompanyreportsfromthelargest10‐25companieswithineachsector.

Companypledgesmaynotbereadilycomparable.Mostcompaniesaccountforemissions

andsetnetzeropledgesbasedontheGHGProtocol(WRI,WBCSD, 2004), but the

coverageandtimeframeofthesepledgesvarieswidely.Somecover only their own

emissions,forexamplebyshiftingtotheuseofzero‐emissionselectricityinofficesand

production facilities, and by eliminating the use of oil in transport or industrial

operations,e.g.FedEx,ArcelorMittalandMaersk.Othersalsocoverwideremissionsfrom

certain parts of their values chains, e.g. Renault in Europe, or all indirect emissions

relatedtotheiractivities,e.g.Daikin,Toyota,Shell,EniandHeidelberg.Around60%of

pledgesaimtoachievenet‐zeroemissionsby2050,butseveralcompanieshavesetan

earlierdeadlineof2030or2040.

Around40%ofcompaniesthathaveannouncednetzeropledgeshaveyettosetouthow

theyaimtoachievethem.Forthosewithdetailedplans,themainoptionsincludedirect

emissionsreductions,useofCO

removaltechnologies,suchasafforestation,bioenergy

20% 40% 60% 80% 100%

Construction

Transportlogistics

Oilandgas

Shippingoperations

Aircraft

Passengerairlines

Steel

Technology

Power

Roadvehicles

Cement

Heatingandcooling

Scope1+2+3 Partialvaluechain Scope1+2 Notarget



36 International Energy Agency | Special Report

with carbon capture, utilisation and storage (CCUS), or direct air capture with CO



storage,andpurchasingemissions(creditsgeneratedthroughemissionsreductionsthat

occurelsewhere).Theuseofoffsetscouldbeacost‐effectivemechanismtoeliminate

emissionsfrompartsofvaluechainswhereemissionsreductionsaremostchallenging,

providedthatschemestogenerateemissionscreditsresultinpermanent,additionaland

verifiedemissionsreductions.However,thereislikelytobealimitedsupplyofemissions

credits consistent with net‐zero emissions globally and the useofsuchcreditscould

divertinvestmentfromoptionsthatenabledirectemissionsreductions.

1.3 OutlookforemissionsandenergyintheSTEPS

TheIEAStatedPoliciesScenario(STEPS)illustratestheconsequencesofexistingandstated

policiesfortheenergysector.Itdrawsonthelatestinformationregardingnationalenergy

andclimateplansandthepoliciesthatunderpinthem.Ittakesaccountofallpoliciesthatare

backedbyrobustimplementinglegislationorregulatorymeasures,includingtheNDCsthat

countrieshaveputforwardundertheParisAgreementuptoSeptember2020andtheenergy

componentsofannouncedeconomicstimulusandrecoverypackages.Sofar,fewnet‐zero

emissionspledgeshavebeenbackedupbydetailedpolicies,implementationplansorinterim

targets:mostnetzeropledgesthereforearenotincludedintheSTEPS.

1.3.1 CO

2

emissions

GlobalCO

emissionsintheSTEPSbringaboutonlyamarginaloverallimprovementinrecent

trends.Switchingtorenewablesleadstoanearlypeakinemissionsintheelectricitysector,

butreductionsacrossallsectorsfallfarshortofwhatisrequiredfornet‐zeroemissionsin

2050.AnnualCO

emissionsreboundquicklyfromthedipcausedbytheCovid‐19pandemic

in2020:theyincreasefrom34Gtin2020to36Gtin2030andthenremainaroundthislevel

until2050(Figure1.5).Ifemissionstrendsweretocontinuealongthesametrajectoryafter

2050, and with commensurate changes in other sources of GHG emissions, the global

averagesurfacetemperaturerisewouldbearound2.7°Cin2100(witha50%probability).

Thereisstrongdivergencebetweentheoutlookforemissionsinadvancedeconomiesonone

hand and the emerging market and developing economies on the other. In advanced

economies,despiteasmallreboundintheearly2020s,CO

emissionsdeclinebyabouta

thirdbetween2020and2050,thankstotheimpactofpoliciesandtechnologicalprogressin

reducingenergydemandandswitchingtocleanerfuels.Inemergingmarketanddeveloping

economies, energy demand continues to grow strongly because of increased population,

brisk economic growth, urbanisation and the expansion of infrastructure: these effects

outweigh improvements in energy efficiency and the deployment of clean technologies,

causingCO

2

emissionstogrowbyalmost20%bythemid‐2040s,beforedecliningmarginally

to2050.



Chapter 1 | Announced net zero pledges and the energy sector 37

1

Figure 1.5 ⊳ Energy-related and industrial process CO

emissions by region

and sector in the STEPS



IEA.Allrightsreserved.

Global CO

emissions rebound quickly after 2020 and then plateau,

with declines in advanced economies offset by increases elsewhere

Note:Other=agricultureandownuseintheenergysector.

1.3.2 Totalenergysupply,totalfinalconsumptionand

electricitygeneration

TheprojectedtrendsinCO

emissionsintheSTEPSresultfromchangesintheamountof

energyusedandthe mix of fuelsandtechnologies.Total energysupply(TES)

worldwide

risesbyjustover30%between2020and2050intheSTEPS(Figure1.6).Withoutaprojected

annualaveragereductionof2.2%inenergyintensity,i.e.energyuseperunitofGDP,TESin

2050wouldbearound85%higher.Inadvancedeconomies,energyusefallsbyaround5%to

2050,despitea75%increaseineconomicactivityovertheperiod.Inemergingmarketand

developingeconomies,energyuseincreasesby50%to2050,reflectingatriplingofeconomic

outputbetween2020and2050.DespitetheincreaseinGDPandenergyuseinemerging

marketanddevelopingeconomies,750millionpeoplestillhavenoaccesstoelectricityin

2050,morethan95%oftheminsub‐SaharanAfrica,and1.5billionpeoplecontinuetorely

onthetraditionaluseofbioenergyforcooking.

Theglobalfuelmixchangessignificantlybetween2020and2050.Coaluse,whichpeakedin

2014,fallsbyaround15%.Havingfallensharplyin2020duetothepandemic,oildemand

reboundsquickly,returningtothe2019levelof98millionbarrelsperday(mb/d)by2023

andreachingaplateauofaround104mb/dshortlyafter2030.Naturalgasdemandincreases

from3900billioncubicmetres(bcm)in2020to4600bcmin2030and5700bcmin2050.

Nuclearenergygrowsby15%between2020and2030,mainlyreflectingexpansionsinChina.

Totalprimaryenergy supply(ortotalprimaryenergy demand)hasbeen renamedtotalenergy supplyin

accordancewiththeInternationalRecommendationsforEnergyStatistics(IEA,2020d).

10

20

30

40

2010 2030 2050

GtCO₂

Region

Advancedeconomies

Emergingmarketand

developingeconomies

Internationalbunkers

2010 2030 2050

Sector

Electricity

Industry

Transport

Buildings

Other



38 International Energy Agency | Special Report

Figure 1.6 ⊳ Total energy supply and CO

emissions intensity in the STEPS



IEA.Allrightsreserved.

Coal use declines, oil plateaus and renewables and natural gas grow substantially to 2050

Note:EJ=exajoule;MJ=megajoule;TES=totalenergysupply.

TotalfinalconsumptionincreasesinallsectorsintheSTEPS,ledbyelectricityandnaturalgas

(Figure1.7).Allthegrowthisinemergingmarketanddevelopingeconomies.Thebiggest

changeinenergyuseisintheelectricitysector(Figure1.8). Global electricity demand

increasesby80%between2020and2050,arounddoubletheoverallrateofgrowthinfinal

energyconsumption.Morethan85%ofthegrowthinglobalelectricitydemandcomesfrom

emergingmarket and developingeconomies. Coal continues to playanimportantrolein

electricitygenerationinthoseeconomiesto2050,despitestronggrowthinrenewables:in

advancedeconomies,theuseofcoalforelectricitygenerationdropssharply.

Figure 1.7

⊳ Total final consumption by sector and fuel in the STEPS



IEA.Allrightsreserved.

Final energy consumption grows on average by 1% per year between 2020 and 2050,

with electricity and natural gas meeting most of the increase

15

30

45

60

50

100

150

200

2000 2010 2020 2030 2040 2050

gCO₂/MJ

Coal

Oil

Naturalgas Renewables

Traditionaluseofbiomass

Nuclear

CO₂intensityofTES

(rightaxis)

2010 2050

Industry TransportBuildings

2010 2050

50

100

150

200

250

2010 2050

Coal Oil Naturalgas Hydrogen Electricity

Heat ModernBioenergy Otherrenewables Traditionaluse

ofbiomass



Chapter 1 | Announced net zero pledges and the energy sector 39

1

Figure 1.8 ⊳ Electricity generation by fuel and share of coal in the STEPS



IEA.Allrightsreserved.

Emerging market and developing economies drive most of the increase in global

electricity demand, met mainly by renewables and gas, though coal remains important

1.3.3 Emissionsfromexistingassets

Theenergysectorcontainsalargenumberoflong‐livedandcapital‐intensiveassets.Urban

infrastructure, pipelines, refineries, coal‐fired power plants, heavy industrial facilities,

buildingsandlargehydropowerplantscanhavetechnicalandeconomiclifetimesofwell

over50years.Iftoday’senergyinfrastructurewastobeoperateduntiltheendofthetypical

lifetimeinamannersimilartothepast,weestimatethatthiswouldleadtocumulative

energy‐relatedandindustrialprocessCO

emissionsbetween2020and2050ofjustunder

650GtCO

.Thisisaround30%morethantheremainingtotalCO

2

budgetconsistentwith

limitingglobalwarmingto1.5°Cwitha50%probability(seeChapter2).

Theelectricitysectoraccountsformorethan50%ofthetotalemissionsthatwouldcome

fromexistingassets;40%oftotalemissionswouldcomefromcoal‐firedpowerplantsalone.

Industry is the next largest sector, with steel, cement, chemicals and other industry

accounting for around 30% total emissions from existing assets.Thelonglifetimeof

productionfacilitiesinthesesub‐sectors(typically30‐40yearsforablastfurnaceorcement

kiln)andtherelativelyyoungageoftheglobalcapitalstockexplaintheirlargecontribution.

Transport accounts for just over 10% of emissions from existingassetsandthebuildings

sectoraccountsforjustunder5%.Thelifetimeofvehiclesandequipmentinthetransport

andbuildingssectorsisgenerallymuchshorterthanisthecaseinelectricityandindustry–

passengercars,forexample,aregenerallyassumedtohavealifetimeofaround17years–

butassociatedinfrastructurenetworkssuchasroads,electricitynetworksandgasgridshave

verylonglifetimes.

There are some large regional differences in emissions levels from existing assets

(Figure1.9). Advanced economies tend to have much older capital stocks than emerging

marketanddevelopingeconomies,particularlyintheelectricitysector,andexistingassets

willreachtheendoftheirlifetimesearlier.Forexample,theaverageageofcoal‐firedpower

20%

40%

60%

10

20

30

2010 2020 2030 2040 2050 2010 2020 2030 2040 2050

ThousandTWh

Coal Oil Naturalgas Nuclear Renewables Shareofcoal(rightaxis)

Advancedeconomies Emergingmarketanddevelopingeconomies



40 International Energy Agency | Special Report

plantsinChinais13yearsand16yearsintherestofAsia,comparedtoaround35yearsin

Europeand40yearsintheUnitedStates(IEA,2020e).

Figure 1.9

⊳ Emissions from existing infrastructure by sector and region

IEA.Allrightsreserved.

Emerging market and developing economies account for three-quarters

of cumulative emissions from existing infrastructure through to 2050

1.4 AnnouncedPledgesCase

TheAnnouncedPledgesCase(APC)assumesthatallnationalnet‐zeroemissionspledgesare

realisedinfullandontime.Itthereforegoesbeyondthepolicycommitmentsincorporated

intheSTEPS.TheaimoftheAPCistoseehowfarfullimplementationofthenationalnet‐

zeroemissionspledgeswouldtaketheworldtowardsreachingnet‐zeroemissions,andto

examinethescaleofthetransformationoftheenergysectorthatsuchapathwouldrequire.

The way these pledges are assumed to be implemented in the APC has important

implications for the energy system. A net zero pledge for all GHG emissions does not

necessarily mean that CO

emissionsfromtheenergysectorneedtoreachnetzero.



For

example,acountry’snetzeroplansmayenvisagesomeremainingenergy‐relatedemissions

areoffsetbytheabsorptionofemissionsfromforestryorlanduse,orbynegativeemissions

arisingfromtheuseofbioenergyordirectcaptureofCO

fromtheair(DAC)withCCUS.

It

isnotpossibletoknowexactlyhownetzeropledgeswillbeimplemented,butthedesignof

theAPC,particularlywithrespecttothedetailsoftheenergysystempathway,hasbeen

informedbythepathwaysthatanumberofnationalbodieshavedevelopedtosupportnet

zeropledges(Box1.1).Policiesincountriesthathavenotyetmadeanetzeropledgeare

assumedtobethesameasintheSTEPS.Nonpolicyassumptions,includingpopulationand

economicgrowth,arethesameasintheSTEPS.

For example, in recent economy‐widenetzeromitigationpathways for the European Union, around

140‐210milliontonnesCO

ofemissionsfromtheenergysectorremainin2050,whichareoffsetbyCDRfrom

managedland‐usesinks,andbioenergyandDACwithCCUS(EuropeanCommission,2018).

5

10

15

20

25

2020 2030 2040 2050

GtCO₂

Electricity Industry Transport Buildings Other

Advancedeconomies

2020 2030 2040 2050

Emergingmarketanddevelopingeconomies



Chapter 1 | Announced net zero pledges and the energy sector 41

1

Box 1.1 ⊳ Consultations with national bodies on achieving national net-

zero emissions goals

Tohelpinformitsworkonnetzeropathways,theIEAengagedinextensiveconsultations

withexpertsinacademiaandnationalbodiesthathavedevelopedpathwaystosupport

netzeropledgesmadebygovernments.Thisincludesgroupsthathavedevelopednet‐

zeroemissionspathwaysforseveralcountriesincludingChina,EuropeanUnion,Japan,

UnitedKingdomandUnitedStates,aswellastheIPCC.Thesepathwayswerenotused

directly as input for the APC, but the discussions informed our modelling of national

preferencesandconstraintswithineachjurisdictionandtobenchmarktheoveralllevel

ofenergy‐relatedCO

emissionsreductionsthatarecommensuratewitheconomy‐wide

netzerogoals.

1.4.1 CO

emissions

IntheAPC,thereisasmallreboundinemissionsto2023,althoughthisismuchsmallerthan

theincreasethatimmediatelyfollowedthefinancialcrisisin2008‐09.Emissionsneverreach

thepreviouspeakof36GtCO

.GlobalCO

emissionsfallaround10%to30Gtin2030and

to22Gtin2050.Thisisaround35%belowthelevelin2020and14GtCO

lowerthaninthe

STEPS(Figure1.10).Ifemissionscontinuethistrendafter2050,andwithasimilarlevelof

changesinnon‐energy‐relatedGHGemissions,theglobalaveragesurfacetemperaturerise

in2100wouldbearound2.1°C(witha50%probability).

Figure 1.10

⊳ Global energy-related and industrial process CO

emissions by

scenario and reductions by region, 2010-2050



IEA.Allrightsreserved.

Achieving existing net zero pledges would reduce emissions globally to 22 Gt CO

in 2050,

a major reduction compared with current policies but still far from net-zero emissions

10

20

30

40

2010 2020 2030 2040 2050

GtCO₂

UnitedStates EuropeanUnion Japan Korea China Other

STEPS

APC



42 International Energy Agency | Special Report

Thenetzeropledgesthathavebeenmadetodatethereforemakeamajordifferencetothe

currenttrajectoryfor CO

emissions.Equally,however,existingnetzeropledgesfallwell

shortofwhatisnecessarytoreachnet‐zeroemissionsgloballyby2050.Thishighlightsthe

importanceofconcretepoliciesandplanstodeliverinfulllong‐termnetzeropledges.Italso

underlinesthevalueofothercountriesmaking(anddeliveringon)netzeropledges:themore

countriesthatdoso,andthemoreambitiousthosepledgesare,themorethegapwillnarrow

withwhatisneededtoreachnet‐zeroemissionsby2050.

ThelargestdropinCO

emissionsisintheAPCisintheelectricitysectorwithglobalemissions

falling by nearly 60% between 2020 and 2050. This occurs despite a near‐doubling of

electricitydemandasenergyend‐usesareincreasinglyelectrified,notablyintransportand

buildings(Figure1.11).Thiscompareswithafallinemissionsoflessthan15%intheSTEPS.

Figure 1.11

⊳ Global CO

emissions by sector in the STEPS and APC



IEA.Allrightsreserved.

Announced net zero pledges would cut emissions in 2050 by 60%

in the electricity sector, 40% in buildings, 25% in industry and just over 10% in transport

ThetransportandindustrysectorsseealessmarkedfallinCO

emissionsto2050intheAPC,

with increases in energy demand in regions without net zero pledgespartiallyoffsetting

emissionsreductioneffortsinotherregions.Emissionsfromthebuildingssectordeclineby

around40%between2020and2050,comparedwitharound5%intheSTEPS:fossilfueluse

inbuildingsismostlytoprovideheating,andcountriesthathavemadepledgesaccountfor

arelativelyhighproportionofglobalheatingdemand.

Eveninregionswithnetzeropledges,therearesomeresidualemissionsin2050,mainlyin

industry and transport. This reflects the scarcity of commercially available options to

eliminateallemissionsfromheavy‐dutytrucks,aviation,shippingandheavyindustry.

10

20

30

40

2000 2010 2020 2030 2040 2050 2030 2040 2050

GtCO₂

Other

Buildings

Transport

Industry

Electricity

STEPS APC



Chapter 1 | Announced net zero pledges and the energy sector 43

1

1.4.2 Totalenergysupply

Globaltotalenergysupplyincreasesbymorethan15%between2020and2050intheAPC,

comparedwithathirdintheSTEPS(Figure1.12).Energyintensityfallsonaveragebyaround

2.6%peryearto2050comparedwith2.2%intheSTEPS.Thereisasubstantialincreasein

energy demand in emerging market and developing economies, where economic and

populationgrowthisfastestandwheretherearefewernetzeropledges,whichoutweighs

thereductionsinenergydemandinthecountrieswithnetzeropledges.

Figure 1.12

⊳ Total energy supply by source in STEPS and APC



IEA.Allrightsreserved.

Announced net zero pledges lift renewables in the APC from 12% of total energy supply

in 2020 to 35% in 2050, mainly at the expense of coal and oil

TheglobalincreaseinenergysupplyintheAPCisledbyrenewables,whichincreasetheir

shareintheenergymixfrom12%in2020to35%by2050(comparedwith25%in2050in

theSTEPS).Solarphotovoltaics(PV)andwindintheelectricitysectortogethercontribute

about 50% of the growth in renewables supply, and bioenergy contributes around 30%.

Bioenergyusedoublesinindustry,triplesinelectricitygenerationandgrowsbyafactorof

four in transport: it plays an important role in reducing emissions from heat supply and

removingCO

fromtheatmospherewhenitiscombinedwithCCUS.Nuclearmaintainsits

shareoftheenergymix,itsoutputrisingbyaquarterto2030(comparedwitha15%increase

intheSTEPS),drivenbylifetime extensions at existing plants and new reactors in some

countries.

GlobalcoalusefallssignificantlymorerapidlyintheAPCthanintheSTEPS.Itdropsfrom

5250milliontonnesofcoalequivalent(Mtce)in2020to4000Mtcein2030and2600Mtce

in2050(compared with4300Mtcein the STEPS in2050). Most of thisdeclineis due to

reduced coal‐fired electricity generation in countries with net zero pledges as plants are

repurposed,retrofittedorretired.Inadvancedeconomies,unabatedcoal‐firedpowerplants

200

400

600

800

2000 2010 2020 2030 2040 2050 2030 2040 2050

Renewables

Nuclear

Naturalgas

Oil

Coal

STEPS APC



44 International Energy Agency | Special Report

aregenerallyphasedoutoverthenext10‐15years.China’scoalconsumptionforelectricity

declinesby85%between2020and2050onitspathtowardscarbonneutralityin2060.These

declinesmorethanoffsetcontinuedgrowthforcoalincountrieswithoutnetzeropledges.

Globally, coal use in industryfalls by 25%between 2020 and 2050,comparedwitha5%

declineintheSTEPS.

Oildemandrecoversslightlyintheearly2020sbutneveragainreachesitshistoricpeakin

2019.Itdeclinesto 90mb/d intheearly2030sandto80mb/din2050,around25mb/d

lowerthanintheSTEPS,thankstoastrongpushtoelectrifytransportandshiftstobiofuels

andhydrogen,especiallyinregionswithpledges.Naturalgasdemandincreasesfromabout

3900bcmin2020toaround4350bcmin2025,butisthenbroadlyflatto2050(itcontinues

togrowtoaround5700bcmintheSTEPS).

1.4.3 Totalfinalconsumption

Global energy use continues to grow in all major end‐use sectorsintheAPC,albeit

substantially more slowly than in the STEPS (Figure1.13). Total final consumption (TFC)

increasesbyaround20%in2020‐50,comparedwitha35%increasegloballyintheSTEPS.

Measuresto improve energyefficiency play a major rolein the APC in reducing demand

growthincountrieswithnetzeropledges.Withoutthoseefficiencygains,electricitydemand

growthwouldmakeitmuchharderforrenewablestodisplacefossil fuels in electricity

generation.ThebiggestreductioninenergydemandrelativetotheSTEPSisintransport,

thanksto an accelerated shift toelectric vehicles(EVs),which arearound three‐times as

energyefficientasconventionalinternalcombustionenginevehicles.

Figure 1.13

⊳ Total final consumption in the APC



IEA.Allrightsreserved.

Announced net zero pledges lead to a shift away from fossil fuels globally to electricity,

renewables and hydrogen. Electricity’s share rises from 20% to 30% in 2050

25%

50%

75%

100%

2020

2030

2040

2050

TFCshares

50

100

150

200

2020

2030

2040

2050

2020

2030

2040

2050

2020

2030

2040

2050

Coal Oil Naturalgas Hydrogen Heat Electricity Renewables Traditionaluse

ofbiomass

Industry Buildings Transport



Chapter 1 | Announced net zero pledges and the energy sector 45

1

Thefuelmix in final energyuseshifts substantially inthe APC. By 2050,electricityisthe

largest single fuel used in all sectors except transport, where oil remains dominant. The

persistenceofoilintransportstemspartlyfromtheextentofitscontinueduseincountries

withoutnetzeropledges,andpartlyfromthedifficultyofelectrifyingsubstantialpartsofthe

transportsector,notablytruckingandaviation.Electricitydoesmakeinroadsintotransport,

however,andrapidgrowthintheuptakeofEVsputsoiluseintodeclineafter2030,withEVs

accountingforaround35%ofglobalpassengercarsalesby2030andnearly50%in2050in

theAPC(versusaround25%intheSTEPSin2050).Electrificationinthebuildingssectoris

alsomuchfasterintheAPCthanintheSTEPS.

Thedirectuseofrenewablesexpandsinallend‐usesectorsgloballythroughto2050.Modern

bioenergy accounts for the bulk of this growth, predominantly through the blending of

biomethaneintonaturalgasnetworksandliquidbiofuelsintransport.Thisoccursmainlyin

regionswithnetzeropledges.Hydrogenandhydrogen‐basedfuelsplayalargerroleinthe

APCthanintheSTEPS,reachingalmost15exajoules(EJ)in2050,thoughtheystillaccount

foronly3%oftotalfinalconsumptionworldwidein2050.Transportaccountsformorethan

two‐thirdsofallhydrogenconsumptionin2050.Inparallel,on‐sitehydrogenproductionin

theindustryandrefiningsectorsgraduallyshiftstowardslow‐carbontechnologies.

1.4.4 Electricitygeneration

GlobalelectricitygenerationnearlydoublesduringthenextthreedecadesintheAPC,rising

from about 26800terawatt‐hours (TWh) in 2020 to over 50000TWh in 2050, some

4000TWhhigherthanintheSTEPS.Low‐emissionsenergysourcesprovidealltheincrease.

Theshareofrenewablesinelectricitygenerationrisesfrom29%in2020tonearly70%in

2050,comparedwithabout55%intheSTEPS,assolarPVandwindraceaheadofallother

sourcesofgeneration(Figure1.14).By2050,solarPVandwindtogetheraccountforalmost

halfofelectricitysupply.Hydropoweralsocontinuestoexpand,emergingasthethird‐largest

energy source in the electricity mix by 2050. Nuclear power increases steadily too,

maintainingitsglobalmarketshareofabout10%,ledbyincreasesinChina.Naturalgasuse

inelectricityincreasesslightlytothemid‐2020sbeforestartingtofallback,whilecoal’sshare

ofelectricitygenerationfallsfromaround35%in2020tobelow10%in2050.Atthatpoint,

20%oftheremainingcoal‐firedoutputcomesfromplantsequippedwithCCUS.

Hydrogenandammoniastarttoemergeasfuelinputstoelectricitygenerationbyaround

2030,usedlargelyincombinationwithnaturalgasingasturbinesandwithcoalincoal‐fired

power plants. This extends the life of existing assets, contributes to electricity system

adequacy and reduces the overall costs of transforming the electricity sectors in many

countries.Totalbatterycapacityalsorisessubstantially,reaching1600gigawatts(GW)in

2050,70%morethanintheSTEPS.



46 International Energy Agency | Special Report

Figure 1.14 ⊳ Global electricity generation by source in the APC



IEA.Allrightsreserved.

Renewables reach new heights in the APC, rising from just under 30% of electricity supply

in 2020 to nearly 70% in 2050, while coal-fired generation steadily declines

Note:Otherrenewables=geothermal,solarthermalandmarine.

2

4

6

8

10

12

14

2010 2020 2030 2040 2050

ThousandTWh

20%

40%

60%

80%

100%

2020 2030 2050

Oil

Unabatednaturalgas

Unabatedcoal

FossilfuelswithCCUS

Hydrogenbased

Nuclear

Otherrenewables

Hydropower

Wind

SolarPV



Chapter 2 | A global pathway to net-zero CO₂ emissions in 2050

Chapter2

A global pathway to net-zero CO₂ emissions in 2050

 TheNet‐ZeroEmissionsby2050Scenario(NZE)showswhatisneededfortheglobal

energysectortoachieve net‐zeroCO

2

emissionsby2050.Alongsidecorresponding

reductionsinGHGemissionsfromoutsidetheenergysector,thisisconsistentwith

limitingtheglobaltemperatureriseto1.5°Cwithoutatemperatureovershoot(with

a 50% probability). Achieving this would require all governments to increase

ambitionsfromcurrentNationallyDeterminedContributionsandnetzeropledges.

 IntheNZE,globalenergy‐relatedandindustrialprocessCO

emissionsfallbynearly

40%between2020and2030andtonetzeroin2050.Universalaccesstosustainable

energyisachievedby2030.Thereisa75%reductioninmethaneemissionsfromfossil

fueluseby2030.Thesechangestakeplacewhiletheglobaleconomy more than

doublesthroughto2050andtheglobalpopulationincreasesby2billion.

 Totalenergysupplyfallsby7%between2020and2030intheNZEandremainsat

aroundthislevelto2050.SolarPVandwindbecometheleadingsourcesofelectricity

globallybefore2030andtogethertheyprovidenearly70%ofglobalgenerationin

2050.Thetraditionaluseofbioenergyisphasedoutby2030.

 Coaldemanddeclinesby90%tolessthan600Mtcein2050,oildeclinesby75%to

24mb/d,andnaturalgasdeclinesby55%to1750bcm.Thefossilfuelsthatremain

in 2050 are used in the production of non‐energy goods where the carbon is

embodiedintheproduct(likeplastics),inplantswithcarboncapture,utilisationand

storage(CCUS),andinsectorswherelow‐emissionstechnologyoptionsarescarce.

 Energyefficiency,windandsolarprovidearoundhalfofemissionssavingsto2030in

theNZE.Theycontinuetodeliveremissionsreductionsbeyond2030,buttheperiod

to2050seesincreasingelectrification,hydrogenuseandCCUSdeployment,forwhich

notalltechnologiesareavailableonthemarkettoday,andtheseprovidemorethan

half of emissions savings between 2030 and 2050. In 2050, there is 1.9Gt of CO



removal in the NZE and 520million tonnes of low‐carbon hydrogen demand.

Behaviouralchangesbycitizensandbusinessesavoid1.7GtCO

emissionsin2030,

curbenergydemandgrowth,andfacilitatecleanenergytransitions.

 Annualenergysectorinvestment,whichaveragedUSD2.3trilliongloballyinrecent

years,jumpstoUSD5trillionby2030intheNZE.AsashareofglobalGDP,average

annualenergyinvestmentto2050intheNZEisaround1%higherthaninrecentyears.

 TheNZEtapsintoallopportunitiestodecarbonisetheenergysector,acrossallfuels

and all technologies. But the path to 2050 has many uncertainties. If behavioural

changesweretobemorelimitedthanenvisagedintheNZE,orsustainablebioenergy

less available, then the energy transition would be more expensive. A failure to

developCCUS for fossilfuels could delayorprevent the development ofCCUSfor

processemissionsfromcementproductionandcarbonremovaltechnologies,making

itmuchhardertoachievenet‐zeroemissionsby2050.

SUMMARY



48 International Energy Agency | Special Report

2.1 Introduction

Achieving a global energy transition that is compatible with the world’s climate goals is

unquestionably a formidable task. As highlighted in Chapter 1, current pledges by

governmentstoreduceemissionstonetzerocollectivelycoveraround70%oftoday’sglobal

economicactivityandglobalCO

emissions.TheAnnouncedPledgesCaseshowsthat,ifall

thosepledgesweremetinfull,itwouldnarrowthegapbetweenwhereweareheadingand

whereweneedtobetoachievenet‐zeroemissionsby2050worldwide.Butitalsoshows

thatthegapwouldremainlarge.Meetingallexistingnetzeropledgesinfullwouldstillleave

22gigatonnes(Gt)ofenergy‐relatedandindustrialprocessCO

emissionsgloballyin2050,

consistentwithatemperaturerisein2100ofaround2.1°C(witha50%probability).

In this chapter, we examine the energy sector transformation which is embodied in our

Net‐ZeroEmissionsby2050Scenario.First,itprovidesanoverviewofthekeyassumptions

and market dynamics underlying the projections, including projected fossil fuel and CO



prices.ItdiscussestrendsinglobalCO

emissions,energyuseandinvestment,includingthe

keyrolesplayedbyefficiencymeasures,behaviouralchange,electrification, renewables,

hydrogenandhydrogen‐basedfuels,bioenergy,andcarboncapture,utilisationandstorage

(CCUS).Further,itdiscussessomeofthekeyuncertaintiessurroundingtheglobalpathway

towards net‐zero emissions related to behavioural change, the availability of sustainable

bioenergy,andthedeploymentofCCUSforfossilfuels.Thetransformationofspecificenergy

sectorsisassessedanddiscussedindetailinChapter3.

2.2 Scenariodesign

TheNet‐ZeroEmissionsby2050Scenario(NZE)isdesignedtoshowwhatisneededacross

themainsectorsbyvariousactors,andbywhen,fortheworldtoachievenet‐zeroenergy‐

related and industrial process CO

2

emissions by 2050.

Italsoaimstominimisemethane

emissionsfromtheenergysector.Inrecentyears,theenergysectorwasresponsiblefor

aroundthree‐quartersofglobalgreenhousegas(GHG)emissions.Achievingnet‐zeroenergy‐

relatedandindustrialprocessCO

emissionsby2050intheNZEdoesnotrelyonactionin

areasotherthantheenergysector,butlimitingclimatechangedoesrequiresuchaction.We

thereforeadditionallyexaminethereductionsinCO

emissionsfromlandusethatwouldbe

commensurate with the transformation of the energy sector in the NZE, working in

co‐operationwiththeInternationalInstituteforAppliedSystemsAnalysis(IIASA).Inparallel

withactiononreducingallothersourcesofGHGemissions,achievingnet‐zeroCO

2

emissions

fromtheenergysectorby2050isconsistentwitharounda50%chanceoflimitingthelong‐

termaverageglobaltemperatureriseto1.5°Cwithoutatemperature overshoot

(IPCC,2018).

Unlessotherwisestated,carbondioxide(CO

)emissionsinthischapterrefertoenergy‐relatedandindustrial

processCO

emissions.Net‐zeroCO

emissionsreferstozeroCO

emissionstotheatmosphere,orwithany

residualCO

emissionsoffsetbyCO

removalfromdirectaircaptureorbioenergywithcarboncaptureand

storage.



Chapter 2 | A global pathway to net-zero CO₂ emissions in 2050

2

TheNZEaimstoensurethatenergy‐relatedandindustrialprocessCO

emissionsto2030are

inlinewithreductionsin1.5°Cscenarioswithnoorloworlimitedtemperatureovershoot

assessedintheIPCCinitsSpecialReportonGlobalWarmingof1.5°C.

Inaddition,theNZE

incorporatesconcreteactionontheenergy‐relatedUnitedNationsSustainableDevelopment

Goalsrelatedtoachievinguniversalenergyaccessby2030anddeliveringamajorreduction

inairpollution.TheprojectionsintheNZEweregeneratedbyahybridmodelthatcombines

componentsoftheIEA’sWorldEnergyModel(WEM),whichisused to produce the

projectionsintheannualWorld Energy Outlook,andtheEnergyTechnologyPerspectives

(ETP)model.

Box 2.1

⊳ International Energy Agency modelling approach for the NZE

Anew,hybridmodellingapproachwasadoptedtodeveloptheNZEandcombinesthe

relativestrengthsoftheWEMandtheETPmodel.TheWEMisalarge‐scalesimulation

modeldesignedtoreplicatehowcompetitiveenergymarketsfunctionandtoexamine

theimplicationsofpoliciesonadetailedsector‐by‐sectorandregion‐by‐regionbasis.The

ETP model is a large‐scale partial‐optimisation model with detailed technology

descriptions of more than 800individual technologies across the energy conversion,

industry,transportandbuildingssectors.

Thisisthefirsttimethismodellingapproachhasbeenimplemented.Thecombinationof

thetwomodelsallowsforauniquesetofinsightsonenergymarkets, investment,

technologies,andthelevelanddetailofpoliciesthatwouldbeneededtobringaboutthe

energysectortransformationintheNZE.

ResultsfromtheWEMandETPmodelhavebeencoupledwiththeGreenhouseGas‐Air

Pollution Interactions and Synergies (GAINS) model developed by IIASA

(Amannetal.,2011).TheGAINSmodelisusedtoevaluateairpollutantemissionsand

resultanthealthimpactslinkedtoairpollution.Forthefirsttime,IEAmodelresultshave

alsobeencoupledwiththeIIASA’sGlobalBiosphereManagementModel(GLOBIOM)to

providedataonlanduseandnetemissionsimpactsofbioenergydemand.

TheimpactsofchangesininvestmentandspendingonglobalGDPintheNZEhavebeen

estimated by the International Monetary Fund (IMF) using the Global Integrated

MonetaryandFiscal(GIMF)model.GIMFisamulti‐countrydynamicstochasticgeneral

equilibrium model used by the IMF for policy and risk analysis (Laxton et al., 2010;

Andersonetal.,2013).IthasbeenusedtoproducetheIMF’sWorldEconomicOutlook

scenarioanalysessince2008.

Therearemanypossiblepathstoachievenet‐zeroCO

emissionsgloballyby2050andmany

uncertaintiesthatcouldaffectanyofthem;theNZEisthereforeapath,notthepathtonet‐

zeroemissions.Muchdepends,forexample,onthepaceofinnovationinnewandemerging

TheIPCCclassifiesscenariosas“noorlimitedtemperatureovershoot”,iftemperaturesexceed1.5°Cbyless

than0.1°Cbutreturntolessthan1.5°Cin2100,andas“higherovershoot”,iftemperaturesexceed1.5°Cby

0.1‐0.4°Cbutreturntolessthan1.5°Cin2100.



50 International Energy Agency | Special Report

technologies, the extent to which citizens are able or willing to change behaviour, the

availability of sustainable bioenergy and the extent and effectiveness of international

collaboration.Weinvestigatesomeofthekeyalternativesanduncertaintieshere and in

Chapter3.TheNet‐ZeroEmissionsby2050Scenarioisbuiltonthefollowingprinciples.

 Theuptakeofalltheavailabletechnologiesandemissionsreductionoptionsisdictated

bycosts,technologymaturity,policypreferences,andmarketandcountryconditions.

 Allcountriesco‐operatetowardsachievingnet‐zeroemissionsworldwide.Thisinvolves

allcountriesparticipatingineffortstomeetthenetzerogoal,workingtogetherinan

effectiveandmutuallybeneficialway,andrecognisingthedifferentstagesofeconomic

developmentofcountriesandregions,andtheimportanceofensuringajusttransition.

 Anorderlytransitionacrosstheenergysector.Thisincludesensuringthesecurityoffuel

and electricity supplies at all times, minimising stranded assets where possible and

aimingtoavoidvolatilityinenergymarkets.

2.2.1 PopulationandGDP

TheenergysectortransformationintheNZEoccursagainstthebackdropoflargeincreases

intheworld’spopulationandeconomy(Figure2.1).In2020,therewerearound7.8billion

peopleintheworld;thisisprojectedtoincreasebyaround750millionby2030andbynearly

2billionpeopleby2050inlinewiththemedianvariantoftheUnitedNationsprojections

(UNDESA,2019).Nearlyallofthepopulationincreaseisinemergingmarketanddeveloping

economies:thepopulationofAfricaaloneincreasesbymorethan1.1billionbetween2020

and2050.

Figure 2.1

⊳ World population by region and global GDP in the NZE



IEA.Allrightsreserved.

By 2050, the world’s population expands to 9.7 billion people

and the global economy is more than twice as large as in 2020

Notes:GDP=grossdomesticproductinpurchasingpowerparity;C&SAmerica=CentralandSouthAmerica.

Sources:IEAanalysisbasedonUNDESA(2019);OxfordEconomics(2020);IMF(2020a,2020b).

100

200

300

400

500

2

4

6

8

10

2000 2010 2020 2030 2040 2050

TrillionUSD(2019)

Billionpeople

Restofworld

Eurasia

MiddleEast

NorthAmerica

C&SAmerica

SoutheastAsia

Europe

Africa

India

China

GlobalGDP

(rightaxis)



Chapter 2 | A global pathway to net-zero CO₂ emissions in 2050

2

Theworld’seconomyisassumedtorecoverrapidlyfromtheimpact of the Covid‐19

pandemic.Itssizereturnstopre‐crisislevelsin2021.From2022,theGDPgrowthtrendis

closetothepre‐pandemicrateofaround3%peryearonaverage,inlinewithassessments

fromtheIMF.Theresponsetothepandemicleadstoalargeincreaseingovernmentdebt,

butresumedgrowth,alongwithlowinterestratesinmanycountries,makethismanageable

inthelongterm.By2030,theworld’seconomyisaround45%largerthanin2020,andby

2050itismorethantwiceaslarge.

2.2.2 EnergyandCO

prices

Projectionsoffutureenergypricesareinevitablysubjecttoahighdegreeofuncertainty.In

IEAscenarios,theyaredesignedtomaintainanequilibriumbetweensupplyanddemand.

TherapiddropinoilandnaturalgasdemandintheNZEmeansthatnofossilfuelexploration

isrequiredandnonewoilandnaturalgasfieldsarerequiredbeyondthosethathavealready

beenapprovedfordevelopment.Nonewcoalminesormineextensionsarerequiredeither.

Pricesareincreasinglysetbytheoperatingcostsofthemarginalprojectrequiredtomeet

demand,andthisresultsinsignificantlylowerfossilfuelpricesthaninrecentyears.Theoil

price drops to around USD35/barrel by 2030 and then drifts down slowly towards

USD25/barrelin2050.



Table 2.1 ⊳ Fossil fuel prices in the NZE

Realterms(USD2019) 2010 2020 2030 2040 2050

IEAcrudeoil(USD/barrel) 91 37 35 28 24

Naturalgas(USD/MBtu)     

UnitedStates 5.1 2.1 1.9 2.0 2.0

EuropeanUnion 8.7 2.0 3.8 3.8 3.5

China 7.8 5.7 5.2 4.8 4.6

Japan 12.9 5.7 4.4 4.2 4.1

Steamcoal(USD/tonne)     

UnitedStates 60 45 24 24 22

EuropeanUnion 108 56 51 48 43

Japan 125 75 57 53 49

CoastalChina 135 81 60 54 50

Notes:MBtu=millionBritishthermalunits.TheIEAcrudeoilpricesareaweightedaverageimportpriceamong

IEAmembercountries.Naturalgaspricesareweightedaveragesexpressedonagrosscalorific‐valuebasis.US

naturalgaspricesreflectthewholesalepriceprevailingonthedomesticmarket.TheEuropeanUnionand

Chinagaspricesreflectabalanceofpipelineandliquefiednaturalgas(LNG)imports,whileJapangasprices

solelyreflectLNGimports.LNGpricesusedarethoseatthecustomsborder,priortoregasification.Steam

coalpricesareweightedaveragesadjustedto6000kilocaloriesperkilogramme.USsteamcoalpricesreflect

mine‐mouth price plus transport and handling cost. Coastal China steam coal price reflects a balance of

importsanddomesticsales,whiletheEuropeanUnionandJapanesesteamcoalpricesaresolelyforimports.



52 International Energy Agency | Special Report

In line with the principle of orderly transitions governing the NZE, the trajectory for oil

marketsandpricesavoidsexcessivevolatility.Whathappensdependstoalargedegreeon

thestrategiesadoptedbyresource‐richgovernmentsandtheirnationaloilcompanies.Inthe

NZEitisassumedthat,despitehavinglowercostresourcesattheirdisposal,theyrestrict

investmentinnewfields.Thislimitstheneedfortheshuttinginandclosureofhighercost

production.Themarketshareofmajorresource‐richcountriesneverthelessstillrisesinthe

NZEduetothelargesizeandslowdeclineratesoftheirexistingfields.

Producereconomiescouldpursuealternativeapproaches.Facedwithrapidlyfallingoiland

gasdemand,theycould,forexample,opttoincreaseproductionsoastocaptureaneven

largershareofthemarket.Inthisevent,thecombinationoffallingdemandandincreased

availabilityoflowcostoilwouldundoubtedlyleadtoevenlower–andprobablymuchmore

volatile–prices.Inpractice,theoptionsopentoparticularproducercountrieswoulddepend

ontheirresiliencetoloweroilpricesandontheextenttowhichexportmarketshave

developedforlow‐emissionsfuelsthatcouldbeproducedfromtheirnaturalresources.

Anticipating and mitigating feedbacks from the supply side is acentralelementofthe

discussionaboutorderlyenergytransitions.Adropinpricesusuallyresultsinsomerebound

in demand, and policies and regulations would be essential to avoid this leading to any

increase in the unabated use of fossil fuels, which would underminewideremissions

reductionefforts.

Astheenergysectortransforms,morefuelsaretradedglobally, such ashydrogen‐based

fuelsandbiofuels.Thepricesofthesecommoditiesareassumedtobesetbythemarginal

costofdomesticproductionorimportswithineachregion.

A broad range of energy policies and accompanying measures are introduced across all

regionstoreduceemissionsintheNZE.Thisincludes:renewablefuelmandates;efficiency

standards;marketreforms;research,developmentanddeployment;andtheeliminationof

inefficient fossil fuel subsidies. Direct emissionsreduction regulationsarealsoneededin

somecases.Inthetransportsector,forexample,regulationsareimplementedtoreduce

sales of internal combustion engine vehicles and increase the use of liquid biofuels and

syntheticfuelsinaviationandshipping,aswellasmeasurestoensurethatlowoilpricesdo

notleadtoanincreaseinconsumption.

pricesareintroducedacrossallregionsintheNZE(Table2.2).Theyareassumedtobe

introduced in the immediate future across all advanced economies for the electricity

generation,industryandenergyproductionsectors,andtoriseonaveragetoUSD130per

tonne(tCO

)by2030andtoUSD250/tCO

2

by2050.Inanumberofothermajoreconomies

–includingChina,Brazil,RussiaandSouthAfrica–CO

pricesinthesesectorsareassumed

to rise to around USD200/tCO

2

in 2050. CO

 prices are introduced in all other emerging

market and developing economies, although it is assumed that they pursue more direct

policiestoadaptandtransformtheirenergysystemsandsothelevelofCO

pricesislower

thanelsewhere.



Chapter 2 | A global pathway to net-zero CO₂ emissions in 2050

2

Table 2.2 ⊳ CO

prices for electricity, industry and energy production in the NZE

USD(2019)pertonneofCO

 2025 2030 2040 2050

Advancedeconomies 75 130 205 250

Selectedemergingmarketand

developingeconomies*

45 90 160 200

Otheremergingmarketand

developingeconomies

3 15 35 55

*IncludesChina,Russia,BrazilandSouthAfrica.

2.3 CO

emissions

Global energy‐related and industrial process CO

emissionsintheNZEfalltoaround

21GtCO

2

in2030andtonet‐zeroin2050(Figure2.2).

CO

emissionsinadvancedeconomies

asawholefalltonetzerobyaround2045andthesecountriescollectivelyremovearound

0.2GtCO

2

fromtheatmospherein2050.Emissionsinseveralindividualemergingmarket

anddevelopingeconomiesalsofalltonetzerowellbefore2050,butinaggregatethereare

around0.2GtCO

ofremainingemissionsinthisgroupofcountriesin2050.Theseareoffset

byCO

removalinadvancedeconomiestoprovidenet‐zeroCO

emissionsatthegloballevel.

Figure 2.2

⊳ Global net CO

emissions in the NZE



IEA.Allrightsreserved.

emissions fall to net zero in advanced economies around 2045 and globally by 2050.

Per capita emissions globally are similar by the early-2040s.

Note:IncludesCO

emissionsfrominternationalaviationandshipping.

Intheperiodto2030,CO

emissionsintheNZEfallatabroadlysimilarratetotheP2illustrativepathwayin

theIPCCSR1.5(IPCC,2018).TheP2scenarioisdescribedas“ascenariowith…shiftstowardssustainableand

healthy consumption patterns, low‐carbon technology innovation, and well‐managed land systems with

limitedsocietalacceptabilityforBECCS[bioenergywithcarboncaptureandstorage]”.After2030,emissions

intheNZEfallatamuchfasterpacethanintheP2scenario,whichhas5.6GtCO

ofresidualenergysector

andindustrialprocessCO

emissionsremainingin2050.

‐10

2010 2020 2030 2040 2050

GtCO₂

Advancedeconomies Emergingmarketanddevelopingeconomies

CO₂emissions

‐3

2010 2020 2030 2040 2050

tCO₂percapita

PercapitaCO₂emissions



54 International Energy Agency | Special Report

Severalemergingmarketanddevelopingeconomieswithaverylargepotentialforproducing

renewables‐basedelectricityandbioenergyarealsoakeysourceofcarbondioxideremoval

(CDR).Thisincludesmakinguseofrenewableelectricitysourcestoproducelargequantities

ofbiofuelswithCCUS,someofwhichisexported,andtocarryoutdirectaircapturewith

carboncaptureandstorage(DACCS).

PercapitaCO

emissionsinadvancedeconomiesdropfromaround8tCO

2

perpersonin2020

toaround3.5tCO

2

in2030,alevelclosetotheaverageinemergingmarketanddeveloping

economies in 2020. Per capita emissions also fall in emerging market and developing

economies,butfromamuchlowerstartingpoint.Bytheearly2040s,percapitaemissionsin

bothregionsarebroadlysimilarataround0.5tCO

2

perperson.

Cumulativeglobalenergy‐relatedandindustrialprocessCO

emissionsbetween2020and

2050 amount to just over 460Gt in the NZE. Assuming parallel action to address CO



emissionsfrom agriculture,forestryandother land use(AFOLU) over theperiod to 2050

wouldresultinaround40GtCO

fromAFOLU(seesection2.7.2).ThismeansthattotalCO



emissionsfromallsources–some500GtCO

–areinlinewiththeCO

budgetsincludedin

the IPCC SR1.5, which indicated that the total CO

 budget from 2020 consistent with

providinga50%chanceoflimitingwarmingto1.5°Cis500GtCO

(IPCC,2018)



Aswellas

reducingCO

emissionstonet‐zero,theNZEseekstoreducenon‐CO

emissionsfromthe

energysector.Methaneemissionsfromfossilfuelproductionanduse,forexample,fallfrom

115milliontonnes(Mt)methanein2020(3.5GtCO

‐equivalent[CO

‐eq])

to30Mtin2030

and10Mtin2050.

The fastest and largest reductions in global emissions in the NZEareinitiallyseeninthe

electricitysector(Figure2.3).Electricitygenerationwasthelargestsourceofemissionsin

2020,butemissionsdropbynearly60%intheperiodto2030,mainlyduetomajorreductions

fromcoal‐firedpowerplants,andtheelectricitysectorbecomesasmallnetnegativesource

ofemissionsaround2040.Emissionsfromthebuildingssectorfallby40%between2020and

2030thankstoashiftawayfromtheuseoffossilfuelboilers,andretrofittingtheexisting

buildingstock toimproveitsenergy performance. Emissionsfrom industry andtransport

bothfallbyaround20%overthisperiod,andtheirpaceofemissionsreductionsaccelerates

duringthe2030sastheroll‐outoflow‐emissionsfuelsandotheremissionsreductionoptions

isscaledup.Nonetheless,thereareanumberofareasintransportandindustryinwhichit

isdifficulttoeliminateemissionsentirely–suchasaviationandheavyindustry–andboth

sectorshaveasmalllevelofresidualemissionsin2050.Theseresidualemissionsareoffset

withapplicationsofBECCSandDACCS.



ThisbudgetisbasedonTable2.2oftheIPCCSR1.5(IPCC,2018).Itassumes0.53°Cadditionalwarmingfrom

the2006‐2015periodtogivearemainingCO

budgetfrom2018of580GtCO

.Therewerearound80GtCO



emissionsemittedfrom2018to2020.

Non‐CO

gasesareconvertedtoCO

‐equivalentsbasedonthe100‐yearglobalwarmingpotentialsreported

bytheIPCC5thAssessmentReport(IPCC,2014).Onetonneofmethaneisequivalentto30tonnesofCO

.



Chapter 2 | A global pathway to net-zero CO₂ emissions in 2050

2

Figure 2.3 ⊳ Global net-CO

emissions by sector, and gross and

net CO

emissions in the NZE

IEA.Allrightsreserved.

Emissions from electricity fall fastest, with declines in industry and transport accelerating

in the 2030s. Around 1.9 Gt CO

are removed in 2050 via BECCS and DACCS.

Notes: Other=agriculture, fuel production, transformation and related process emissions, and direct air

capture.BECCS=bioenergywithcarboncaptureandstorage;DACCS=directaircapturewithcarboncapture

andstorage.BECCSandDACCSincludesCO

emissionscapturedandpermanentlystored.

The NZE includes a systematic preference for all new assets and infrastructure to be as

sustainableandefficientaspossible,andthisaccountsfor50%oftotalemissionsreductions

in 2050. Tackling emissions from existing infrastructure accountsforanother35%of

reductions in 2050, while behavioural changes and avoided demand, including materials

efficiency

 gains and modal shifts in the transport sector, provide the remaining 15% of

emissionsreductions (see section2.5.2). A wide range oftechnologies and measuresare

deployedintheNZEtoreduceemissionsfromexistinginfrastructuresuchaspowerplants,

industrialfacilities,buildings,networks,equipmentandappliances.TheNZEisdesignedto

minimise stranded capital where possible, i.e. cases where the initial investment is not

recouped,butinmanycasesearlyretirementsorlowerutilisationleadtostrandedvalue,i.e.

areductioninrevenue.

Therapiddeploymentofmoreenergy‐efficienttechnologies,electrificationofend‐usesand

swiftgrowthofrenewablesallplayacentralpartinreducingemissionsacrossallsectorsin

theNZE(Figure2.4).By2050,nearly90%ofallelectricitygenerationisfromrenewables,as

isaround25%ofnon‐electricenergyuseinindustryandbuildings.Thereisalsoamajorrole

foremergingfuelsandtechnologies,notablyhydrogenandhydrogen‐basedfuels,bioenergy

andCCUS,especiallyinsectorswhereemissionsareoftenmostchallengingtoreduce.

Materialsefficiencyincludesstrategiesthatreducematerialdemand,orshifttotheuseofloweremissions

materialsorloweremissionsproductionroutes.Examplesincludelightweightingandrecycling.

‐5

2010 2020 2030 2040 2050

GtCO₂

Electricity

Buildings

Transport

Industry

Other

Sector

‐10

2010 2020 2030 2040 2050

GrossCO₂

emissions

BECCSand

DACCS

NetCO₂

emissions

GrossandnetCO₂emissions



56 International Energy Agency | Special Report

Figure 2.4 ⊳ Average annual CO

reductions from 2020 in the NZE



IEA.Allrightsreserved.

Renewables and electrification make the largest contribution to emissions reductions, but a

wide range of measures and technologies are needed to achieve net-zero emissions

Notes: Activity = changes in energy service demand from economic and population growth.

Behaviour=change in energy service demand from user decisions, e.g. changing heating temperatures.

Avoideddemand=changeinenergyservicedemandfromtechnologydevelopments,e.g.digitalisation.

2.4 Totalenergysupplyandfinalenergyconsumption

2.4.1 Totalenergysupply



Totalenergysupplyfallsto550exajoules(EJ)in2030,7%lowerthanin2020(Figure2.5).

Thisoccursdespitesignificantincreasesintheglobalpopulationandeconomybecauseofa

fall in energy intensity (the amount of energy used to generateaunitofGDP).Energy

intensityfallsby4%onaverageeachyearbetween2020and2030.Thisisachievedthrough

a combination of electrification, a push to pursue all energy and materials efficiency

opportunities,behaviouralchangesthatreducedemandfor energy services, and a major

shift away from the traditional use of bioenergy.

Thislevelofimprovementinenergy

intensityismuchgreaterthanhasbeenachievedinrecentyears:between2010and2020,

averageannualenergyintensityfellbylessthen2%eachyear.

After 2030, continuing electrification of end‐use sectors helpsto reduce energy intensity

further,buttheemphasisonmaximisingenergyefficiencyimprovementsintheyearsupto

Thetermstotalprimaryenergysupply(TPES)ortotalprimaryenergydemand(TPED)havebeenrenamedas

total energy supply (TES) in accordance with the International Recommendations for Energy Statistics

(IEA,2020a).

Modernformsofcookingrequiremuchlessenergythanthetraditionaluseofbiomassininefficientstoves.

Forexample,cookingwithaliquefiedpetroleumgasstoveusesaround five‐times less energy than the

traditionaluseofbiomass.

‐60

‐40

‐20

2021‐25 2026‐30 2031‐35 2036‐40 2041‐45 2046‐50

GtCO

Activity

Behaviourandavoideddemand

Energysupplyefficiency

Buildingsefficiency

Industryefficiency

Transportefficiency

Electricvehicles

Otherelectrification

Hydrogen

Windandsolar

Transportbiofuels

Otherrenewables

Otherpower

CCUSindustry

CCUSpowerandfuelsupply

Netemissionsreduction



Chapter 2 | A global pathway to net-zero CO₂ emissions in 2050

2

2030limitstheavailableopportunitiesinlateryears.Atthesametime,increasingproduction

of new fuels, such as advanced biofuels,hydrogen and synthetic fuels, tends to push up

energyuse.Asaresult,therateofdeclineinenergyintensitybetween2030and2050slows

to2.7%peryear.Withcontinuedeconomicandpopulationgrowth,thismeansthattotal

energysupplyfallsslightlybetween2030and2040butthenremainsbroadlyflatto2050.

Totalenergysupplyin2050intheNZEisclosetothelevelin2010,despiteaglobalpopulation

thatisnearly3billionpeoplehigherandaglobaleconomythatisoverthree‐timeslarger.

Figure 2.5

⊳ Total energy supply in the NZE



IEA.Allrightsreserved.

Renewables and nuclear power displace most fossil fuel use in the NZE,

and the share of fossil fuels falls from 80% in 2020 to just over 20% in 2050

Theenergymixin2050intheNZEismuchmorediversethantoday.In2020,oilprovided

30%oftotalenergysupply,whilecoalsupplied26%andnaturalgas23%.In2050,renewables

providetwo‐thirdsofenergyuse,splitbetweenbioenergy,wind,solar,hydroelectricityand

geothermal(Figure2.6).Thereisalsoalargeincreaseinenergysupplyfromnuclearpower,

whichnearlydoublesbetween2020and2050.

TherearelargereductionsintheuseoffossilfuelsintheNZE.Asashareoftotalenergy

supply,theyfallfrom80%in2020tojustover20%in2050.However,theirusedoesnotfall

tozeroin2050:significantamountsarestillusedinproducingnon‐energygoods,inplants

withCCUS,andinsectorswhereemissions are especially hard to abate such as heavy

industryandlong‐distancetransport.Allremainingemissionsin2050areoffsetbynegative

emissionselsewhere(Box2.2).Coal use falls from5250million tonnes of coalequivalent

(Mtce)in2020to2500Mtcein2030andtolessthan600Mtcein2050–anaverageannual

declineof7%eachyearfrom2020to2050.Oildemanddroppedbelow90millionbarrels

perday(mb/d)in2020anddemanddoesnotreturntoits2019peak:itfallsto72mb/din

2030and24mb/din2050–anannualaveragedeclineofmorethan4%from2020to2050.

Naturalgasusedroppedto3900billioncubicmetres(bcm)in2020,butexceedsitsprevious

100

200

300

400

500

600

2000 2010 2020 2030 2040 2050

Other

Otherrenewables

Wind

Solar

Hydro

Traditionaluseofbiomass

Moderngaseousbioenergy

Modernliquidbioenergy

Modernsolidbioenergy

Nuclear

Naturalgas

Oil

Coal



58 International Energy Agency | Special Report

2019peakinthemid‐2020sbeforestartingtodeclineasitisphasedoutintheelectricity

sector.Naturalgasusedeclinesto3700bcmin2030and1750bcmin2050–anannual

averagedeclineofjustunder3%from2020to2050.

Figure 2.6

⊳ Total energy supply of unabated fossil fuels and low-emissions

energy sources in the NZE



IEA.Allrightsreserved.

Some fossil fuels are still used in 2050 in the production of non-energy goods,

in plants equipped with CCUS, and in sectors where emissions are hard to abate

Note:Low‐emissionsincludestheuseoffossilfuelswithCCUSandinnon‐energyuses.

Box 2.2 ⊳ Why does fossil fuel use not fall to zero in 2050 in the NZE?

Intotal,around120EJoffossilfuelsisconsumedin2050intheNZErelativeto460EJin

2020.Threemainreasonsunderliewhyfossilfuelusedoesnotfalltozeroin2050,even

thoughtheenergysectoremitsnoCO

onanetbasis:

 Usefornon‐energypurposes.Morethan30%oftotalfossilfuelusein2050inthe

NZE–including70%ofoiluse–isinapplicationswherethefuelsarenotcombusted

andsodonotresultinanydirectCO

emissions(Figure2.7).Examplesincludeuse

as chemical feedstocks and in lubricants, paraffin waxes and asphalt. There are

majoreffortstolimitfossilfueluseintheseapplicationsintheNZE,forinstance

globalplasticcollectionratesforrecyclingrisingfrom15%in2020to55%in2050,

butfossilfueluseinnon‐energyapplicationsstillrisesslightlyto2050.

 UsewithCCUS.Aroundhalfoffossilfuelusein2050isinplantsequippedwithCCUS

(around 3.5GtCO

 emissions are captured from fossil fuels in 2050). Around

925bcm of natural gas is converted to hydrogen with CCUS. In addition, around

470Mtceofcoaland225bcmofnaturalgasareusedwithCCUSintheelectricity

andindustrialsectors,mainlytoextendtheoperationsofyoungfacilitiesandreduce

strandedassets.

100

200

300

400

500

600

2010 2020 2030 2040 2050 2010 2020 2030 2040 2050

Other

renewables

Solar

Wind

Traditional

useofbiomass

Modern

bioenergy

Hydro

Nuclear

Naturalgas

Oil

Coal

Unabatedfossilfuels Low‐emissions



Chapter 2 | A global pathway to net-zero CO₂ emissions in 2050

2

 Useinsectorswheretechnologyoptionsarescarce.Theremaining20%offossil

fuelusein2050intheNZEisinsectorswherethecompleteeliminationofemissions

is particularly challenging. Mostly this is oil, as it continues to fuel aviation in

particular.Asmallamountofunabatedcoalandnaturalgasareusedinindustryand

in the production of energy. The unabated use of fossil fuel results in around

1.7GtCO

emissionsin2050,whicharefullyoffsetbyBECCSandDACCS.

Figure 2.7 ⊳ Fossil fuel use and share by sector in 2050 in the NZE



IEA.Allrightsreserved.

More than 30% of fossil fuel use in 2050 is not combusted and so does

not result in direct CO

emissions, around 50% is paired with CCUS

Notes: Non‐combustion includes use for non‐emitting, non‐energy purposes such as petrochemical

feedstocks,lubricantsandasphalt.Energyproductionincludesfuelusefordirectaircapture.

Solid,liquidandgaseousfuelscontinuetoplayanimportantroleintheNZE,whichseeslarge

increasesinbioenergyandhydrogen(Figure2.8).Around40%ofbioenergyusedtodayisfor

thetraditionaluseofbiomassincooking:thisisrapidlyphasedoutintheNZE.Modernforms

ofsolidbiomass,whichcanbeusedtoreduceemissionsinboththeelectricityandindustry

sectors,risefrom32EJin2020to55EJin2030and75EJin2050,offsettingalargeportion

ofadropincoaldemand.Theuseoflow‐emissionsliquidfuels,suchasammonia,synthetic

fuelsandliquidbiofuels,increasesfrom3.5EJ(1.6millionbarrelsofoilequivalentperday

[mboe/d])in2020tojustabove25EJ(12.5mboe/d)in2050.Thesupplyoflow‐emissions

gases,suchashydrogen,syntheticmethane,biogasandbiomethanerisesfrom2EJin2020

to17EJin2030and50EJin2050.Theincreaseingaseoushydrogenproductionbetween

2020 and 2030 in the NZE is twice as fast as the fastest ten‐yearincreaseinshalegas

productionintheUnitedStates.

20%

40%

60%

80%

100%

10

20

30

40

50

Non‐

combustion

Energy

production

Industry

Power

Transport

Buildings

withCCUS

withoutCCUS

withCCUS

withoutCCUS

withCCUS

withoutCCUS

Shareofsector

Coal

Naturalgas

Oil

total(rightaxis)



60 International Energy Agency | Special Report

Figure 2.8 ⊳ Solid, liquid and gaseous fuels in the NZE

IEA.Allrightsreserved.

Increases in low-emissions solids, liquids and gases from bioenergy, hydrogen and

hydrogen-based fuels offset some of the declines in coal, oil and natural gas

Notes: Hydrogen conversion losses = consumption of natural gas when producing low‐carbon merchant

hydrogenusingsteammethanereforming.Hydrogen‐basedincludeshydrogen,ammoniaandsyntheticfuels.

2.4.2 Totalfinalconsumption

Totalfinalconsumptionworldwidereboundsmarginallyfollowingits5%dropin2020,butit

neverreturnsto2019levelsintheNZE(435EJ).Itfallsbyjustunder1%eachyearonaverage

between2025and2050to340EJ.Energyefficiencymeasuresandelectrificationarethetwo

maincontributingfactors,withbehaviouralchangesandmaterialsefficiencyalsoplayinga

role. Without these improvements, final energy consumption in 2050 would be around

640EJ, around 90% higher than the level in the NZE. Final consumption of electricity

increasesby25%from2020to2030,andby2050itismorethandoublethelevelin2020.

Theincreaseinelectricityconsumptionfromend‐usessectorsandfromhydrogenproduction

meansthatoverallannualelectricitydemandgrowthisequivalenttoaddinganelectricity

marketthesizeofIndiaeveryyearintheNZE.Theshareofelectricityinglobalfinalenergy

consumptionjumpsfrom20%in2020to26%in2030andtoaround50%in2050(Figure2.9).

Thedirectuseofrenewablesinbuildingsandindustrytogetherwithlow‐emissionsfuelssuch

asbioenergyandhydrogen‐basedfuelsprovideafurther28%offinalenergyconsumption

in 2050; fossil fuels comprise the remainder, most of which are used in non‐emitting

processesorinfacilitiesequippedwithCCUS.

Inindustry,mostoftheglobalemissionsreductionsintheNZEduringtheperiodto2030are

deliveredthroughenergyandmaterialsefficiencyimprovements,electrificationofheat,and

fuelswitchingtosolarthermal,geothermalandbioenergy.Thereafter,CCUSandhydrogen

playanincreasinglyimportantroleinreducingCO

emissions,especiallyinheavyindustries

suchassteel,cementandchemicals.Electricityconsumptioninindustrymorethandoubles

between2020and2050,providing45%oftotalindustrialenergyneedsin2050(Figure2.10).

50

100

150

200

2000

2010

2020

2030

2040

2050

2000

2010

2020

2030

2040

2050

2000

2010

2020

2030

2040

2050

Coal Oil Naturalgas Hydrogenconversion

Traditionalbiomass Modernbioenergy Hydrogen‐based

Solids Liquids Gases

losses



Chapter 2 | A global pathway to net-zero CO₂ emissions in 2050

2

The demand for merchant hydrogen in industry increases from less than 1Mt today to

around40Mtin2050.Afurther10%ofindustrialenergydemandin2050ismetbyfossil

fuelsusedinplantsequippedwithCCUS.

Figure 2.9

⊳ Global total final consumption by fuel in the NZE



IEA.Allrightsreserved.

The share of electricity in final energy use jumps from 20% in 2020 to 50% in 2050

Note:Hydrogen‐basedincludeshydrogen,ammoniaandsyntheticfuels.

Intransport,thereisarapidtransitionawayfromoilworldwide,whichprovidedmorethan

90%offuelusein2020.Inroadtransport,electricitycomestodominatethesector,providing

more than 60% of energy use in 2050, while hydrogen and hydrogen‐based fuels play a

smallerrole, mainlyinfuelling long‐haulheavy‐dutytrucks.In shipping, energyefficiency

improvements significantly reduce energy needs (especially up to 2030), while advanced

biofuelsandhydrogen‐basedfuels,suchasammonia,increasinglydisplaceoil.Inaviation,

theuseofsyntheticliquidsand advanced biofuels growsrapidly,and their share of total

energydemandrisesfromalmostzerotodaytoalmost80%in2050. Overall, electricity

becomes the dominant fuel in the transport sector globally by the early 2040s, and it

accountsforaround45%ofenergyconsumptioninthesectorin2050(comparedwith1.5%

in 2020). Hydrogen and hydrogen‐based fuels account for nearly 30% of consumption

(almostzeroin2020)andbioenergyforafurther15%(around4%in2020).

Inbuildings,theelectrificationofend‐usesincludingheatingleadstodemandforelectricity

increasingbyaround35%between2020and2050:itbecomesthedominantfuel,reaching

16000terawatt‐hours(TWh)in2050,andaccountingfortwo‐thirdsoftotalbuildingssector

energyconsumption.By2050,two‐thirdsofresidentialbuildingsinadvancedeconomiesand

around40%ofresidentialbuildingsinemergingmarketanddevelopingeconomiesarefitted

withaheatpump.Onsiterenewables‐basedenergysystemssuchassolarwaterheatersand

biomassboilersprovideafurtherquarteroffinalenergyuseinthebuildingssectorin2050

(upfrom6%in2020).Low‐emissionsdistrictheatingandhydrogenprovideonly7%ofenergy

use,butplayasignificantroleinsomeregions.

50 100 150 200 250 300 350

2010

2020

2030

2040

2050

2010

2020

2030

2040

2050

Oil

Naturalgas

Coal

Heat

Modernbioenergy

Traditionaluse

ofbiomass

Hydrogen‐based

Otherrenewables

Fossilfuelsunabated

FossilfuelswithCCUS

Hydrogen‐based

Nuclear

SolarPVandwind

Hydro

Otherrenewables

Fuelsandother

Electricityuse

FuelsandotherElectricityuse



62 International Energy Agency | Special Report

Figure 2.10 ⊳ Global final energy consumption by sector and fuel in the NZE



IEA.Allrightsreserved.

There is a wholesale shift away from unabated fossil fuel use to electricity, renewables,

hydrogen and hydrogen-based fuels, modern bioenergy and CCUS in end-use sectors

Note:Hydrogen‐basedincludeshydrogen,ammoniaandsyntheticfuels.

Buildingsenergyconsumptionfallsby25%between2020and2030,largelyasaresultofa

majorpushtoimproveefficiencyandtophaseoutthetraditionaluseofsolidbiomassfor

cooking: it is replaced by liquefiedpetroleumgas(LPG),biogas, electric cookers and

improvedbioenergystoves.Universalaccesstoelectricityisachievedby2030,andthisadds

lessthan1%toglobalelectricitydemandin2030.Energyconsumptioninthebuildingssector

contractsbyaround15%between2030and2050givencontinuedefficiencyimprovements

and electrification. By 2050, energy use in buildings is 35% lower than in 2020. Energy

efficiency measures – including improving building envelopes and ensuring that all new

appliancesbroughttomarketarethemostefficientmodelsavailable–playakeyrolein

limiting the rise in electricity demand in the NZE. Without these measures, electricity

demandinbuildingswouldbearound10000TWhhigherin2050,oraround70%higherthan

thelevelintheNZE.

How does the NZE compare with similar 1.5 °C scenarios

assessed by the IPCC?

TheIPCCSR1.5includes90individualscenariosthathaveatleasta50%chanceoflimiting

warmingin2100to1.5°C(IPCC,2018).

Only18ofthesescenarioshavenet‐zeroCO



energysectorandindustrialprocessemissionsin2050.Inotherwords,onlyone‐in‐five

ofthe1.5°CscenariosassessedbytheIPCChavethesamelevelofemissionsreduction

Includes53scenarioswithnoorlimitedtemperatureovershootand37scenarioswithahighertemperature

overshoot.

40

80

120

160

200

2010

2020

2030

2040

2050

2010

2020

2030

2040

2050

2010

2020

2030

2040

2050

Other

Hydrogen‐based

Otherrenewables

Modernbioenergy

Traditionaluse

ofbiomass

Electricity

FossilfuelswithCCUS

Unabatedfossilfuels

Industry Transport Buildings

SPOTLIGHT

Chapter 2 | A global pathway to net-zero CO₂ emissions in 2050

2

ambition for the energy and industrial process sectors to 2050 as the NZE.

Some

comparisonsbetweenthese18scenariosandtheNZEin2050(Figure2.11):

Figure 2.11 ⊳ Comparison of selected indicators of the IPCC scenarios and

the NZE in 2050

IEA.Allrightsreserved.

The NZE has the lowest level of energy-related CDR and bioenergy of any scenario that

achieves net-zero energy sector and industrial process CO

emissions in 2050

Notes:CCUS=carboncapture,utilisationandstorage;CDR=carbondirectremoval;TES=totalenergy

supply;TFC=totalfinalconsumption.Energy‐relatedCDRincludesCO

capturedthroughbioenergywith

CCUSanddirectaircapturewithCCUSandputintopermanentstorage.Windandsolarsharearegiven

asapercentageoftotalelectricitygeneration.Only17ofthe18scenariosassessedbytheIPCCreport

hydrogenuseinTFC.

 UseofCCUS.ThescenariosassessedbytheIPCChaveamedianofaround15GtCO

capturedusingCCUSin2050,morethandoublethelevelintheNZE.

 UseofCDR.CO

emissionscapturedandstoredfromBECCSandDACCSintheIPCC

scenariosrangefrom3.5‐16GtCO

2

in2050,comparedwith1.9GtCO

2

intheNZE.

Thelow‐energydemandscenariohasaround4.5GtCO

energysectorandindustrialprocessemissionsin

2050andisnotincludedinthiscomparison.

HydrogeninTFC

25%

50%

75%

100%

Windandsolarshar

80

160

240

320

BioenergyTES

5

10

15

20

GtCO

CCUS

5

10

15

20

GtCO₂

Energy‐relatedCDR

150

300

450

600

ScenariosassessedbyIPCC NZE

TFC

64 International Energy Agency | Special Report

 Bioenergy.TheIPCCscenariosuseamedianof200EJofprimarybioenergyin2050

(comparedwith 63 EJ today) andanumberusemore than 300 EJ. TheNZEuses

100EJofprimarybioenergyin2050.

 Energy efficiency. Total final consumption in the IPCC scenarios range from

300‐550EJin2050(comparedwitharound410EJin2020).TheNZEhasfinalenergy

consumptionof340EJin2050.

 Hydrogen.TheIPCCscenarioshaveamedianof18EJhydrogenintotalfinal

consumptionin2050,comparedwith33EJintheNZE.

 Electricitygeneration.Thesharesofwindandsolarintotalelectricitygenerationin

2050intheIPCCscenariosrangefromaround15‐80%withamedianvalueof50%.

IntheNZE,windandsolarprovide70%oftotalgenerationin2050.

2.5 Keypillarsofdecarbonisation

AchievingtherapidreductioninCO

emissionsoverthenext30yearsintheNZErequiresa

broad range of policy approaches and technologies (Figure2.12). The key pillars of

decarbonisation of the global energy system are energy efficiency, behavioural changes,

electrification,renewables,hydrogenandhydrogen‐basedfuels,bioenergyandCCUS.

Figure 2.12

⊳ Emissions reductions by mitigation measure in the NZE, 2020-2050

IEA.Allrightsreserved.

Solar, wind and energy efficiency deliver around half of emissions reductions to 2030

in the NZE, while electrification, CCUS and hydrogen ramp up thereafter

Notes:Activity=energyservicedemandchangesfromeconomicandpopulationgrowth.Behaviour=energy

servicedemandchangesfromuserdecisions,e.g.changingheatingtemperatures.Avoideddemand=energy

servicedemandchangesfromtechnologydevelopments,e.g.digitalisation.Otherfuelshifts=switchingfrom

coalandoiltonaturalgas,nuclear,hydropower,geothermal,concentratingsolarpowerormarine.

TheNZEvalueforhydrogenincludesthetotalenergycontentof hydrogen and hydrogen‐based fuels

consumedinfinalenergyconsumption.

15

30

45

2020 2030 2050

GtCO₂

Activity

Behaviourand

avoideddemand

Energyefficiency

Hydrogen‐based

Electrification

Bioenergy

Windandsolar

Otherfuelshifts

CCUS

+24%

‐50%

+51%

‐100%

Mitigationmeasures

Measures

Chapter 2 | A global pathway to net-zero CO₂ emissions in 2050

2

2.5.1 Energyefficiency

Minimising energy demand growth through improvements in energy efficiency makes a

criticalcontributionintheNZE.Manyefficiencymeasuresinindustry,buildings,appliances

andtransportcanbeputintoeffectandscaledupveryquickly.Asaresult,energyefficiency

measures are front‐loaded in the NZE, and they play their largestroleincurbingenergy

demandandemissionsintheperiodto2030.Althoughenergyefficiencyimprovesfurther

after2030,itscontributiontooverallemissionsreductionsfallsasothermitigationmeasures

play an expanding role. Without the energy efficiency, behavioural changes and

electrificationmeasuresdeployedintheNZE,finalenergy consumptionwouldbearound

300EJhigherin2050,almost90%abovethe2050levelintheNZE(Figure2.13).Efficiency

improvementsalsohelpreducethevulnerabilityofbusinessesandconsumerstopotential

disruptionstoelectricitysupplies.

Figure 2.13

⊳ Total final consumption and demand avoided by mitigation

measure in the NZE

IEA.Allrightsreserved.

Energy efficiency plays a key role in reducing energy consumption across end-use sectors

Notes:Otherfuelswitchincludesswitchingtohydrogen‐relatedfuels,bioenergy,solarthermal,geothermal,

ordistrictheat.

Inthebuildingssector,manyefficiencymeasuresyieldfinancialsavingsaswellasreducing

energy use and emissions. In the NZE, there are immediate and rapid improvements in

energyefficiencyinbuildings,mainlyfromlarge‐scaleretrofitprogrammes.Around2.5%of

existingresidentialbuildingsinadvancedeconomiesareretrofittedeachyearto2050inthe

NZEtocomplywithzero‐carbon‐readybuildingstandards

(comparedwithacurrentretrofit

rateoflessthan1%).Inemergingmarketanddevelopingeconomies,buildingreplacement

Azero‐carbon‐readybuildingishighlyenergyefficientanduseseitherrenewableenergydirectlyorfroman

energysupplythatwillbefullydecarbonisedby2050intheNZE(suchaselectricityordistrictheat).Azero‐

carbon‐readybuildingwillbecomeazero‐carbonbuildingby2050,withoutfurtherchangestothebuildingor

itsequipment(seeChapter3).

100

200

300

2020 2030 2050 2020 2030 2050 2020 2030 2050

NZEdemand Electricity Otherfuelswitch Efficiency Behaviour

Industry Buildings Transport

Avoideddueto:



66 International Energy Agency | Special Report

ratesarehigherandtheannualrateofretrofitsisaround2%throughto2050.By2050,the

vast majority of existing residential buildings are retrofitted to be zero‐carbon buildings.

Energy‐relatedbuildingcodesareintroducedinallregionsby2030toensurethatvirtually

all new buildings constructed are zero‐carbon‐ready. Minimum energy performance

standards and replacement schemes for low‐efficiency appliancesareintroducedor

strengthenedinthe2020sinallcountries.Bythemid‐2030s,nearlyallhouseholdappliances

soldworldwideareasefficientasthemostefficientmodelsavailabletoday.

Inthetransportsector,stringentfuel‐economystandardsandensuringnonew

passengercarsrunningoninternalcombustionengines(ICEs)aresoldgloballyfrom2035

resultinarapidshiftinvehiclesalestowardmuchmoreefficientelectricvehicles(EVs).

The

impactonefficiencyisseeninthe2030s,asthecompositionofthevehiclestockchanges:

electriccarsmakeup20%ofallcarsontheroadin2030and60%in2040(comparedwith

1%today).Continuousimprovementsinthefueleconomyofheavyroadvehiclestakeplace

throughto2050astheyswitchtoelectricityorfuelcells,whileefficiencyinshippingand

aviationimprovesasmoreefficientplanesandshipsreplaceexistingstock.

Intheindustrysector,mostmanufacturingstockisalreadyquiteefficient,buttherearestill

opportunities for energy efficiency improvements. Energy management systems,

best‐in‐classindustrialequipmentsuchaselectricmotors,variablespeeddrives,heatersand

grinders are installed, and process integration options such aswasteheatrecoveryare

exploitedtotheirmaximumeconomicpotentialsintheperiodto2030intheNZE.After2030,

therateofefficiencyimprovementslowsbecausemanyofthetechnologies needed to

reduce emissions in industry in the NZE require more energy than their equivalent

conventionaltechnologies.TheuseofCCUS,forexample,increasesenergyconsumptionto

operate the capture equipment, and producing electrolytic hydrogen on‐site requires

additionalenergythanthatneededforthemainmanufacturingprocess.

Table 2.3

⊳ Key global milestones for energy efficiency in the NZE

Sector 2020 2030 2050

Totalenergysupply 2010‐20 2020‐30 2030‐50

Annualenergyintensityimprovement(MJperUSDGDP) ‐1.6% ‐4.2% ‐2.7%

Industry  

Energyintensityofdirectreducedironfromnaturalgas(GJpertonne) 12 11 10

Processenergyintensityofprimarychemicals(GJpertonne) 17 16 15

Transport  

AveragefuelconsumptionofICEheavytrucksfleet(index2020=100) 100 81 63

Buildings   

Shareofzero‐carbon‐readybuildingsintotalstock <1% 25% >85%

Newbuildings:heating&coolingenergyconsumption(index2020=100) 100 50 20

Appliances:unitenergyconsumption(index2020=100) 100 75 60

Notes:ICE=internalcombustionengine;zero‐carbon‐readybuildings=seedescriptioninsection3.7.

In2020,theaveragebatteryelectriccarrequiredaround30%oftheenergyoftheaverageICEcartoprovide

thesamelevelofactivity.



Chapter 2 | A global pathway to net-zero CO₂ emissions in 2050

2

2.5.2 Behaviouralchange

The wholescale transformation of the energy sector demonstrated in the NZE cannot be

achievedwithouttheactiveandwillingparticipationofcitizens.Itisultimatelypeoplewho

drive demand for energy‐related goods and services, and societal norms and personal

choiceswillplayapivotalroleinsteeringtheenergysystemontoasustainablepath.Just

under 40% of emissions reductions in the NZE result from the adoption of low‐carbon

technologies that require massive policy support and investment but little direct

engagementfromcitizensorconsumers,e.g.technologiesinelectricitygenerationorsteel

production.Afurther55%ofemissionsreductionsrequireamixtureofthedeploymentof

low‐carbon technologies and the active involvement or engagement of citizens and

consumers, e.g. installing a solar water heater or buying an EV. A final 8% of emissions

reductionsstemfrombehaviouralchangesandmaterialsefficiencygainsthatreduceenergy

demand, e.g. flying less for business purposes (Figure2.14). Consumer attitudes can also

impactinvestmentdecisionsbybusinessesconcernedaboutpublicimage.

IntheNZE,behaviouralchangereferstochangesinongoingorrepeatedbehaviouronthe

partofconsumerswhichimpactenergyservicedemandortheenergyintensityofanenergy‐

relatedactivity.

ReductionsinenergyservicedemandintheNZEalsocomefromadvances

intechnology,butthesearenotcountedasbehaviouralchanges.Forexample,increased

digitalisationandagrowingmarketshareofsmartappliances,suchassmartthermostatsor

space‐differentiatedthermalcontrolsreducethenecessityforpeopletoplayanactiverole

inenergysavinginhomesovertimeintheNZE.

There are three main types of behavioural change included in theNZE.Awiderangeof

governmentinterventionscouldbeusedtomotivatethesechanges(seesection2.7.1).

 Reducing excessive or wasteful energy use. This includes reducing energy use in

buildingsandonroads,e.g.byreducingindoortemperaturesettings,adoptingenergy

savingpracticesinhomesandlimitingdrivingspeedsonmotorwaysto100kilometres

perhour.

 Transportmodeswitching.Thisincludesashifttocycling,walking,ridesharingortaking

buses for trips in cities that would otherwise be made by car, as well as replacing

regionalair travel by high‐speed rail in regionswherethisisfeasible.Manyofthese

typesofbehaviouralchangeswouldrepresentabreakinfamiliarorhabitualwaysoflife

andassuchwouldrequireadegreeofpublicacceptanceandevenenthusiasm.Many

wouldalsorequirenewinfrastructure,suchascyclelanesandhigh‐speedrailnetworks,

clearpolicysupportandhighqualityurbanplanning.

 Materialsefficiencygains.Thisincludesreduceddemandformaterials,e.g.higherrates

ofrecycling,andimproveddesignandconstructionofbuildingsandvehicles.Thescope

forgainstosomeextentreflectssocietalpreferences.Forinstance,insomeplacesthere

Thismeans,forexample,thatpurchasinganelectricheatpumpinsteadofagasboilerisnotconsideredas

a behavioural change, as it is both an infrequent event and does not necessarily impact energy service

demand.



68 International Energy Agency | Special Report

hasbeenashiftawayfromtheuseofsingle‐useplasticsinrecentyears,atrendthat

acceleratesintheNZE.Gainsinmaterialsefficiencydependonamixtureoftechnical

innovationinmanufacturingandbuildingsconstruction,standardsandregulationsto

supportbest‐practiceandensureuniversaladoptionoftheseinnovations,andincreased

recyclinginsocietyatlarge.

Figure 2.14

⊳ Role of technology and behavioural change in emissions

reductions in the NZE



IEA.Allrightsreserved.

round 8% of emissions reductions stem from behavioural changes and materials efficienc

Notes:Low‐carbontechnologiesincludelow‐carbonelectricitygeneration,low‐carbongasesinend‐usesand

biofuels. Low‐carbon technologies with the active involvement of citizens includes fuel switching,

electrification and efficiency gains in end‐uses. Behavioural changes and materials efficiency includes

transportmodeswitching,curbingexcessiveorwastefulenergyuse,andmaterialsefficiencymeasures.

Three‐quarters of the emissions reductions from behavioural changes in the NZE are

achievedthroughtargetedgovernmentpoliciessupportedbyinfrastructuredevelopment,

e.g.ashifttorailtravelsupportedbyhigh‐speedrailways.The remainder come from

adoptingvoluntarychangesinenergysavinghabits,mainlyinhomes.Eveninthiscase,public

awarenesscampaignscanhelpshapeday‐to‐daychoicesabouthowconsumersuseenergy.

(Detailsofwhatgovernmentscandotohelpbringaboutbehaviouralchangesarediscussed

inChapter4).

Behaviouralchangesreduceenergy‐relatedactivitybyaround10‐15%onaverageoverthe

period to 2050 in the NZE, reducing overall global energy demand by over 37EJ in 2050

(Figure2.15).In2030,around1.7GtCO

emissionsareavoided,45%ofwhichcomefrom

transport,notablythroughmeasurestophaseoutcaruseincities and to improve fuel

economy.Forexample,reducingspeedlimitsonmotorwaysto100km/hreducesemissions

fromroadtransportby3%or140MtCO

2

in2030.Ashiftawayfromsingleoccupancycaruse

towardsridesharingorcyclingandwalkinginlargecitiessavesafurther185MtCO

.Around

‐35

‐30

‐25

‐20

‐15

‐10

‐5

2020 2030 2040 2050

GtCO

Low‐carbon

technologies

Low‐carbon

technologieswiththe

activeinvolvement

ofconsumers

Behaviouralchanges

andmaterials



Chapter 2 | A global pathway to net-zero CO₂ emissions in 2050

2

40%ofemissionssavingsin2030occurinindustrybecauseofimprovementsinmaterials

efficiencyandincreasedrecycling,withthebiggestimpactscomingfromreducingwasteand

improvingthedesignandconstructionofbuildings.Theremainderofemissionssavingsin

2030arefrombehaviouralchangesinbuildings,for exampleadjustingspaceheatingand

coolingtemperatures.

Figure 2.15

⊳ CO

emissions and energy demand reductions from

behavioural changes and materials efficiency in the NZE



IEA.Allrightsreserved.

By 2030, behaviour changes and materials efficiency gains reduce emissions by

1.7 Gt CO

, and energy demand by 27 EJ; reductions increase further through to 2050

In 2050, the growing importance of low‐emissions electricity and fuels in transport and

buildingsmeansthat90%ofemissionsreductionsareinindustry,predominantlyinthose

sectorswhereitismostchallengingtotackleemissionsdirectly.Materialefficiencyalone

reducesdemandforcementandsteelby20%,savingaround1700MtCO

.Oftheemissions

reductions in transport in 2050, nearly 80% come from measures to reduce passenger

aviationdemand,withtheremainderfromroadtransport.

Thescope,scaleandspeedofadoptionofthebehaviouralchangesintheNZEvarieswidely

betweenregions,dependingonseveralfactorsincludingtheabilityofexistinginfrastructure

tosupportsuchchangesanddifferencesingeography,climate,urbanisation,socialnorms

andculturalvalues.Forexample,regionswithhighlevelsofprivatecarusetodayseeamore

gradualshiftthanotherstowardspublictransport,sharedcaruse,walkingandcycling;air

travelisassumedtoswitchtohigh‐speedrailonexistingorpotentialroutesonlywheretrains

could offer a similar journey time; and the potential for moderating air conditioning in

buildingsandvehiclestakesintoaccountseasonaleffectsandhumidity.Wealthierregions

generallyhavehigherlevelsofpercapitaenergy‐relatedactivity,andbehaviouralchanges

playanespeciallyimportantroleintheseregionsinreducingexcessiveorwastefulenergy

consumption.

‐40

‐32

‐24

‐16

‐8

2030 2040 2050

‐3.0

‐2.4

‐1.8

‐1.2

‐0.6

2030 2040 2050

GtCO₂

Transport

Buildings

Industry

Emissions Energy demand



70 International Energy Agency | Special Report

MostofthebehaviouralchangesintheNZEwouldhavesomeeffectonnearlyeveryone’s

dailylife,butnonerepresentsaradicaldeparturefromenergy‐reducingpracticesalready

experiencedinmanypartsoftheworldtoday.Forexample,inJapananawarenesscampaign

has successfully reduced cooling demand in line with the reductions assumed in many

regionsintheNZEby2040;legislationtolimiturbancarusehasbeenintroducedinmany

largecities;andspeedlimitreductionstoaround100km/h(theleveladoptedgloballyinthe

NZEby2030)havebeentestedintheUnitedKingdomandSpaintoreduceairpollutionand

improvesafety.

Table 2.4

⊳ Key global milestones for behavioural change in the NZE

Sector Year Milestone

Industry 2020

 Globalaverageplasticscollectionrate=17%.

 2030

 Globalaverageplasticscollectionrate=27%.

 Lightweightingreducestheweightofanaveragepassengercarby10%.

 2050

 Globalaverageplasticscollectionrate=54%.

 Efficiencyoffertiliseruseimprovedby10%.

Transport 2030

 Eco‐drivingandmotorwayspeedlimitsof100km/hintroduced.

 UseofICEcarsphasedoutinlargecities.

 2050

 Regionalflightsareshiftedtohigh‐speedrailwherefeasible.

 Businessandlong‐haulleisureairtraveldoesnotexceed2019levels.

Buildings 2030

 Spaceheatingtemperaturesmoderatedto19‐20°Conaverage.

 Spacecoolingtemperaturesmoderatedto24‐25°Conaverage.

 Excessivehot‐watertemperaturesreduced.

 2050

 Useofenergy‐intensivematerialsperunitoffloorareadecreasesby30%.

 Buildinglifetimeextendedby20%onaverage.

Note:Eco‐drivinginvolvespre‐emptivestoppingandstarting;ICE=internalcombustionengine.

2.5.3 Electrification

Thedirectuseoflow‐emissionselectricityinplaceoffossilfuelsisoneofthemostimportant

driversofemissionsreductionsintheNZE,accountingforaround20%ofthetotalreduction

achievedby2050.Globalelectricitydemandmorethandoublesbetween2020and2050,

withthelargestabsoluteriseinelectricityuseinend‐usesectorstakingplaceinindustry,

whichregistersanincreaseofmorethan11000TWhbetween2020and2050.Muchofthis

is due to the increasing use of electricity for low‐ and medium‐temperature heat and in

secondaryscrap‐basedsteelproduction(Figure2.16).

Intransport,theshareofelectricityincreasesfromlessthan2%in2020toaround45%in

2050 in the NZE. More than 60% of total passenger car sales globally are EVs by 2030

(comparedwith5%ofsalesin2020),andthecarfleetisalmostfullyelectrifiedworldwide

by2050(theremainderarehydrogen‐poweredcars).Theincreaseinelectricpassengercar

salesgloballyoverthenexttenyearsisovertwenty‐timeshigherthantheincreaseinICEcar

salesoverthelastdecade.Electrificationisslowerfortrucksbecauseitdependsonhigher



Chapter 2 | A global pathway to net-zero CO₂ emissions in 2050

2

density batteries than those currently available on the market,especiallyforlong‐haul

trucking, and on new high‐power charging infrastructure: electric trucks nevertheless

accountforaround25%oftotalheavytrucksalesgloballyby2030andaroundtwo‐thirdsin

2050.Theelectrificationofshippingandaviationismuchmorelimitedandonlygetsunder

wayafterlargeimprovementsinbatteryenergydensity(seesection3.6)(Figure2.17).Inthe

NZE,demandforbatteriesfortransportreachesaround14TWhin2050,90‐timesmorethan

in2020.Growthinbatterydemandtranslatesintoanincreasingdemandforcriticalminerals.

Forexample,demandforlithiumforuseinbatteriesgrows30‐foldto2030andismorethan

100‐timeshigherin2050thanin2020(IEA,2021).

Figure 2.16

⊳ Global electricity demand and share of electricity in

energy consumption in selected applications in the NZE



IEA.Allrightsreserved.

Global electricity demand more than doubles in the period to 2050,

with the largest rises to produce hydrogen and in industry

Notes: Merchant hydrogen = hydrogen produced by one company to sell to others. Light‐duty vehicles =

passengercarsandvans.Heavytrucks=medium‐freighttrucksandheavy‐freighttrucks.

In buildings, electricity demand is moderated in the NZE by a huge push to improve the

efficiency of appliances, cooling, lighting and building envelopes.Butalargeincreasein

activity,alongwiththewidespreadelectrificationofheatingthroughtheuseofheatpumps,

meansthatelectricitydemandinbuildingsstillrisessteadilyovertheperiodreaching66%of

totalenergyconsumptioninbuildingsin2050.

Alongsidethegrowthinthedirectuseofelectricityinend‐usesectors,thereisalsoahuge

increase in the use of electricity for hydrogen production. Merchant hydrogen produced

using electrolysis requires around 12000TWh in 2050 in the NZE,whichisgreaterthan

currenttotalannualelectricitydemandofChinaandtheUnitedStatescombined.

25%

50%

75%

4000

8000

12000

Merchant

hydrogen

Heavy

industry

Light

industry

Heatingin

buildings

Cooking Light‐duty

vehicles

Heavy‐

trucks

TWh

2020 2030 2050

Electricitydemand:

Electricityshareinconsumption(rightaxis):



72 International Energy Agency | Special Report

Figure 2.17 ⊳ Battery demand growth in transport and battery energy density

in the NZE



IEA.Allrightsreserved.

Nearly 20 battery giga-factories open every year to 2030 to satisfy battery demand

for electric cars in the NZE; higher density batteries are needed to electrify long-haul trucks

Notes:Li‐S=lithium‐sulphurbattery;Whperkg=Watthoursperkilogramme.

Theaccelerationofelectricitydemandgrowthfrom2%peryearoverthepastdecadeto3%

peryearthroughto2050,togetherwithasignificantlyincreasedshareofvariablerenewable

electricitygeneration,meansthatannualelectricitysectorinvestmentintheNZEisthree‐

timeshigheronaveragethaninrecentyears.Theriseinelectricitydemandalsocallsfor

extensive efforts to ensure the stability and flexibility of electricity supply through

demand‐sidemanagement,the operationof flexible low‐emissionssourcesofgeneration

includinghydropowerandbioenergy,andbatterystorage.

Table 2.5

⊳ Key global milestones for electrification in the NZE

Sector 2020 2030 2050

Shareofelectricityintotalfinalconsumption 20% 26% 49%

Industry 

Shareofsteelproductionusingelectricarcfurnace 24% 37% 53%

Electricityshareoflightindustry 43% 53% 76%

Transport   

Shareofelectricvehiclesinstock:cars 1% 20% 86%

 two/three‐wheelers 26% 54% 100%

 bus 2% 23% 79%

vans0% 22% 84%

 heavytrucks 0% 8% 59%

Annualbatterydemandforelectricvehicles(TWh) 0.16 6.6 14

Buildings   

Heatpumpsinstalled(millions) 180 600 1800

Shareofheatpumpsinenergydemandforheating 7% 20% 55%

Millionpeoplewithoutaccesstoelectricity 786 0 0

200

400

600

800

2010 2020 2030 2040 2050

Whperkg

TWhperyear

Long‐haultrucks Cars,buses,deliverytrucks Batterycelldensity(rightaxis)

Solidstate(400 Whperkg)

requiredforelectric long‐haultrucks

Li‐S(orother)(650Whperkg)

requiredforelectricaircrafts



Chapter 2 | A global pathway to net-zero CO₂ emissions in 2050

2

2.5.4 Renewables

Atagloballevel,renewableenergytechnologiesarethekeyto reducing emissions from

electricitysupply.Hydropowerhasbeenaleadinglow‐emissionsourceformanydecades,

butitismainlytheexpansionofwindandsolarthattriplesrenewablesgenerationby2030

andincreasesitmorethaneightfoldby2050intheNZE.Theshareofrenewablesintotal

electricitygenerationgloballyincreasesfrom29%in2020toover60%in2030andtonearly

90% in 2050 (Figure2.18). To achieve this, annual capacity additions of wind and solar

between2020and2050arefive‐timeshigherthantheaverageoverthelastthreeyears.

Dispatchable renewables are critical to maintain electricity security, together with other

low‐carbongeneration,energystorageandrobustelectricitynetworks.IntheNZE,themain

dispatchable renewables globally in 2050 are hydropower (12% of generation),

bioenergy(5%),concentratingsolarpower(2%)andgeothermal(1%).

Figure 2.18

⊳ Fuel shares in total energy use in selected applications in the NZE

IEA.Allrightsreserved.

Renewables are central to emissions reductions in electricity, and they make major

contributions to cut emissions in buildings, industry and transport both directly and indirectly

Notes:Indirectrenewables=useofelectricityanddistrictheatproducedbyrenewables.Otherlow‐carbon

=nuclearpower,facilitiesequippedwithCCUS,andlow‐carbonhydrogenandhydrogen‐basedfuels.



74 International Energy Agency | Special Report

Renewables also play an important role in reducing emissions in buildings, industry and

transport.Renewablescanbeusedeitherindirectly,viatheconsumptionofelectricityor

districtheatingthatwasproducedbyrenewables,ordirectly,mainlytoproduceheat.

Intransport,renewablesplayanimportantindirectroleinreducingemissionsbygenerating

theelectricitytopowerelectricvehicles.Theyalsocontributetodirectemissionsreductions

throughtheuseofliquidbiofuelsandbiomethane.

Inbuildings,renewableenergyismainlyusedforwaterandspaceheating.Thedirectuseof

renewableenergyrisesfromabout10%ofheatingdemandgloballyin2020to40%in2050,

aboutthree‐quartersoftheincreaseisintheformofsolarthermalandgeothermal.Deep

retrofitsandenergy‐relatedbuildingcodesarepairedwithrenewableswheneverpossible:

almostallbuildingswithavailableroofspaceandsufficientsolarinsolationareequippedwith

solarthermalwaterheatersby2050,astheyaremoreproductivepersquaremetrethan

solarPVandasheatstorageinwatertanksisgenerallymorecost‐effectivethanstorageof

electricity.RooftopsolarPV,whichproducesrenewableelectricityonsite,iscurrently

installed on around 25million rooftops worldwide; the number increases to 100million

rooftopsby 2030and 240million by 2050. A further15% of heating in buildings in 2030

comesindirectlyfromrenewablesintheformofelectricity,andthisrisestoalmost40%in

2050.

Inindustry,bioenergyisthemostimportantdirectrenewableenergysourceforlow‐and

medium‐temperature needs in the NZE. Solar thermal and geothermal also produce low

temperatureheatforuseinnon‐energy‐intensiveindustriesandancillaryordownstream

processesin heavyindustries. Bioenergy,solar thermal and geothermaltogether provide

about15%ofindustryheatdemandin2030,roughlydoubletheirsharein2010,andthis

increasesto40%in2050.Theindirectuseofrenewableenergyviaelectricityadds15%to

thecontributionthatrenewablesmaketototalindustryenergyusein2050.

Table 2.6

⊳ Key deployment milestones for renewables

Sector 2020 2030 2050

Electricitysector   

Renewablesshareingeneration 29% 61% 88%

Annualcapacityadditions(GW):TotalsolarPV 134 630 630

 Totalwind 114 390 350

 –ofwhich:Offshorewind 5 80 70

 Dispatchablerenewables 31 120 90

End‐usessectors   

RenewableshareinTFC 5% 12% 19%

HouseholdswithrooftopsolarPV(million) 25 100 240

Shareofsolarthermalandgeothermalinbuildings 2% 5% 12%

Shareofsolarthermalandgeothermalinindustryfinalconsumption 0% 1% 2%

Note:TFC=totalfinalconsumption.



Chapter 2 | A global pathway to net-zero CO₂ emissions in 2050

2

2.5.5 Hydrogenandhydrogen‐basedfuels

TheinitialfocusforhydrogenuseintheNZEistheconversionofexistingusesoffossilenergy

to low‐carbon hydrogen in ways that do not immediately require new transmission and

distributioninfrastructure.Thisincludeshydrogenuseinindustryandinrefineriesandpower

plants,andtheblendingofhydrogenintonaturalgasfordistributiontoend‐users.

Globalhydrogenuseexpandsfromlessthan90Mtin2020tomorethan200Mtin2030;the

proportion of low‐carbonhydrogen risesfrom 10% in2020 to 70% in 2030(Figure2.19).

Aroundhalfoflow‐carbonhydrogenproducedgloballyin2030comesfromelectrolysisand

theremainderfromcoalandnaturalgaswithCCUS,althoughthisratiovariessubstantially

between regions. Hydrogen is also blended with natural gas in gasnetworks:theglobal

averageblendin2030includes15%ofhydrogeninvolumetricterms,reducingCO

emissions

fromgasconsumptionbyaround6%.

Figure 2.19

⊳ Global hydrogen and hydrogen-based fuel use in the NZE



IEA.Allrightsreserved.

The initial focus for hydrogen is to convert existing uses to low-carbon hydrogen;

hydrogen and hydrogen-based fuels then expand across all end-uses

Note:Includeshydrogenandhydrogencontainedinammoniaandsyntheticfuels.

Thesedevelopmentsfacilitatearapidscalingupofelectrolysermanufacturingcapacityand

theparalleldevelopmentofnewhydrogentransportinfrastructure.Thisleadstorapidcost

reductions for electrolysers and for hydrogen storage, notably insaltcaverns.Stored

hydrogen is used to help balance both seasonal fluctuations in electricity demand and

imbalances that may arise between the demand for hydrogen and its supply by off‐grid

renewable systems. During the 2020s, there is also a large increase in theinstallation of

end‐useequipmentforhydrogen,includingmorethan15millionhydrogenfuelcellvehicles

ontheroadby2030.

20%

40%

60%

80%

100%

100

200

300

400

500

2020 2025 2030 2035 2040 2045 2050

Other

Refineries

Ironandsteel

Chemicals

Other

Refineries

Industry

Shipping

Aviation

Road

Buildings

Electricitygeneration

Blendedingasgrid

Low‐carbonshare

Merchant

Onsite

76 International Energy Agency | Special Report

After 2030, low‐carbon hydrogen use expands rapidly in all sectorsintheNZE.Inthe

electricity sector, hydrogen and hydrogen‐based fuels provide an important low‐carbon

sourceofelectricitysystemflexibility,mainlythroughretrofittingexistinggas‐firedcapacity

toco‐firewithhydrogen,togetherwithsomeretrofittingofcoal‐firedpowerplantstoco‐fire

withammonia.Althoughthesefuelsprovideonlyaround2%ofoverallelectricitygeneration

in2050,thistranslatesintoverylargevolumesofhydrogenandmakestheelectricitysector

animportantdriverofhydrogendemand.Intransport,hydrogenprovidesaroundone‐third

offueluseintrucksin2050intheNZE:thisiscontingentonpolicymakerstakingdecisions

that enable the development of the necessary infrastructure by 2030. By 2050,

hydrogen‐basedfuelsalsoprovidemorethan60%oftotalfuelconsumptioninshipping.

Of the 530Mt of hydrogen produced in 2050, around 25% is produced within industrial

facilities(includingrefineries),andtheremainderismerchanthydrogen(hydrogenproduced

byonecompanytoselltoothers).Almost30%ofthelow‐carbonhydrogenusedin2050

takestheformofhydrogen‐basedfuels,whichincludeammoniaandsyntheticliquidsand

gases.Anincreasingshareofhydrogenproductioncomesfromelectrolysers,whichaccount

for60%oftotalproductionin2050.Electrolysersarepoweredbygridelectricity,dedicated

renewables in regions with excellent renewable resources and other low‐carbon sources

suchas nuclear power.Rolling out electrolysers at thepace required inthe NZEis a key

challengegiventhelackofmanufacturingcapacitytoday,asisensuringtheavailabilityof

sufficientelectricitygenerationcapacity.Globaltradeinhydrogendevelopsovertimeinthe

NZE,withlargevolumesexportedfromgasandrenewables‐richareasintheMiddleEast,

CentralandSouthAmericaandAustraliatodemandcentresinAsiaandEurope.

Table 2.7

⊳ Key deployment milestones for hydrogen and hydrogen-based fuels

Sector 2020 2030 2050

Totalproductionhydrogen‐basedfuels(Mt) 87 212 528

Low‐carbonhydrogenproduction 9 150 520

shareoffossi

‐basedwithCCUS 95% 46% 38%

shareofelectrolysis‐based 5% 54% 62%

Merchantproduction 15 127 414

Onsiteproduction 73 85 114

Totalconsumptionhydrogen‐basedfuels(Mt) 87 212 528

Electricity 0 52 102

ofwhichhydrogen 0 43 88

ofwhichammonia 0 8 13

Refineries 36 25 8

Buildingsandagriculture 0 17 23

Transport 0 25 207

ofwhichhydrogen 0 11 106

ofwhichammonia 0

8 44

ofwhichsyntheticfuels 0

5 56

Industry 51 93 187

Note:Hydrogen‐basedfuelsarereportedinmilliontonnesofhydrogenrequiredtoproducethem.



Chapter 2 | A global pathway to net-zero CO₂ emissions in 2050

2

2.5.6 Bioenergy

Globalprimarydemandforbioenergywasalmost65EJin2020,ofwhichabout90%was

solidbiomass.Some40%ofthesolidbiomasswasusedintraditionalcookingmethodswhich

isunsustainable,inefficientandpolluting,andwaslinkedto2.5millionprematuredeathsin

2020.Theuseofsolidbiomassinthismannerfallstozeroby2030intheNZE,toachievethe

UNSustainableDevelopmentGoal7.Increasesinallformsofmodernbioenergymorethan

offset this,



with production rising from less than 40EJ in 2020 to around 100EJ in 2050

(Figure2.20).

Allbioenergyin2050comesfromsustainablesourcesandthefiguresinthe

NZEfortotalbioenergyusearewell below estimates of global sustainable bioenergy

potential,thusavoidingtheriskofnegativeimpactsonbiodiversity,freshwatersystems,and

foodpricesandavailability(seesection2.7.2).

Figure 2.20

⊳ Total bioenergy supply in the NZE



IEA.Allrightsreserved.

Modern bioenergy use rises to 100 EJ in 2050, meeting almost 20% of total energy needs.

Global demand in 2050 is well below the assessed sustainable potential

Notes:TES=Totalenergysupply.Conversionlossesoccurduringtheproductionofbiofuelsandbiogases.

Modernsolidbioenergyuserisesbyabout3%eachyearonaverageto2050.Intheelectricity

sector,wheredemandreaches35EJin2050,solidbioenergyprovidesflexiblelow‐emissions

generationtocomplementgenerationfromsolarPVandwind,anditremovesCO

fromthe

atmospherewhenequippedwithCCUS.In2050,electricitygenerationusingbioenergyfuels

reaches3300TWh,or5%oftotalgeneration.Bioenergyalsoprovidesaround50%ofdistrict

heatproduction.Inindustry,wheredemandreaches20EJin2050,solidbioenergyprovides

hightemperatureheatand canbeco‐firedwithcoaltoreducetheemissionsintensityof

Modernbioenergyincludesbiogases,liquidbiofuelsandmodernsolidbiomassharvestedfromsustainable

sources.Itexcludesthetraditionaluseofbiomass.

10%

15%

20%

25%

20

40

60

80

100

2010 2020 2030 2040 2050

Traditionaluseofbiomass

Conversionlosses

Biogases

Liquidbiofuels

Buildingsandagriculture

Industry

Electricity

Modernbioenergyshare

shareinTES(rightaxis)

Modernsolidbioenergy



78 International Energy Agency | Special Report

existinggenerationassets.Demandishighestforpaperandcementproduction: in2050,

bioenergymeets60%ofenergydemandinthepapersectorand30%ofenergydemandfor

cementproduction.Modernsolidbioenergydemandinbuildingsincreasestonearly10EJin

2030,mostofitforuseinimprovedcookstovesasunsustainabletraditionalusesofbiomass

disappear. Bioenergy is also increasingly used for space and water heating in advanced

economies.

Householdandvillagebiogasdigestersinruralareasprovideasourceofrenewableenergy

andcleancookingfornearly500millionhouseholdsby2030intheNZEandtotalbiogasuse

rises to 5.5EJ in 2050 (from under 2EJ in 2020).

 Biomethane demand grows to 8.5EJ,

thankstoblendingmandatesforgasnetworks,withaverage blending ratesincreasingto

above80%inmanyregionsby2050.Halfoftotalbiomethaneuseisintheindustrysector,

where biomethane replaces natural gas as a source of process heat. The buildings and

transport sectors each account for around a further 20% of biomethane consumption in

2050.

Oneofthekeyadvantagesofbioenergyisthatitcanuseexistinginfrastructure.Forexample,

biomethane can use existing natural gas pipelines and end‐user equipment,whilemany

drop‐inliquidbiofuelscanuseexistingoildistributionnetworksandbeusedinvehicleswith

only minor or limited alterations. BioLPG – LPG derived from renewable feedstocks – is

identical to conventional LPG and so can be blended and distributed in the same way.

Sustainablebioenergyalsoprovidesavaluablesourceofemploymentandincomeforrural

communities,reducesundueburdensonwomenoftentaskedwithfuelcollection,brings

healthbenefitsfromreducedairpollutionandproperwastemanagement, and reduces

methaneemissionsfrominefficientcombustionandthedecompositionofwaste.

Liquidbiofuelconsumptionrisesfrom1.6mboe/din2020to6mboe/din2030intheNZE,

mainly used in road transport. After 2030, liquid biofuels grow more slowly to around

7mboe/d in 2050 and their use shifts to shipping and aviation as electricity increasingly

dominatesroadtransport.Almosthalfofliquidbiofuelusein2050isforaviation,wherebio‐

keroseneaccountsforaround45%oftotalfueluseinaircraft.

Bioenergy with carbon capture and storage (BECCS) plays a critical role in the NZE in

offsettingemissionsfromsectorswherethefulleliminationofemissionsisverydifficultto

achieve.In2050,around10%oftotalbioenergyisusedinfacilitiesequippedwithCCUSand

around1.3GtCO

iscapturedusingBECCS.Around45%ofthisCO

iscapturedinbiofuels

production, 40% in the electricity sector and the rest in heavy industry, notably cement

production.



Biogasisamixtureofmethane,CO

andsmallquantitiesofothergasesproducedbyanaerobicdigestionof

organicmatterinanoxygenfreeenvironment.Biomethaneisanearpuresourceofmethaneproducedeither

byremovingCO

andothercontaminantsfrombiogasorthroughthegasificationofsolidbiomass(IEA,2020b).



Chapter 2 | A global pathway to net-zero CO₂ emissions in 2050

2

Table 2.8 ⊳ Key deployment milestones for bioenergy

 2020 2030 2050

Totalenergysupply(EJ) 63 72 102

Shareofadvancedbiomassfeedstock 27% 85% 97%

Moderngaseousbioenergy(EJ) 2.1 5.4 13.7

Biomethane 0.3 2.3 8.3

Modernliquidbioenergy(mboe/d) 1.6 6.0 7.0

Advancedbiofuels 0.1 2.7 6.2

Modernsolidbioenergy(EJ) 32 54 74

Traditionaluseofsolidbiomass(EJ) 25 0 0

Millionpeopleusingtraditionalbiomassforcooking 2340 0 0

Notes: mboe/d = million barrels of oil equivalent per day. Bioenergy from forest plantings is considered

advancedwhenforestsaresustainablymanaged(seesection2.7.2).

2.5.7 Carboncapture,utilisationandstorage

CCUS can facilitate the transition to net‐zero CO

 emissions by: tackling emissions from

existingassets; providingaway to addressemissionsfromsome of the mostchallenging

sectors;providingacost‐effectivepathwaytoscaleuplow‐carbon hydrogen production

rapidly;andallowingforCO

removalfromtheatmospherethroughBECCSandDACCS.

IntheNZE,policiessupportarangeofmeasurestoestablishmarketsforCCUSinvestment

andtoencourageuseofsharedCO

transportandstorageinfrastructurebythoseinvolved

intheproductionofhydrogenandbiofuels,theoperationofindustrialhubs,andretrofitting

ofexistingcoal‐firedpowerplants.CapturevolumesintheNZEincreasemarginallyoverthe

next five years from the current level of around 40 Mt CO

peryear,reflectingprojects

currentlyunderdevelopment,butthereisarapidexpansionoverthefollowing25yearsas

policyactionbearsfruit.By2030,1.6GtCO

2

peryeariscapturedglobally,risingto7.6GtCO



in 2050 (Figure2.21). Around 95% of total CO

 captured in 2050 is stored in permanent

geologicalstorageand5%isusedtoprovidesyntheticfuels.Estimatesofglobalgeological

storage capacity are considerably above what is necessary to store the cumulative CO



capturedandstoredintheNZE.Atotalof2.4GtCO

2

iscapturedin2050fromtheatmosphere

through bioenergy with CO

captureanddirectaircapture,ofwhich1.9GtCO

2

is

permanentlystoredand0.5GtCO

isusedtoprovidesyntheticfuelsinparticularforaviation.

Energy‐related and processCO

emissions in industry account foralmost 40%of the CO



captured in 2050 in the NZE. CCUS is particularly important for cement manufacturing.

AlthougheffortsarepursuedintheNZEtoproducecementmoreefficiently,CCUSremains

centraltoeffortstolimittheprocessemissionsthatoccurduringcementmanufacturing.The

electricitysectoraccountsforalmost20%oftheCO

capturedin2050(ofwhicharound45%

isfromcoal‐firedplants,40%frombioenergyplantsand15%from gas‐fired plants).

CCUS‐equippedpowerplantscontributejust3%oftotalelectricitygenerationin2050but

thevolumesofCO

capturedarecomparativelylarge.Inemergingmarketanddeveloping

economies,wherelargenumbersofcoalpowerplantshavebeenbuiltrelativelyrecently,



80 International Energy Agency | Special Report

retrofits play an important rolewheretherearestorageopportunities. In advanced

economies,gas‐firedplantswithCCUSplayabiggerrole,providingdispatchableelectricity

atrelativelylowcostinregionswithcheapnaturalgasandexistingnetworks.In2030,around

50GWofcoal‐firedpowerplants(4%ofthetotalatthattime)and30GWofnaturalgas

powerplants(1%ofthetotal)areequippedwithCCUS,andthisrisesto220GW ofcoal

(almosthalfofthetotal)and170GWofnaturalgas (7%ofthetotal)capacityin2050. A

further30%ofCO

capturedin2050comesfromfueltransformation,includinghydrogen

and biofuels production as well as oil refining. The remaining 10% is from DAC, which is

rapidlyscaledupfromseveralofpilotprojectstodayto90MtCO

peryearin2030andjust

under1GtCO

peryearby2050.

Figure 2.21

⊳ Global CO

capture by source in the NZE



IEA.Allrightsreserved.

By 2050, 7.6 Gt of CO

is captured per year from a diverse range of sources. A total of 2.4 Gt

is captured from bioenergy use and DAC, of which 1.9 Gt CO

is permanently stored.

Table 2.9 ⊳ Key global milestones for CCUS

2020 2030 2050

TotalCO

2

captured(MtCO

) 40 1670 7600

2

capturedfromfossilfuelsandprocesses 39 1325 5245

Power 3 340 860

Industry 3 360 2620

Merchanthydrogenproduction 3 455 1355

Non‐biofuelsproduction 30 170 410

capturedfrombioenergy 1 255 1380

Power 0 90 570

Industry 0 15 180

Biofuelsproduction 1 150 625

Directaircapture 0 90 985

Removal 0 70 630

2

4

6

8

2020 2025 2030 2035 2040 2045 2050

GtCO₂

Directaircapture

Hydrogenproduction

Biofuelsproduction

Other

Industrycombustion

Industryprocesses

Bioenergy

Gas

Coal

Electricitysector

Industry

Fuelsupply

Other



Chapter 2 | A global pathway to net-zero CO₂ emissions in 2050

2

2.6 Investment

The radical transformation of the global energy system required to achieve net‐zero CO



emissionsin2050hingesonabigexpansionininvestmentandabigshiftinwhatcapitalis

spenton.TheNZEexpandsannualinvestmentinenergyfromjustoverUSD2trillionglobally

onaverageoverthelastfiveyearstoalmostUSD5trillionby2030andtoUSD4.5trillionby

2050(Figure2.22).

TotalannualcapitalinvestmentinenergyintheNZErisesfromaround

2.5%ofglobalGDPinrecentyearstoabout4.5%in2030beforefallingbackto2.5%by2050.

Figure 2.22

⊳ Annual average capital investment in the NZE



IEA.Allrightsreserved.

Capital investment in energy rises from 2.5% of GDP in recent years to 4.5% by 2030; the

majority is spent on electricity generation, networks and electric end-user equipment

Notes:Infrastructureincludeselectricitynetworks,publicEV charging,CO

pipelines andstoragefacilities,

directaircapture andstoragefacilities, hydrogenrefuellingstations, and importandexportterminalsfor

hydrogen, fossil fuels pipelines and terminals. End‐use efficiency investments are the incremental cost of

improvingtheenergyperformanceofequipmentrelativetoaconventionaldesign.Electricitysystemsinclude

electricitygeneration,storage anddistribution,andpublic EVcharging.Electrification investmentsinclude

spending in batteries for vehicles, heat pumps and industrial equipment for electricity‐based material

productionroutes.

Theshiftinwhatcapitalisspentonleadstoannualinvestmentinelectricitygenerationrising

fromjustoverUSD500billionoverthelastfiveyearstomorethanUSD1600billionin2030,

beforefallingbackasthecostofrenewableenergytechnologiescontinuestodecline.Annual

nuclearinvestmentrisestoo:itmorethandoublesby2050comparedwithcurrentlevels.

AnnualinvestmentinfuelsupplyhoweverdropsfromaboutUSD575billiononaverageover

Investmentlevelspresentedinthisreportincludeabroaderaccounting of efficiency improvements in

buildingsthanreportedintheIEAWorldEnergyInvestment(IEA,2020c)andso differ from thenumbers

presentedthere.



1

2

3

4

5

2030 2040 2050 2030 2040 2050

TrillionUSD(2019)

Other

Fossilfuels

CCUS

Hydrogen

Electricitysystem

Electrification

Efficiency

Otherrenewables

Bioenergy

Buildings

Transport

Industry

Infrastructure

Electricitygeneration

Fuelproduction

Bysector Bytechnologyarea

2016‐20 2016‐20

Technologyarea

Sector



82 International Energy Agency | Special Report

thelasthalf‐decadetoUSD315billionin2030andUSD110billionin2050.Theshareoffossil

fuelsupplyintotalenergysectorinvestmentdropsfromits25%levelinrecentyearstojust

7%by2050:thisispartlyoffsetbytheriseinspendingonlow‐emissionsfuelsupply,suchas

hydrogen,hydrogen‐basedfuelsandbioenergy.Annualinvestmentinthesefuelsincreases

tonearlyUSD140billionin2050.InvestmentintransportincreasessignificantlyintheNZE

fromUSD150peryearinrecentyearstomorethanUSD1100billionin2050:thisstems

mainlyfromtheupfrontcostofelectriccarscomparedwithconventionalvehiclesdespite

thedeclineinthecostofbatteries.

Bytechnologyarea,electrification isthe dominant focus in theNZE.Inadditiontomore

investmentinelectricitygeneration,thereisahugeincreaseininvestmentinexpansionand

modernisation of electricity networks. Annual investment rises from USD260billion on

averageinrecentyearstoaroundUSD800billionin2030andremainsaboutthatlevelto

2050.Suchinvestmentisneededtoensureelectricitysecurityinthefaceofrisingelectricity

demandandtheproportionofvariablegenerationinthepowermix.Thereisalsoalarge

increaseininvestmentintheelectrificationofend‐usesectors,whichincludesspendingon

EV batteries, heat pumps and electricity‐based industrial equipment. In addition to

investmentinelectrification,thereisamoderateincreaseininvestmentinhydrogento2030

asproductionfacilitiesarescaledup,andlargerincreasesafterashydrogenuseintransport

expands:annualinvestmentinhydrogen,includingproductionfacilities,refuellingstations

andend‐userequipment,reachesUSD165billionin2030andoverUSD470billionin2050.

There is also an increase in global investment in CCUS (annual investment exceeds

USD160billionby2050andinefficiency(aroundUSD640billionannualinvestmentby2050,

mostly for deep building retrofits and efficient appliances in the industry and buildings

sectors).

Financingthe investmentneeded intheNZEinvolvesredirecting existing capital towards

clean energy technologies and substantially increasing the overall level of investment in

energy.Mostofthisincreaseininvestmentcomesfromprivatesources,mobilisedbypublic

policiesthatcreateincentives, set appropriateregulatoryframeworksandreformenergy

taxes.However,directgovernmentfinancingisalsoneededtoboostthedevelopmentof

new infrastructure projects and to accelerate innovation in technologies that are in the

demonstrationorprototypephasetoday.Projectsinmanyemergingmarketanddeveloping

economies are often relatively reliant on public financing, and policies that ensure a

predictableflowofbankableprojectshaveanimportantroleinboostingprivateinvestment

intheseeconomies,as doesthescalingupofconcessionaldebtfinancingandtheuseof

developmentfinance.Thereareextensivecross‐countryco‐operationeffortsintheNZEto

facilitatetheinternationalflowofcapital.

The large increase in capital investment in the NZE is partly compensated for by lower

operatingexpenditure.Operatingcostsaccounttodayforalargeshareofthetotalcostof

upstreamfuelsupplyprojectsandfossilfuelgenerationprojects:thecleantechnologiesthat

playanincreasingroleintheNZEarecharacterisedbymuchloweroperatingcosts.



Chapter 2 | A global pathway to net-zero CO₂ emissions in 2050

2

2.7 Keyuncertainties

Theroadtonet‐zeroemissionsisuncertainformanyreasons:we cannot be sure how

underlying economic conditions will change, which policies willbemosteffective,how

peopleandbusinesseswillrespondtomarketandpolicysignals,orhowtechnologiesand

theircostswillevolvefromwithinoroutsidetheenergysector.TheNZEthereforeisjustone

possible pathway to achieve net‐zero emissions by 2050. Against this background, this

sectionlooksatwhattheimplicationswouldbeiftheassumptionsintheNZEturnouttobe

offthemarkwithrespecttobehaviouralchange,bioenergyandCCUSforfossilfuels.These

threeareaswereselectedbecausetheassumptionsmadeabouttheminvolveahighdegree

ofuncertaintyandbecauseoftheircriticalcontributionstoachievenet‐zeroemissionsby

2050.

Figure 2.23

⊳ Additional electricity demand in 2050 and additional investment

between 2021-2050 for selected areas of uncertainty



IEA.Allrightsreserved.

The absence of behaviour change, restrictions on bioenergy use and failure to develop

fossil fuel CCUS would each raise investment to meet net-zero emissions by USD 4-15 trillion

Notes:Nobehaviourassumes none of thebehaviouralchangesincluded in theNZE.Restrictedbioenergy

assumesnoincreaseinlanduseforbioenergyproduction.LowfossilCCUSassumesnoincreaseinfossilfuel‐

basedCCUSapartfromprojectsalreadyapprovedorunderconstruction.

Ouranalysisclearlyhighlightsthatmorepessimisticassumptionswouldaddconsiderablyto

boththecostsanddifficultyofachievingnet‐zeroemissionsby2050(Figure2.23).

 Behaviouralchangesareimportantinreducingenergydemandintransport,buildings

and industry. If the changes in behaviour assumed in the NZE were not attainable,

emissionswouldbearound2.6GtCO

higherin2050.Avoidingtheseemissionsthrough

the use of additional low‐carbon electricity and hydrogen wouldcostanadditional

USD4trillion.

12%

16%

20%

3

5

8

10

13

behaviour

Restricted

bioenergy

Lowfossil

CCUS

ThousandTWh

IncreasefromNZE(rightaxis)

Electricitydemand

12%

16%

20%

4

8

12

16

behaviour

Restricted

bioenergy

Lowfossil

CCUS

TrillionUSD(2019)

Investment



84 International Energy Agency | Special Report

 Bioenergyusegrowsby60%between2020and2050intheNZEandlanduseforits

propagationincreasesbyaround25%.Bioenergyusein2050intheNZEiswellbelow

current best estimates of global sustainable bioenergy potential, but there is a high

degreeofuncertaintyconcerningthislevel.Iflanduseforbioenergyremainsattoday’s

level, bioenergy use in 2050 would be around 10% lower, and achieving net‐zero

emissionsin2050wouldrequireUSD4.5trillionextrainvestment.

 AfailuretodevelopCCUSforfossilfuelswouldsubstantiallyincreasetheriskofstranded

assetsandwouldrequirearoundUSD15trillionofadditionalinvestmentinwind,solar

andelectrolysercapacitytoachievethesamelevelofemissionsreductions.Itcouldalso

criticallydelayprogressonBECCSandDACCS:ifthesecannotbedeployedatscale,then

achievingnet‐zeroemissionsby2050wouldbeverymuchharder.

2.7.1 Behaviouralchange

ImpactofbehaviouralchangesinselectedsectorsintheNZE

ChangesinthebehaviourofenergyconsumersplayanimportantroleincuttingCO



emissionsandenergydemandgrowthintheNZE.Behaviouralchangesreduceglobalenergy

demandby37EJin2050,a10%reductioninenergydemandatthattime,andwithoutthem

cumulativeemissionsbetween2021and2050wouldbearound10%higher(Figure2.24).

Behaviouralchangeplaysaparticularlyimportantroleinthetransportsector.

Figure 2.24

⊳ Reduction in total final consumption due to behavioural changes

by fuel in the NZE



IEA.Allrightsreserved.

The impact of behaviour changes and materials efficiency on

final energy consumption increases over time

Note:Otherincludescoal,hydrogen,geothermal,solarthermal,syntheticoilandsyntheticgas.

Passengeraviation.Demandwouldgrowmorethanthreefoldgloballybetween2020and

2050intheabsenceoftheassumedchangesinbehaviourintheNZE.About60%ofthis

‐12%

‐9%

‐6%

‐3%

‐40

‐30

‐20

‐10

2020 2030 2040 2050

Oil Naturalgas Electricity Heat Modernbioenergy Other

Changeinfinalenergyconsumption(rightaxis)



Chapter 2 | A global pathway to net-zero CO₂ emissions in 2050

2

growth would occur in emerging market and developing economies. In the NZE, three

changes lead to a 50% reduction in emissions from aviation in 2050,whilereducingthe

numberofflightsbyonly12%(Figure2.25).

 Keepingairtravelforbusinesspurposesat2019levels.Althoughbusinesstripsfellto

almostzeroin2020,theyaccountedforjustoverone‐quarterofairtravelbeforethe

pandemic.Thisavoidsaround110MtCO

in2050intheNZE.

 Keeping long‐haul flights (more than six hours) for leisure purposes at 2019 levels.

Emissionsfromanaveragelong‐haulflightare35‐timesgreaterthanfromaregional

flight(lessthanonehour).Thisaffectslessthan2%offlightsbutavoids70MtCO

in

2050.

 Ashifttohigh‐speedrail.Theopportunitiesforshiftingregionalflightstohigh‐speedrail

varybyregion.Globally,weestimatethataround15%ofregionalflightsin2019could

havebeenshiftedgivenexistingrailinfrastructure;futurehigh‐speedraillinesensure

thatby2050around17%couldbeshifted(IEA,2019).

Thiswouldreduceemissionsby

around45MtCO

in2050(high‐speedtrainsgeneratenoemissionsin2050intheNZE).

Figure 2.25

⊳ Global CO

emissions from aviation and impact of behavioural

changes in the NZE

IEA.Allrightsreserved.

Demand for passenger aviation is set to grow significantly by 2050, but behavioural

changes reduce emissions by 50% in 2050 despite reducing flights by only 12%

Notes:Long‐haul=morethan6hourflight;medium‐haul=1‐6hourflight;regional=lessthan1hour.Business

flights=trips for work purposes; leisure flights = trips for leisure purposes. Average speeds vary by flight

distanceandrangefrom680‐750km/h.

Thisassumesthat:newrailroutesavoidwaterbodiesandtunnellingthroughelevatedterrain;traveltimes

are similar to aviation; and centres of demand are sufficientlylargetoensurethathigh‐speedrailis

economicallyviable.

100

0.2

0.4

0.6

0.8

1.0

2019 2020 2050

GtCO

Long‐haul

Medium‐haul

Regional

#REF!

Caplong‐haul

Capbusiness

Shifttohigh‐speed

Millionflights

Emissions reductions

Emissions

‐50%

(rightaxis)

leisureflights

flights

rail

Behaviour

reductions



86 International Energy Agency | Special Report

Caruse.Avarietyofnewmeasuresthataimtoreducetheuseofcarsincitiesandoverallcar

ownershiplevelsareassumedintheNZE.Theyleadtorapidgrowthintheridesharemarket

inurbanareas,aswellasphasingoutpollutingcarsinlargecitiesandreplacingthemwith

cycling,walkingandpublictransport.ThetimingofthesechangesintheNZEdependson

citieshavingthenecessaryinfrastructureandpublicsupport toensureashiftawayfrom

privatecaruse.Between20‐50%ofcartripsareshiftedtobuses,dependingonthecityin

question, with the remainder replaced by cycling, walking and public transport. These

changes reduce emissions from cars in cities by more than 320MtCO

 in total in the

mid‐2030s(Figure2.26).Theirimpactonemissionsfadesovertimeascarsareincreasingly

electrified,buttheystillhaveasignificantimpactoncurbingenergyusein2050.

Figure 2.26

⊳ Global CO

emissions savings and car ownership per household

due to behavioural change in the NZE

IEA.Allrightsreserved.

Policies discouraging car use in cities lead to rapid reductions in CO

emissions and lower

car ownership levels, though the impact diminishes over time as cars are electrified

Thegradualmoveawayfromcarsincitiesalsohasanimpactoncarownershiplevels.Survey

data indicates that car‐share schemes and the provision of public transport reduces car

ownershipbyupto35%,withthebiggestchangestakingplaceinmultiplecarhouseholds

(Jochemetal.,2020;Martin,ShaheenandLidiker,2010).Withoutbehaviouralchanges,35%

ofhouseholdswouldhaveacarin2050;withbehaviouralchangesthissharefallstoaround

20%intheNZE,andtwo‐carhouseholdsfallfrom13%ofthetotaltolessthan5%.

ThechangingpatternsofmobilityincitiesinNZEhaveimplicationsformaterialsdemand.

Reducedcarownershipleadstoasmalldropinsteeldemandin2050, saving around

40MtCO

insteelproduction.Increasedcyclingwouldneedtobesupportedbybuildingan

estimated 80000km of new cycle lanes globally over the period to 2050, generating

increaseddemandforcementandbitumen.Thiseffectissmall,however:theextraemissions

associatedwiththiswouldbelessthan5%oftheemissionsavoidedbylowercaruse.

‐50

100

150

200

2020 2030 2040 2050

Ridesharing Cyclingandwalking Buses

MtCO

emissionssavings

20%

40%

60%

80%

100%

0cars 1car 2cars 3+cars

Beforebehaviourchange

Afterbehaviourchange

Carsperhouseholdin2050



Chapter 2 | A global pathway to net-zero CO₂ emissions in 2050

2

HowtobringaboutthebehaviouralchangesinNZE

Regulationsandmandatescouldenableroughly70%oftheemissionssavedbybehavioural

changesintheNZE.Examplesinclude:

 Upperspeedlimits,whicharereducedovertimeintheNZEfromtheircurrentlevelsto

100km/h,cuttingemissionsfromroadvehiclesby3%in2050.

 Appliancestandards,whichmaximiseenergyefficiencyinthebuildingssector.

 Regulationscoveringheatingtemperaturesinofficesanddefaultcoolingtemperatures

forairconditioningunits,whichreduceexcessivethermaldemand.

 Changesinitiallytackledbymarket‐basedmechanisms,e.g.swappingregionalflightsfor

high‐speedrail,

whichcanbeaddressedbyregulationovertimetomirrorchangesin

publicsentimentandconsumernorms.

Market‐basedinstrumentsuseamixoffinancialincentivesanddisincentivestoinfluence

decisionmaking.Theycouldenablearoundtwo‐thirdsoftheemissionssavedbybehavioural

changesintheNZE.Examplesinclude:

 Congestionpricingandtargetedinterventionsdifferentiatedbyvehicletype,

suchas

chargesaimedatthemostpollutingvehicles,orpreferentialparkingforcleancars.

 Transportdemandmeasuresthatreducetravel,suchasfueltaxesanddistance‐based

vehicleinsuranceandregistrationfees(Byars,WeiandHandy,2017).

 Informationmeasuresthathelpconsumerstodrivechange,suchasmandatorylabelling

ofembodiedorlifecycleemissionsinmanufacturingandarequirementforcompanies

todisclosetheircarbonemissions.

Informationandawarenessmeasurescouldenablearound30%oftheemissionssavedby

behaviouralchangesintheNZE.Examplesinclude:

 Personalised and real‐time travel planning information, which facilitates a switch to

walking,cyclingandpublictransport.

 Product labelling and public awareness campaigns in combination, which help make

recyclingwidespreadandhabitual.

 Comparisons with consumption patterns of similar households, which can reduce

wastefulenergyusebyupto20%(Aydin,BrounenandKok,2018).

NotallthebehaviouralchangesintheNZEwouldbeequallyeasytoachieveeverywhere,

andpolicyinterventionswouldneedtodrawoninsightsfrombehaviouralscienceandtake

intoaccountexistingbehaviouralnormsandculturalpreferences.Somebehaviouralchanges

maybemoresociallyacceptablethanothers.CitizenassembliesintheUnitedKingdomand

Alawbanningdomesticflightswhere a rail alternative of under two‐and‐a‐half hours exists has been

proposedinFrance(AssembleeNationale,2021).

Congestionchargingiscurrentlyusedin11majorcitiesandhasbeenshowntoreducetrafficvolumesbyup

to27%.Low‐emissionszoneschargevehiclestoenterurbanzonesbasedvehicletypeandcurrentlyexistin

15countries(TFL,2021;ToolsofChange,2014;EuropeanCommission,2021).



88 International Energy Agency | Special Report

Franceindicatealargelevelofsupportfortaxesonfrequentandlong‐distanceflyersandfor

banningpollutingvehiclesfromcitycentres;conversely,measuresthatlimitcarownership

orreducespeedlimitshavegainedlessacceptance(ConventionCitoyennepourleClimat,

2021;ClimateAssemblyUK,2020).Behaviouralchangeswhichreduceenergyuseinhomes

may be particularly well supported: a recent survey showed 85% support for line‐drying

clothesandswitchingoffappliances,andonly20%ofpeoplefeltthatreducingtemperature

settingsinhomeswasundesirable(NewgateResearchandCambridgeZero,2021).

Table 2.10

⊳ Key behavioural changes in the NZE

 Policyoptions Relatedpolicy‐goals

Cost‐

effectiveness

Timeliness

Social

acceptability

emissions

impact

Low‐carcities

 PhaseoutICEcarsfrom

largecities.

 Rideshareallurbancartrips.



 Low‐emissionszones.

 Accessrestrictions.

 Parkingrestrictions.

 Registrationcaps.

 Parkingpricing.

 Congestioncharges.

 Investmentincyclinglanes

andpublictransportation.



 Airpollution

mitigation.

 Publichealth.

 Reducedcongestion.

 Urbanspace.

 Beautificationand

liveability.



Fuel‐efficientdriving

 Reducemotorwayspeedsto

lessthan100km/h.

 Eco‐driving.

 Raiseairconditioning

temperatureincarsby3°C.



 Speedlimits.

 Real‐timefuelefficiency

displays.

 Awarenesscampaigns.



 Roadsafety.

 Reducednoise

pollution.



Reduceregionalflights

 Replaceallflights<1hwhere

high‐speedrailisafeasible

alternative.



 High‐speedrailinvestment.

 Subsidiesforhigh‐speedrail

travel.

 Pricepremiums.

 Lowerairpollution.

 Lowernoisepollution.



Reduceinternationalflights

 Keepairtravelforbusiness

purposesat2019levels.

 Keeplong‐haulflightsfor

leisureat2019levels.



 Awarenesscampaigns.

 Pricepremiums.

 Corporatetargets.

 Frequent‐flyerlevies.

 Lowerairpollution.

 Lowernoisepollution.



Spaceheating

 Targetaverageset‐point

temperaturesof19‐20°C.



 Awarenesscampaigns.

 Consumptionfeedback.

 Corporatetargets.



 Publichealth.

 Energyaffordability.



Spacecooling

 Targetaverageset‐point

temperaturesof24‐25°C.



 Awarenesscampaigns.

 Consumptionfeedback.

 Corporatetargets.

 Publichealth.

 Energyaffordability.





=poormatch =neutralmatch =goodmatch

Notes:Largecities=citiesover1millioninhabitants.ICE=internalcombustionengine.CO

emissionsimpact

=cumulativereductions2020‐2050.Eco‐driving= earlyupshiftingaswellasavoidingsuddenacceleration,

stopsoridling.Thenumberofjobsthatcanbedoneathomevaries considerably by region, globally, an

averageof20%ofjobscanbedoneathome.



Chapter 2 | A global pathway to net-zero CO₂ emissions in 2050

2

ThebehaviouralchangesintheNZEwouldbringwiderbenefitsintermsofairpollutionin

cities,roadsafety,noisepollution,congestionandhealth.Attitudestopolicyinterventions

canchangequicklywhenco‐benefitsbecomeapparent.Forexample,supportforcongestion

charging in Stockholm jumped from less than 40% when the schemewasintroducedto

around70%threeyearslater;asimilartrendwasseeninSingapore,Londonandothercities,

allofwhichexperienceddeclinesinairpollutionaftertheintroductionofcharging(Toolsof

Change,2014;DEFRA,2012).

Arenet‐zeroemissionsby2050stillpossiblewithoutbehaviouralchange?

IfthebehaviouralchangesdescribedintheNZEwerenottomaterialise,finalenergyuse

would be 27 EJ and emissions 1.7GtCO

 higher in 2030, and they would be 37EJ and

2.6GtCO

2

higherin2050.Thiswouldfurtherincreasethealreadyunprecedentedramp‐up

neededinlow‐carbontechnologies.TheshareofEVsintheglobalcarfleetwouldneedto

increasefromaround20%in2030to45%toensurethesamelevelofemissionsreductions

(Figure2.27). Achieving the same reductionin emissions in homeswouldrequireelectric

heat pumps sales to reach 680million in 2030 (compared with 440million in the NZE).

Without gains in materials efficiency, the share of low‐carbon primary steel production

wouldneedtobemorethantwiceashighin2030asintheNZE.In2050,theuseof

sustainableaviationfuelswouldalsoneedtoriseto7mboe/d(comparedwith5mboe/din

theNZE).Emissionsfromcementandsteelproductionwouldbe1.7GtCO

higherin2050

thanintheNZE,andsorequireincreaseddeploymentofCCUSinindustry,deploymentof

electricarcfurnacesandmoreuseoflow‐carbonhydrogen.

Figure 2.27

⊳ Share of low-carbon technologies and fuels with and without

behavioural change in 2030 in the NZE



IEA.Allrightsreserved.

In the absence of behavioural changes, the share of low-emissions technologies in end-

uses in 2030 would need to be much larger to achieve the same emissions as in the NZE

Notes:Electriccars=shareofelectriccarsontheroadglobally.Sustainableaviationfuels=biojetkerosene

andsyntheticjetkerosene.Low‐carbonsteelreferstoprimarysteelproduction.

10%

20%

30%

40%

50%

Electriccars Heatpumpsin

residentialbuildings

Low‐carbonsteel Sustainableaviation

fuels

NZE Additionalwithoutbehaviourchanges 2020



90 International Energy Agency | Special Report

2.7.2 Bioenergyandland‐usechange

Modernformsofbioenergyplayakeyroleinachievingnet‐zeroemissionsintheNZE.

Bioenergyisaversatilerenewableenergysourcethatcanbeusedinallsectors,anditcan

oftenmakeuseofexistingtransmissionanddistributioninfrastructure and end‐user

equipment. But there are constraints on expanding the supply of bioenergy: with finite

potential for bioenergy production from waste streams, there are possible trade‐offs

between expanding bioenergy production, achieving sustainable development goals and

avoidingconflictswithotherlanduses,notablyfoodproduction.

ThelevelofbioenergyuseintheNZEtakesaccountoftheseconstraints:bioenergydemand

in 2050 is around 100EJ. The global sustainable bioenergy potential in 2050 has been

assessedtobeatleast100EJ(Creutzig,2015)andrecentassessmentsestimateapotential

between 150‐170EJ when integrating relevant UN Sustainable Development Goals

(Frank,2021; IPCC, 2019; IPCC, 2014; Wu, 2019). However, there is a high degree of

uncertainty over the precise levels of this potential. Using modelling developed in

co‐operation with IIASA, here we examine the implications for achieving net‐zero CO



emissionsby2050iftheavailablelevelsofsustainablebioenergyweretobelower.Wealso

examinewhatwouldneedtobedonetoachievelargereductionsin emissions from

agriculture,forestryandotherlanduse(AFOLU).

Ensuringasustainablesupplyofbioenergy

Most liquid biofuels produced today come from dedicated bioenergy crops such as

sugarcane,corn or oil crops, often knownasconventional biofuels.The expanded use of

feedstocksandarablelandtoproducethesebiofuelscanconflictwithfoodproduction.In

theNZE,thereisashifttowardstheuseofsustainable,certifiedagriculturalproductsand

wood. Biofuel production processes in the NZE use advanced conversion technologies

coupledwith CCUS where possible(seesection3.3.2). The emphasisisalso on advanced

bioenergyfeedstocks,includingwastestreamsfromotherprocesses,short‐rotationwoody

cropsandfeedstocksthatdonotrequiretheuseofarableland. Advanced bioenergy

accounts for the vast majority of bioenergy supply in the NZE by2050.Theuseof

conventionalenergycropsforbiofuelproductiongrowsfromaround9EJin2020toaround

11EJin2030,butthenfallsby70%to3EJin2050(includingfeedstocksconsumedinthe

biofuelproductionprocesses).

Advancedbioenergyfeedstocksthatdonotrequirelandincludeorganicwastestreamsfrom

agricultureandindustry,andwoodyresiduesfromforestharvestingandwoodprocessing.

InvestmentincomprehensivewastecollectionandsortingintheNZEunlocksaround45EJ

ofbioenergysupplyfromvariousorganicwastestreamswhichisprimarilyusedtoproduce

biogasesandadvancedbiofuels(Figure2.28).Woodyresiduesfromwoodprocessingand

forestharvestingprovideafurther20EJofbioenergyin2050intheNZE–lessthanhalfof

currentbestestimatesofthetotalsustainablepotential.Bioenergycanalsobeproduced



Chapter 2 | A global pathway to net-zero CO₂ emissions in 2050

2

fromdedicatedshort‐rotationwoodycrops(25EJofbioenergysupplyin2050).

Sustainably

managedforestryfuelwoodorplantations

andtreeplantingsintegratedwithagricultural

productionviaagroforestrysystemsthatdonotconflictwithfoodproductionorbiodiversity

providejustover10EJofbioenergyin2050.

Figure 2.28

⊳ Global bioenergy supply by source in the NZE



IEA.Allrightsreserved.

Bioenergy use increases by around 60% between 2020 and 2050,

while shifting away from conventional feedstocks and the traditional use of biomass

Note:Organicwastestreamsincludeagriculturalresidues,foodprocessing,industrialandmunicipalorganic

wastestreams;theydonotrequirelandarea.

Source:IEAanalysisbasedonIIASAdata.

ThetotallandareadedicatedtobioenergyproductionintheNZEincreasesfrom330million

hectares(Mha)in2020to410Mhain2050.In2050,around270Mhaisforest,representing

aroundone‐quarterofthetotalareaofglobalmanagedforests,andaround5%oftotalforest

area.Thereis130Mhaoflandusedforshort‐rotationadvancedbioenergycropsin2050and

10Mhaforconventionalbioenergycrops.Thereisnooverallincreaseincroplandusefor

bioenergyproductionintheNZEfromtoday’slevelandnobioenergycropsaredeveloped

onforestedlandintheNZE.

Aswellasallowingamuchgreaterlevelofbioenergycrop

productiononmarginallands,woodyenergycropscanproducetwiceasmuchbioenergyper

hectareasconventionalbioenergycrops.

Woodyshort‐rotationcoppicecropsgrownoncropland,pasturelandormarginallandsnotsuitedtofood

crops.

Sustainableforestrymanagementensuresthatthecarbonstockandcarbonabsorptioncapabilityofthe

forestisexpandedorremainsunchanged.

Ofthe140Mhalandusedforbioenergycropsin2050,70Mhaaremarginallandsorlandcurrentlyusedfor

livestockgrazingand70Mhaarecropland.Thereisa60Mhaincreaseincroplanduseforwoodycropsto2050

intheNZEbutthisisoffsetbyareductionincroplanduseforproducingconventionalbiofuelfeedstocks.

20

40

60

80

100

2010 2020 2030 2040 2050

Forestryplantings

Short‐rotationwoodycrops

Forestandwoodresidues

Organicwastestreams

Traditionaluseofbiomass

Conventionalbioenergycrops



92 International Energy Agency | Special Report

Totalland use for bioenergyin theNZE iswell belowestimatedrangesof potentialland

availabilitythattakefullaccountofsustainabilityconstraints,includingtheneedtoprotect

biodiversityhotspotsandtomeettheUNSustainableDevelopmentGoal15onbiodiversity

andlanduse.Thecertificationofbioenergyproductsandstrictcontrolofwhatlandcanbe

convertedtoexpandforestryplantationsandwoodyenergycropsneverthelessiscriticalto

avoidland‐useconflictissues.CertificationisalsocriticaltoensuretheintegrityofCO

offsets

(seeChapter1),theuseofwhichshouldbecarefullymanagedandrestrictedtosectorsthat

lackalternativemitigationoptions.Arelatedland‐useissueishowtotackleemissionsthat

arisefromoutsidetheenergysector(Box2.3).

Box 2.3

⊳ Balancing emissions from land use, agriculture and forestry

Tolimittheglobaltemperaturerise,allsourcesofGHGemissionsneedtodeclinetoclose

tozeroortobeoffsetwithCDR.Theenergysectoraccountedforaroundthreequarters

oftotalGHGemissionsinrecentyears.ThelargestsourceofGHGemissionsotherthan

theenergysectorisagriculture,forestryandotherlanduse(AFOLU),whichproduced

between 10‐12GtCO

‐eq net GHG emissions in recent years.

CO

 emissions from

AFOLUwerearound5‐6GtCO

,andnitrousoxideandmethaneemissionswerearound

5‐6GtCO

‐eq(IPCC,2019).

Options to reduce emissions from AFOLU and enhance removals include: halting

deforestation;improvingforestmanagementpractices;institutingfarmingpracticesthat

increase soil carbon levels; and afforestation. A number of companies have recently

expressedinterestinthesesortsofnature‐basedsolutionstooffsetemissionsfromtheir

operations(seeChapter1).Forafforestation,convertingaround170Mha(roughlyhalf

thesizeofIndia)toforestswouldsequesteraround1GtCO

annuallyby2050.

Achievingnet‐zeroenergy‐relatedandindustrialprocessCO

emissionsby2050inthe

NZEdoesnotrelyonanyoffsetsfromoutsidetheenergysector. But commensurate

actiononAFOLUwouldhelplimitclimatechange.Theenergy‐sectortransformationin

theNZEwouldreduceCO

2

emissionsfromAFLOUin2050byaround150MtCO

2

given

theswitchawayfromconventionalcropsandtheincreaseinshortrotationadvanced‐

bioenergycropproductiononmarginallandsandpastureland.Toreduceemissionsfrom

AFOLUfurtherwouldrequirereducingdeforestationbytwo‐thirdsby2050,instituting

improvedforestmanagementpracticesandplantingaround250Mhaofnewforests.The

combinedimpactofthesechangeswouldreduceCO

emissionsfromAFOLUtozeroby

2040 and absorb 1.3GtCO

 annually by 2050. In this case, cumulative AFOLU CO



emissionsbetween2020and2050wouldbearound40GtCO

.

Non‐CO

emissionsfromlivestock,aswellasotheragriculturalemissions,maybemore

difficulttomitigategiventhelinkbetweenlivestockproductionandnitrousoxideand

methane emissions. Changes to farming practices and technology improvements,

AFOLUemissionsareemissionsfromanthropogenicactivitiesanddonotincludeCO

emissionsremoval

fromtheatmospherebynaturallandsinks.



Chapter 2 | A global pathway to net-zero CO₂ emissions in 2050

2

includingchangestoanimalfeed,couldhelptoreducetheseemissions,butitmaybe

necessarytouseafforestationtooffsettheseemissionsentirely.Analternativecouldbe

toreducetheseemissionsbyreducingthedemandforlivestockproducts.Forexample,

weestimatethatreducingmeatconsumptioninhouseholdswiththehighestlevelsof

percapitaconsumptiontodaytotheglobalaveragelevelwouldreduceGHGemissions

bymorethan1GtCO

‐eqin2050.Lowerdemandforlivestockproductswouldreduce

thepastureneededgloballyforlivestockbycloseto200Mhaandthecroplandthatis

usedtogrowfeedforlivestockbyafurther80Mha.

Arenet‐zeroemissionsby2050possiblewithoutexpandinglanduseforbioenergy?

Estimates of the global sustainable bioenergy potential are subject to a high degree of

uncertainty,inparticularovertheextenttowhichnewlandarea could sustainably be

converted to bioenergy production. As a result, the NZE takes a cautious approach to

bioenergy use, with consumption in 2050 (100EJ) well below the latest estimates that

integraterelevantSDGs,whichsuggestapotentialbetween150‐170EJ.Butitispossiblethat

thelandavailabletoprovidesustainablebioenergyisevenmorelimited.Hereweexplore

the implications for emissions of restricting land use for dedicated bioenergy crops and

forestryplantationstoaround330Mha,whichiswhatisusedtoday.

Figure 2.29

⊳ Impact on electricity demand and ability to achieve net-zero

emissions by 2050 without expanded bioenergy land use



IEA.Allrightsreserved.

Achieving net-zero emissions without expanding bioenergy land use would require a

further 3 200 TWh from solar PV and wind, increasing capacity in the NZE by nearly 10%

Limitinglanduseto330Mhawouldreduceavailablebioenergysupplyin2050bymorethan

10EJ.Thiswouldmostlytaketheformofareductionintheavailabilityof short‐rotation

woodyenergycrops,whicharemainlyusedintheNZEinplaceoffossilfuelstoprovidehigh

temperatureheatforindustrialprocessesandforelectricitygeneration.Withoutbioenergy,

30

60

90

120

NZE Withoutexpandingbioenergylanduse

Bioenergyuse Electricitydemand SolarPVandwind

20

40

60

80

ThousandTWh

8

16

24

32

ThousandGW



94 International Energy Agency | Special Report

itislikelythathydrogenandsyntheticmethanewouldbeusedinstead,andtheirproduction

wouldrequirearound70Mtofhydrogenin2050(15%morethanintheNZE).Ifthiswereto

beproducedthroughtheuseofelectrolysisitwouldrequirearound750GWofelectrolyser

capacityandincreaseelectricitydemandin2050byaround3200TWh(Figure2.29).

Theadditionalelectricitythatwouldbeneededcouldbeproducedusingrenewables,which

wouldrequireanadditional1700GWofwindandsolarPVcapacityandalmost350GWof

additionalbatterycapacityin2050.Annualcapacityadditionsduringthe2030swouldneed

tobe160GWhigherthanintheNZE.Theadditionalwind,solar,batteryandelectrolyser

capacity,togetherwiththeelectricitynetworksandstorageneededtosupportthishigher

levelofdeploymentwouldcostmorethanUSD5trillionby2050.ThisisUSD4.5trillionmore

thanwouldbeneedediftheuseofbioenergyweretobeexpandedasenvisagedintheNZE,

andwouldincreasethetotalinvestmentneededintheNZEby3%.Whileitmighttherefore

be possible still to achieve net‐zero emissions in 2050 without expanding land use for

bioenergy,thiswouldmaketheenergytransitionsignificantlymoreexpensive.

2.7.3 CCUSappliedtoemissionsfromfossilfuels

Atotalof7.6GtCO

iscapturedin2050intheNZE,almost50%ofwhichisfromfossilfuel

combustion,20%isfromindustrialprocesses,andaround30%isfrombioenergyusewith

captureandDAC(Figure2.30).TheuseofCCUSwithfossilfuelsprovidesalmost70%of

thetotalgrowthinCCUSto2030intheNZE.Yettheprospectsfortherapidscalingupof

CCUSareveryuncertainforeconomic,politicalandtechnicalreasons.Herewelookatthe

implications for reaching net‐zero emissions in 2050 if fossil fuel CCUS does not expand

beyondexistingandplannedprojects.

Figure 2.30

⊳ CCUS by sector and emissions source in the NZE



IEA.Allrightsreserved.

Fossil fuel emissions account for almost 70% of total CO

capture in 2030

and almost 50% in 2050

Note:DAC=directaircapture.

1

2

3

2020

2030

2040

2050

2020

2030

2040

2050

2020

2030

2040

2050

2020

2030

2040

2050

GtCO

Atmosphere

Industrial

processes

Bioenergy

Fossilfuels

Electricity Industry Fuelsupply DAC

source



Chapter 2 | A global pathway to net-zero CO₂ emissions in 2050

2

Arenet‐zeroemissionsby2050possiblewithoutfossilfuel‐basedCCUS?

Fossilfuel‐basedCCUSapplicationscomprisemostoftheCCUSprojectsaddedto2030inthe

NZE.Theseprojectshelptoreducerisksforothernon‐fossilfuelCCUSapplicationsthatare

essentialtoreachnetzero.Inviewofthechallengesthatfossilfuel‐basedCCUSprojectsface,

wehaveconstructedaLowCCUSCase(LCC)inwhichnonewfossilfuelCCUSprojectsare

developedbeyondthosealreadyunderconstructionorapprovedfordevelopment.Inthe

LCC,CO

emissionscapturedfromfossilfuelsareonlyaround150Mtin2050,comparedwith

3600Mtin2050intheNZE.

Inindustry,thelackofnewfossilfuelCCUSprojectsleadsintheLCCto1.2Gtofadditional

emissionscomparedwiththeNZEin2050.Itwouldbenecessary to use alternative

technologiestoeliminatetheseemissionsinordertoachievenetzeroby2050.Anumberof

technologies that are at the prototype stage of development would be needed, such as

electric cement kilns or electric steam crackers for high‐valuechemicalsproduction(see

Box2.4).Assumingthatthesetechnologiescouldbedemonstratedanddeployedatscale,

this would increase electricity demand by around 2400TWh and hydrogen demand in

industry by around 45Mt in 2050. It would also be necessary to replace the 145Mt of

hydrogenthatisproducedintheNZEfromfossilfuelsequippedwithCCUS.Provisionofthis

190Mtofhydrogenthroughelectrolysiswouldrequireanadditional2000GWcapacityof

electrolysersin2050(almost60%morethanintheNZE)andanadditional9000TWhof

electricity(Figure2.31).

Figure 2.31

⊳ Impacts of achieving net-zero emissions by 2050 without

expanded fossil fuel-based CCUS



IEA.Allrightsreserved.

Failure to deploy fossil fuel-based CCUS would significantly increase electricity demand

and require much more solar, wind and electrolyser capacity

Note:LCC=LowCCUSCasewhereCCUSappliedtofossilfuelsisrestrictedtoprojectsunderconstructionor

approvedfordevelopmenttoday.

20

40

60

NZE LCC NZE LCC

ThousandTWh

Electricitydemand

Hydrogen Industry Other

2030 2050

Electricityfor:

10

20

30

NZE LCC NZE LCC NZE LCC NZE LCC

ThousandGW

Capacity

SolarPV Wind Electrolysers Batteries

2030 2050 2030 2050

Capacity:



96 International Energy Agency | Special Report

Box 2.4 ⊳ Technology innovation in the NZE

Innovationiskeytodevelopingnewcleanenergytechnologiesandadvancingexisting

ones.Theimportanceofinnovationincreasesaswegetcloserto2050becauseexisting

technologieswillnotbeabletogetusallthewayalongthepathtonet‐zeroemissions.

Almost 50% of the emissions reductions needed in 2050 in the NZE depend on

technologiesthatareattheprototypeordemonstrationstage,i.e.arenotyetavailable

onthemarket(seeChapter4).

Afteranewideamakesitswayfromthedrawingboardtothelaboratoryandoutinto

theworld,therearefourkeystagesinthecleanenergyinnovationpipeline(IEA,2020d).

Butthepathwaytomaturitycanbelongandsuccessisnotguaranteed.

 Prototype.Aconceptisdevelopedintoadesignandthenintoaprototypeforanew

device,e.g.afurnacethatproducessteelwithpurehydrogeninsteadofcoal.

 Demonstration.Thefirstexamplesofanewtechnologyareintroducedatthesize

of a full‐scale commercial unit, e.g. a system that captures CO

 emissions from

cementplants.

 Marketuptake.Thetechnologyisbeingdeployedinanumberofmarkets.However,

it either has a cost and performance gap with established technologies (e.g.

electrolysersforhydrogenproduction)oritiscompetitivebuttherearestillbarriers,

suchasintegrationwithexistinginfrastructureorconsumerpreferences,toreaching

itsfullmarketpotential(e.g.heatpumps).Policyattentionisneededinbothcases

tostimulatewiderdiffusiontoreducecostsandtoovercomeexistingbarriers,with

moreofthecostsandrisksbeingbornegraduallybytheprivatesector.

 Maturity. The technology has reached market stability, and new purchasesor

installations are constant or even declining in some environments as newer

technologiesstarttocompetewiththestockofexistingassets, e.g. hydropower

turbines.

Innovation is critical in the NZEto bring new technologies to marketandtoimprove

emerging technologies, including for electrification, CCUS, hydrogen and sustainable

bioenergy. The degree of reliance on innovation in the NZE varies across sectors and

alongthevariousstepsofthevaluechainsinvolved(Figure2.32).

 Electrification.Almost30%ofthe170GtCO

cumulativeemissionsreductionsfrom

theuseoflow‐emissions electricity in the NZEcomesfromtechnologiesthat are

currently at prototype or demonstration stage, such as electricity‐based primary

steelproductionorelectrictrucks.

 Hydrogen.Notallstepsofthelow‐carbonhydrogenvaluechainareavailableonthe

markettoday.Themajorityofdemandtechnologies,suchashydrogen‐basedsteel

production,areonlyatthedemonstrationorprototypestage.Thesedelivermore

than75%ofthecumulativeemissionsreductionsintheNZErelatedtohydrogen.



Chapter 2 | A global pathway to net-zero CO₂ emissions in 2050

2

 CCUS.Around55%ofthecumulativeemissionsreductionsthatcomefromCCUSin

theNZEarefromtechnologiesthatareatthedemonstrationorprototype stage

today.WhileCO

capturehasbeeninusefordecadesincertainindustrialandfuel

transformationprocesses,suchasammoniaproductionandnaturalgasprocessing,

it is still being demonstrated at a large scale in many of the other possible

applications.

 Bioenergy.Around45%ofthecumulativeemissionsreductionsintheNZErelated

tosustainablebioenergycomefromtechnologiesthatareatthedemonstrationor

prototypestagetoday,mainlyfortheproductionofbiofuels.

Figure 2.32 ⊳ Cumulative CO

emissions reductions for selected

technologies by maturity category in the NZE



IEA.Allrightsreserved.

CCUS, hydrogen and bioenergy technologies are less mature than electrification.

Most technologies for heavy industry and trucks are at early stages of development.

Notes:Bio‐FT=BiomassgasificationwithFischer‐Tropschsynthesis.Maturitylevelsarethetechnology

designatthemostadvancedstage.

20 40 60 80 100 120

Bio‐FT

Bio‐FTwithCCUS

BiomassCCUSpower

Steel

Cars

Shipping

Trucks

DACS

Steel

FossilCCUSpower

Cement

Electrifiedprimarysteel

Heatpumps

Electrictrucks

Electriccars

Wind

SolarPV

GtCO₂

Marketuptake Demonstration Prototype

CCUS

Hydrogen‐based fuels

Electricity

Bioenergy



98 International Energy Agency | Special Report

In the electricity sector, it would be necessary to produce an additional 11300TWh of

electricityforindustryandfueltransformationandtoreplacevirtuallyalloftheelectricity

generatedfromfossilfuel poweredplantsequippedwithCCUSin2050intheNZE.Using

renewables,thiswouldrequireanadditional7000GWofwindandsolarPVcapacityin2050.

Thisisaround30%morethanintheNZE,andwouldmeanthatannualcapacityadditionsof

solarPVandwindduringthe2030swouldneedtoreach1300GW(300GWmorethanin

theNZE).Toaccommodatethisadditionallevelofvariablerenewablesandtoprovidethe

flexibilitythatisavailablefromfossilfuelCCUSequippedplantsintheNZE,around660GW

morebattery capacity would be neededin 2050 (20%more than intheNZEinin2050),

togetherwithadditional110GWofotherdispatchablecapacity.

ReducingtherateofaddingCCUSatexistingcoal‐andgas‐firedgenerationplantsintheLCC

wouldalsoraisetheriskofstrandedassets.WeestimatethatuptoUSD90billionofexisting

coal‐andgas‐firedcapacitycouldbestrandedin2030anduptoUSD400billionby2050.

Investmentinfossil fuel‐basedCCUSintheNZE to 2050 isaround USD650billion,which

wouldbeavoidedintheLCC.ButadditionalinvestmentisrequiredintheLCCforextrawind,

solar and electrolyser capacity, for electricity‐based routes in heavy industry, and for

expandedelectricitynetworksandstoragetosupportthishigherlevelofdeployment.Asa

result,theadditionalcumulativeinvestmenttoreachnet‐zeroemissionsin2050intheLCC

isUSD15trillionhigherthanintheNZE.

Failure to develop CCUS for fossil fuels would also be likely to delay or prevent the

development of other CCUS applications. Without fossil fuel‐based CCUS, the number of

users and the volumes of the CO

 transport and storage infrastructure deployed around

industrialclusterswouldbereduced.Feweractorsandmorelimitedpoolsofcapitalwould

beavailabletoincurthehighupfrontcostsofinfrastructure,aswellasotherrisksassociated

withtheinitialroll‐outofCCUSinfrastructureclusters.Inaddition,therewouldbefewer

spill‐over learning and cost‐reduction benefits from developing fossil fuel‐based CCUS,

makingthesuccessfuldemonstrationandscaleupofmorenascentCCUStechnologiesmuch

lesslikely.AdelayinthedevelopmentofotherCCUStechnologieswouldhaveamajorimpact

ontheprospectofgettingtonet‐zeroemissionsin2050.Forexample, CCUS is the only

scalablelow‐emissionsoptiontoremoveCO

fromtheatmosphereandtoalmosteliminate

emissionsfromcementproduction.Ifprogressinthesetechnologiesweredelayedandcould

notbedeployedatscale,thenachievingnet‐zeroemissionsby2050wouldbevastlymore

difficult.



Chapter 3 | Sectoral pathways to net-zero emissions by 2050 99

Chapter3

Sectoral pathways to net-zero emissions by 2050

 FossilfuelusefallsdrasticallyintheNet‐ZeroEmissionsScenario(NZE)by2050,and

nonewoilandnaturalgasfieldsarerequiredbeyondthosethathavealreadybeen

approvedfordevelopment.Nonewcoalminesormineextensionsarerequired.Low‐

emissionsfuels–biogases,hydrogenandhydrogen‐basedfuels–seerapidgrowth.

Theyaccount for almost20% of global final energy in 2050,compared with 1% in

2020.Morethan500Mtoflow‐carbonhydrogenisproducedin2050,ofwhichabout

60% is produced using electrolysis that accounts for 20% of global electricity

generationin2050.Liquidbiofuelsprovide45%ofglobalaviationfuelin2050.

 ElectricitydemandgrowsrapidlyintheNZE,rising40%fromtodayto2030andmore

thantwo‐and‐a‐half‐timesto2050,whileemissionsfromgenerationfalltonet‐zero

inaggregateinadvancedeconomiesby2035andgloballyby2040.Renewablesdrive

thetransformation,upfrom29%ofgenerationin2020to60%in2030andnearly90%

in2050.From2030to2050,600GWofsolarPVand340GWofwindareaddedeach

year.Theleast‐efficientcoalplantsarephasedoutby2030andallunabatedcoalby

2040.Investmentinelectricitygridstriplesto2030andremainselevatedto2050.

 Inindustry,emissionsdropby20%to2030and90%to2050.Around60%ofheavy

industryemissionsreductionsin2050intheNZEcomefromtechnologiesthatarenot

readyformarkettoday:manyoftheseusehydrogenorCCUS.From2030,allnew

industrycapacityadditionsarenear‐zeroemissions.Eachmonthfrom2030,theworld

equips10newandexistingheavyindustryplantswithCCUS,adds3newhydrogen‐

basedindustrialplantsandadds2GWofelectrolysercapacityatindustrialsites.

 Intransport,emissionsdropby20%to2030and90%to2050.Theinitialfocusison

increasingtheoperationalandtechnicalefficiencyoftransportsystems,modalshifts,

andtheelectrificationofroadtransport.By2030,electriccarsaccountforover60%

ofcarsales(4.6%in2020)andfuelcellorelectricvehiclesare30%ofheavytrucksales

(lessthan0.1%in2020).By2035,nearlyallcarssoldgloballyareelectric,andby2050

nearly all heavy trucks sold are fuel cell or electric. Low‐emissions fuels and

behaviouralchangeshelptoreduceemissionsinlong‐distancetransport,butaviation

andshippingremainchallengingandaccountfor330MtCO

emissionsin2050.

 Inbuildings,emissionsdropby40%to2030andmorethan95%to2050.By2030,

around 20% of the existing building stock worldwide is retrofitted and all new

buildings comply with zero‐carbon‐ready building standards. Over 80% of the

appliances sold are the most efficient models available by 2025 in advanced

economiesandbythemid‐2030sworldwide.Therearenonewfossilfuelboilerssold

from2025,exceptwheretheyarecompatiblewithhydrogen,andsalesofheatpumps

soar. By 2050, electricity provides 66% of energy use in buildings (33% in 2020).

Naturalgasuseforheatingdropsby98%intheperiodto2050.

SUMMARY



100 International Energy Agency | Special Report

3.1 Introduction

The Net‐Zero Emissions by 2050 Scenario (NZE) involves a global energy system

transformationthatisunparalleledinitsspeedandscope.Thischapterlooksat howthe

mainsectorsaretransformed,aswellasthespecificchallenges and opportunities this

involves (Figure3.1). It covers the supply of fossil and low‐emissions fuels, electricity

generationandthethreemainend‐usesectors–industry,transportandbuildings.Foreach

sector,wesetoutsomekeytechnology and infrastructure milestones on which the NZE

dependsforitssuccessfuldelivery.Furtherwediscusswhatkeypolicydecisionsareneeded,

andbywhen,toachievethesemilestones.Recognisingthatthereisnosinglepathwayto

achievenet‐zeroemissionsby2050andthattherearemanyuncertaintiesrelatedtoclean

energytransitions,inthischapterwealsoexploretheimplicationsofchoosingnottorelyon

certain fuels, technologies or emissions reduction options across the transformation and

end‐usesectors.

Figure 3.1

⊳ CO

emissions by sector in the NZE



IEA.Allrightsreserved.

Emissions fall fastest in the power sector, with transport, buildings and industry seeing steady

declines to 2050. Reductions are aided by the increased availability of low-emissions fuels

Note: Other = agriculture, fuel production, transformation and related process emissions, and direct air

capture.

3.2 Fossilfuelsupply

3.2.1 EnergytrendsintheNet‐ZeroEmissionsScenario

Coalusedeclinesfrom5250milliontonnesofcoalequivalent(Mtce)in2020to2500Mtce

in 2030 and to less than 600Mtce in 2050. Even with increasing deployment of carbon

capture, utilisation and storage (CCUS), coal use in 2050 is 90% lower than in 2020

‐5

5

10

15

2010 2020 2030 2040 2050

GtCO₂

Power Buildings Transport Industry Other



Chapter 3 | Sectoral pathways to net-zero emissions by 2050 101

(Figure3.2).Oildemandneverreturnstoits2019peakanditdeclinesfrom88millionbarrels

perday(mb/d)in2020to72mb/din2030andto24mb/din2050,afallofalmost75%

between2020and2050.Naturalgasquicklyreboundsfromthedipindemandin2020and

risesthroughtothemid‐2020s,reachingapeakofaround4300billioncubicmetres(bcm),

beforedroppingto3700bcmin2030andto1750bcmin2050.By2050,naturalgasuseis

55%lowerthanin2020.

Figure 3.2

⊳ Coal, oil and natural gas production in the NZE

IEA.Allrightsreserved.

Between 2020 and 2050, demand for coal falls by 90%, oil by 75%, and natural gas by 55%

Oil

The trajectory of oil demand in the NZE means that no explorationfornewresourcesis

required and, other than fields already approved for development, no new oil fields are

necessary.However,continuedinvestmentinexistingsourcesofoilproductionareneeded.

OnaverageoildemandintheNZEfallsbymorethan4%peryearbetween2020and2050.If

allcapitalinvestmentinproducingoilfieldsweretoceaseimmediately,thiswouldleadtoa

lossofover8%ofsupplyeachyear.Ifinvestmentweretocontinueinproducingfieldsbut

nonewfieldsweredeveloped,thentheaverageannuallossofsupplywouldbearound4.5%

(Figure3.3).Thedifferenceismadeupbyfieldsthatarealreadyapprovedfordevelopment.

ThesedynamicsarereflectedintheoilpriceintheNZE,whichdropstoaroundUSD35/barrel

in 2030 and USD25/barrel in 2050. This price trajectory is largely determined by the

operatingcostsforfieldscurrentlyinoperation,andonly avery small volumeofexisting

productionwouldneedtobeshutin.However,incomefromoilproductioninallcountries

ismuchlowerintheNZEthaninrecentyears,

andtheNZEprojectssignificantstranded

Governmentsmayalsoreduceoreliminateupstreamtaxestoensurethatproductioncostsarebelowtheoil

pricetomaintaindomesticproduction.

50

100

150

200

1990 2000 2010 2020 2030 2040 2050

Historical

Projected

Natural gas

Oil

Coal



102 International Energy Agency | Special Report

capitalandstrandedvalue.

TheoilpriceintheNZEwouldbesufficientinprincipletocover

thecostofdevelopingnewfieldsforthelowestcostproducers,includingthoseintheMiddle

East,butitisassumedthatmajorresourceholdersdonotproceedwithinvestmentinnew

fieldsbecausedoingsowouldcreatesignificantadditionaldownwardpressureonprices.

TherefiningsectoralsofacesmajorchallengesintheNZE.Refinery throughput drops

considerablyandtherearesignificantchangesinproductdemand.Withrapidelectrification

ofthevehiclefleet,thereisamajordropindemandfortraditionalrefinedproductssuchas

gasoline and diesel, while demand for non‐combusted products such as petrochemicals

increases.Inrecentyears,around55%ofoildemandwasforgasolineanddiesel,butthis

dropstolessthan15%in2050,whiletheshareofethane,naphthaandliquefiedpetroleum

gas(LPG)risesfrom20%inrecentyearstoalmost60%in2050.Thisshiftaccentuatesthe

drop in oil demand for refiners, and refinery runs fall by 85% between 2020 and 2050.

Refinersareusedtocopingwithchangingdemandpatterns,butthescaleofthechangesin

theNZEwouldinevitablyleadtorefineryclosures,especiallyfor refineries not able to

concentrateprimarilyonpetrochemicaloperationsortheproductionofbiofuels.

Figure 3.3

⊳ Oil and natural gas production in the NZE

IEA.Allrightsreserved.

No new oil and natural gas fields are required beyond those already approved for

development. Supply is increasingly concentrated in a few major producing countries

Naturalgas

NonewnaturalgasfieldsareneededintheNZEbeyondthosealreadyunderdevelopment.

Alsonotneededaremanyoftheliquefiednaturalgas(LNG)liquefactionfacilitiescurrently

underconstructionorattheplanningstage.Between2020and2050,naturalgastradedas

Strandedcapitaliscapitalinvestmentinfossilfuelinfrastructurethatisnotrecoveredovertheoperating

lifetimeoftheassetbecauseofreduceddemandorreducedpricesresultingfromclimatepolicies.Stranded

valueisareductioninthefuturerevenuegeneratedbyanassetorassetownerassessedatagivenpointin

timebecauseofreduceddemandorreducedpricesresultingfromclimatepolicies(IEA,2020a).

25

50

75

100

125

2010 2020 2030 2040 2050

mb/d

MiddleEast NorthAmerica Eurasia Africa AsiaPacific CentralandSouthAmerica Europe

Oil

1

2

3

4

5

2010 2020 2030 2040 2050

Thousandbcm

Naturalgas



Chapter 3 | Sectoral pathways to net-zero emissions by 2050 103

LNGfallsby60%andtrade bypipelinefallsby65%.Duringthe2030s,globalnaturalgas

demanddeclinesbymorethan5%peryearonaverage,meaningthatsomefieldsmaybe

closedprematurelyorshutintemporarily.Declinesinnaturalgasdemandslowafter2040,

andmorethanhalfofnaturalgasusegloballyin2050istoproducehydrogeninfacilities

withCCUS.Thelargelevelofhydrogen,alsoproducedusingelectrolysis,andbiomethanein

theNZE,meansthatthedeclineintotalgaseousfuelsismoremutedthanthedeclinein

naturalgas.Thishasimportantimplicationsforthefutureofthegasindustry(seeChapter4).

Coal

NonewcoalminesorextensionsofexistingonesareneededintheNZEascoaldemand

declinesprecipitously.Demandforcokingcoalfallsataslightlyslowerratethanforsteam

coal,butexistingsourcesofproductionaresufficienttocoverdemandthroughto2050.Such

adeclineincoaldemandwouldhavemajorconsequencesforemploymentincoalmining

regions (see Chapter4). There is a slowdown in the rate of decline in the 2040s as coal

productionfacilitiesareincreasinglyequippedwithCCUS:intheNZE,around80%ofcoal

producedin2050appliesCCUS.

3.2.2 Investmentinoilandgas

Upstreamoiland gas investment averagesaboutUSD350billioneachyear from 2021to

2030intheNZE(Figure3.4).Thisissimilartothelevelin2020,butaround30%lowerthan

average levels during the previous five years. Once fields under development start

production,alloftheupstreaminvestmentintheNZEistosupportoperationsinexisting

fields;after2030,totalannualupstreaminvestmentisaroundUSD170billioneachyear.

Figure 3.4

⊳ Investment in oil and natural gas supply in the NZE

IEA.Allrightsreserved.

Once fields under development start production, all upstream oil and gas

investment is spent on maintaining production at existing fields

Note:Investmentinnewfieldsinthe2021‐2030periodisforprojectsthatarealreadyunderconstructionor

havebeenapproved.

200

400

600

1991‐

2000

2001‐

2010

2011‐

2020

2021‐

2030

2031‐

2040

2041‐

2050

1991‐

2000

2001‐

2010

2011‐

2020

2021‐

2030

2031‐

2040

2041‐

2050

BillionUSD(2019)

Refining

Transport

Existing

New

Oil Naturalgas

Fields



104 International Energy Agency | Special Report

3.2.3 Emissionsfromfossilfuelproduction

Emissionsfromthesupplychainsofcoal,oilandnaturalgasfalldramaticallyintheNZE.The

globalaveragegreenhousegas(GHG)emissionsintensityofoilproductiontodayisjustunder

100kilogrammes ofcarbon‐dioxideequivalent(kgCO

‐eq)perbarrel.Withoutchanges, a

largeproportionofglobalproductionwouldbecomeuneconomic,asCO

2

pricesareapplied

to the full value chains of fossil fuels. For example, by 2030 the CO

priceinadvanced

economiesintheNZEisUSD100pertonneofCO

2

(tCO

),whichwouldaddUSD10tothe

costofproducingeachbarrelattoday’saveragelevelofemissionsintensity.

Methaneconstitutesabout60%ofemissionsfromthecoalandnaturalgassupplychainsand

about35%ofemissionsfromtheoilsupplychain.IntheNZE,totalmethaneemissionsfrom

fossil fuels fall by around75% between 2020and 2030, equivalent to a 2.5gigatonne of

carbon‐dioxideequivalent(GtCO

‐eq)reductioninGHGemissions(Figure3.5).Aroundone‐

thirdofthisdeclineisaresultofanoverallreductioninfossilfuelconsumption,butthelarger

sharecomesfromahugeincreaseinthedeploymentofemissionsreductionmeasuresand

technologies,whichleadstotheeliminationofalltechnicallyavoidablemethaneemissions

by2030(IEA,2020a).

Figure 3.5

⊳ Methane emissions from coal, oil and natural gas in the NZE



IEA.Allrightsreserved.

Methane emissions from fossil fuels fall by 75% between 2020 and 2030 as result of a

concerted global effort to deploy all available reduction measures and technologies

Note:Mt=milliontonnes.

ActionstoreducetheemissionsintensityofexistingoilandgasoperationsintheNZEleads

to:theendofallflaring;theuseofCCUSwithcentralisedsourcesofemissions(includingto

capturenaturalsourcesof CO

thatareoften extracted withnaturalgas);and significant

electrification of upstream operations (often making use of off‐grid renewable energy

sources).

1200

2400

3600

40

80

120

2000 2005 2010 2015 2020 2025 2030

MtCO₂‐eq

Mtmethane

Naturalgas Oil Coal



Chapter 3 | Sectoral pathways to net-zero emissions by 2050 105

TheNZEinevitablybringssignificantchallengesforfossilfuelindustriesandthosewhowork

inthem,butitalsobringsopportunities.CoalminingdeclinesdramaticallyintheNZE,but

theminingofmineralsneededforcleanenergytransitionsincreasesveryrapidly,andmining

expertiseislikelytobehighlyvaluedinthiscontext.Theoilandgasindustrycouldplayakey

roleinhelpingtodevelopatscaleanumberofcleanenergytechnologiessuchasCCUS,low‐

carbonhydrogen,biofuelsandoffshorewind.Scalingupthesetechnologies andbringing

downtheircostswillrelyonlarge‐scaleengineeringandprojectmanagementcapabilities,

qualitiesthatareagoodmatchtothoseoflargeoilandgascompanies. These issues,

includingthequestionofhowtohelpthoseaffectedbythemajorchangesimpliedbythe

NZE,arediscussedinmoredetailinChapter4.

3.3 Low‐emissionsfuelsupply

3.3.1 EnergytrendsintheNet‐ZeroEmissionsScenario

Reachingnet‐zeroemissionswillrequirelow‐emissionsfuels

whereenergyneedscannot

easilyoreconomicallybemetbyelectricity(Figure3.6).Thisislikelytobethecaseforsome

modesoflong‐distancetransport(trucks,aviationandshipping)andofheatandfeedstock

supply in heavy industry. Some low‐emissions fuels are effectively drop‐in, i.e. they are

compatiblewiththeexistingfossilfueldistributioninfrastructureandend‐usetechnologies,

andrequirefewifanymodificationstoequipmentorvehicles.

Low‐emissionsfuelstodayaccountforjust1%ofglobalfinalenergydemand,asharethat

increasesto20%in2050intheNZE.Liquidbiofuelsmeet14%ofglobaltransportenergy

demandin2050,upfrom4%in2020;hydrogen‐basedfuelsmeetafurther28%oftransport

energyneedsby2050.Low‐carbongases(biomethane,syntheticmethaneandhydrogen)

meet35%ofglobaldemandforgassuppliedthroughnetworksin2050,upfromalmostzero

today.Thecombinedshareoflow‐carbonhydrogenandhydrogen‐basedfuelsintotalfinal

energyuseworldwidereaches13%in2050.Hydrogenandammoniaalsoprovideimportant

low‐emissions sourcesof powersystem flexibilityand contribute 2%of overall electricity

generationin2050,whichisenoughtomaketheelectricitysectoranimportantdriverof

hydrogendemand.

Low‐emissionsfuelsrefertoliquidbiofuels,biogasandbiomethane,andhydrogen‐basedfuels(hydrogen,

ammoniaandsynthetichydrocarbonfuels)thatdonotemitCO

fromfossilfuelsdirectlywhenusedandalso

emitverylittlewhenbeingproduced.Forexample,hydrogenproducedfromnaturalgaswithCCUSandhigh

capturerates(90%orhigher)isconsideredalow‐emissionsfuel,butnotifproducedwithoutCCUS.



106 International Energy Agency | Special Report

Figure 3.6 ⊳ Global supply of low-emissions fuels by sector in the NZE



IEA.Allrightsreserved.

Low-emissions fuels in the form of liquid biofuels, biomethane, hydrogen-based fuels

help to decarbonise sectors where direct electrification is challenging

Notes:TFC=totalfinalconsumption.Low‐carbongasesinthegasgridreferstotheblendingofbiomethane,

hydrogenandsyntheticmethanewithnaturalgasinagasnetworkforuseinbuildings,industry,transportand

electricitygeneration.SynfuelsrefertosynthetichydrocarbonfuelsproducedfromhydrogenandCO

.Final

energyconsumptionofhydrogenincludes,inadditiontothefinalenergyconsumptionofhydrogen,ammonia

andsynthetichydrocarbonfuels,theon‐sitehydrogenproductionintheindustrysector.

3.3.2 Biofuels



Around10%oftheglobalprimarysupplyofmodernbioenergy(biomassexcludingtraditional

usesforcooking)wasconsumedasliquidbiofuelsforroadtransportand6%wasconsumed

as biogases (biogas and biomethane) to provide power and heat in 2020, with the rest

directly used for electricity generation and heating in the residential sector. Supply

acceleratessharplyintheNZEwithliquidbiofuelsexpandingbyafactorofalmostfourand

biogasesincreasingbyafactorofsixby2050.

Allbutabout7%ofliquidbiofuelsfortransportarecurrentlyproducedfromconventional

cropssuchassugarcane,cornandsoybeans.Suchcropsdirectlycompetewitharableland

thatcanbeusedforfoodproduction,whichlimitsthescopeforexpandingoutput.Somost

ofthegrowthinbiofuelsintheNZEcomesfromadvancedfeedstockssuchaswastesand

residuesandwoodyenergycropsgrownonmarginallandsandcroplandnotsuitableforfood

Liquidsandgasesproducedfrombioenergy.

10% 20% 30% 40%

2020

2030

2050

2020

2030

2050

2020

2030

2050

Shipping

Aviation

Roadtransport

Biomethane

Hydrogen

Syntheticmethane

Buildings

Industry

Transport‐hydrogen

Transport‐ammonia

Transport‐synfuels

Liquidbiofuelsintransport

Low‐carbongasesingasgrid

Hydrogen‐basedfuelsinTFC



Chapter 3 | Sectoral pathways to net-zero emissions by 2050 107

production(seesection2.7.2).Advancedliquidbiofuelproductiontechnologyusingwoody

feedstockexpandsrapidlyoverthenextdecade intheNZE,anditscontributiontoliquid

biofuelsjumpsfromlessthan1%in2020toalmost45%in2030and90%in2050(Figure3.7).

By2030,productionreaches2.7millionbarrelsofoilequivalentperday(mboe/d)by2030,

underpinnedbybiomassgasificationusingtheFischer‐Tropschprocess(bio‐FT)andcellulosic

ethanol,mostlytoproducedrop‐insubstitutesfordieselandjetkerosene.Advancedliquid

biofuelproductionincreasesbyanadditional130%tomorethan6mboe/din2050,thebulk

ofwhichisbiokerosene.

Figure 3.7

⊳ Global biofuels production by type and technology in the NZE



IEA.Allrightsreserved.

Liquid biofuel production quadruples while that of biogases expands sixfold between 2020

and 2050, underpinned by the development of sustainable biomass supply chains

Notes:EJ=exajoules;CCUS=carboncapture,utilisationandstorage. Conventional ethanol refers to

productionusingfoodenergycrops.Advancedethanolreferstoproductionusingwastesandresiduesand

non‐foodenergycropsgrownonmarginalandnon‐arableland.Conventionalbiodieselincludesfattyacidand

methylesters(FAME)routeusingfoodenergycrops.Advancedbiodiesel includes biomass‐based Fischer‐

TropschandHEFAroutesusingwastes,residuesandnon‐foodenergycropsgrownonmarginalandnon‐arable

land.Biomethaneincludesbiogasupgradingandbiomassgasification‐basedroutes.

Production using these feedstocks is mostly under development today. Current output

capacity,principallycellulosicethanol,isabout2.5thousandbarrelsofoilequivalentperday

(kboe/d). The NZE assumes that projects currently in the pipeline in Japan, the United

KingdomandtheUnitedStateswillbringthesetechnologiestothemarketwithinthenext

fewyears.Thescaleuprequiredforalladvancedliquidbiofuels(includingfromwasteoils)

overthenextdecadeisequivalenttobuildingone55kboe/dbiorefineryeverytenweeks

(theworld’slargestbiorefineryhascapacityof28kboe/d).

Thesupplyofthesebiofuelsafter2030shiftsrapidlyintheNZEfrompassengervehiclesand

lighttrucks,whereelectrificationisincreasinglytheorderoftheday,toheavyroadfreight,

shipping and aviation. Ammonia makes inroads into shipping. Advanced liquid biofuels

increasetheirshareoftheglobalaviationfuelmarketfrom15%in2030to45%in2050.

5 10 15

2050

2040

2030

2020

2050

2040

2030

2020

Biogas

Biomethane

Conventionalethanol

Advancedethanol

Conventionalbiodiesel

Advancedbiodieselandbiokerosene

withCCUS

Liquidbiofuels Gaseousbiofuels



108 International Energy Agency | Special Report

Advancedbiofuelssuchashydrogenatedestersandfattyacids(HEFA)andbio‐FTareableto

adjusttheirproductslates(uptoapoint)fromrenewabledieseltobiokerosene,andexisting

ethanol plants, especially those that can be retrofitted with CCUS or integrated with

cellulosicfeedstock,alsomakeacontribution.

Thesupplyofbiogasesincreasesevenmorethanliquidbiofuels.Injectionintogasnetworks

expandsfromunder1%oftotal gasvolumein2020toalmost20%in2050,reducingthe

emissionsintensityofthenetwork‐basedgas.Biomethaneismostlyproducedbyupgrading

biogasproducedfromanaerobicdigestionoffeedstockssuchasagriculturalresidueslike

manureandbiogenicmunicipalsolidwaste,therebyavoidingmethaneemissionsthatwould

otherwisebereleased.Duetothedispersednatureofthesefeedstocks,thisassumesthe

construction of thousands of injection sites and associated distribution lines every year.

Biogasandbiomethanearealsousedascleancookingfuelsandinelectricitygenerationin

theNZE.

TheproductionofbiofuelscanbecombinedwithCCUSatarelativelylowcostinsomebiofuel

production routes (ethanol, bio‐FT, biogas upgrading) because the processes involved

releaseverypurestreamsofCO

.IntheNZE,theuseofbiofuelswithCCUSresultsinannual

carbondioxideremoval(CDR)of0.6GtCO

 in 2050, which offset residual emissions in

transportandindustry.

3.3.3 Hydrogenandhydrogen‐basedfuels

Hydrogenuseintheenergysectortodayislargelyconfinedtooilrefiningandtheproduction

ofammoniaandmethanolinthechemicalsindustry.Globalhydrogendemandwasaround

90milliontonnes(Mt)in2020,mainlyproducedfromfossilfuels(mostlynaturalgas)and

emitting close to 900MtCO

. Both the amount needed and the production route of

hydrogenchangeradicallyintheNZE.Demandincreasesalmostsixfoldto530Mtin2050,of

which half is used in heavy industry (mainly steel and chemicals production) and in the

transportsector; 30% is convertedinto otherhydrogen‐based fuels, mainly ammonia for

shippingandelectricitygeneration,synthetickeroseneforaviationandsyntheticmethane

blendedintogasnetworks;and17%isusedingas‐firedpowerplantstobalanceincreasing

electricity generation from solar PV and wind and to provide seasonal storage. Overall,

hydrogen‐basedfuels

accountfor13%ofglobalfinalenergydemandin2050(Figure3.8).

Ammoniaisusedtodayasfeedstockinthechemicalindustry,butintheNZEitisalsoused

asfuelinvariousenergyapplications,benefittingfromitslowertransportcostandhigher

energydensitythanhydrogen.Ammoniaaccountsforaround45%ofglobalenergydemand

forshippingin2050intheNZE.Co‐firingwithammoniaisalsoapotentialearlyoptionto

reduceCO

emissionsinexistingcoal‐firedpowerplants.Thetoxicityofammoniameansthat

itshandlingislikelytobelimitedtoprofessionallytrainedoperators,whichcouldrestrictits

potential.

Hydrogen‐basedfuelsaredefinedashydrogen,ammoniaaswellassynthetichydrocarbonfuelsproduced

fromhydrogenandCO

.



Chapter 3 | Sectoral pathways to net-zero emissions by 2050 109

Figure 3.8 ⊳ Global production of hydrogen by fuel and hydrogen demand

by sector in the NZE

IEA.Allrightsreserved.

Hydrogen production jumps sixfold by 2050, driven by water electrolysis and natural gas

with CCUS, to meet rising demand in shipping, road transport and heavy industry

Note:RefiningCNR=hydrogenby‐productfromcatalyticnaphthareformingatrefineries.

Synthetickerosenemeetsaroundone‐thirdofglobalaviationfueldemandin2050inthe

NZE. Its manufacture at bioenergy‐fired power or biofuel production plants requires CO



capturedfromtheatmosphere.CO

fromthesesourcescanbeconsideredcarbonneutral,

asitresultsinnonetemissionswhenthefuelisused.Thereisscopefortheco‐production

of advanced liquid biofuels and synthetic liquid fuels from hydrogen and CO

, with the

integrationofthetwoprocessesreducingtheoverallliquidfuelproductioncosts.Alongside

syntheticliquidfuels,enoughsyntheticmethaneisproducedfromhydrogenandCO

in2050

tomeet10%ofdemandfornetworksuppliedgasinthebuildings,industryandtransport

sectors.

By 2050, hydrogen production in the NZE is almost entirely based on low‐carbon

technologies: water electrolysis accounts for more than 60% of global production, and

naturalgasincombinationwithCCUSforalmost40%.Globalelectrolysercapacityreaches

850gigawatts (GW) by 2030 and 3600GW by 2050, up from around0.3GWtoday.

Electrolysisabsorbscloseto15000terawatt‐hours(TWh),or20%ofglobalelectricitysupply

in2050,largelyfromrenewableresources(95%),butalsofromnuclearpower(3%)andfossil

fuelswithCCUS(2%).NaturalgasuseforhydrogenproductionwithCCUSis925bcmin2050,

oraround50%ofglobalnaturalgasdemand,with1.8GtCO

beingcaptured.

Scalingupdeploymentoftechnologiesandrelatedmanufacturingcapacitywillbecriticalto

reducingcosts.Waterelectrolysersareavailableonthemarket today and hydrogen

productionfromnaturalgaswithCCUShasbeendemonstratedatacommercialscale(there

aresevenplantsinoperationaroundtheworld).Thechoicebetweenthetwodependson

200

400

600

2020 2030 2040 2050

Fossil withCCUS

RefiningCNR Electricity

Hydrogenproduction

25%

50%

75%

Shipping Road

transport

Aviation Chemicals Ironand

steel

Syntheticfuels Ammonia Hydrogen

Shareofhydrogenfuelsbysectorin2050



110 International Energy Agency | Special Report

economicfactors,mainlythecostofnaturalgasandelectricity,andonwhetherCO

storage

isavailable.FornaturalgaswithCCUS,productioncostsintheNZEarearoundUSD1‐2per

kilogramme(kg)ofhydrogenin2050,withgascoststypicallyaccountingfor15‐55%oftotal

productioncosts. For waterelectrolysis, learning effects and economiesofscaleresultin

CAPEX cost reductions of 60% in the NZE by 2030 compared to 2020. Production cost

reductionshingeonloweringthecostoflow‐carbonelectricity,aselectricityaccountsfor

50‐85% of total production costs, depending on the electricity source and region. The

averagecostofproducinghydrogenfromrenewablesdropsintheNZEfromUSD3.5‐7.5/kg

todaytoaroundUSD1.5‐3.5/kgin2030andUSD1‐2.5/kgin2050–essentiallyaboutthe

sameasthecostofproducingwithnaturalgaswithCCUS.

Convertinghydrogenintootherenergycarriers,suchasammoniaorsynthetichydrocarbon

fuels,involvesevenhighercosts.Butitresultsinfuelsthatcanbemoreeasilytransported

and stored, and which are also often compatible with existing infrastructure or end‐use

technologies(asinthecaseofammoniaforshippingorsynthetickeroseneforaviation).For

ammonia, the additional synthesis step increases the production costs by around 15%

comparedwithhydrogen(mainlyduetoadditionalconversionlossesandequipmentcosts).

The relatively high cost of synthetic hydrocarbon fuels explains why their use is largely

restrictedtoaviationintheNZE,wherealternativelow‐carbonoptionsarelimited.Synthetic

kerosene costs were USD300‐700/barrel in 2020: although these costs fall to

USD130‐300/barrelby2050intheNZEasthecostsofelectricityfromrenewablesandCO



feedstocks decline, the cost of synthetic kerosene remains far higher than the projected

USD25/barrelcostofconventionalkerosenein2050intheNZE.ThesupplyofCO

,captured

frombioenergyequippedwithCCUSordirectaircapture(DAC),neededtomakethesefuels

isarelevantcostfactor,accountingforUSD15‐70/barrelofthe cost of synthetic

hydrocarbonfuelsin2050.Closingthesecostgapsimpliespenaltiesforfossilkeroseneor

support measures for synthetic kerosene corresponding to a CO

priceof

USD250‐400/tonne.

Increasingglobaldemandforlow‐carbonhydrogenintheNZEprovidesameansforcountries

toexportrenewableelectricityresourcesthatcouldnototherwise be exploited. For

example, Chile and Australia announced ambitions to become major exporters in their

national hydrogen strategies. With declining demand for naturalgasintheNZE,gas‐

producingcountriescouldjointhismarketbyexportinghydrogenproducedfromnaturalgas

withCCUS.Long‐distancetransportofhydrogen,however,isdifficultandcostlybecauseof

itslowenergydensity,andcanaddaroundUSD1‐3/kgofhydrogentoitsprice.Thismeans

that, depending on each country’s own circumstances, producing hydrogen domestically

may be cheaper than importing it, even if domestic production costs from low‐carbon

electricity or natural gas with CCUS are relatively high. International trade nevertheless

becomesincreasinglyimportantintheNZE:aroundhalfofglobalammoniaandathirdof

syntheticliquidfuelsaretradedin2050.



Chapter 3 | Sectoral pathways to net-zero emissions by 2050 111

3.3.4 Keymilestonesanddecisionpoints

Table 3.1 ⊳ Key milestones in transforming low-emissions fuels

Sector 2020 2030 2050

Bioenergy   

Shareofmodernbiofuelsinmodernbioenergy

(excludingconversionlosses)

20% 45% 48%

Advancedliquidbiofuels(mboe/d) 0.1 2.7 6.2

Shareofbiomethaneintotalgasnetworks <1% 2% 20%

capturedandstoredfrombiofuelsproduction(MtCO

) 1 150 625

Hydrogen   

Production(MtH

) 87 212 528

ofwhich:low‐carbon(MtH

) 9 150 520

Electrolysercapacity(GW) <1 850 3585

Electricitydemandforhydrogen‐relatedproduction(TWh) 1 3850 14500

capturedfromhydrogenproduction(MtCO

) 135 680 1800

Numberofexportterminalsatportsforhydrogenandammoniatrade 0 60 150

Note:mboe/d=millionbarrelsofoilequivalentperday;Mt=milliontonnes;H

2

=hydrogen.

Biofuels

Several sustainability frameworks considering net lifecycle GHG emissions and other

sustainabilityindicatorsexistindifferentregions,e.g.theRenewableEnergyDirectiveIIin

the European Union, RenovaBio in Brazil and the Low‐C Fuel Standards in California.

However, the scope, methodology and sustainability metrics of these frameworks differ.

Globalconsensus on a sustainability frameworkand indicatorswithinthe next fewyears

wouldhelpstimulateinvestment;thisshouldbeapriority.Suchaframeworkshouldcover

allformsofbioenergy(liquid,gaseousandsolid)andotherlow‐emissionsfuels,andshould

strive for continuous environmental performance improvement. Certification schemes

ideallyshouldbedevelopedinparallel.

Anotherearlypriorityisforgovernmentstoassessnationalsustainablebiomassfeedstock

potentialassoonaspossibletoestablishthequantitiesandtypesofwastes,residuesand

marginallandssuitableforenergycrops.Assessmentsshouldprovidethebasisfornational

roadmapsforallliquid andgaseousbiofuels,andstrategiesforlow‐emissionsfuels.Early

decisionswillbeneededinthiscontextabouthowtosupportthesustainablecollectionof

wastes and residues from the forestry, agriculture, animal and food industries and from

advancedmunicipalsolidwastesortingsystems:intheNZE,supportmeasuresareinplace

by2025.Measuresmightusefullyincludelow‐emissionsfuelsstandardsthatincentivisethe

useofbiofuelsasfeedstock.Internationalknowledge‐sharingwouldhelpwiththedesignof

suchmeasuresandassistefficientdisseminationofbestpracticesfromregionswithexisting

collection systems, e.g. for forestry residues in Nordic countries and used cooking oil

collectioninEurope,ChinaandSoutheastAsiacountries.



112 International Energy Agency | Special Report

Governments will also need to decide how best to support biogas installations and

distributioninordertomoveawayfromtraditionalusesofbiomassforcookingandheating

by 2030. Such practices remain widespread in some developing countries. They are best

tackledaspartofbroaderprogrammestopromotecleancookingalongsideimprovingaccess

toelectricityandLPG.

Decisionswillbeneededby2025onhowbesttocreatemarketsforsustainablebiofuelsand

closethecostgapbetweenbiofuelsandfossilfuels.Measureswillneedtoincentivisethe

rapid development and deployment of advanced liquid biofuel technologies in end‐use

sectors(particularlyheavy‐dutytrucking,shippingandaviation),usingmechanismssuchas

low‐carbonfuelstandards,biofuelmandatesandCO

removalcredits.Measuresthatcould

boost the scaling up of advanced biofuels production in the next four years include:

incentivesforco‐processingbio‐oilinexistingoilrefineriesorfullyconvertingoilrefineries

to biorefineries; retrofitting ethanol plants with CCUS; and integrating cellulosic ethanol

productionwithexistingethanolplants.

Newinfrastructurewillbeneededtoprovidefortheinjectionofmorebiomethaneintogas

networksandtotransportandstoretheCO

capturedfromethanolandbio‐FTbiofuelplants.

Governments should prioritise the co‐development of biogas upgrading facilities and

biomethaneinjectionsitesby2030,ensuringthatparticularattentionispaidtominimising

fugitive biomethane emissions from the supply chain. Where biomass availability allows,

governmentsmayseevalueinencouragingthedeploymentofbiofuelplantswithCCUSnear

existingindustrialhubswhereintegratedCCUSprojectsareplanned,suchastheHumber

regionintheUnitedKingdom.

Hydrogen‐basedfuels

Animmediatepriorityshouldbeforgovernmentstoassesstheopportunitiesandchallenges

of developing a low‐carbon hydrogenindustry as part of national hydrogenstrategies or

roadmaps.Decisionswillbeneededonwhethertoproducehydrogendomesticallyfromlow‐

carbonelectricityviawaterelectrolysisorfromgaswithCCUSoracombinationofboth,or

whethertorelyonimportedhydrogen‐basedfuels.Buildingtechnologyleadershipalongthe

hydrogensupplychaincouldhelpcreatejobsandstimulateeconomicgrowth.

Decisionswillbeneededduringthenextdecadeonhowbesttobringdownthecostsoflow‐

carbon hydrogen production. Switching existing hydrogen production in industry and oil

refiningfromunabatedfossilfuelstolow‐carbonhydrogenisonepossiblewaytorampup

low‐carbonhydrogenproductioninapplicationsthathavelargedemandalreadyavailable.

Financialsupportinstruments,suchascontractsfordifferences,couldhelptoreducethe

current cost gap of low‐carbon hydrogen production compared to existing unabated

productionfromfossilfuels.

Decisionswillalsobeneededonhowbesttoscaleuphydrogen.Industrialportscouldbea

goodstartingpoint,sincetheymayprovideaccesstolow‐carbonhydrogensupplyinthe

formofoffshorewindorCO

storage.Theyalsoofferscopetopromotenewport‐related



Chapter 3 | Sectoral pathways to net-zero emissions by 2050 113

usesforhydrogen,e.g.shippinganddeliverytrucks,andtheycouldbecomethefirstnodes

of an international hydrogen trade network. The establishment of hydrogen trade will

require the development of methodologies to determine the carbon footprint of the

different hydrogen production routes and the adoption of guaranteesoforiginand

certificationschemesforlow‐carbonhydrogen(andhydrogen‐basedfuels).

Blendinghydrogenintoexistinggasnetworksoffersanotherearlyavenuetoscaleuplow‐

carbon hydrogen production and trigger cost reductions. International harmonisation of

safetystandardsandnationalregulationsonallowedconcentrationsofhydrogeningasgrids

would help with this, as would the adoption of blending quotas or low‐emissions fuel

standards.

Repurposing existing gas pipelines, where technically feasible, with declining natural gas

demandandconnectinglargehydrogendemandhubstotransporthydrogencouldresultin

low cost and low regret opportunities to kick‐start the development of new hydrogen

infrastructure.DevelopingtheinfrastructureforhydrogenatthepacerequiredintheNZE

wouldinvolveconsiderableinvestmentrisksalongthevaluechainofproduction,transport

and demand ranging from hydrogen production technologies through to low‐emissions

electricity generation and CO

 transport and storage. Governments and local authorities

could play an important role by co‐ordinating the planning processes among the various

stakeholders;directpublicinvestmentorpublic‐privatepartnershipscouldhelptodevelop

necessary shared infrastructure for hydrogen; and international co‐operation and cross‐

borderinitiativescouldhelptoshareinvestmentburdensandrisksandsofacilitatelarge‐

scaledeployments,asintheEUImportantProjectsofCommonEuropeanInterest.

3.4 Electricitysector

3.4.1 EnergyandemissionstrendsintheNet‐ZeroEmissionsScenario

TheNZEinvolvesbothasignificantincreaseinelectricityneeds–theresultofanincreasein

economicactivity,rapidelectrificationofend‐usesandexpansionofhydrogenproductionby

electrolysis – and a radical transformation in the way electricity is generated. Global

electricitydemandwas23230TWhin2020withanaveragegrowthrateof2.3%peryear

overthepreviousdecade.Itclimbsto60000TWhin2050intheNZE,anaverageincreaseof

3.2%peryear.

Emerging market and developing economies account for 75% of theprojectedglobal

increaseinelectricitydemandto2050(Figure3.9).Theirdemandincreasesbyhalfby2030

andtriplesby2050,drivenbyexpandingpopulationandrisingincomesandlivingstandards,

aswellnewsourcesofdemandlinkedtodecarbonisation.Inadvancedeconomies,electricity

demandreturnstogrowthafteradecade‐longlull,nearlydoublingbetween2020and2050,

drivenmostlybyend‐useelectrificationandhydrogenproduction.



114 International Energy Agency | Special Report

Figure 3.9 ⊳ Electricity demand by sector and regional grouping in the NZE



IEA.Allrightsreserved.

Electrification of end-uses and hydrogen production raise electricity demand worldwide,

with a further boost to expand services in emerging market and developing economies

Thetransformationoftheelectricitysectoriscentraltoachievingnet‐zeroemissionsin2050.

Electricitygenerationisthesinglelargestsourceofenergy‐related CO

 emissions today,

accounting for 36% of total energy‐related emissions. CO

 emissions from electricity

generation worldwide totalled 12.3Gt in 2020, of which 9.1Gt was from coal‐fired

generation, 2.7Gt from gas‐fired plants and 0.6Gt from oil‐fired plants. In the NZE, CO



emissionsfromelectricitygenerationfalltozeroinaggregateinadvancedeconomiesinthe

2030s.Theyfalltozeroinemergingmarketanddevelopingeconomiesaround2040.



RenewablescontributemosttodecarbonisingelectricityintheNZE:globalgenerationfrom

renewablesnearlytriplesby2030andgrowseightfoldby2050(Figure3.10).Thisraisesthe

shareofrenewablesintotaloutputfrom29%in2020toover60%in2030andnearly90%in

2050.Solar PVandwind race ahead,becoming the leadingsources ofelectricity globally

before 2030: each generates over 23000TWh by 2050, equivalent to about 90% of all

electricityproducedintheworldin2020.PairingbatterystoragesystemswithsolarPVand

wind to improve power system flexibility and maintain electricity security becomes

commonplace in the late 2020s, complemented by demand response for short duration

flexibility and hydropower or hydrogen for flexibility across days or even seasons.

Hydropoweristhelargestlow‐carbonsourceofelectricitytodayandsteadilygrowsinthe

NZE,doublingby2050.Generationusingbioenergy–indedicatedplantsandasbiomethane

deliveredthroughgasnetworks–doublesto2030andincreasesnearlyfivefoldby2050.

10

20

30

40

2010 2020 2030 2040 2050

ThousandTWh

Industry Transport Buildings Hydrogensupply Districtheating Other

Advancedeconomies

2010 2020 2030 2040 2050

Emergingmarketanddevelopingeconomies



Chapter 3 | Sectoral pathways to net-zero emissions by 2050 115

Figure 3.10 ⊳ Global electricity generation by source in the NZE



IEA.Allrightsreserved.

Solar and wind power race ahead, raising the share of renewables in total generation

from 29% in 2020 to nearly 90% in 2050, complemented by nuclear, hydrogen and CCUS

NuclearpoweralsomakesasignificantcontributionintheNZE,itsoutputrisingsteadilyby

40%to2030anddoublingby2050,thoughitsoverallshareofgenerationisbelow10%in

2050.Atitspeakintheearly2030s,globalnuclearcapacityadditionsreach30GWperyear,

five‐times the rate of the past decade. In advanced economies, lifetime extensions for

existingreactorsarepursuedinmanycountriesastheyareoneofthemostcost‐effective

sources of low‐carbon electricity (IEA, 2019), while new construction expands to about

4.5GW per year on average from 2021 to 2035, with an increasing emphasis on small

modularreactors.Despitetheseefforts,thenuclearshareoftotalgenerationinadvanced

economiesfallsfrom18%in2020to10%in2050.Two‐thirdsofnewnuclearpowercapacity

intheNZEisbuiltinemergingmarketanddevelopingeconomiesmainlyintheformoflarge‐

scale reactors, where the fleet of reactors quadruples to 2050.Thisraisestheshareof

nuclearinelectricitygenerationinthosecountriesfrom5%in2020to7%in2050(aswellas

nuclearmeeting4%ofcommercialheatdemandin2050).

Nuclearpowertechnologieshaveadvancedinrecentyears,withseveralfirst‐of‐a‐kindlarge‐

scalereactorscompletedthatincludeenhancedsafetyfeatures.Whileprojectshavebeen

completed on schedule in China, Russia and the United Arab Emirates, there have been

substantialdelaysandcostoverrunsinEuropeandtheUnitedStates.Smallmodularreactors

and other advanced reactor designs are moving towards full‐scale demonstration, with

scalabledesigns,lowerupfrontcostsandthepotentialtoimprovetheflexibilityofnuclear

powerintermsofbothoperationsandoutputs,e.g.electricity,heatorhydrogen.

Retrofittingcoal‐ and gas‐firedcapacitywithCCUSorco‐firingwithhydrogen‐basedfuels

enablesexistingassetstocontributetothetransitionwhilecuttingemissionsandsupporting

electricity security. The best opportunities for CCUS are at large, young facilities with

5

10

15

20

25

2010 2020 2030 2040 2050

ThousandTWh

20%

40%

60%

80%

100%

2020 2030 2050

Oil

Unabatednaturalgas

Unabatedcoal

FossilfuelswithCCUS

Hydrogenbased

Nuclear

Otherrenewables

Hydropower

Wind

SolarPV



116 International Energy Agency | Special Report

available space to add capture equipment and in locations with CO

storageoptionsor

demandforuse.OpportunitiesareconcentratedinChinaforcoal‐firedpowerplantsandthe

UnitedStatesforgas‐firedcapacity.Whiletheyprovidejust2%oftotalgenerationfrom2030

to2050intheNZE,retrofittedplantscaptureatotalof15GtCO

emissionsovertheperiod.

Carboncapturetechnologiesremainatanearlystageofcommercialisation.Twocommercial

powerplantshavebeenequippedwithCCUSoverthepastfiveyears,andtherearecurrently

18CCUSpowerprojectsindevelopmentworldwide.Completingtheseprojectsinatimely

manner and driving down costs through learning‐by‐doing will becriticaltofurther

expansion.Analternativewouldbetoretrofitexistingcoal‐andgas‐firedpowerplantsto

co‐fire high shares of hydrogen‐based fuels. In the NZE, hydrogen‐based fuels generate

900TWh of electricity in 2030 and 1700TWh in 2050 in this way (about 2.5% of global

generationinbothyears).Alarge‐scale(1GW)demonstrationprojecttoco‐firewith20%

ammonia is underway in 2021, with aims to move towards ammonia‐only combustion.

Manufacturershavesignalledthatfuturegasturbinedesignswillbecapableofco‐firinghigh

sharesofhydrogen.Whiletheinvestmentneededtoco‐firehydrogen‐basedfuelslooksto

bemodest,relativelyhighfuelcostspointtotargetedapplicationstosupportpowersystem

stabilityandflexibilityratherthanbulkpower.

TheglobaluseofunabatedfossilfuelsinelectricitygenerationissharplyreducedintheNZE.

Unabatedcoal‐firedgenerationiscutby70%by2030,includingthephase‐outofunabated

coalinadvancedeconomies,andphasedoutinallotherregionsby2040.Large‐scaleoil‐fired

generationisphasedoutinthe2030s.Generationusingnaturalgaswithoutcarboncapture

risesinthenearterm,replacingcoal,butstartsfallingby2030andis90%lowerby2040

comparedwith2020.

Theelectricitysectoristhefirsttoachievenet‐zero emissionsmainlybecauseofthelow

costs,widespreadpolicysupportandmaturityofanarrayofrenewableenergytechnologies.

SolarPVisfirstamongthem:itisthecheapestnewsourceofelectricityinmostmarketsand

haspolicysupportinmorethan130countries.Onshorewindisalsoamarket‐readylowcost

technologythatiswidelysupportedandcanbescaledupquickly,rivallingthelowcostsof

solar PV where conditions are good, though it faces public opposition and extensive

permittingandlicensingprocessesinseveralmarkets.Offshorewindtechnologyhasbeen

maturingrapidlyinrecentyears;itsdeploymentispoisedtoaccelerateinthenearterm.The

currentfocusisonfixed‐bottominstallations,butfloatingoffshorewindstartstomakea

majorcontributionfromaround2030intheNZE,helpingtounlocktheenormouspotential

thatexistsaroundtheworld.Hydropower,bioenergyandgeothermaltechnologiesarewell

established, mature and flexible renewable energy sources. As dispatchable generating

options,theywillbecriticaltoelectricitysecurity,complementedbybatteries,whichhave

seensharpcostreductions,haveproventheirabilitytoprovidehigh‐valuegridservicesand

canbebuiltinamatterofmonthsinmostlocations.Concentratingsolarandmarinepower

arelessmaturetechnologies,butinnovationcouldseethemmakeimportantcontributions

inthelongterm. 



Chapter 3 | Sectoral pathways to net-zero emissions by 2050 117

3.4.2 Keymilestonesanddecisionpoints

Table 3.2 ⊳ Key milestones in transforming global electricity generation

Category



Decarbonisationof

electricitysector

 Advancedeconomiesinaggregate:2035.

 Emergingmarketanddevelopingeconomies:2040.

Hydrogen‐based

fuels

 Startretrofittingcoal‐firedpowerplantstoco‐firewithammoniaandgasturbines

toco‐firewithhydrogenby2025.

Unabated

fossilfuel

 Phaseoutallsubcriticalcoal‐firedpowerplantsby2030(870GWexistingplants

and14GWunderconstruction).

 Phaseoutallunabatedcoal‐firedplantsby2040.

 Phaseoutlargeoil‐firedpowerplantsinthe2030s.

 Unabatednaturalgas‐firedgenerationpeaksby2030andis90%lowerby2040.

Category 2020 2030 2050

Totalelectricitygeneration(TWh) 26800 37300 71200

Renewables   

Installedcapacity(GW) 2990 10300 26600

Shareintotalgeneration 29% 61% 88%

ShareofsolarPVandwindintotalgeneration 9% 40% 68%

Carboncapture,utilisationandstorage(CCUS)generation(TWh)   

CoalandgasplantsequippedwithCCUS 4 460 1330

BioenergyplantswithCCUS 0 130 840

Hydrogenandammonia   

Averageblendinginglobalcoal‐firedgeneration(withoutCCUS) 0% 3% 100%

Averageblendinginglobalgas‐firedgeneration(withoutCCUS) 0% 9% 85%

Unabatedfossilfuels   

Shareofunabatedcoalintotalelectricitygeneration 35% 8% 0.0%

Shareofunabatednaturalgasintotalelectricitygeneration 23% 17% 0.4%

Nuclearpower 2016‐20 2021‐30 2031‐50

Averageannualcapacityadditions(GW) 7 17 24

Infrastructure  

ElectricitynetworksinvestmentinUSDbillion(2019) 260 820 800

Substationscapacity(GVA) 55900 113000 290400

Batterystorage(GW) 18 590 3100

PublicEVcharging(GW) 46 1780 12400

Note:GW=gigawatts;GVA=gigavoltamperes.

TransformingtheelectricitysectorinthewayenvisionedintheNZEinvolveslargecapacity

additionsforalllow‐emissionsfuelsandtechnologies.Globalrenewablescapacitymorethan

triplesto2030andincreasesninefoldto2050.From2030to2050,thismeansaddingmore

than600GWofsolarPVcapacityperyearonaverageand340GWofwindcapacityperyear

includingreplacements(Figure3.11),whileoffshorewindbecomesincreasinglyimportant



118 International Energy Agency | Special Report

overtime(over20%oftotalwindadditionsfrom2021to2050,comparedwith7%in2020).

The annual deployment of battery capacity in the electricity sectorneedstoscaleupin

parallel,from3GWin2019to120GWin2030andover240GWin2040.Retrofittingexisting

coal‐andgas‐firedpowerplantsalsoneedstogetunderway.

Figure 3.11

⊳ Solar PV and wind installed capacity in the NZE



IEA.Allrightsreserved.

Solar PV and wind need to scale up rapidly to decarbonise electricity,

with total solar PV capacity growing 20-fold and wind 11-fold by 2050

Figure 3.12 ⊳ Global investment in electricity networks in the NZE



IEA.Allrightsreserved.

Electricity network investment triples to 2030 and remains elevated to 2050,

meeting new demand, replacing ageing infrastructure and integrating more renewables

4000

8000

12000

16000

2010 2020 2030 2040 2050

Emergingmarketanddevelopingeconomies Advancedeconomies

SolarPV

2010 2020 2030 2040 2050

Wind

300

600

900

1200

2020 2030 2040 2050

BillionUSD(2019)

Gridinvestment

25%

50%

75%

100%

2021‐30 2031‐40 2041‐50

Replacement

Renewables

Increased

demand

Driverforgridinvestment



Chapter 3 | Sectoral pathways to net-zero emissions by 2050 119

Investment in electricity networks will becrucial to achieving this transformation. Global

electricity networks that took over 130years to build need to more than double in total

lengthby2040andincreasebyanother25%by2050.Totalgridinvestmentneedstoriseto

USD820billionby2030,andUSD1trillionin2040,beforefallingbackafterelectricityisfully

decarbonisedandthegrowthofrenewablesslowstomatchdemandgrowth(Figure3.12).

Replacingageinginfrastructureisanimportantpartofnetworkinvestmentthroughto2050

intheNZE.

Governments face several key decisions in the electricity sectoriftheyaretofollowthe

pathwaytonet‐zeroemissionsby2050envisionedintheNZEparticularlyabouthowtobest

useexistingpowerplants.Forretrofitsofcoal‐orgas‐firedcapacity, either with carbon

captureorco‐firingwithhydrogen‐basedfuels(orfullconversion),decisionsareneededto

support first‐of‐a‐kind projects before 2030 before widespread retirement of unabated

plantsbecomesnecessary.Forotherfossilfuelpowerstations,decisionsaboutphaseouts

are needed. Coal‐fired power plants should be phased out completely by 2040 unless

retrofitted,startingwiththeleast‐efficientdesignsby2030(Figure3.13).Thiswouldrequire

shutting870GWofexistingsubcriticalcoalcapacityglobally(11%ofallpowercapacity)and

internationalcollaborationtofacilitatesubstitutes.By2040,alllarge‐scaleoil‐firedpower

plants should be phased out. Natural gas‐fired generation remains an important part of

electricitysupplythroughto2050,butstronggovernmentsupportwillbeneededtoensure

thatCCUSisdeployedsoonandonalargescale.

Figure 3.13

⊳ Coal-fired electricity generation by technology in the NZE



IEA.Allrightsreserved.

Coal-fired power accounted for 27% of global energy CO

emissions in 2020, and in the

NZE, all subcritical plants are phased out by 2030 and all plants without CCUS by 2040

Notes:APC=AnnouncedPledgesCase;IGCC=integratedgasification combined‐cycle. Ammonia includes

co‐firingandfullconversionofcoalplants.

2

4

6

8

10

2010 2020 2030 2040 2050

ThousandTWh

EquippedwithCCUS

Ammonia

Combinedheatandpower

Ultra‐supercriticalandIGCC

Supercritical

Subcritical

Generationfromcoal‐fired

plantsintheAPC



120 International Energy Agency | Special Report

Thepathtonet‐zeroemissionscouldbefacilitatedbyearlygovernmentactiontohelpmove

severaltechnologiesthatprovidepowersystemflexibilitythroughthedemonstrationphases

andbringthemtomarket.Expandingthesetofenergystoragetechnologiestocomplement

batteriesandaddressingemergingneedsforlongerdurationseasonalstoragewouldbeof

particularvalue.Technicalsolutionstosupportthestabilityofpowergridswithhighshares

ofsolarandwindwouldalsobenefitfromresearchanddevelopment(R&D)support.

Therearethreeimportantsetsofdecisionstobemadeconcerningnuclearpower:lifetime

extensions; pace of new construction; and advances in nuclear power technology. In

advanced economies, decisions need to be made about new construction and the large

numberofnuclearpowerplantsthatmayberetiredoverthenextdecadeabsentactionto

extend their lifetimes and make the required investment. Without further lifetime

extensions and new projects beyond those already under construction, nuclear power

output in advanced economies will decline by two‐thirds over the next two decades

(IEA,2019).Inemergingmarketanddevelopingeconomies,therearedecisionstobemade

aboutthepaceofnewnuclearpowerconstruction.From2011to2020,anaverageof6GW

of new nuclear capacity came online each year. By 2030, the rate of new construction

increasesto24GWperyearintheNZE.Thethirdsetofdecisionsconcernstheextentof

governmentsupportforadvancednucleartechnologies,particularlythoserelatedtosmall

modularreactorsandhigh‐temperaturegasreactors,bothofwhichcanexpandmarketsfor

nuclearpowerbeyondelectricity.

Figure 3.14

⊳ Additional global alternative capacity needed in a Low Nuclear

and CCUS Case



IEA.Allrightsreserved.

Sharply reducing the roles of nuclear power and carbon capture would require even faster

growth in solar PV and wind, making achieving the net zero goal more costly and less likely

Note:TheLowNuclearandCCUSCaseassumesthatglobalnuclearpoweroutputisabout60%lowerin2050

thanintheNZEduetonoadditionallifetimeextensionsornewnuclearprojectsinadvancedeconomiesand

noexpansionofthecurrentpaceofconstructioninemergingmarketanddevelopingeconomies,andthatthe

amountofcoal‐andgas‐firedcapacityequippedwithCCUSis99%lowerthanintheNZE.

‐1000

0

1000

2000

3000

2025 2030 2035 2040 2045 2050

Otherdispatchable

Batteries

SolarPV

Wind

CCUS

Nuclear



Chapter 3 | Sectoral pathways to net-zero emissions by 2050 121

FailingtotaketimelydecisionsonnuclearpowerandCCUSwouldraisethecostsofanet‐

zeroemissionspathwayandaddtotheriskofnotmeetingthegoalbyplacinganadditional

burdenonwindandsolartoscaleupevenmorequicklythanintheNZE(Figure3.14).Ina

LowNuclearandCCUSCase,weassumethatglobalnuclearpoweroutputis60%lowerin

2050thanintheNZEasaresultofnoadditionalnuclearlifetimeextensionsornewprojects

inadvancedeconomiesandnoexpansionofthecurrentpaceofconstructioninemerging

market and developing economies, and that only the announced CCUS projects are

completed(representing1%oftheCCUScapacityaddedintheNZE).

Ouranalysisindicatesthattheburdenofreplacingthosesourcesoflow‐carbongeneration

wouldfallmainlyonsolarPVandwindpower,callingfor2400GWmorecapacitythanin

the NZE – an amount far exceeding their combined global capacity in operation in 2020

(Figure3.14).Therewouldalsobeaneedforabout480GWofbatterycapacityaboveand

beyondthe3100GWdeployedintheNZE,plusmorethan300GWofotherdispatchable

capacitytomeetdemandinallseasonsandensuresystemadequacy.Thiswouldcallforan

additionalUSD2trillion investmentin powerplants and relatedgridassets(netoflower

investmentinnuclearandCCUS).Takingaccountofavoidedfuelcosts,theestimatedtotal

additionalcostofelectricitytoconsumersbetween2021and2050isUSD260billion.

3.5 Industry

3.5.1 EnergyandemissiontrendsintheNet‐ZeroEmissionsScenario

Asthesecond‐largestglobalsourceofenergysectorCO

 emissions, industry has a vital

contributiontomakeinachievingthenetzerogoal.IndustrialCO

emissions

(includingfrom

energyuseandproductionprocesses)totalledabout8.4Gtin2020.Advancedeconomies

accountedforaround20%andemergingmarketanddevelopingeconomiesforaround80%,

althoughcomplexglobalsupplychainsfortheproductionofmaterialsandmanufacturing

meanthatadvancedeconomiesgenerallyconsumefarmorefinished goods than they

produce.

Three heavy industries – chemicals, steel and cement – account for nearly 60% of all

industrialenergyconsumptionandaround70%ofCO

emissionsfromtheindustrysector.

Production is highly concentrated in emerging market and developing economies, which

accountfor70‐90%ofthecombinedoutputofthesecommodities(Figure3.15).Chinaalone

wasresponsibleforalmost60%ofbothsteelandcementproductionin2020.Thesebulk

materials are essential inputs to our modern way of life, with few cost‐competitive

substitutes;thechallengeistocarryonproducingthesematerialswithoutemittingCO

.

TheoutlookforglobalmaterialsdemandintheNZEisoneofplateausandsmallincreases.

Thisisinstarkcontrastwiththegrowthseenduringthelasttwodecadeswhenglobalsteel

AllCO

emissionsin thissectionrefer todirectCO

emissionsfrom the industrysectorunless otherwise

specified.



122 International Energy Agency | Special Report

demandroseby2.1‐times,cementby2.4‐timesandplastics(akeygroupofmaterialoutputs

from the chemical sector) by 1.9‐times in response to global economic and population

expansion. When economies are developing, per capita material demand tends to rise

rapidlytobuildupstocksofgoodsandinfrastructure.Aseconomiesmature,futuredemand

stemsprimarilyfromtheneedtorefurbishandreplacethesestocks,thelevelsofwhichtend

tosaturate.IntheNZE,flatteningorevendecliningdemandinmanycountriesaroundthe

worldleadstoslowerglobaldemandgrowth.SomecountriessuchasIndiaseehighergrowth

insteelandcementproduction,whileproductioninChinadeclinesconsiderablyfollowingits

industrialboomperiodaftertheturnofthemillennium.

Figure 3.15

⊳ Global CO

emissions from industry by sub-sector in the NZE



IEA.Allrightsreserved.

The majority of residual emissions in industry in 2050 come

from heavy industries in emerging market and developing economies

Note:Otherincludestheproductionofaluminium,paper,othernon‐metallicmineralsandothernon‐ferrous

metals,andaseriesoflightindustries.

Certainsegmentsofmaterialdemandincreaserapidlytosupporttherequiredexpansionof

energy‐related infrastructure in the NZE, notably renewable electricity generation and

transportinfrastructure.Theadditionalinfrastructurerequiredforthesetwosegmentsby

2050 relative to today alone contributes roughly 10% of steel demand in 2050. But co‐

ordinated cross‐sectoral strategies, including modal shifts in transport and building

renovation,aswellasotherchanges in design, manufacturing methods, construction

practicesandconsumerbehaviour,morethanoffsetthisincrease.Overall,globaldemand

for steel in 2050is 12% higher than today, primary chemicals is 30% higher and cement

demandisbroadlyflat.

emissionsfromheavyindustry declineby20%by2030and 93%by2050intheNZE.

Optimisingtheoperationalefficiencyofequipment,adoptingthebestavailabletechnologies

fornewcapacityadditionsandmeasurestoimprovematerialefficiencyplayanimportant

50

100

150

200

2

4

6

8

2020 2030 2040 2050 2020 2030 2040 2050

Index(2020=100)

GtCO

Chemicals Steel Cement Other Materialproduction(rightaxis)

Advancedeconomies

Emergingmarket anddevelopingeconomies



Chapter 3 | Sectoral pathways to net-zero emissions by 2050 123

partinthis.However,therearelimitstohowmuchemissionscan be reduced by these

measures. Almost 60% of emissions reductions in 2050 in the NZE are achieved using

technologiesthatareunderdevelopmenttoday(largeprototypeordemonstrationscale)

(Figure3.16).

Figure 3.16

⊳ Global CO

emissions in heavy industry and reductions by

mitigation measure and technology maturity category in the NZE



IEA.Allrightsreserved.

An array of measures reduces emissions in heavy industry,

with innovative technologies like CCUS and hydrogen playing a critical role

Hydrogen and CCUS technologies together contribute around 50% of the emissions

reductionsinheavyindustryin2050intheNZE.Thesetechnologiesenabletheprovisionof

largeamountsofhigh‐temperatureheat,whichinmanycasescannotbeeasilyprovidedby

electricitywithcurrenttechnologies,andhelptoreduceprocessemissionsfromthechemical

reactionsinherentinsomeindustrialproduction.Bioenergyalsomakesacontributionina

widearrayofindustrialapplications.

Asidefromtheneedforhigh‐temperatureheatandprocessemissions,twofactorsexplain

theslowerpaceofemissionsreductionsinheavyindustriesrelativetootherareasofthe

energysystem. First, theease with which many industrialmaterials andproducts can be

tradedgloballymeansthatmarketsarecompetitiveandmarginsarelow.Thisleaveslittle

roomtoabsorbadditionalcostsstemmingfromtheadoptionofmoreexpensiveproduction

pathways.Itwilltaketimetodeveloprobustglobalco‐operationandtechnologytransfer

frameworksordomesticsolutionstoenablealevelplayingfield for these technologies.

Second,heavyindustriesusecapital‐intensiveandlong‐livedequipment,whichslowsthe

deployment of innovative low‐emission technologies. Capacity additions in the period to

2030–beforealarge‐scaleroll‐outofinnovativeprocessescantakeplace–largelyexplain

thepersistenceofindustrialemissionsin2050,morethan80% ofwhichareinemerging

market and developing economies. Strategically timed investmentinlow‐carbon

technologiescouldhelpminimiseearlyretirements(Box3.1).

2

4

6

8

2020 2050 2020 2050

GtCO

Activity

CCUS

Energyefficiency

Otherfuelshifts

Electrification

Otherrenewables

Bioenergy

Hydrogen

Materialefficiency

Prototype

Demonstration

Marketuptake

Mature

‐95%

+39%

Maturity

Measure

Mitigationmeasures

Maturityofmeasures



124 International Energy Agency | Special Report

Box 3.1 ⊳ Investment cycles in heavy industry

Forheavyindustry,theyear2050isjustoneinvestmentcycleaway.Averagelifetimesof

emissions‐intensiveassetssuchasblastfurnacesandcementkilnsarearound40years.

Afterabout25yearsofoperation,however,plantsoftenundergoamajorrefurbishment

toextendtheirlifetimes.

Thechallengeistoensurethatinnovativenear‐zeroemissionsindustrialtechnologies

thatareatlargeprototypeanddemonstrationstagetodayreachmarketswithinthenext

decade,whenaround30%ofexistingassetswillhavereached25yearsofageandthus

faceaninvestmentdecision.Iftheseinnovativetechnologiesarenotready,ornotused

even if ready, this would have amajornegativeimpactonthepace of emissions

reductionsor riskanincrease in stranded assets (Figure3.17).Conversely, if theyare

ready,andifexistingplantsareretrofitorreplacedwiththematthe25‐yearinvestment

decisionpoint,thiscouldreduceprojectedcumulativeemissionsto2050fromexisting

heavyindustryassetsbyaround40%.Thecriticalwindowofopportunityfromnowto

2030shouldnotbemissed.

Figure 3.17 ⊳ CO

emissions from existing heavy industrial assets in the NZE



IEA.Allrightsreserved.

Intervening at the end of the next 25-year investment cycle could help unlock

60 Gt CO

, around 40% of projected emissions from existing heavy industry assets



Theenergy mix inindustry changes radicallyin the NZE.The share offossil fuels intotal

energyusedeclinesfromaround70%todayto30%in2050.Thevastmajorityoffossilfuels

stillbeingusedthenareinheavyindustries,mainlyaschemicalfeedstock(50%)orinplants

equipped with CCUS (around 30%). Electricity is the dominant fuel in industrial energy

demandgrowth,withitsshareoftotalindustrialenergyconsumptionrisingfrom20%in2020

to45%in2050.Some15%ofthiselectricityisusedtoproducehydrogen.Bioenergyplaysan

importantrole,contributing15%oftotalenergyusein2050,butsustainablesuppliesare

2

4

6

2020 2030 2040 2050

GtCO

Existing

infrastructure:

Typicallifetime

Existinginfrastructure:25‐year

investmentcycle

NZE(heavyindustry)



Chapter 3 | Sectoral pathways to net-zero emissions by 2050 125

limited,anditisalsoinhighdemandinthepowerandtransportsectors.Renewablesolar

andgeothermaltechnologiestoprovideheatmakeasmallbutfastgrowingcontribution

(Figure3.18).

Figure 3.18

⊳ Global final industrial energy demand by fuel in the NZE



IEA.Allrightsreserved.

Fossil fuel use in industry is halved by 2050, replaced primarily by electricity and bioenergy

Notes:Industrialenergyconsumptionincludeschemicalfeedstockandenergyconsumedinblastfurnacesand

cokeovens.Hydrogenreferstoimportedhydrogenandexcludescaptivehydrogengeneration.Electricityfor

hydrogenreferstoelectricityusedintheproductionofcaptivehydrogenviaelectrolysis.

Chemicalsproduction

IntheNZE,emissionsfromthechemicalssub‐sectorfallfrom1.3Gtin2020to1.2Gtin2030

andaround65Mtin2050.Theshareoffossilfuelsintotalenergyusefallsfrom83%in2020

(mostlyoilandnaturalgas),to76%in2030and61%in2050.Oilremainsthelargestfuel

usedinprimarychemicalsproductionby2050intheNZE,alongwithsmallerquantitiesof

gasandcoal.

Technologies that are currently available on the market accountforalmost80%ofthe

emissionssavingsachievedgloballyinthechemicalindustryby2030intheNZErelativeto

today. They include recycling and re‐use of plastics and more efficient use of nitrogen

fertilisers,whichreducethedemandforprimarychemicals,andmeasurestoincreaseenergy

efficiency.Beyond2030,thebulkofemissionsreductionsresultfromtheuseoftechnologies

whoseintegrationinchemicalprocessesisunderdevelopmenttoday,includingcertainCCUS

applicationsandelectrolytichydrogengenerateddirectlyfromvariablerenewableelectricity

(Figure3.19). CCUS‐equipped conventional routes and pyrolysis technologiesaremost

competitiveinregionswithaccesstolowcostnaturalgas,whileelectrolysisisthefavoured

optioninregionswherethedeploymentofCCUSisimpededbyalackofinfrastructureor

publicacceptance.

20%

40%

60%

80%

100%

2020 2030 2040 2050

Coal CoalwithCCUS Oil Naturalgas

NaturalgaswithCCUS Electricity Electricityforhydrogen Heat(imported)

Bioenergyandwaste Otherrenewables Hydrogen(imported)

Totalindustry

2020 2030 2040 2050

Heavyindustry



126 International Energy Agency | Special Report

Figure 3.19 ⊳ Global industrial production of bulk materials by production

route in the NZE



IEA.Allrightsreserved.

Near-zero emissions routes dominate cement, primary steel and chemicals

production by 2050, with key roles for CCUS and hydrogen-based technologies

Notes:CCUS=carboncapture,utilisationandstorage.Chemicalsreferstotheproductionofprimarychemicals

(ethylene,propylene,benzene,toluene,mixedxylenes,ammoniaandmethanol).Steelreferstoprimarysteel

production. Other includes innovative processes that utilise bioenergy and directly electrify production.

Hydrogen‐basedreferstoelectrolytichydrogen.Fossilfuel‐basedhydrogenwithCCUSisincludedintheCCUS‐

equippedcategory.

Ironandsteelproduction

IntheNZE,globalCO

emissionsfromtheironandsteelsub‐sectorfallfrom2.4Gtin2020

to1.8Gtin2030and0.2Gtin2050,astheunabateduseoffossilfuelsfallssharply.Their

shareoftheoverallfuelmixdropsfrom85%todaytojustover 30% in 2050. The steel

industryremainsoneofthelastsectorsusingsignificantamountsofcoalin2050,primarily

duetoitsimportanceasachemicalreductionagent,albeitmostlyinconjunctionwithCCUS.

TheNZEseesaradicaltechnologicaltransformationoftheironandsteelsub‐sectorbased

largelyonamajorshiftfromcoaltoelectricity.By2050,electricityandothernon‐fossilfuels

accountfornearly70%offinalenergydemandinthesector,upfromjust15%in2020.This

shift is driven by technologiessuch as scrap‐based electric arc furnaces (EAF), hydrogen‐

based direct reduced iron (DRI) facilities, iron ore electrolysis and the electrification of

ancillaryequipment.Theshareofcoalintotalenergyusedropsfrom75%in2020to22%by

2050intheNZE,ofwhich90%isusedinconjunctionwithCCUS.

Technologiesthatarecurrentlyonthemarketdeliveraround85%ofemissionssavingsin

steelproductionto2030.Theyincludematerialandenergyefficiencymeasuresandamajor

increaseinscrap‐basedproduction–whichrequiresonlyaroundone‐tenthoftheenergyof

primarysteelproduction–drivenprimarilybyincreasedscrapavailabilityasmoreproducts

reachtheir end‐of‐life. Partial hydrogen injection into commercial blastfurnaces and DRI

25%

50%

75%

100%

2020 2030 2050 2020 2030 2050 2020 2030 2050

Conventionalroutes

Other

Hydrogen‐based

CCUS‐equipped

Chemicals Steel Cement

Innovativeroutes



Chapter 3 | Sectoral pathways to net-zero emissions by 2050 127

furnacesgainpaceinthemid‐2020s,buildingonpilotprojectstestingthepracticetoday.

After2030,thebulkofemissionreductionscomefromtheuseoftechnologiesthatareunder

development, including hydrogen‐based DRI and iron ore electrolysis. Several

CCUS‐equippedprocesstechnologiesaredeployedinparallel,includinginnovativesmelting

reduction, natural gas‐based DRI production (particularly in regions with low natural gas

prices)andinnovativeblastfurnaceretrofitarrangementsinregionswithrelativelyyoung

plants.

Cementproduction

Producingatonneofcementtodaygeneratesaround0.6tonnesCO

onaverage,two‐thirds

ofwhichareprocessemissionsgeneratedfromcarbonreleasedfromtherawmaterialsused.

Fossilfuels–mostlycoalplussomepetroleumcoke–accountfor90%ofthermalenergy

needs.

Increasedblendingofalternativematerialsintocementtoreplaceaportionofclinker(the

active and most emissions‐intensive ingredient), lower demand for cement and energy

efficiency measures deliver around 40% of the emissions savings in 2030 compared with

2020.Throughuseofblendedcements,theglobalclinker‐to‐cementratiodeclinesfrom0.71

in2020to0.65in2030.Theratiocontinuestodeclineafter2030,butmoreslowly,reaching

0.57 in 2050 (blended cements could reach a clinker‐to‐cement ratio as low as 0.5, but

marketapplicationpotentialdependsonregionalcontexts).Limestoneandcalcinedclayare

themain alternativematerials usedin blendedcements by 2050.Since0.5isthelowest

technicallyachievableclinker‐to‐cementratio,othermeasuresareneededtoachievedeeper

emissionreductions.

After2030intheNZE,thebulkofemissionsreductionscomefromtheuseoftechnologies

that are under development today. CCUS is the most important, accounting for 55% of

reductionsin2050relativetotoday.Inmanycases,itismorecost‐effectiveintheNZEto

applyCCUStofossilfuelcombustionemissionsthantoswitchto zero‐emissions energy

sources.Coaluseiseliminatedfromcementproductionby2050,whennaturalgasaccounts

forabout40%ofthermalenergy(upfrom15%today),biomassandrenewablewastefora

further35%(upfromlessthan5%today),hydrogenanddirectelectrificationforjustabout

15%, and oil products and non‐renewable waste for the remainder. Constraints on the

availabilityofsustainablebiomasssuppliespreventitfromclaimingahighershare.Direct

electrificationofcementkilnsisatthesmallprototypestagetoday,andsoonlystartstobe

deployedafter2040onasmallscale.Fromthe2040s,hydrogenprovidesaround10% of

thermalenergyneedsincementkilns,althoughblendingofsmallamountsbeginsearlier.

Innovativetypesofcementbased onalternativebindingmaterialsthatlimitoravoidthe

generationofprocessemissions,andevenenableCO

captureduringthecuringprocess,are

eitherstillatmuchearlierstagesofdevelopmentrelativetootheroptionslikeCCUS,orhave

limitedapplicability.



128 International Energy Agency | Special Report

Box 3.2 ⊳ What about other industry sub-sectors?

Steel,cementandchemicalsarenottheonlyoutputsfromtheindustrysector.Italso

includes other energy‐intensive sub‐sectors such as aluminium, paper, other non‐

metallic minerals and non‐ferrous metals, as well as light industries that produce

vehicles,machinery,food,timber,textilesandotherconsumergoods,togetherwiththe

energyconsumedinconstructionandminingoperations.

Emissionsfromthelightindustriesdeclinebyaround30%by2030andaround95%by

2050intheNZE.Incontrasttotheheavyindustries,mostofthetechnologiesrequired

fordeepemissionreductionsinthesesub‐sectorsareavailableonthemarketandready

todeploy.Thisisinpartbecausemorethan90%oftotalheatdemandislow/medium‐

temperature,whichcanbemorereadilyandefficientlyelectrified.

Figure 3.20 ⊳ Share of heating technology by temperature level in light

industries in the NZE

IEA.Allrightsreserved.

The share of electricty in satisfying heat demand for light industries rises

from less than 20% today to around 40% in 2030 and about 65% in 2050

Notes:Lightindustriesexcludesnon‐specifiedindustrialenergyconsumption.Low/medium‐temperature

heatcorrespondsto0‐400°Candhigh‐temperatureheatto>400°C.Otherheatsourcesincludessolar

thermalandgeothermalheaters,aswellasimportedheatfromthepowerandfueltransformationsector.

Electricityaccountsforaround40%ofheatdemandby2030andabout65%by2050.For

low‐(<100°C)andsomemedium‐(100‐400°C)temperatureheat,electrificationincludes

animportantroleforheat pumps(accountingforabout30%oftotalheatdemand in

2050).IntheNZE,around500MWofheatpumpsneedtobeinstalledeverymonthover

thenext30years.Alongwithelectrification,therearesmallerrolesfor hydrogen and

bioenergyforhigh‐temperatureheat(>400°C),accountingforaround20%andaround

15%respectivelyoftotalenergydemandin2050(Figure3.20).Therateofelectrolyser

capacitydeploymentismuchlowerthanheavyindustries,buttheunitsizeswillalsobe

25% 50% 75% 100%

2050

2030

2020

2050

2030

2020

2050

2030

2020

Fossilfuelheater

Biomassheater

Electricheater

Hydrogenheater

Heatpump

Otherheatsources

Miningandconstruction

Foodandtobacco

Machinery

Textileandleather

Transportequipment

Woodandwoodproducts

Low/medium‐temperatureheatdemandbytechnology

Heatdemandbysub‐sector

High‐temperatureheatdemandbytechnology

Sub‐sectors

Technology



Chapter 3 | Sectoral pathways to net-zero emissions by 2050 129

muchsmaller.About5%ofheatdemandissatisfiedbydirectuse of renewables,

includingsolarthermalandgeothermalheatingtechnologies.

Energyefficiencyalsoplaysacriticalroleinthesemanufacturing industries, notably

through increased efficiency in electric motors (conveyers, pumps and other driven

systems).By2030,90%ofthemotorsalesinotherindustriesareClass3orabove.

3.5.2 Keymilestonesanddecisionpoints

Table 3.3 ⊳ Key milestones in transforming global heavy industry sub-sectors

Category

Heavyindustry

 2035:virtually,allcapacityadditionsareinnovativelow‐emissionsroutes.

Industrialmotors

 2035:allelectricmotorssalesarebestinclass.

Category 2020 2030 2050

Totalindustry   

Shareofelectricityintotalfinalconsumption 21% 28% 46%

Hydrogendemand(MtH

) 51 93 187

captured(MtCO

) 3 375 2800

Chemicals   

Shareofrecycling:reuseinplasticscollection 17% 27% 54%

 reuseinsecondaryproduction 8% 14% 35%

Hydrogendemand(MtH

) 46 63 83

 withon‐siteelectrolysercapacity(GW) 0 38 210

Shareofproductionviainnovativeroutes 1% 13% 93%

captured(MtCO

) 2 70 540

Steel   

Recycling,re‐use:scrapasshareofinput 32% 38% 46%

Hydrogendemand(MtH

) 5 19 54

 withon‐siteelectrolysercapacity(GW) 0 36 295

Shareofprimarysteelproduction:hydrogen‐basedDRI‐EAF 0% 2% 29%

 ironoreelectrolysis‐EAF 0% 0% 13%

 CCUS‐equippedprocesses 0% 6% 53%

captured 1 70 670

Cement   

Clinkertocementratio 0.71 0.65 0.57

Hydrogendemand(MtH

) 0 2 12

Shareofproductionviainnovativeroutes 0% 9% 93%

captured(MtCO

) 0 215 1355

Note:DRI=directreducediron;EAF=electricarcfurnace.

From 2030 onwards, all new capacity additions in industry in the NZE feature near‐zero

emissionstechnologies.Muchoftheheavyindustrycapacitythatwillbeaddedandreplaced



130 International Energy Agency | Special Report

in the coming years is in emerging market and developing economies; they may expect

financialsupportfromadvancedeconomies.Eachmonthfrom2030to2050,theNZEimplies

anadditional10industrialplantsequippedwithCCUS,threeadditionalfullyhydrogen‐based

industrialplantsand2GWofextraelectrolysercapacityatindustrialsites.Whilechallenging,

thisisachievable.Forcomparison,about12heavyindustrialfacilitieswerebuiltfromscratch

onaveragepermonthinChinaalonefrom2000to2015.By2050,nearlyallproductionin

heavyindustryiswithnear‐zeroemissionstechnologies.

Decisiveactionfromgovernmentsisimperativetoachievecleanenergytransitionsinheavy

industryatthescaleandpaceenvisionedintheNZE.Withinthenexttwoyears,governments

inadvancedeconomieswillneedtotakedecisionsaboutfundingforR&Dforcriticalnear‐

zeroemissionsindustrialtechnologiesandformitigatingtheinvestmentrisksassociatedwith

demonstrating them at scale. This should lead to at least two or three commercial

demonstrationprojectsforeachtechnologyindifferentregions,andtomarketdeployment

bythemid‐2020s.Internationalco‐ordinationandco‐operationwouldfacilitatebetteruse

ofresourcesandhelppreventgapsinfunding.

Governmentsalsoneedtotakeearlydecisionsonlarge‐scaledeployment of near‐zero

emissionstechnologies.By2024inadvancedeconomiesand2026inemergingmarketand

developingeconomies,governmentsshouldhaveinplaceastrategyforincorporatingnear‐

zeroemissionstechnologiesintothenextseriesofcapacityadditionsandreplacementsfor

steelandchemicalplants,whichshouldincludedecisionsaboutwhethertopursueCCUS,

hydrogenoracombinationofboth.Iftheyaretosucceed,thosestrategiesneedtoinclude

concreteplansfordeveloping andfinancingthenecessaryinfrastructureforCCUSand/or

hydrogen, together with clean electricity generation for hydrogen production. The

constructionoftherequiredinfrastructureshouldbeginassoonaspossiblegiventhelong

lead‐timesinvolved.

Withinasimilartimeframe,governmentsofcountriesthatproducecementshoulddecide

howtodevelopthenecessaryCCUSinfrastructureforthatsub‐sector, including the

necessarylegalandregulatoryframeworks.Importingcountriesshouldmakeplanstomove

progressively to exclusive use of low‐emissions cement, which mayinvolvetheneedto

supportthedevelopmentofCCUS‐equippedfacilitieselsewhereinordertoensuresupplies

andtoavoidadisproportionateburdenbeingplacedonothercountries.

Strategiesmustbeunderpinnedbyspecificpolicies.By2025,allcountriesshouldhavealong‐

termCO

emissionsreductionpolicyframeworkinplacetoprovidecertaintythatthenext

wave of investment in capacity additions will feature near‐zero emissions technologies.

Successful strategies are likely torequireinitialmeasuressuchascarboncontractsfor

difference,publicprocurementandincentivestoencourageprivatesectorprocurement.As

newtechnologiesaredeployedandcostsdecline,thereislikelytobeastrongcasebyabout

2030forreplacingtheseinitialmeasureswithotherssuchasCO

taxes,emissionstrading

systemsandemissionsperformancestandards.Financingsupportfornear‐zeroemissions

capacityadditionsmayalsohaveanimportantroletoplaythroughmeasuressuchaslow

interestandconcessionalloans andblended finance, as well asthrough contributions by



Chapter 3 | Sectoral pathways to net-zero emissions by 2050 131

advanced economies to funds that support projects in emerging market and developing

economies.Strategiesshouldalsoincludemeasurestoreduceindustrialemissionsthrough

material efficiency, for example by revising design regulations, adopting incentives to

promote longer product and building lifetimes, and improving systems for collecting and

sortingmaterialsforrecycling.

Thereisastrongcaseforaninternationalagreementonthetransitiontonear‐zeroemissions

for globally traded products by the mid‐2020s so as to establish a level playing field.

Alternatively,countriesmayneedtoresorttomeasurestoshield domestic near‐zero

emissionsproductionfromcompetitionfromproductsthatcreateemissions.Anysuchpolicy

wouldneedto bedesignedtorespecttheregulatoryframeworksgoverninginternational

trade,suchasthoseoftheWorldTradeOrganization.

Evenwithacceleratedinnovationtimelinesandstrongpoliciesinplace,somehigh‐emitting

capacity additions will be needed to meet demand in the next decade before near‐zero

emissionstechnologiesareavailable.Itwouldmakesenseforgovernmentstorequireany

newcapacitytoincorporateretrofit‐readydesignssothatunabatedcapacityaddedinthe

nextfewyearshasthetechnicalcapacityandspacerequirement to integrate near‐zero

emissionstechnologiesincomingyears.Beyond2030,investmentintheNZEisconfinedto

innovativenear‐zeroemissionsprocessroutes.

Governmentsshouldnotoverlooktheneedformeasurestospurdeployment of already

available near‐zero emissions technologies in light manufacturing industries. Adopting a

carbonpriceandthensufficientlyincreasingthepriceovertime–throughcarbontaxesor

emissionstradingsystemsforlargermanufacturers–maybethesimplestwaytoachieve

thatobjective.Otherregulatorymeasuressuchastradeablelow‐carbonfuelandemissions

standardscouldyieldthesameoutcome,butmayinvolvegreateradministrativecomplexity.

Technologymandatesarelikelytobeneededtoachievetheenergyefficiencysavingsinthe

NZE,suchasminimumenergyperformancestandardsfornewmotorsandboilers.Tailored

programmesandincentivesforsmallandmediumenterprisescouldalsoplayahelpfulrole.

3.6 Transport

3.6.1 EnergyandemissiontrendsintheNet‐ZeroEmissionsScenario

Theglobaltransportsectoremittedover7GtCO

in2020,andnearly8.5Gtin2019before

theCovid‐19pandemic.

7

IntheNZE,transportsectorCO

emissionsareslightlyover5.5Gt

in2030.By2050theyarearound0.7Gt–a90%droprelativeto2020levels.CO

2

emissions

declineevenwithrapidlyrisingpassengertravel,whichnearlydoublesby2050,andrising

freightactivity,whichincreasesbytwo‐and‐a‐half‐timesfromcurrentlevels,andanincrease

intheglobalpassengercarfleetfrom1.2billionvehiclesin2020tocloseto2billionin2050.

Unlessotherwisenoted,CO

emissionsreportedherearedirectemissionsfromfossilfuelcombustedduring

theoperationofvehicles.



132 International Energy Agency | Special Report

The transport modes do not decarbonise at the same rate because technology maturity

variesmarkedlybetweenthem(Figure3.21).CO

2

emissionsfromtwo/three‐wheelersalmost

ceaseby2040,followedbycars,vansandrailinthelate2040s.Emissionsfromheavytrucks,

shipping and aviation fall by an annual average of 6% between 2020 and 2050, but still

collectivelyamounttomorethan0.5GtCO

in2050.Thisreflectsprojectedactivitygrowth

andthatmanyofthetechnologiesneededtoreduceCO

2

emissionsinlongdistancetransport

are currently under development and do not start to make substantial inroads into the

marketinthecomingdecade.

Figure 3.21

⊳ Global CO

transport emissions by mode and share of emissions

reductions to 2050 by technology maturity in the NZE



IEA.Allrightsreserved.

Passenger cars can make use of low-emissions technologies on the market, but major

advances are needed for heavy trucks, shipping and aviation to reduce their emissions

Notes: Other road = two/three wheelers and buses. Shipping and aviation include both domestic and

internationaloperations.SeeBox2.4fordetailsonthematuritycategories.

DecarbonisationofthetransportsectorintheNZEreliesonpoliciestopromotemodalshifts

and more efficient operations across passenger transport modes (see sections

2.5.7and4.4.3),

aswellasimprovementsinenergyefficiency.Italsodependsontwomajor

technologytransitions:shiftstowardselectricmobility(electricvehicles[EVs]andfuelcell

electricvehicles[FCEVs])

andshiftstowards higherfuelblendingratiosanddirectuseof

Examplesofefficientoperations include: seamless integration of various modes (inter‐modality) and

“MobilityasaService”inpassengertransport;logisticsmeasuresinroadfreight,e.g.backhauling,night‐time

deliveries,real‐timerouting;slowsteaminginshipping;andairtrafficmanagement,e.g.landingandtake‐off

schedulinginaviation.

EVsincludebatteryelectricvehicles,plug‐inhybridelectric‐gasolinevehiclesandplug‐inhybridelectric‐diesel

vehicles.FCEVscontainabatteryandelectricmotorandarecapableofoperatingwithouttailpipeemissions.

2010 2020 2030 2040 2050

GtCO

Light‐dutyvehicles Heavytrucks

Otherroad Shipping

Aviation Rail

CO₂emissionsbymode

25%

50%

75%

100%

Heavy

trucks

Shipping Aviation

Mature Marketuptake

Demonstration Prototype

Technologymaturitybymode



Chapter 3 | Sectoral pathways to net-zero emissions by 2050 133

low‐carbon fuels (biofuels and hydrogen‐based fuels). These shifts are likely to require

interventionstostimulateinvestmentinsupplyinfrastructureandtoincentiviseconsumer

uptake.

Transporthastraditionallybeenheavilyreliantonoilproducts,whichaccountedformore

than 90% of transport sector energy needs in 2020 despite inroads from biofuels and

electricity(Figure3.22).IntheNZE,theshareofoildropstolessthan75%in2030andslightly

over10%by2050.Bytheearly2040s,electricitybecomesthedominantfuelinthetransport

sectorworldwideintheNZE:itaccountsfornearly45%oftotalfinalconsumptionin2050,

followedbyhydrogen‐basedfuels(28%)andbioenergy(16%).Biofuelsalmostreacha15%

blendingshareinoilproductsby2030inroadtransport,whichreducesoilneedsbyaround

4.5millionbarrelsofoilequivalentperday(mboe/d).Beyond2030,biofuelsareincreasingly

usedforaviationandshipping,wherethescopeforusingelectricityandhydrogenismore

limited.Hydrogencarriers(suchasammonia)andlow‐emissionssyntheticfuelsalsosupply

increasingsharesofenergydemandinthesemodes.

Figure 3.22

⊳ Global transport final consumption by fuel type and mode

in the NZE



IEA.Allrightsreserved.

Electricity and hydrogen-based fuels account for more than

70% of transport energy demand by 2050

Note:LDVs=Light‐dutyvehicles;Otherroad=two/threewheelersandbuses.

Roadvehicles

Electrification plays a central role indecarbonising roadvehicles in the NZE. Battery cost

declinesofalmost90%inadecadehaveboostedsalesofelectricpassengercarsby40%on

average over the past five years.Batterytechnologyisalready relatively commercially

competitive.FCEVsstarttomakeinroadsinthe2020sintheNZE.Theelectrificationofheavy

trucks moves more slowly due to the weight of the batteries, high energy and power

30

60

90

120

2020 2030 2040 2050

Other

Aviation

Shipping

Rail

Heavytrucks

LDVs

Otherroad

Hydrogen‐

basedfuels

Bioenergy

Electricity

Fossilfuels

Consumptionbyfuel

2020 2030 2050

Consumptionbymode

Fuels

Modes



134 International Energy Agency | Special Report

requirementsrequiredforcharging,andlimitsondrivingranges.Butfuelcellheavytrucks

makesignificantprogress,mainlyafter2030(Figure3.23).Thenumberofbatteryelectric,

plug‐inhybridandfuelcellelectriclight‐dutyvehicles(carsandvans)ontheworld’sroads

reaches350millionin2030 and almost 2billionin2050,upfrom 11millionin2020.The

numberofelectrictwo/three‐wheelersalsorisesrapidly,fromjustunder300milliontoday

to600millionin2030and1.2billionin2050.Theelectricbusfleetexpandsfrom0.5million

in2020to8millionin2030and50millionin2050.

Figure 3.23

⊳ Global share of battery electric, plug-in hybrid and fuel cell

electric vehicles in total sales by vehicle type in the NZE

IEA.Allrightsreserved.

Sales of battery electric, plug-in hybrid and fuel cell electric vehicles soar globally

Note:Light‐dutyvehicles=passengercarsandvans;Heavytrucks=medium‐andheavy‐freighttrucks.

Light‐dutyvehiclesareelectrifiedfasterinadvancedeconomiesoverthemediumtermand

account for around 75% of sales by 2030. In emerging and developing economies, they

accountforabout50%ofsales.Almostalllight‐dutyvehiclesalesinadvancedeconomiesare

batteryelectric,plug‐inhybridorfuelcellelectricbytheearly2030sandinemergingand

developingeconomiesbythemid‐2030s.

Forheavy trucksthat operate overlong distances, currently biofuelsarethemainviable

commercialalternativetodiesel,andtheyplayanimportantroleinloweringemissionsfrom

heavy‐duty trucks over the 2020s. Beyond 2030, the number of electric and hydrogen‐

poweredheavytrucksincreasesintheNZEassupportinginfrastructureisbuiltandascosts

decline(lowerbatterycosts,energydensityimprovementsandlowercoststoproduceand

deliver hydrogen) (IEA, 2020b). This coincides with a reduction in the availability of

sustainablebioenergy,aslimitedsuppliesincreasinglygotohard‐to‐abatesegmentssuchas

aviation and shipping, though biofuels stillmeet about10% of fuel needs for heavy‐duty

trucksin2050(seeChapter2).Advancedeconomieshaveahighermarketshareofbattery

20%

40%

60%

80%

100%

2020 2030 2050 2020 2030 2050 2020 2030 2050

Batteryelectric Plug‐inhybridelectric Fuelcellelectric

Light‐dutyvehicles Heavytrucks Two/three‐wheelers



Chapter 3 | Sectoral pathways to net-zero emissions by 2050 135

electricandfuelcellelectricheavy‐dutytruckssalesin2030,morethantwicethelevelin

emergingmarketanddevelopingeconomies,althoughthisgapclosestowards2050.

Figure 3.24

⊳ Heavy trucks distribution by daily driving distance, 2050



IEA.Allrightsreserved.

Driving distance is the key factor affecting powertrain choice for trucks

RealisingtheobjectivesoftheNZEdependsonrapidscalingupofbatterymanufacturing

(currentannouncedproductioncapacityfor2030wouldcoveronly50%ofrequireddemand

in that year), and on the rapid introduction on the market of next generation battery

technology(solid state batteries)between2025 and 2030.Electrified road systemsusing

conductiveorinductivepowertransfertoprovideelectricitytotrucksofferanalternativefor

batteryelectricandfuelcellelectrictrucksonlong‐distanceoperations,butthesesystems

toowouldneedrapiddevelopmentanddeployment.

Aviation



TheNZEassumesthatairtravel,measuredinrevenue‐passengerkilometres,increasesby

onlyaround3%peryearto2050relativeto2020.Thiscompareswithaboutaround6%over

the2010‐19period.TheNZEassumesthataviationgrowthisconstrainedbycomprehensive

governmentpoliciesthatpromoteashifttowardshigh‐speedrailandreininexpansionof

long‐haul business travel, e.g. throughtaxesoncommercialpassenger flights (see

section2.5.2).

GlobalCO

emissionsfromaviationriseintheNZEfromabout640Mtin2020(downfrom

around1Gtin2019)toapeakof950Mtbyaround2025.Emissionsthenfallto210Mtin

2050astheuseoflow‐emissionsfuelsgrows.Emissionsarehardtoabatebecauseaviation

 Aviation considered here includes both domestic and internationalflights.Whilethefocushereison

commercialpassengeraviation,dedicated freight and general (military and private) aviation, which

collectivelyaccountformorethan10%offueluseandemissions,arealsoincludedintheenergyandemissions

accounting.

0.05%

0.10%

0.15%

0.20%

0.25%

0 200 400 600 800 1000

Probabilitydensity

Dailydrivingdistance(km)

Battery

electric

Fuelcell

electric



136 International Energy Agency | Special Report

requiresfuelwitha high energy density.Emissionsinaviation comprisejustover10% of

unabatedCO

2

emissionsfromfossilfuelsandindustrialprocessesin2050.

IntheNZE,theglobaluseofjetkerosenedeclinestoabout3EJin2050from9EJin2020

(andaround14.5EJin2019beforetheCovid‐19crisis),anditsshareoftotalenergyusefalls

fromalmost100%tojustover20%.Theuseofsustainableaviation fuel (SAF) starts to

increasesignificantlyinthelate‐2020s.In2030,around15% of totalfuelconsumptionin

aviationisSAF,mostofwhichisbiojetkerosene(atypeofliquidbiofuel).Thisisestimated

toincreasetheticketpriceforamid‐haulflight(1200km)byaboutUSD3perpassenger.By

2050, biojet kerosene meets 45% of total fuel consumption in aviation and synthetic

hydrogen‐basedfuelsmeetabout30%.Thisisestimatedtoincreasetheticketpricefora

mid‐haulflightin2050byaboutUSD10perpassenger.TheNZEalsoseestheadoptionof

commercialbatteryelectricandhydrogenaircraftfrom2035,buttheyaccountforlessthan

2%offuelconsumptionin2050.

Operational improvements, together with fuel efficiency technologies for airframes and

engines,alsohelptoreduceCO

emissionsbycurbingthepaceoffueldemandgrowthinthe

NZE. These improvements are incremental, but revolutionary technologies such as open

rotors,blendedwing‐bodyairframesandhybridisationcouldbringfurthergainsandenable

theindustrytomeettheInternationalCiviIAviationOrganization’s(ICAO)ambitious2050

efficiencytargets(IEA,2020b).

Maritimeshipping



Maritime shipping was responsible for around 830Mt CO

 emissions worldwide in 2020

(880MtCO

in2019),whichisaround2.5%oftotalenergysectoremissions.Duetoalackof

available low‐carbon options on the market and the long lifetime of vessels (typically

25‐35years),shippingisoneofthefewtransportmodesthatdoes not achieve zero

emissionsby2050intheNZE.Nevertheless,emissionsfromshippingdeclineby6%annually

to120MtCO

in2050.

Intheshortterm,thereisconsiderablepotentialforcurbingfuelconsumptioninshipping

throughmeasurestooptimiseoperationalefficiency andimprove energy efficiency. Such

approachesincludeslowsteamingandtheuseofwind‐assistancetechnologies(IEA,2020b).

Inthe medium tolong term, significant emissions reductions are achieved in the NZE by

switchingtolow‐carbonfuelssuchasbiofuels,hydrogenandammonia.Ammonialookslikely

to be a particularly good candidate for scaling up, and a criticalfuelforlong‐range

transoceanicjourneysthatneedfuelwithhighenergydensity.

Ammoniaandhydrogenarethemainlow‐carbonfuelsforshippingadoptedoverthenext

threedecades in theNZE, their combined shareof total energyconsumption inshipping

reachingaround60%in2050.The20largestportsintheworldaccountformorethanhalf

ofglobalcargo(UNCTAD,2018);theycouldbecomeindustrialhubstoproducehydrogenand

Maritimeshippinghereincludesbothdomesticandinternationaloperations.



Chapter 3 | Sectoral pathways to net-zero emissions by 2050 137

ammonia for use in both chemical and refining industries, as well as for refuelling ships.

Internalcombustionenginesforammonia‐fuelledvesselsarecurrentlybeingdevelopedby

twoofthelargestmanufacturersofmaritimeenginesandareexpectedtobecomeavailable

onthemarketby2024.Sustainablebiofuelsprovidealmost20%oftotalshippingenergy

needsin 2050.Electricity plays a very minor role, as the relatively low energy densityof

batteries compared with liquid fuels makes it suitable only for shipping routes of up to

200km. Even with an 85% increase in battery energy density in the NZE as solid state

batteriescometomarket,onlyshort‐distanceshippingroutescanbeelectrified.

Rail

Railtransportisthemostenergy‐efficientandleastcarbon‐intensivewaytomovepeople

andsecondonlytoshippingforcarryinggoods.Passengerrailalmostdoublesitsshareof

totaltransportactivityto20%by2050intheNZE,withparticularlyrapidgrowthinurban

andhigh‐speedrail(HSR),thelatterofwhichcontributestocurbinggrowth inair travel.

GlobalCO

emissionsfromtherailsectorfallfrom95MtCO

in2020(100MtCO

in2019)

toalmostzeroby2050intheNZE,drivenprimarilybyrapidelectrification.

Figure 3.25

⊳ Global energy consumption by fuel and CO

intensity in

non-road sectors in the NZE



IEA.Allrightsreserved.

Railways rely heavily on electricity to decarbonise, while shipping and aviation

curb emissions mainly by switching to low-emissions fuels

Note:Syntheticfuel=low‐emissionssynthetichydrogen‐basedfuels.

IntheNZE,allnewtracksonhigh‐throughputcorridorsareelectrifiedfromnowon,while

hydrogenandbatteryelectrictrains,whichhaverecentlybeendemonstratedinEurope,are

adoptedonraillineswherethroughputistoolowtomakeelectrificationeconomicallyviable.

Oiluse,whichaccountedfor55%oftotalenergyconsumptionintherailsectorin2020,falls

toalmostzeroin2050:itisreplacedbyelectricity,whichprovidesover90%ofrailenergy

needsandbyhydrogenwhichprovidesanother5%.

20%

40%

60%

80%

100%

2020 2030 2040 2050 2020 2030 2040 2050 2020 2030 2040 2050

gCO₂/MJ

Oil Gas Bioenergy Hydrogen Ammonia Electricity Syntheticfuel CO₂intensity

Rail Maritimeshipping Aviation

(rightaxis)



138 International Energy Agency | Special Report

3.6.2 Keymilestonesanddecisionpoints

Table 3.4 ⊳ Key milestones in transforming the global transport sector

Category



Roadtransport

 2035:nonewpassengerinternalcombustionenginecarsalesglobally

Aviationand

shipping

 Implementationofstrictcarbonemissionsintensityreductiontargetsassoonas

possible.

Category 2020 2030 2050

Roadtransport   

ShareofPHEV,BEVandFCEVinsales:cars 5% 64% 100%

 two/three‐wheelers 40% 85% 100%

 bus 3% 60% 100%

vans0% 72% 100%

 heavytrucks 0% 30% 99%

Biofuelblendinginoilproducts 5% 13% 41%

Rail   

Shareofelectricityandhydrogenintotalenergyconsumption 43% 65% 96%

Activityincreaseduetomodalshift(index2020=100) 100 100 130

Aviation   

Synthetichydrogen‐basedfuelsshareintotalaviationenergyconsumption 0% 2% 33%

Biofuelsshareintotalaviationenergyconsumption 0% 16% 45%

Avoideddemandfrombehaviourmeasures(index2020=100) 0 20 38

Shipping   

Shareintotalshippingenergyconsumption:Ammonia 0% 8% 46%

Hydrogen0% 2% 17%

Bioenergy0% 7% 21%

Infrastructure   

EVpubliccharging(millionunits) 1.3 40 200

Hydrogenrefuellingunits 540 18000 90000

Shareofelectrifiedraillines 34% 47% 65%

Note:PHEV=plug‐inhybridelectricvehicles;BEV=batteryelectricvehicles;FCEV=fuelcellelectricvehicles.

Electrification is themain option toreduce CO

emissions from road and railmodes, the

technologiesarealreadyonthemarketandshouldbeacceleratedimmediately,together

withtheroll‐outofrecharginginfrastructureforEVs.Deepemissionreductionsinthehard‐

to‐abate sectors (heavy trucks, shipping and aviation) require amassivescaleupofthe

requiredtechnologiesoverthenextdecade,whichtodayarelargelyattheprototypeand

demonstrationstages,togetherwithplansforthedevelopmentofassociatedinfrastructure,

includinghydrogenrefuellingstations.



Chapter 3 | Sectoral pathways to net-zero emissions by 2050 139

Thetransformationoftransportrequiredtobeontracktoreduceemissionsinlinewiththe

NZEcallsforarangeofgovernmentdecisionsoverthenextdecade.Inthenextfewyears,

all governments need to eliminate fossil fuel subsidies and encourage switching to low‐

carbontechnologiesandfuelsacrosstheentiretransportsector.Before2025,governments

needtodefineclearR&Dprioritiesforallthetechnologiesthatcancontributetodecarbonise

transportinlinewiththeirstrategicprioritiesandneeds.Ideallythiswouldbeinformedby

internationaldialogueandcollaboration.R&Discriticalinparticularforbatterytechnology,

whichshouldbeanimmediatepriority.

ToachievetheemissionsreductionsrequiredbytheNZE,governmentsalsoneedtomove

quicklytosignaltheendofsalesofnewinternalcombustionenginecars.Earlycommitments

wouldhelptheprivatesectortomakethenecessaryinvestmentinnewpowertrains,relative

supplychainsandrefuellinginfrastructure(seesection4.3.4).Thisisparticularlyimportant

forthesupplyofbatterymetals,whichrequirelong‐termplanning(IEA,2021a).

By 2025, the large‐scale deployment of EV public charging infrastructure in urban areas

needstobesufficientlyadvancedtoallowhouseholdswithoutaccesstoprivatechargersto

opt for EVs. Governments should ensure sustainable business models for companies

installingchargers,removebarrierstoplanningandconstruction,andputinplaceregulatory,

fiscalandtechnologicalmeasurestoenableandencouragesmartcharging,andtoensure

thatEVssupportelectricitygridstabilityandstimulatetheadoptionofvariablerenewables

(IEA,2021b).

For heavy trucks, battery electric trucks are just beginning to become available on the

market,andfuelcellelectrictechnologiesareexpectedtocometomarketinthenextfew

years.Workingincollaborationwithtruckmanufacturers,governmentsshouldtakestepsin

theneartermtoprioritisetherapidcommercialadoptionofbatteryelectricandfuelcell

electric trucks. By 2030, they should take stock of the competitiveprospectsforthese

technologies,soastofocusR&Donthemostimportantchallengesandallowadequatetime

forstrategicinfrastructuredeployment,thuspavingthewayforlarge‐scaleadoptionduring

the2030s.

Governmentsneedtodefinetheirstrategiesforlow‐carbonfuelsinshippingandaviationby

2025atthelatest,giventheslowturnoverrateofthefleets,afterwhichtheyshouldrapidly

implement them. International co‐operation and collaboration will be crucial to success.

Priorityactionshouldtargetthemostheavilyusedportsandairportssoastomaximisethe

impactofinitialinvestment.Harboursnearindustrialareasareideallyplacedtobecomelow‐

carbonfuelhubs.





140 International Energy Agency | Special Report

Box 3.3 ⊳ What would be the implications of an all-electric approach to

emissions reductions in the road transport sector?

TheuseofavarietyoffuelsinroadtransportisacorecomponentoftheNZE.However,

governmentsmightwanttoconsideranall‐electricroutetoeliminateCO

emissionsfrom

transport,especiallyifothertechnologiessuchasFCEVsandadvancedbiofuelsfailto

developasprojected.WehavethereforedevelopedanAll‐ElectricCasewhichlooksat

theimplicationsofelectrifyingallroadvehiclemodes.IntheNZE,decarbonisationofroad

transportoccursprimarilyviatheadoptionofplug‐inhybridelectric vehicles(PHEVs),

batteryelectricvehicles(BEVs),fuelcellelectricvehicles(FCEVs)andadvancedbiofuels.

TheAll‐ElectricCaseassumesthesamerateofroadtransportdecarbonisationastheNZE,

butachievedviabatteryelectricvehiclesalone.

TheAll‐ElectricCasedependsonevenfurtheradvancesinbatterytechnologiesthanthe

NZEthatleadtoenergydensitiesofatleast400Watthoursperkilogramme(Wh/kg)by

the2030satcoststhatwouldmakeBEVtruckspreferabletoFCEVtrucksinlong‐haul

operations.Thiswouldmean30%moreBEVs(anadditional350million)ontheroadin

2030thanintheNZE.Oversixtyfivemillionpublicchargerswouldbeneededtosupport

thevehicles,requiringacumulativeinvestmentofaroundUSD300billion,35%higher

thantheNZE.Thiswouldrequirefasterexpansionofbatterymanufacturing.Theannual

global battery capacity additions for BEVs in 2030 would be almost 9TWh, requiring

80giga‐factories(assuming35GWhperyearoutput)morethanintheNZE,oranaverage

ofovertwopermonthfromnowto2030.

Theincreaseduseofelectricityforroadtransportwouldalsocreateadditionalchallenges

fortheelectricitysector.Thetotalelectricitydemandforroadtransport(11000TWhor

15%oftotalelectricityconsumptionin2050),wouldberoughlythesameinbothcases,

whenaccountistaken ofdemandforelectrolytichydrogen.However,theelectrolytic

hydrogen in the NZE can be produced flexibly, in regions and at times with surplus

renewables‐basedcapacityandfromdedicated(off‐grid)renewablepower.Peakpower

demand in the All‐Electric Case, taking into consideration the flexibility that enables

smartchargingofcars,isaboutone‐third(2000GW)higherthanintheNZE,mainlydue

totheadditional evening/overnight charging ofbuses and trucks. If not coupled with

energystoragedevices,ultra‐fastchargersforheavy‐dutyvehiclescouldcauseadditional

spikesindemand,puttingevenmorestrainonelectricitygrids.

While full electrification of road transport is possible, it could involve additional

challenges and undesirable side effects. For example, it could increase pressure on

electricity grids, requiring significant additional investment, and increasing the

vulnerability of the transport system to power disruptions. Fuel diversification could

bringbenefitsintermsofresilienceandenergysecurity.



Chapter 3 | Sectoral pathways to net-zero emissions by 2050 141

Figure 3.26 ⊳ Global electricity demand and battery capacity for road

transport in the NZE and the All-Electric Case



IEA.Allrightsreserved.

Both direct electricity consumption and vehicle battery capacity in 2050

increase by about a quarter in the All-Electric Case relative to the NZE

Note:AEC=All‐ElectricCase.

3.7 Buildings

3.7.1 EnergyandemissiontrendsintheNet‐ZeroEmissionsScenario

Floorareainthebuildingssectorworldwideisexpectedtoincrease75%between2020and

2050,ofwhich80%isinemergingmarketanddevelopingeconomies.Globally,floorarea

equivalenttothesurfaceofthecityofParisisaddedeveryweekthroughto2050.Moreover,

buildingsinmanyadvancedeconomieshavelonglifetimesandaroundhalfoftheexisting

buildingsstockwillstillbestandingin2050.Demandforappliancesandcoolingequipment

continues to grow, especially in emerging market and developingeconomieswhere

650millionair conditioners are added by2030 and another2billion by 2050intheNZE.

Despitethisdemandgrowth,totalCO

emissionsfromthebuildingssectordeclinebymore

than95%fromalmost3Gtin2020toaround120Mtin2050intheNZE.



Energy efficiency and electrification are the two main drivers of decarbonisation of the

buildingssectorintheNZE(Figure3.27).Thattransformationreliesprimarilyontechnologies

AllCO

 emissions inthissectionrefertodirectCO

 emissions unless otherwisespecified. TheNZEalso

pursuesreductionsinemissionslinkedtoconstructionmaterialsusedinbuildings.Theseembodiedemissions

arecutby40%persquaremetreofnewfloorareaby2030,withmaterialefficiencystrategiescuttingcement

andsteeluseby50%by2050relativetotodaythroughmeasuresatthedesign,construction,useandend‐of‐

lifephases.

4000

8000

12000

2020 2030 2050 2030 2050

NZE AEC

TWh

Two/three‐wheelers Buses Carsandvans Heavytrucks ElectrolyticH₂

Electricitydemand

100

200

300

2020 2030 2050 2030 2050

NZE AEC

TWh

On‐roadbatterycapacity



142 International Energy Agency | Special Report

already available on the market, including improved envelopes fornewandexisting

buildings, heat pumps, energy‐efficient appliances, and bioclimatic and material‐efficient

building design. Digitalisation and smart controls enable efficiency gains that reduce

emissions from the buildings sector by 350MtCO

by2050.Behaviourchangesarealso

importantintheNZE,withareductionofalmost250MtCO

in2030reflectingchangesin

temperature settings for space heating or reducing excessive hot water temperatures.

Additionalbehaviourchangessuchasgreateruseofcoldtemperatureclotheswashingand

line drying, facilitate the decarbonisation of electricity supply.Thereisscopeforthese

reductionstobeachievedrapidlyandatnocost.

Figure 3.27

⊳ Global direct CO

emissions reductions by mitigation measure in

buildings in the NZE



IEA.Allrightsreserved.

Electrification and energy efficiency account for nearly 70% of buildings-related emissions

reductions through to 2050, followed by solar thermal, bioenergy and behaviour

Notes: Activity = change in energy service demand related to rising population, increased floor area and

incomepercapita.Behaviour=changeinenergyservicedemandfromuserdecisions,e.g.changingheating

temperatures. Avoided demand = change in energy service demand from technology developments, e.g.

digitalisation.

Rapidshiftstozero‐carbon‐readytechnologiesseetheshareoffossilfuelsinenergydemand

inthebuildingssectordropto30%by2030,andto2%by2050intheNZE.Theshareof

electricityintheenergymixreachesalmost50%by2030and66%by2050,upfrom33%in

2020(Figure3.28).Allend‐usestodaydominatedbyfossilfuelsareincreasinglyelectrifiedin

theNZE,withtheshareofelectricityinspaceheating,waterheatingandcookingincreasing

fromlessthan20%todaytomorethan40%in2050.Districtenergynetworksandlow‐carbon

gases,includinghydrogen‐basedfuels,remainsignificantin2050inregionswithhighheating

needs,denseurbanpopulationsandexistinggasordistrictheatnetworks.Bioenergymeets

nearlyone‐quarterofoverallheatdemandintheNZEby2050,over50%ofbioenergyuseis

for cooking, nearly all in emerging market and developing economies, where 2.7billion

1

2

3

4

2020 2030 2050

GtCO

Activity

Behaviourand

avoideddemand

Energyefficiency

Electrification

Hydrogen‐based

Bioenergy

Otherrenewables

Otherfuelshifts

+29%

‐51%

+96%

‐97%

Measures

Mitigationmeasures

Activity



Chapter 3 | Sectoral pathways to net-zero emissions by 2050 143

peoplegainaccesstocleancookingby2030intheNZE.Spaceheatingdemanddropsbytwo‐

thirdsbetween2020and2050,drivenbyimprovementinenergyefficiencyandbehavioural

changessuchastheadjustmentoftemperaturesetpoints.

Figure 3.28

⊳ Global final energy consumption by fuel and end-use

application in buildings in the NZE



IEA.Allrightsreserved.

Fossil fuel use in the buildings sector declines by 96% and space heating energy needs

by two-thirds to 2050, thanks mainly to energy efficiency gains

Note:Otherincludes desalination andtraditionaluse of solidbiomasswhichisnotallocatedtoaspecific

end‐use.

Zero‐carbon‐readybuildings

TheNZEpathwayforthebuildingssectorrequiresastepchangeimprovementintheenergy

efficiencyandflexibilityofthestockandacompleteshiftawayfromfossilfuels.Toachieve

this,morethan85%ofbuildingsneedtocomplywithzero‐carbon‐readybuilding energy

codes by 2050 (Box3.4). This means that mandatory zero‐carbon‐ready building energy

codesforallnewbuildingsneedtobeintroducedinallregionsby2030,andthatretrofits

need to be carried out in most existing buildings by 2050 to enablethemtomeetzero‐

carbon‐readybuildingenergycodes.

Retrofitratesincreasefromlessthan1%peryeartodaytoabout2.5%peryearby2030in

advancedeconomies:thismeansthataround10milliondwellingsareretrofittedeveryyear.

Inemergingmarketanddevelopingeconomies,buildinglifetimesaretypicallylowerthanin

advancedeconomies,meaningthatretrofitratesby2030intheNZEarelower,ataround2%

peryear.Thisrequirestheretrofittingof20milliondwellingsperyearonaverageto2030.

To achieve savings at the lowest cost and to minimise disruption,retrofitsneedtobe

comprehensiveandone‐off.

25 50 75 100 125

2050

2030

2020

2050

2030

2020

Spaceheating

Waterheating

Spacecooling

Lighting

Cooking

Appliances

Other

Coal

Oil

Naturalgas

Hydrogen

Electricity

Districtenergy

Renewables

Traditionaluseof

Byfuel

Byend‐use

End‐uses

Fuels

biomass



144 International Energy Agency | Special Report

Box 3.4 ⊳ Towards zero-carbon-ready buildings

Achieving decarbonisation of energy use in the sector requires almost all existing

buildingstoundergoasinglein‐depthretrofitby2050,andnewconstructiontomeet

stringentefficiencystandards.Buildingenergycodescoveringnewandexistingbuildings

are the fundamental policy instrument to drive such changes. Building energy codes

currentlyexistorareunderdevelopmentinonly75countries,andcodesinaround40of

thesecountriesaremandatoryforboththeresidentialandservicessub‐sectors.Inthe

NZE,comprehensivezero‐carbon‐readybuildingcodesareimplementedinallcountries

by2030atthelatest.

Whatisazero‐carbon‐readybuilding?

Azero‐carbon‐readybuildingishighlyenergyefficientandeitherusesrenewableenergy

directly, or uses an energy supply that will be fully decarbonised by 2050, such as

electricityordistrictheat.Thismeansthatazero‐carbon‐readybuildingwillbecomea

zero‐carbon building by 2050, without any further changes to the building or its

equipment.

Zero‐carbon‐readybuildingsshouldadjusttouserneedsandmaximisetheefficientand

smart use of energy, materials and space to facilitate the decarbonisation of other

sectors.Keyconsiderationsinclude:

 Scope.Zero‐carbon‐readybuildingenergycodesshouldcoverbuildingoperations

(scope1and2)aswellasemissionsfromthemanufacturingofbuildingconstruction

materialsandcomponents(scope3orembodiedcarbonemissions).

 Energyuse.Zero‐carbon‐readyenergycodesshouldrecognisetheimportantpart

that passive design features, building envelope improvements and high energy

performance equipment play in lowering energy demand, reducing both the

operatingcostofbuildingsandthecostsofdecarbonisingtheenergysupply.

 Energy supply. Whenever possible, newand existing zero‐carbon‐ready buildings

shouldintegratelocallyavailablerenewableresources,e.g.solarthermal,solarPV,

PV thermal and geothermal, to reduce the need for utility‐scale energy supply.

Thermal or battery energy storage may be needed to support local energy

generation.

 Integration with power systems. Zero‐carbon‐ready building energy codes need

buildingstobecomeaflexibleresourcefortheenergysystem,usingconnectivity

andautomationtomanagebuildingelectricitydemandandtheoperationofenergy

storagedevices,includingEVs.

 Buildings and constructionvaluechain.Zero‐carbon‐readybuildingenergycodes

should also target net‐zero emissions from material use in buildings. Material

efficiencystrategies cancut cementand steel demandin thebuildings sector by

morethanathirdrelativetobaselinetrends,andembodiedemissionscanbefurther

reduced by more robust uptake of bio‐sourced and innovative construction

materials.



Chapter 3 | Sectoral pathways to net-zero emissions by 2050 145

Heatingandcooling

Buildingenvelopeimprovementsinzero‐carbon‐readyretrofitandnewbuildingsaccountfor

themajorityofheatingandcoolingenergyintensityreductionsintheNZE,butheatingand

coolingtechnologyalsomakesasignificantcontribution.Spaceheatingistransformedinthe

NZE,withhomesheatedbynaturalgasfallingfromnearly30%ofthetotaltodaytolessthan

0.5%in2050,whilehomesusingelectricityforheatingrisefromnearly20%ofthetotaltoday

to35% in 2030andabout55% in 2050(Figure3.29). High efficiencyelectricheat pumps

becometheprimarytechnologychoiceforspaceheatingintheNZE,withworldwideheat

pump installations per month rising from 1.5million today to around 5million by 2030

and10millionby2050.Hybridheatpumpsarealsousedinsomeofthecoldestclimates,but

meetnomorethan5%ofheatingdemandin2050.

Figure 3.29

⊳ Global building and heating equipment stock by type and useful

space heating and cooling demand intensity changes in the NZE



IEA.Allrightsreserved.

By 2050, over 85% of buildings are zero-carbon-ready, reducing average useful heating

intensity by 75%, with heat pumps meeting over half of heating needs

Notes:ZCRBreferstobuildingsmeetingzero‐carbon‐readybuildingenergycodes.Otherforbuildingenvelope

referstoenvelopesthatdonotmeetzero‐carbon‐readybuildingenergycodes.Otherforheatingequipment

stockincludesresistiveheaters,andhybridandgasheatpumps.

Notallbuildingsarebestdecarbonisedwithheatpumps,however,andbioenergyboilers,

solarthermal,districtheat,low‐carbongasesingasnetworksandhydrogenfuelcellsallplay

aroleinmakingtheglobalbuildingstockzero‐carbon‐readyby2050.Bioenergymeets10%

ofspaceheatingneedsby2030andmorethan20%by2050.Solarthermalisthepreferred

renewabletechnologyforwaterheating,especiallywhereheatdemandislow;intheNZEit

meets 35% of demand by 2050, up from 7% today. District heat networks remain an

attractive option for many compact urban centres where heat pump installation is

impractical,intheNZEtheyprovidemorethan20%offinalenergydemandforspaceheating

in2050,upfromalittleover10%today.

25

50

75

100

200

300

400

2020 2030 2050

Index(2020=100)

Billionm²

RetrofitZCRB NewZCRB Other

Heating Cooling

Buildingenvelope

Intensity (rightaxis):

1

2

3

4

2020 2030 2050

Billionunits

Coalandoil Gas Districtheat

Biomass Solarthermal Hydrogen

Heatpumps Other

Heatingequipmentstock



146 International Energy Agency | Special Report

Therearenonewcoalandoilboilerssoldgloballyfrom2025intheNZE.Salesofgasboilers

fallbymorethan40%fromcurrentlevelsby2030andby90%by2050.By2025intheNZE,

anygasboilersthataresoldarecapableofburning100%hydrogenandthereforearezero‐

carbon‐ready.Theshareoflow‐carbongases(hydrogen,biomethane,syntheticmethane)in

gasdistributedtobuildingsrisesfromalmostzeroto10%by2030toabove75%by2050.

Buildingsthatmeetthestandardsofzero‐carbon‐readybuildingenergycodesdrivedown

theneednotonlyforspaceheatingbutalsoforspacecooling–thefastestgrowingend‐use

in buildings since 2000. Space cooling represented only 5% of total buildings energy

consumptionworldwide in2020, but demandforcooling is likelytogrow stronglyinthe

comingdecadeswithrisingincomesandahotterclimate.Inthe NZE,60%ofhouseholds

haveanairconditionerin2050,upfrom35%in2020.High‐performancebuildingenvelopes,

includingbioclimaticdesignsandinsulation,can reduce thedemandforspacecoolingby

30‐50%,whileprovidinggreaterresilienceduringextremeheatevents.IntheNZE,electricity

demand for space cooling grows annually by 1% to reach 2500TWh in 2050. Without

2000TWhofsavingsfromresidentialbuildingenvelopeimprovementsandhigherefficiency

equipment,spacecoolingdemandwouldbealmosttwiceashigh.

Appliancesandlighting

Electricappliancesandlightingbecomemuchmoreefficientoverthenextthreedecadesin

theNZEthankstopolicymeasuresandtechnicaladvances.By2025intheNZE,over80%of

all appliances and air conditioners sold in advanced economies are the best available

technologiestodayinthesemarkets,andthisshareincreasesto100%bythemid‐2030s.In

emergingmarketanddevelopingeconomies,whichaccountforoverhalfofappliancesand

airconditionersby2050,theNZEassumesawaveofpolicyactionoverthenextdecadewhich

leads to 80% of equipment sold in these markets in 2030 being asefficientasthebest

availabletechnologiesinadvancedeconomiestoday,increasingtocloseto100%by2050

(Figure3.30).Theshareoflight‐emittingdiode(LED)lampsintotallightbulbsalesreaches

100%by2025inallregions.Minimumenergyperformancestandardsarecomplementedby

requirements for smart control of appliances to facilitate demand‐side response in all

regions.

Energyuse in buildings will be increasingly focused on electric, electronicandconnected

equipmentandappliances.Theshareofelectricityinenergyconsumptioninbuildingsrises

from33%in2020toaroundtwo‐thirdsin2050intheNZE,withmanybuildingsincorporating

decentralised electricity generation using local solar PV panels,batterystorageandEV

chargers.ThenumberofresidentialbuildingswithsolarPVpanelsincreasesfrom25million

to240millionoverthesameperiod.IntheNZE,smartcontrolsystemsshiftflexibleusesof

electricity in time to correspond with generation from local renewables, or to provide

flexibilityservicestothepowersystem,whileoptimisedhomebatteryandEVchargingallow

householdstointeractwiththegrid.Thesedevelopmentshelpimproveelectricitysupply

security and lower the cost of the energy transition by making it easier and cheaper to

integraterenewablesintothesystem.



Chapter 3 | Sectoral pathways to net-zero emissions by 2050 147

Figure 3.30 ⊳ Global change in electricity demand by end-use in the buildings

sector



IEA.Allrightsreserved.

Energy efficiency is critical to mitigate electricity demand growth for appliances and air

conditioning, with savings more than offsetting the impact of electrifying heat

3.7.2 Keymilestonesanddecisionpoints

Table 3.5 ⊳ Key milestones in transforming global buildings sector

Category

Newbuildings

 From2030:allnewbuildingsarezero‐carbon‐ready.

Existingbuildings

 From2030:2.5%ofbuildingsareretrofittedtobezero‐carbon‐readyeachyear.

Category 2020 2030 2050

Buildings   

Shareofexistingbuildingsretrofittedtothezero‐carbon‐readylevel <1% 20% >85%

Shareofzero‐carbon‐readynewbuildingsconstruction 5% 100% 100%

Heatingandcooling   

Stockofheatpumps(millionunits) 180 600 1800

Milliondwellingsusingsolarthermal 250 400 1200

Avoidedresidentialenergydemandfrombehaviour n.a. 12% 14%

Appliancesandlighting   

Appliances:unitenergyconsumption(index2020=100) 100 75 60

Lighting:shareofLEDinsales 50% 100% 100%

Energyaccess   

Populationwithaccesstoelectricity(billionpeople) 7.0 8.5 9.7

Populationwithaccesstocleancooking(billionpeople) 5.1 8.5 9.7

Energyinfrastructureinbuildings   

DistributedsolarPVgeneration(TWh) 320 2200 7500

EVprivatechargers(millionunits) 270 1400 3500

10

20

30

2020 Activity Electrification Efficiency Behaviour 2050

ThousandTWh

Heatneeds Appliances Spacecooling Lighting

+101%

+37%

‐93%

‐9%



148 International Energy Agency | Special Report

Near‐termgovernmentdecisionsarerequiredforenergycodesandstandardsforbuildings,

fossil fuel phase out, use of low‐carbon gases, acceleration of retrofits and financial

incentivestoencourageinvestmentinbuildingsectorenergytransitions.Decisionswillbe

mosteffectiveiftheyfocusondecarbonisingtheentirevaluechain,takingintoaccountnot

onlybuildingsbutalsotheenergyandinfrastructurenetworksthatsupplythem,aswellas

widerconsiderationsincludingtheroleoftheconstructionsectorandurbanplanning.Such

decisionsarelikelytobringwiderbenefits,notablyinreducingfuelpoverty.

Near‐termgovernmentactionisneededtoensurethatzero‐carbon‐readybuildingsbecome

thenewnormacrosstheworldbefore2030forbothnewconstructionandretrofits.This

requires governments to act before 2025 to ensure that zero‐carbon‐ready compliant

buildingenergycodesareimplementedby2030atthelatest.Whilethisgoalappliestoall

regions,waystoachievezero‐carbon‐readybuildingsvarysignificantlyacrossregionsand

climate zones, and the same is true for heating and cooling technology strategies.

Governmentsshouldconsiderpavingthewaybymakingpublicbuildingszero‐carbon‐ready

inthecomingdecade.

Governmentswillneedtofindwaystomakenewzero‐carbon‐readybuildingsandretrofits

affordable and attractive to owners and occupants by overcomingfinancialbarriers,

addressingsplitincentivebarriersandminimisingdisruptiontobuildinguse.Buildingenergy

performancecertificates,greenleaseagreements,greenbondfinancingandpay‐as‐yousave

modelscouldallplayapart.

Makingzero‐carbon‐readybuildingretrofitsacentralpillarofeconomicrecoverystrategies

intheearly2020sisano‐regretsactiontojumpstartprogress towards a zero‐emissions

buildingsector.Foregoingtheopportunitytomakeenergyuseinbuildingsmoreefficient

would drive up electricity demand linked to electrification of energy use in the buildings

sectorandmakedecarbonisingtheenergysystemsignificantlymoredifficultandmorecostly

(Box3.5).

Box 3.5

⊳ What would be the impact of global retrofit rates not rising to 2.5%?

DecarbonisingheatinginexistingbuildingsintheNZErestsuponadeepretrofitofthe

majority of the existing building stock. Having almost all buildings meet

zero‐carbon‐readybuildingenergycodesby2050would requireretrofitratesof2.5%

eachyearby2030,upfromlessthan1%today.Retrofitscanbedisruptiveforoccupants,

requirehighupfrontinvestmentandmayfacepermittingdifficulties.Theseissuesmake

achieving the required pace and depth of retrofits in the coming years the biggest

challengefacingthebuildingssector.

Any delay in reaching 2.5% of annual retrofits by 2030 would require such a steep

subsequent ramp up as to make retrofitting the vast majority of buildings by 2050

virtuallyimpossible.Modellingindicatesthatadelayoftenyearsintheaccelerationof

retrofitting,wouldincreaseresidentialspaceheatingenergydemandby25%andspace



Chapter 3 | Sectoral pathways to net-zero emissions by 2050 149

coolingdemandbymorethan20%,translatingtoa20%increaseinelectricitydemandin

2050relativetotheNZE(Figure3.31).Thiswouldputmorestrainonthepowersector,

which would need to install more low‐carbon generation capacity. Policies and fuel

switchingwouldstilldrivedownfossilfueldemandintheDelayedRetrofitCase,butan

additional15EJoffossilfuelswouldbeburnedby2050,emitting1GtofCO

.

Figure 3.31 ⊳ Global residential space heating and cooling energy

demand in the NZE and Delayed Retrofit Case



IEA.Allrightsreserved.

Delays in the ramp up of retrofit rates and depth would be almost impossible to catch

up, placing further strain on the power sector and pushing up fossil fuel demand



Governmentsneedtoestablishpoliciesforcoalandoilboilersandfurnacesforspaceand

waterheating,whichintheNZEarenolongeravailableforsalefrom2025.Theyalsoneed

totake actionto ensure that new gasboilers areable to operatewithlow‐carbongases

(hydrogenready)indecarbonisedgasnetworks.Thisputsapremiumontheavailabilityof

compellingalternativestothetypesofboilersbeingphasedout,includingtheuseofheat

pumps,efficientwoodstoves(usingsustainablesuppliesofwood),districtenergy,solarPV,

solar thermal and other renewable energy technologies. Which alternatives are best will

depend to some extent on local conditions, but electrification will be the most energy‐

efficient and cost‐effective low‐carbon option in most cases, and decarbonising and

expandingdistrictenergynetworksislikelytomakesensewheredensitiesallow.Theuseof

biomethaneorhydrogeninexistingorupgradedgasnetworksmaybethebestoptionin

areaswheremoreefficientalternativesarenotpossible.

Governmentsalsofacedecisionsonminimumenergyperformancestandards(MEPS).The

NZE sees all countries introduce MEPS for all main appliance categories set at the most

stringentlevelsprevailinginadvancedeconomiesby2025atthelatest.Amongothers,this

wouldmeanendingthesaleofincandescent,halogenandcompactfluorescentlampsbythat

3

6

9

12

15

18

2020 2025 2030 2035 2040 2045 2050

NZE DelayedRetrofitCase

Fossilfuels

Electricityanddistrictheat



150 International Energy Agency | Special Report

time.SettingMEPSattherightlevelwillrequirecarefulplanning;internationalcollaboration

toalignstandardsandobjectivescouldplayahelpfulroleinkeepingcostsdown.

ThesystemicnatureoftheNZEmeansthatstrategiesandpoliciesforbuildingswillworkbest

iftheyarealignedwiththosebeingadoptedforpowersystems,urbanplanningandmobility.

Thiswouldhelptoensurethesuccessfulscalingupofbuilding‐integratedPVtechnologies,

battery storage and smart controls to make buildings active serviceproviderstogrids.It

would also help to foster the deployment of smart EV charging infrastructure. Policies

incentivisingdenseandmixed‐useurbanplanningcoupledwitheasyaccesstolocalservices

andpublictransportcouldreducerelianceonpersonalvehicles(seeChapter2).Thereare

also links between buildings strategies and measures to reduce the embodied carbon

emissionsofnewconstruction,whichfallsby95%by2050intheNZE.



Chapter 4 | Wider implications of achieving net-zero emissions 151

Chapter4

Wider implications of achieving net-zero emissions

 Economy:InourNet‐ZeroEmissionsby2050 Scenario (NZE),globalCO

emissions

reachnetzeroby2050andinvestmentrisesacrosselectricity,low‐emissionsfuels,

infrastructureandend‐usesectors.Cleanenergyemploymentincreasesby14million

to2030,butemploymentinoil,gasandcoaldeclinesbyaround5million.Thereare

varyingresultsfordifferentregions,withjobgainsnotalwaysoccurringinthesame

place,ormatchingthesameskillset,asjoblosses.Theincreaseinjobsandinvestment

stimulateseconomicoutput,resultinginanetincreaseinglobalGDPto2030.Butoil

andgasrevenuesinproducereconomiesare80%lowerin2050thaninrecentyears

andtaxrevenuesfromretailoilandgassalesinimportingcountriesare90%lower.

 Energyindustry:Thereisamajorcontractioninfossilfuelproduction,butcompanies

that produce these fuels have skills and resources that could play a key role in

developingnewlow‐emissionsfuelsandtechnologies.Theelectricityindustryscales

uptomeetdemandrisingovertwo‐and‐a‐half‐foldto2050andbecomesmorecapital

intensive, focusing on renewables, sources of flexibility and grids. Large energy‐

consumingcompanies,vehiclemanufacturersandtheirsuppliersadjustdesignsand

retoolfactorieswhileimprovingefficiencyandswitchingtoalternativefuelsupplies.

 Forcitizenswholackaccesstoelectricityandcleancooking,theNZEdeliversuniversal

accessby2030.ThiscostsaroundUSD40billionayearoverthenextdecadeandadds

lessthan0.2%toCO

emissions.Forcitizenstheworldover,theNZEbringsprofound

changes,andtheiractivesupportisessentialifitistosucceed.Aroundthree‐quarters

ofbehaviouralchangesintheNZEcanbedirectlyinfluencedor mandated by

governmentpolicies.Thecostofenergyisalsoanimportantissueforcitizens,andthe

proportionofdisposablehouseholdincomespentonenergyovertheperiodto2050

remains stable in emerging market and developing economies, despitealarge

increaseindemandformodernenergyservices.

 Governmentactioniscentraltoachievenet‐zeroemissionsgloballyby2050; it

underpinsthedecisionsmadebyallotheractors.Fourparticularpointsareworth

stressing.First,theNZEdependsonactionsthatgofarbeyondtheremitofenergy

ministers,andrequiresaco‐ordinatedcross‐governmentapproach.Second,thefall

inoilandgasdemandintheNZEmayreducesometraditionalenergysecurityrisks,

buttheydonotdisappear,whilepotentialnewvulnerabilitiesemergefromincreasing

relianceonelectricitysystemsandcriticalminerals.Third,acceleratedinnovationis

needed. The emissions cuts to 2030 in the NZE can be mostly achieved with

technologiesonthemarkettoday,butalmosthalfofthereductionsin2050depend

on technologies that are currently under development. Fourth, an unprecedented

level of international co‐operation is needed. This helps to accelerate innovation,

develop international standards and facilitate new infrastructure to link national

markets.Without the co‐operation assumed in the NZE,the transition to net‐zero

emissionswouldbedelayedbydecades.

SUMMARY

152 International Energy Agency | Special Report

4.1 Introduction

Achievingnet‐zeroemissionsby2050isamonumentaltask,especiallyagainstabackdropof

increasing economic and population growth. It calls for an unwavering focus from all

governments,workingtogetherwithindustriesandcitizens,toensurethatthetransitionto

globalnet‐zeroemissionsproceedsinaco‐ordinatedwaywithoutdelay.Inthischapter,we

lookatwhatthechangesthatdelivernet‐zeroemissionsgloballyby2050intheNZEwould

meanfortheeconomy,theenergyindustry,citizensandgovernments.

Figure 4.1

⊳ Selected global milestones for policies, infrastructure and

technology deployment in the NZE

IEA.Allrightsreserved.

There are multiple milestones on the way to global net-zero emissions by 2050.

If any sector lags, it may prove impossible to make up the difference elsewhere.

‐5

2020 2025 2030 2035 2040 2045 2050

GtCO₂

Buildings Transport Industry Electricityandheat Other

2045

150 Mtlow‐carbonhydrogen

850GWelectrolysers

435Mtlow‐carbonhydrogen

3000GWelectrolysers

4GtCO

captured

Phase‐outof

unabatedcoalin

advancedeconomies

2030

Universalenergyaccess

60%ofglobalcar

salesareelectric

1020GWannualsolar

andwindadditions

Allnewbuildingsare

zero‐carbon‐ready

Mostnewclean

technologiesinheavy

industrydemonstrated

atscale

Allindustrial

electricmotorsales

arebestinclass

NonewICEcarsales

2035

Overallnet‐zero

emissionselectricityin

advancedeconomies

Mostappliancesand

coolingsystemssold

arebestinclass

50%ofheavytruck

salesareelectric

7.6GtCO

captured

Nonewunabated

coalplantsapproved

fordevelopment

2021

2025

Nonewsalesof

fossilfuelboilers

2040

Morethan90%of

heavyindustrial

productionis

low‐emissions

2050

Almost70%of

electricitygeneration

globallyfromsolarPV

andwind

Morethan85%

ofbuildingsare

zero‐carbon‐ready

50%ofheatingdemand

metbyheatpumps

Phase‐outofall

unabatedcoalandoil

powerplants

Net‐zeroemissions

electricityglobally

50%offuelsused

inaviationare

low‐emissions

Around90%ofexisting

capacityinheavy

industriesreachesend

ofinvestmentcycle

50%ofexisting

buildingsretrofitted

tozero‐carbon‐ready

levels

Nonewoilandgas

fieldsapprovedfor

development;no

newcoalminesor

mineextensions

Chapter 4 | Wider implications of achieving net-zero emissions 153

4

Wide‐rangingmeasuresandregulationsintheNZEhelptoinfluenceorchangethepurchases

thatindividualsmake,thewaytheyheatandcooltheirhomes,andtheirmeansoftransport.

Manyindustries,especiallythosethatarecurrentlyinvolvedintheproductionofenergyor

are large‐scale users of energy, also face change. Some of the shifts for individuals and

industriesmaybeunpopular, underscoring thefactthat itis essential toensurethatthe

energytransitionistransparent,justandcost‐effective,andtopersuadecitizensoftheneed

forreform.Thesechangesdeliversignificantbenefits.Therearearound790millionpeople

whodonothaveaccesstoelectricitytodayand2.6billionpeoplewhodonothaveaccessto

cleancookingoptions.TheNZEshowshowemissionsreductionscangohand‐in‐handwith

effortstoprovideuniversalaccesstoelectricityandcleancooking,andtoimproveairquality.

Itprovidessignificantopportunitiestoo,withcleanenergytechnologiesprovidingmanynew

business opportunities and jobs, and with innovations that stimulate new industrial

capacities.

Underpinning all of these changesaredecisionstakenbygovernments. This will require

wholeheartedbuy‐infromalllevelsofgovernmentandfromallcountries.Themagnitudeof

thechangesrequiredtoreachglobalnet‐zeroemissionsby2050arenotwithinthepowerof

governmentenergyorenvironmentdepartmentsalonetodeliver,norwithinthepowerof

individual countries. It will involve an unprecedented level of global collaboration, with

recognition of and sensitivity to differences in the stages of development of individual

countries, and an appreciation of the difficulties faced by particular communities and

membersofsociety,especiallythosewhomaybenegativelyaffectedbythetransitionto

net‐zeroemissions.IntheNZE,governmentsstartbysettingunequivocallong‐termtargets,

ensuringthatthesearefullysupportedfromtheoutsetbyexplicit,near‐termtargetsand

policymeasuresthatclearlysetoutthepathway,andthatrecogniseeachcountry’sunique

starting conditions, to support the deployment of new infrastructure and technologies

(Figure4.1).

4.2 Economy

4.2.1 Investmentandfinancing

Thetransitiontonet‐zeroemissionsby2050requiresasubstantialrampupintheinvestment

of electricity, infrastructure and the end‐use sectors. The largestincreaseoverthenext

decadeisinelectricitygeneration:annualinvestmentincreasesfromaboutUSD0.5trillion

overthepastfiveyearstoUSD1.6trillionin2030(Figure4.2).By2030,annualinvestment

in renewables in the electricity sector is around USD1.3trillion, slightly more than the

highestleveleverspentonfossilfuelsupply(USD1.2trillionin2014).Annualinvestmentin

cleanenergyinfrastructureincreasesfromaroundUSD290billionoverthepastfiveyearsto

about USD880billion in 2030. This is forelectricity networks, public electric vehicle(EV)

chargingstations,hydrogenrefuellingstationsandimportandexportterminals,directair

capture and CO

 pipelines and storage facilities. Annual investment in low‐carbon

technologiesinend‐usesectorsrisesfromUSD530billioninrecentyearstoUSD1.7trillion

154 International Energy Agency | Special Report

in2030.

Thisincludesspendingondeepretrofittingofbuildings,transformationofindustrial

processes,andthepurchaseofnewlow‐emissionsvehiclesandmoreefficientappliances.

After 2030, annual electricity generation investment falls by one‐third to 2050. A lot of

infrastructureforalow‐emissionselectricitysectorisestablishedwithinthefirstdecadeof

theNZE,andthecostofrenewablescontinuestodeclineafter2030.Inend‐usesectors,there

arecontinuedincreasesininvestmentinEVs,carboncapture,utilisationandstorage(CCUS)

andhydrogenuseinindustryandtransport,andmoreefficientbuildingsandappliances.

GlobalinvestmentinfossilfuelsupplyfallssteadilyfromaboutUSD575billiononaverage

over the past five years to USD110billion in 2050 in the NZE, with upstream fossil fuel

investmentrestrictedtomaintainingproductionatexistingoilandnaturalgasfields.This

investmentreflectsthefactthatfossilfuelsarestillusedin2050intheNZEinprocesses

where they are paired with CCUS, in non‐emitting processes (such as petrochemical

manufacturing), and in sectors where emissions reductions are most challenging (with

emissionsoffsetbycarbondioxideremoval).Investmentinlow‐emissionsfuelsincreases

morethanthirty‐foldbetween2020and2050,reachingaboutUSD135billionin2050.This

issplitroughlyequallybetweentheproductionofhydrogenandhydrogen‐basedfuels,and

theproductionofbiofuels.

Overthe2021‐50periodintheNZE,annualaveragetotalenergysectorinvestmentasashare

of gross domestic product (GDP) is around 1% higher than over thepastfiveyears.The

private sector is central to finance higher investment needs. It requires enhanced

collaborationbetweendevelopers,investors,publicfinancialinstitutionsandgovernments.

Collaborationwillbeespeciallyimportantoverthenextfivetotenyearsforthedevelopment

oflargeinfrastructureprojectsandfortechnologiesinthedemonstrationorprototypephase

todaysuchassomehydrogenandCCUSapplications.Companiesandinvestorshavedeclared

strong interest to invest in clean energy technologies, but turning interest into actual

investmentatthelevelsrequiredintheNZEalsodependsonpublicpolicies.



Someobstaclestoinvestmentneedtobetackled.Manyemergingmarketanddeveloping

economies are reliant on public sources to finance energy projects and new industrial

facilities.Insomecases,improvementsinregulatoryandpolicyframeworkswouldfacilitate

theinternational flow of long‐termcapital to supportthe development of both new and

existingcleanenergytechnologies.Therapidgrowthininvestmentintransportandbuildings

intheNZEpresentsadifferentkindofchallengeforpolicymakers.Inmanycases,anincrease

incapitalspendingforanefficientapplianceorlow‐emissionsvehiclewouldbemorethan

offset by lower expenditure on fuels and electricity over the product lifetime, but some

low‐incomehouseholdsandsmallandmediumenterprisesmaynotbeabletoaffordthe

upfrontcapitalrequired.

Investmentlevelspresentedinthisreportincludeabroaderaccounting of efficiency improvements in

buildingsanddifferfromthatreportedintheIEAWorldEnergyInvestmentreport(IEA,2020a).End‐use

efficiencyinvestmentsaretheincrementalcostofimprovingtheenergyperformanceofequipmentrelative

toaconventionaldesign.

Chapter 4 | Wider implications of achieving net-zero emissions 155

4

Figure 4.2 ⊳ Global average annual energy investment needs by sector and

technology in the NZE

IEA.Allrightsreserved.

Investment increases rapidly in electricity generation, infrastructure and end-use sectors.

Fossil fuel investment drops sharply, partly offset by a rise in low-emissions fuels.

Notes:CCUS=carboncapture,utilisationandstorage;EV=electricvehicle.Infrastructureincludeselectricity

networks, public EVcharging, CO

 pipelines andstoragefacilities,direct air captureandstoragefacilities,

hydrogenrefuellingstations,andimportand exportterminalsforhydrogen andfossilfuelspipelinesand

terminals.End‐useefficiencyinvestmentsaretheincrementalcostofimprovingtheenergyperformanceof

equipmentrelativetoaconventionaldesign.

4.2.2 Economicactivity

The energy transition required for net‐zero emissions by 2050 will affect all economic

activitiesdirectlyorindirectly.Inco‐ordinationwiththeInternationalMonetaryFund,we

havemodelledthemedium‐termglobalmacroeconomicimpactofthechangesintheenergy

0.5 1.0 1.5 2.0 2.5

2016‐20

2021‐30

2031‐40

2041‐50

2016‐20

2021‐30

2031‐40

2041‐50

2016‐20

2021‐30

2031‐40

2041‐50

2016‐20

2021‐30

2031‐40

2041‐50

Oil

Naturalgas

Coal

Low‐emissionsfuels

FossilfuelswithoutCCUS

FossilfuelswithCCUS

Nuclear

Renewables

Batterystorage

Electricitygrids

EVchargers

Hydrogeninfrastructure

Fossilfuels

Directaircapture

CO₂transportandstorage

#REF!

Renewables

Hydrogen

Efficiency

Electrification

Fossilfuelsandothers

CCUS

Electricity

TrillionUSD(2019)

Fuels

End‐use

Infrastructure

156 International Energy Agency | Special Report

sectorthatoccurintheNZE.Thisanalysisshowsthatthesurgeinprivateandgovernment

spending on clean energy technologies in the NZE creates a large number of jobs and

stimulateseconomicoutputintheengineering,manufacturingandconstructionindustries.

ThisresultsinannualGDPgrowththatisnearly0.5%higherthanthelevelsintheStated

PoliciesScenario(STEPS)

duringlatterhalfofthe2020s(Figure4.3).



Figure 4.3

⊳ Change in annual growth rate of global GDP in the NZE relative

to the STEPS

IEA.Allrightsreserved.

The surge in government and private investment in the NZE has a positive impact

on global GDP, but there are large differences between regions

Notes:GDP=grossdomesticproduct.Reductioninrentsstemmainlyfromlowerfossilfuelincome.

Source:IEAanalysisbasedonIMF.

Therearelargedifferencesinmacroeconomicimpactsbetweenregions.Thedeclineinfossil

fueluseandpricesresultsinafallinGDPintheproducereconomies,

whererevenuesfrom

oilandgassalesoftencoveralargeshareofpublicspendingoneducation,healthcareand

otherpublicservices.Thedropinoilandgasdemand,andtheconsequentfallininternational

prices for oil and gas, cause net income in producer economies todroptohistoriclows

(Figure4.4).Somecountrieswiththelowestcostoilresources(includingmembersofthe

TheIEAStatedPoliciesScenarioistheprojectionfortheglobalenergysystembasedonthepoliciesand

measures that governments around the world have already put in place and on announced policies as

expressedinofficialtargetsandplans,suchasNationallyDeterminedContributionsputforwardunderthe

ParisAgreement(seeChapter1).

Theestimatedgeneralequilibriummacroeconomicimpactoftheincreaseinpublicandprivateinvestment

and the reduction in oil‐related revenue contained in the NZE has been provided by the International

MonetaryFundusingitsGlobalIntegratedMonetaryandFiscalModel(GIMF).

Producereconomiesarelargeoilandgasexportersthatrelyonhydrocarbonrevenuestofinanceasignificant

proportionoftheirnationalbudgets,includingcountriesintheMiddleEast,RussiaandtheCaspianregion.

‐0.1%

0.0%

0.1%

0.2%

0.3%

0.4%

0.5%

2021‐25 2026‐30

Privateinvestment

Governmentinvestment

Reductioninrent

Netchange



Chapter 4 | Wider implications of achieving net-zero emissions 157

4

Organization of the Petroleum Exporting Countries [OPEC]) gain market share in these

circumstances,buteventheywouldseelargefallsinrevenues.Structuralreformswouldbe

needed to address the societal challenges, including those to accelerate the process of

reforming inefficient fossil fuel subsidies and to speed up moves to use hydrocarbon

resources to produce low‐emissionsfuels,e.g.hydrogenandhydrogen‐based fuels (see

section4.3.1).

Figure 4.4

⊳ Income from oil and gas sales in producer economies in the NZE

IEA.Allrightsreserved.

Structural reforms and new sources of revenue are needed in producer economies,

but these are unlikely to compensate fully for a large drop in oil and gas income

ThemacroeconomiceffectsoftheNZEareveryuncertain.Theydependonahostoffactors

including:howgovernmentexpenditureisfinanced;benefitsfromimprovementstohealth;

changesinconsumerbills;broadimpactofchangesinconsumerbehaviour;andpotential

for productivityspill‐overs from accelerated energy innovation.Nonetheless, impacts are

likelytobelowerthanassessmentsofthecostofclimatechangedamages(OECD,2015).It

isalsolikelythataco‐ordinated, orderlytransitioncanbeexecutedwithout majorglobal

systemicfinancialimpacts,butthiswillrequirecloseattentionfromgovernments,financial

regulatorsandthecorporatesector.

4.2.3 Employment

EmploymentintheenergysectorshiftsmarkedlyintheNZEinresponse to changes in

investmentandspendingonenergy.Weestimatethattodayroughly 40million people

around the world work directly in the oil, gas, coal, renewables, bioenergy and energy

networkindustries(IEA,2020b).IntheNZE,cleanenergyemploymentincreasesby14million

0.4

0.8

1.2

1.6

2.0

200

400

600

800

1000

1971‐

1981‐

1991‐

2001‐

2011‐

2021‐

2031‐

2041‐

ThousandUSDpercapita

BillionUSD(2019)

Oil Naturalgas Percapitaincome(rightaxis)



158 International Energy Agency | Special Report

to2030, while employment inoil,gasand coalfuelsupply and powerplantsdeclines by

around5million,leadingtoanetincreaseofnearly9millionjobs(Figure4.5).

Figure 4.5

⊳ Global energy sector employment in the NZE, 2019-2030

IEA.Allrightsreserved.

Overall employment in the energy sector increases by almost 9 million to 2030

as jobs created in clean energy sectors outpace losses in fossil fuels

Jobscreatedwouldnotnecessarilybeinthesameareawherejobsarelost,plustheskillsets

requiredforthecleanenergyjobsmaynotbedirectlytransferable.Joblosseswouldbemost

pronounced in communities that are heavily dependent on fossil energy production or

transformation activities. Even where the number of direct energy jobs lost is small, the

impactonthelocaleconomymaybesignificant.Governmentsupportwouldalmostcertainly

beneededtomanagethesetransitionsinajust,people‐centredway.Inpreparation,abetter

understandingofcurrentenergyindustryemploymentisneeded.Ausefulactionwouldbe

for governments to adopt more detailed surveying approaches for energy industry

employment,suchasthoseusedintheUSEnergy&EmploymentReport(NASEOandEnergy

FuturesInitiative,2021).

Inadditiontothe14millionnewcleanenergyjobscreatedintheNZE,othernewjobsare

createdbychangesinspendingonmoreefficientappliances,electricandfuelcellvehicles,

and building retrofits and energy‐efficient construction. Thesechangeswouldrequirea

further16millionworkers,meaningthattherewouldbe30millionmorepeopleworkingin

cleanenergy, efficiency and low‐emissionstechnologies by 2030 inthe NZE(Figure4.6).



Investment in electricity generation, electricity networks, EV manufacturing and energy

efficiency are among the areas that will open up new employment opportunities. For

example,jobsinsolarandwindmorethanquadrupleintheNZEovercurrentlevels.Nearly

two‐thirdsofworkersinthesesectorsby2030intheNZEwouldbehighlyskilledandthe

Thisincludesnewjobsandjobsfilledbymovingcurrentemploymentfromonetypeofproductiontoanother.

10

20

30

40

50

60

2019 2030

Millionjobs

Bioenergy

Electricity

Coal

Oilandgas

Losses

Growth



Chapter 4 | Wider implications of achieving net-zero emissions 159

4

majorityrequiresubstantialtraining.Inaddition,withthemorethandoublingoftotalenergy

investment,newemploymentopportunitieswillariseinassociatedareassuchaswholesale

trading,financialandlegalservices.

Inmanycasesitmaybepossibletoshiftworkerstonewproduct lines within the same

company,forexampleinvehiclemanufacturingasproductionreconfigurestoEVs.However,

therewouldbelargerrisksforspecialisedsupplychaincompaniesthatprovideproductsand

services,e.g. internal combustionengines thatare replaced bynewcomponentssuchas

batteries.

Figure 4.6

⊳ New workers in clean energy and related sectors and shares by

skill level and occupation in the NZE and the STEPS in 2030



IEA.Allrightsreserved.

About 30 million new workers are needed by 2030 to meet increased demand for clean

energy, efficiency, and low-emissions technologies; over half are highly skilled positions

Note:EVs=electricvehicles.

The new jobs created in the NZE tend to have more geographic flexibility and a wider

distributionthanisthecasetoday.Around40%arejobslocatedclosetowheretheworkis

being done, e.g. building efficiency improvements or wind turbine installation, and the

remaining are jobs tied to manufacturing sites. Today the manufacturing capacity for a

number of clean energy technologies, such as batteries and solar photovoltaic panels, is

concentrated in particular areas, notably China. The rapid increase in demand for clean

energytechnologiesintheNZErequiresnewproductioncapacitytocomeonlinethatcould

belocatedinanyregion.Thosecountriesandcompaniesthatmovefirstmayenjoystrategic

advantagesincapturingburgeoningdemand.

10 20 30

STEPS

NZE

Grids

Powergeneration

EVs

Bioenergyproduction

Efficiency

End‐userenewables

Innovativetechnologies

Additional workers incleanenergy andrelatedsectors(millions)

Skilllevel

Occupation

20% 40% 60% 80% 100%

Professional

38%

Construction

23%

High65% Medium27% Low8%

Positions byoccupationandskilllevelintheNZE

Manufacturing

28%

Other

12%



160 International Energy Agency | Special Report

4.3 Energyindustry

4.3.1 Oilandgas

The energy transition envisionedintheNZEinvolvesamajorcontraction of oil and gas

productionwithfar‐reachingimplicationsforallthecompaniesthatproducethesefuels.Oil

demandfallsfromaround90millionbarrelsperday(mb/d)in2020to24mb/din2050,while

naturalgasdemandfallsfrom3900billioncubicmetres(bcm)toaround1700bcm.Nofossil

fuel exploration is required in the NZE as no new oil and natural gas fields are required

beyondthosethathavealready been approved fordevelopment.This represents aclear

threattocompanyearnings,buttherearealsoopportunities.Theresourcesandskillsofthe

oilandgasindustryareagoodmatchwithsomeofthenewtechnologiesneededtotackle

emissionsinsectorswherereductionsarelikelytobemostchallenging,andtoproducesome

ofthelow‐emissionsliquidsandgasesforwhichthereisarapidincreaseindemandinthe

NZE(seeChapter2).Bypartneringwithgovernmentsandotherstakeholders,theoilandgas

industrycouldplayaleadingroleindevelopingthesefuelsandtechnologiesatscale,andin

establishingnewbusinessmodels.

Theoilandgasindustryishighlydiverse,andvariouscompaniescouldpursueverydifferent

strategiesinthetransitiontonet‐zeroemissions.Minimisingemissionsfromcoreoilandgas

operations however should be a first‐order priority for all oil and gas companies. This

includestacklingmethaneemissionsthatoccurduringoperations(theyfallby75%between

2020and2030intheNZE)andeliminatingflaring.Companiesshouldalsoelectrifyoperations

usingrenewableelectricitywhereverpossible,eitherbypurchasingelectricityfromthegrid

or by integrating off‐grid renewable energy sources into upstream facilities or transport

infrastructure. Producers that can demonstrate strong and effective action to reduce

emissionscancrediblyarguethattheiroilandgasresourcesshouldbepreferredoverhigher

emissionsoptions.

Someoilandgascompaniesmaychoosetobecome“energycompanies”focusedonlow‐

emissionstechnologiesandfuels,includingrenewableelectricity,electricitydistribution,EV

chargingandbatteries.Severaltechnologiesthatarecriticaltotheachievementofnet‐zero

emissions,suchasCCUS,hydrogen,bioenergyandoffshorewind,lookespeciallywell‐suited

tosomeoftheexistingskills,competenciesandresourcesofoilandgascompanies.

 Carboncapture,utilisationandstorage.Theoilandgasindustryisalreadytheglobal

leaderindevelopinganddeployingCCUS.Ofthe40milliontonnes(Mt)ofCO

captured

today at large‐scale facilities, around three‐quarters is captured from oil and gas

operations,whichoftenproduceconcentratedstreamsofCO

thatarerelativelyeasy

andcosteffectivetocapture(IEA,2020c).Theoilandgasindustryalsohasthelarge‐

scaleengineering,pipeline,sub‐surfaceandprojectmanagementskillsandcapabilities

tohandlelargevolumesofCO

andtohelpscaleupthedeploymentofCCUS.



Chapter 4 | Wider implications of achieving net-zero emissions 161

4

 Low‐emissions hydrogen and hydrogen‐based fuels. Oil and gas companies could

contribute to developing and deploying low‐emissions hydrogen in several ways

(IEA,2019a).Nearly40%ofhydrogenproductionin2050intheNZEisfromnaturalgas

infacilitiesequippedwithCCUS,providinganimportantopportunityforcompaniesand

countriestoutilisetheirnaturalgasresourcesinawaythatisconsistentwithnet‐zero

emissions.Ofthetotaloutputof530Mtofhydrogenin2050,about30%isprocessed

into ammonia and synthetic fuels (equivalent to around 7.5mboe/d). The

transformation processes involved have many potential synergies with the skills and

equipmentusedinoilandgasprocessingandrefining.Oilandgascompaniesalsohave

longexperienceoftransportingliquidsandgasesbypipelineandships.

 Advanced biofuels and biomethane.Theproductionofadvancedbiofuelsgrows

substantially in the NZE, but this depends critically on continued technological

innovation.ManyoilandgascompanieshaveactiveR&Dprogrammesintheseareas

and could become leading producers. Biomethane – a low‐emissions alternative to

naturalgas–canbeproducedinlargecentralisedfacilities,whichcouldbeagoodfit

withtheknowledgeandtechnicalexpertiseofexistinggasproducers(IEA,2020d).

 Offshore wind. About 40%of the lifetimecosts of a standard offshore wind project

involvesignificantsynergieswiththeoffshoreoilandgassector(IEA,2019b).Theoiland

gasindustryhasconsiderableexperienceofworkinginoffshorelocations,whichcould

beofvalueintheconstructionoffoundationsandsubseastructuresforoffshorewind

farms,especiallywhenusingvesselsduringinstallationandoperation.Theexperience

ofmaintainingsafetystandardsinoilandgascompaniescouldalsobehelpfulduring

maintenanceandinspectionofoffshorewindfarmsoncetheyareinoperation.

Oil and gas companies are well‐placedtoacceleratethepaceof development and

deploymentofthesetechnologies,andtogainacommercialedgeoverothercompanies.In

theNZE,investmentinlow‐emissionstechnologiessuitedtotheskillsandexpertiseofoil

andgascompaniesexceedsthatintraditionaloilandgasoperationsby2030.Totalcapital

spending on these technologies and on traditional oil and gas operations averages

USD650billionperyearover2021‐50,justlessthanannualinvestmentinoilandgasprojects

between2016and2020(Figure4.7).

Notalloilandgascompanieswillchoosetofollowastrategyofdiversifyingintoothertypes

ofenergy.Forexample,itisfarfromcertainthatnationaloilcompanieswillbechargedby

theirstateownerstodiversifyanddeveloplow‐emissionsenergysourcesoutsidetheircore

area of activity; other companies may decide simply to concentrate on supplying oil and

naturalgasascleanlyandefficientlyaspossible,andtoreturnincometoshareholders.What

isclear,however,isthatnooilandgascompanywouldbeunaffectedbytheNZEandthat

allpartsoftheindustryneedtodecidehowtorespond(IEA,2020e).



162 International Energy Agency | Special Report

Figure 4.7 ⊳ Annual average investment in oil and gas and low-emissions

technologies with synergies for the oil and gas industry in the NZE

IEA.Allrightsreserved.

Investment in low-emissions technologies suited to the skills and expertise of

oil and gas companies exceeds investment in traditional operations by 2030

Note:CCUS=carboncapture,utilisationandstorage.

4.3.2 Coal

TheprecipitousdeclineincoaluseprojectedintheNZEwouldhavemajorimplicationsfor

the future of mining companies and countries with large existing production capacities.

Around470milliontonnesofcoalequivalent(Mtce)ofcoalusedintheNZEin2050isin

facilitiesequippedwithCCUS(80%ofglobalcoaldemandin2050),whichpreventsaneven

sharperdeclineindemand.ButnonewcoalminesormineextensionsareneededintheNZE.

Retrainingandregionalrevitalisationprogrammeswouldbeessentialtoreducethesocial

impact of job losses at the local level and to enable workers and communities to find

alternative livelihoods. There could also be opportunities to locate new clean energy

facilities,includingthenewprocessingfacilitiesthatareneededforcriticalminerals,inthe

areasmostaffectedbymineclosures.

Forminingcompanies,however,thecontractionincoaldemandintheNZEcouldbeoffset

bytheneedtoincreaseminingofotherrawminerals,includingthosevitaltomanyclean

energy technologies, such as copper, lithium and nickel (IEA, 2021a). Global demand for

thesecriticalmineralsrisesrapidlyintheNZE(Figure4.8).Forexample,demandforlithium

foruseinbatteriesexpandsbyafactorof30by2030,whiledemandforrareearths,primarily

usedformakingEVmotorsandwindturbines,increasesbyafactoroftenby2030.Critical

mineralresourcesarenotalwayslocatedinthesamelocationsorcountriesasexistingcoal

mines,buttheskillsandexperienceofminingcompanieswillbeessentialtoensurethatthe

supplyofthesemineralsisabletomatchdemandatreasonableprices.Bythe2040s,thesize

oftheglobalmarketforthesemineralsapproachesthatforcoaltoday.

200

400

600

800

2016‐

2021‐

2031‐

2041‐

2016‐

2021‐

2031‐

2041‐

BillionUSD(2019)

Oil Naturalgas CCUS Hydrogen Bioenergy Offshorewind

Oilandnaturalgas

Low‐emissionstechnologies



Chapter 4 | Wider implications of achieving net-zero emissions 163

4

Figure 4.8 ⊳ Global value of coal and selected critical minerals in the NZE



IEA.Allrightsreserved.

The market for critical minerals approaches that of coal today in the 2040s

Notes:Includestotalrevenueforcoalandforselectedcriticalmineralsusedincleanenergytechnologies.The

pricesofcriticalmineralsarebasedonconservativeassumptionsaboutcostincreases(arounda10%‐20%

increasefromcurrentlevelsto2050).

4.3.3 Electricity

Gettingtonet‐zeroemissionscallsforamassiveexpansionoftheelectricitysectortopower

theneedsofagrowingglobaleconomy,theelectrificationofend‐usesthatpreviouslyused

fossilfuels,andtheproductionofhydrogenfromelectrolysis.Whileelectricitydemand

increasesmorethantwo‐and‐a‐halftimes,therapidtransformationoftheindustrymeans

thattotalelectricitysupplycoststriplefrom2020to2050intheNZE,raisingaveragecosts

perunitofelectricitygenerationmodestly(Figure4.9).

The electricity supply industry also becomes much more capital intensive, accelerating a

recenttrend.Theshareofcapitalintotalcostsrisesfromlessthan60%in2020(alreadyten

percentagepointshigherthanin2010)toabout80%in2050.Thisislargelyduetoamassive

increaseinrenewableenergyandthecorrespondingneedformorenetworkcapacityand

sourcesofflexibility,includingbatterystorage.Inthelate2020sand2030s,theupgrading

and replacement of existing solar and wind capacity as they cometotheendoftheir

operatinglivesalsoboostscapitalneeds.

Newnuclearpowercapacityadditionsaddfurther

capitalspendingintheNZE.Therisingcapitalintensityoftheelectricityindustryincreases

theimportanceoflimitingriskfornewinvestmentandensuringsufficientrevenuesinall

yearsforgridoperatorstofundrisinginvestmentneeds–apointunderlinedbythefinancial

difficultiesexperiencedbysomenetworkcompanies in 2020duetodepressedelectricity

demandresultingfromtheCovid‐19crisis(IEA,2020f).

 They typically need replacing after 25‐30 years of operation, whereas many conventional hydropower,

nuclearandcoalplantsoperatefarlongeralbeitwithperiodicadditionalinvestment.

100

200

300

400

500

BillionUSD(2019)

Coal

Rareearth

Silicon

Manganese

Cobalt

Graphite

Nickel

Lithium

Copper

Critical minerals

2020 2030 2040 2050



164 International Energy Agency | Special Report

Figure 4.9 ⊳ Global electricity supply costs by component in the NZE



IEA.Allrightsreserved.

Electricity system costs triple to 2050, raising average supply costs modestly;

the massive growth of renewables makes the industry more capital intensive

Notes:Electricitysupplycostsincludeallthedirectcoststoproduceandtransmitelectricitytoconsumers.

Batterystoragesystemsareincludedinpowerplantcapitalrecovery.

Therisingshareofrenewablesintheelectricitygenerationmixhasimportantimplications

for the design of electricity markets. When the shares of solar, wind, other variable

renewablesandnuclearpowerreachhighlevels,availableelectricitysupplyatnomarginal

costisoftenaboveelectricitydemand,resultinginawholesalepriceofelectricitythatiszero

orevennegative.By2050,withoutchangesinelectricitymarketdesign,about7%ofwind

andsolaroutputintheNZEwouldbeaboveandbeyondwhatcanbeintegrated(andso

curtailed),andtheshareofzero‐pricehoursintheyearwouldincreasetoaround30%in

majormarketsfromclosetozerotoday,despitetheactiveuseofdemandresponse.Ifthe

shareofrenewablesintheelectricitygenerationmixistoriseasenvisionedintheNZE,it

wouldthereforebehighlydesirabletoeffectsignificantchangesinthedesignofelectricity

marketssoastoprovidesignalsforinvestment,includinginvestmentinsourcesofflexibility

suchasbatterystorageanddispatchablepowerplants.

Theincreaseinelectricityuseinevitablyraisesassociatedcosts.Operatingandmaintaining

powerplantsworldwidecostsclosetoUSD1trillionin2050intheNZE,two‐and‐a‐halftimes

thelevelin2020.In2020,upkeepatfossilfuelpowerplantsaccountedforUSD150billion,

and renewables required nearly as much, mostly for hydropower. By 2050, the cost of

operatingandmaintainingrenewablesreachesUSD780billion,mostitneededforwindand

solarphotovoltaics(PV)asaresultoftheirmassivescalingup:offshorewindaloneaccounts

forUSD90billion.

20

40

60

80

100

120

1

2

3

4

5

6

2010 2020 2030 2040 2050

USDperMWh(2019)

Grids Powerplantcapitalrecovery

Powerplantoperationsandmaintenance Fuel

CO₂price Averagecost(rightaxis)

TrillionUSD(2019)

20%

40%

60%

80%

100%

2010 2020 2030 2040 2050



Chapter 4 | Wider implications of achieving net-zero emissions 165

4

Thesharpreductionoffossilfueluseintheelectricityindustryandlowerfuelpricesmean

thatcostsrelatedtofuelandCO

pricesaresignificantlyreduced.Thiscontinuesarecent

trenddrivenbynearrecord‐lownaturalgaspricesinmanymarkets.EvenwithrisingCO



pricesovertime,therapiddecarbonisationofelectricitymeansthatfuelandCO

makeupa

declining share oftotal costs, falling from aboutone‐quarter in 2020 to5% in2050. The

balance of fuel costs shifts towards low‐emissions sources, mainly nuclear power and

bioenergy(includingwithCCUS),thoughsomestillremainsrelatedtonaturalgasandcoal

usedinpowerplantsequippedwithCCUS.

Onechallengeinthiscontextiswhattodoaboutthecoal‐firedpowerplantsinoperation.In

2020,over2100gigawatts(GW)ofpowerplantsworldwideusedcoaltoproduceelectricity

andheat,andtheyemittednearly30%ofallenergy‐relatedCO

emissions.Optionsinclude

retrofitting coal‐fired power plants with CCUS technologies, co‐firing with biomass or

ammonia;repurposingcoalplantstofocusonprovidingflexibility; and, where feasible,

phasing them out. In the NZE, all unabated coal‐fired power plants are phased out in

advancedeconomiesby2030andinemergingmarketanddevelopingeconomiesby2040.

Asaresult,emissionsfromcoal‐firedpowerplantsfallfrom9.8gigatonnes(Gt)in2020to

3.0Gtin2030andtojust0.1Gtby2040(residualemissionsfromcoalwithCCUSplants).



Anotherchallengeisrelatedtothescaleofcapacityretirementsenvisagedandassociated

siterehabilitation,startingwithcoal.Thepaceofretirementofcoal‐firedpowerplantsover

2020‐50isnearlytriplethatofthepastdecade.Decommissioningateachsitecanoftenlast

adecadeandentailsignificantcost,andmayinvolveclosingamineaswell.Insomecases,it

maybefinanciallyattractivetobuildarenewableenergyprojectonthesamesite,taking

advantageofthegridconnectionandlimitingthecostofrehabilitation.Thousandsofnatural

gas‐firedandoil‐firedpowerplantsarealsoretiredby2050,thoughthesesitesareoften

strategicallylocatedonthegridandmanyarelikelytobereplaceddirectly with battery

storagesystems.

The large fleet of ageing nuclear reactors in advanced economies means their

decommissioningincreases, despitemany reactor lifetimeextensions. Inthe NZE,annual

averagenuclearretirementsgloballyare60%higheroverthenext30yearsthaninthelast

decade.Eachnucleardecommissioningprojectcanspandecades,withcostsrangingfrom

severalhundredmilliondollarstowelloverUSD1billionforlargereactors(NEA,2016).

4.3.4 Energy‐consumingindustries

Thechangesinthe NZE would haveanenormousimpacton industries thatmanufacture

vehiclesandtheirmaterialandcomponentsuppliers.Around95%ofallthecarsandnearly

all of the trucks sold worldwide in 2020 were conventional vehicles with an internal

combustionengine.IntheNZE,about60%ofglobalcarsalesin2030areEVs,and85%of

ACO

capturerateof90%isassumed,thoughhigherratesaretechnicallypossiblewithreducedefficiencies

andadditionalcosts(IEA,2020g).



166 International Energy Agency | Special Report

heavy‐dutytruckssoldin2040areEVsorfuelcellvehicles.IntheNZE,vehiclecomponent

suppliers and vehicle manufacturers alikeretool factories, change designs to incorporate

batteries and fuel cells, and adjust supply chains to minimise the lifecycle emissions

intensities of vehicles. This provides opportunities to redesign existing parts and

manufacturingprocessestoimproveefficiencyandlowercosts.

TherapidincreaseinEVsalesintheNZErequiresanimmediatescaleupofnewsupplychains

forbatteriesaswellasrechargingandlow‐emissionsrefuellinginfrastructure.IntheNZE,

battery production capacity increases to more than 6.5terawatt‐hours (TWh) by 2030,

comparedwithlessthan0.2TWhin2020.Anydelayinexpandingbatterymanufacturing

capacitywouldhaveadetrimentalimpactontheroll‐outofEVsandslowcostreductionsfor

othercleanenergytechnologiesthatbenefitintheNZEfromhavingsimilarmanufacturing

processesandknow‐how(suchasfuelcellvehiclesandelectrolysers).

Inaviationandshipping,liquidlow‐emissionsfuelsarecentraltocutemissions.Switchingto

someofthesewouldhavelittleimpactonvesseldesign:theuseofhydrogen‐basedfuelsor

biofuels in shipping would only require changes to the motor and fuel system, and bio‐

kerosene or synthetic kerosene canoperatewithexistingaircraft. New bunkering and

refuellinginfrastructureareneededintheNZE,however,andtheuseoftheselow‐emissions

fuels also requires new safety and standardisation standards, protocols for permitting,

construction and design, as well as international regulation, monitoring, reporting and

verificationoftheirproductionanduse.

Inheavyindustrialsectors–steel,cementandchemicals–mostdeepemissionsreduction

technologiesarenotavailableonthemarkettoday.IntheNZE, material producerssoon

demonstratenear‐zeroemissionprocesses,aidedbygovernmentrisk‐sharingmechanisms,

andstarttoadapttheirexistingproductionassets.Formultinationalcompanies,thisincludes

developingtechnologytransferstrategiestoroll‐outprocessesacrossplants.International

co‐operationwouldhelptoensurealevelplayingfieldforall.Withincountries,effortsfocus

on industrial hubs in order to accelerate emissions reductions across multiple industrial

sectorsbypromotingeconomiesofscalefornewinfrastructure(suchasCO

transportand

storage)andsuppliesoflow‐emissionsenergy.

Materials producers work with governments in the NZE to create an international

certificationsystemfornear‐zeroemissionmaterialstodifferentiate them from

conventionalones.Thiswouldenablebuyersofmaterialssuchasvehiclemanufacturersand

construction companies to enter into commercial agreements to purchase near‐zero

emissionsmaterialsatapricepremium.Inmostcases,thepremiumwouldresultinonlya

modestimpactonthefinalpriceoftheproductpricegiventhatmaterialsgenerallyaccount

forasmallportionofmanufacturingcosts(MaterialEconomics,2019).



Chapter 4 | Wider implications of achieving net-zero emissions 167

4

4.4 Citizens

4.4.1 Energy‐relatedSustainableDevelopmentGoals

Aninclusiveandpeople‐centredtransitioniskeytotheworldmovingrapidly,collectively

andconsistentlytowardnet‐zeroemissionsbymid‐century.TheNZEachievestheUnited

Nationsenergy‐relatedSustainableDevelopmentGoals(SDGs)ofuniversalaccesstoclean

modernenergyby2030(SDG7.1)andreducingprematuredeathscausedbyairpollution

(SDG3.9). The technologies, options and measures used to achievefullaccesstolow‐

emissions electricity and clean cooking solutions by 2030 in the NZE also help to reduce

greenhousegas(GHG)emissionsfromhouseholdenergyuse.

Energyaccess

About790millionpeopleworldwidedidnothaveaccesstoelectricityin2020,mostofthem

living in sub‐Saharan Africa and developing Asia. Around 2.6billion people did not have

accesstocleancookingoptions:35%ofthemwereinsub‐SaharanAfrica,25%inIndiaand

15%inChina.Alackofaccesstoenergynotonlyimpedeseconomicdevelopment,butalso

causesseriousharmtohealthandisabarriertoprogressongenderequalityandeducation.



Figure 4.10

⊳ People gaining access to electricity by type of connection in

emerging market and developing economies in the NZE

IEA.Allrightsreserved.

More than 80% of people gaining access to electricity by 2030 are supplied

renewable power and just over half via off-grid systems

Householdsrelyingonthetraditionaluseofbiomassforcooking dedicate around 1.4hours each day

collectingfirewoodandseveralhourscookingwithinefficientstoves,aburdenlargelybornebywomen(IEA,

2017).

200

400

600

800

1000

2020 2025 2030

Millionpeople

Stand‐alonerenewables

Stand‐alone

Mini‐gridsrenewables

Mini‐grids

Gridrenewables

Grid

Withoutaccess



168 International Energy Agency | Special Report

Around45%ofthosewholackaccesstoelectricityby2030gainitviaaconnectiontoamain

grid,whiletherestareservedbymini‐grids(30%)andstand‐alone solutions (25%)

(Figure4.10).Almostalloff‐gridormini‐gridsolutionsare100%renewable.Decentralised

systems that rely on diesel generators, which are also deployed in some grid‐connected

systems to compensate for low reliability, are phased out later and replaced with solar

storage systems. Achieving full access does not lead to a significant increase in global

emissions:in2030itaddslessthan0.2%toCO

2

emissions.Achievingfullaccesstoelectricity

alsobringsefficiencygainsandacceleratestheelectrificationofappliances,whichbecome

criticaltoemissionsreductionsinbuildingsafter2030inemergingmarketanddeveloping

economies.

Forcleancooking,55%ofthosegainingaccessby2030intheNZEdosothroughimproved

biomasscookstoves(ICS)fuelledbymodernbiomass,biogasorethanol,25%throughthe

useofliquefiedpetroleumgas(LPG)and20%viaelectriccookingsolutions(Figure4.11).LPG

isthemainfueladoptedinurbanareasandICSisthemainoptioninruralareas.Theuseof

LPGresultsinaslightincreaseinCO

emissionsin2030butanetreductioninoverallGHG

emissions due to reduced methane, nitrous oxides and black carbonemissionsfromthe

traditionaluseofbiomass.Inaddition,LPGisincreasinglydecarbonisedafter2030usingbio‐

sourced butane and propane (bioLPG) produced sustainably from municipal solid waste

(MSW)andotherrenewablefeedstocks.ThetechnicalpotentialofbioLPGproductionfrom

MSWin2050inAfricacouldbeenoughtosatisfythecookingneedsofmorethan750million

people(GLPGP,2020;LiquidGasEurope,2021).

Figure 4.11

⊳ Primary cooking fuel by share of population in emerging market

and developing economies in the NZE

IEA.Allrightsreserved.

Traditional biomass is entirely replaced with modern energy by 2030, mainly in the form of

bioenergy and LPG; by 2050, electricity, bioenergy and bioLPG meet most cooking needs

Notes:Modernbioenergyincludesimprovedcookstoves,biogasandethanol.Liquefiedpetroleumgas(LPG)

includesfossilandrenewablefuel.

20%

40%

60%

80%

100%

2020 2025 2030 2035 2040 2050

Otherpolluting

Traditionalbiomass

Modernbioenergy

Naturalgas

LPG

Electricity

WithAccess

WithoutAccess



Chapter 4 | Wider implications of achieving net-zero emissions 169

4

The achievement of universal access to clean energy by 2030 requires governments and

donorstoputexpandingaccessattheheartofrecoveryplansandprogrammes.Therewould

be multiple benefits: investing heavily in energy access would provide an immediate

economicboost,createlocaljobsandbringdurableimprovementstosocialwell‐beingby

modernisinghealthservicesandfoodchains.IntheNZE,aroundUSD35billionisspenteach

yearimprovingaccesstoelectricityandalmostUSD7billioneach year on clean cooking

solutionsforpeopleinlow‐incomecountriesfromnowto2030.

Airpollutionandhealth

Morethan90%ofpeoplearoundtheworldareexposedtopollutedairtoday.Suchpollution

ledtoaround5.4millionprematuredeathsin2020,underminingeconomicproductivityand

placingextrastressonhealthcaresystems.Mostofthesedeathswereinemergingmarket

anddevelopingeconomies.Justoverhalfwerecausedbyexposuretooutdoorairpollution;

theremainderresultedfrombreathingpollutedairindoors,causedmainlybythetraditional

useofbiomassforcookingandheating.

Energy‐relatedemissionsofthethreemajorairpollutants–sulphurdioxide(SO

),nitrogen

oxides(NO

)andfineparticulatematter(PM

2.5

)–fallrapidlyintheNZE.SO

emissionsfallby

85%between2020and2050,mainlyasaresultofthelarge‐scalephase‐outofcoal‐fired

powerplantsandindustrialfacilities.NO

X

emissionsalsodropbyaround85%asaresultof

the increased use of electricity, hydrogen and ammonia in the transport sector. The

increaseduptakeofcleancookingfuelsindevelopingcountries,togetherwithairpollution

control measures in industry and transport, results in a 90% drop in PM

2.5

 emissions

(Figure4.12).ThereductioninairpollutionintheNZEleadstoroughlyahalvinginpremature

deaths in 2050 compared with 2020, saving the lives of about 2million people per year,

around85%oftheminemergingmarketanddevelopingeconomies.

Figure 4.12

⊳ Global premature deaths and air pollutant emissions in the NZE



IEA.Allrightsreserved.

Reductions in major air pollutants mean 2 million fewer premature deaths per year

Sources:IEAanalysisbasedonIIASA.

1

2

3

4

5

2020 2050

Millionpeople

Advancedeconomies

Emergingmarketanddevelopingeconomies

Prematuredeaths

2.5

20

40

60

80

100

2020 2030 2040 2050

Index(2020=100)

Changeinairpollutant emissions



170 International Energy Agency | Special Report

4.4.2 Affordability

Totalspendingonenergy

Energyaffordabilityisakeyconcernforgovernments,businessesandhouseholds.Global

direct spending on energy, i.e. the total fuel bills paid by all end users, which totalled

USD6.3trillionin2020,increasesby45%to2030and75%to2050,inlargepartreflecting

populationandGDPgrowthoverthisperiod.AsashareofglobalGDP,thefigureslookrather

different:totaldirectspendingonenergyholdssteadyataround8%outto2030(similarto

theaverageoverthelastfiveyears),butthendeclinesto6%in2050.Thisdeclineoffsetsa

significant share of the higher cost of buying new, more efficient energy‐consuming

equipment.

AportionoftheincreaseinenergyspendingintheNZEisrelatedtorisingCO

pricesandthe

removal of consumption subsidies for fossil fuels and electricity. CO

pricing(taxesand

tradingschemes)paidbyendusersatitspeakgeneratesglobalrevenuesintheNZEofclose

to USD700billion each year between 2030 and 2035, before declining steadily due to

decliningoverallemissions:theserevenuescouldberecycledintoeconomiesorotherwise

usedtoimproveconsumerwelfare,particularlyforlow‐incomehouseholds.TheNZEalso

sees the progressive removal of consumption subsidies for fossil fuels, many of which

disproportionally benefit wealthier segments of the population thatusemoreofthe

subsidised fuel. Phasing out the subsidies would provide more efficient price signals for

consumers,andspurmoreenergyconservationandmeasurestoimproveenergyefficiency.

Theimpactofphasingoutsubsidiesonlowerincomehouseholdscouldbeoffsetthrough

directpaymentschemesorothermeansatloweroverallcoststotheeconomy.

Figure 4.13

⊳ Global energy spending by fuel in the NZE

IEA.Allrightsreserved.

Total energy spending increases by 75% to 2050, mainly on electricity

Note:Other=hydrogen‐basedandsyntheticfuels,anddistrictheating.

20%

40%

60%

80%

100%

2010 2020 2030 2040 2050

Oilproducts Naturalgas Coal Electricity Bioenergy Other

2

4

6

8

10

2010 2020 2030 2040 2050

TrillionUSD(2019)



Chapter 4 | Wider implications of achieving net-zero emissions 171

4

The transformation of the global energy system in the NZE drives a major shift in the

compositionofenergyspending.SpendingonelectricityatUSD2.7trillionin2020(45%of

totalenergyspending)exceededspendingonoilproductsforthefirsttimeanditrisesto

overUSD8.5trillionin2050(80%oftotalenergyspending)(Figure4.13).Retailelectricity

pricesincreaseby50%onaverage,contributingtothetotalincrease.Spendingonoil,which

has dominated overall energy spending for decades, goes into long‐term decline in the

2020s,itsshareofspendingfallingfrom40%in2020tojust5%in2050.Spendingonnatural

gasandcoalalsodeclinesinthelongterm,offsetbyhigherspendingonlow‐emissionsfuels.

SpendingonbioenergyreachesaboutUSD900billionperyearby2040,whileotherlow‐

emissionsfuels,includinghydrogen‐basedproducts,gainafootholdandestablishamarket

worthofaroundUSD600billionperyearby2050.

Householdspendingonenergy

Directspendingbyhouseholdsonenergy,includingforheating,cooling,electricityandfuel

forpassengercars,fallsasashareofdisposableincomeintheNZE,thoughtherearelarge

differencesbetweencountries(Figure4.14).

Figure 4.14

⊳ Average annual household energy bill in the NZE

IEA.Allrightsreserved.

The proportion of disposable household income spent on energy is stable in emerging

market and developing economies, and drops substantially in advanced economies

Note:Hydrogen‐basedincludeshydrogen,ammoniaandsyntheticfuels.

Inadvancedeconomies,theaverageannualbilldeclinesfromaboutUSD2800in2020to

USD2300 in 2030, thanks to a strong push on energy efficiencyandcost‐effective

electrification.Oilproductsmakeupclosetohalfofhouseholdenergybillsin2020,butthis

fallsto30%in2030andalmostzeroin2050,duetoarapidshifttoEVsandtodownward

pressureonoilprices.Naturalgasbills,whichmakeupalmost10%ofthetotaltoday,also

500

1000

1500

2000

2500

3000

2020 2030 2050 2020 2030 2050

USD(2019)

Hydrogen‐based

Districtheating

Bioenergy

Electricity

Coal

Naturalgas

Oilproducts

Shareofincome

Advancedeconomies Emergingmarketand

developingeconomies

(rightaxis)



172 International Energy Agency | Special Report

falltoalmostzeroin2050withtheelectrificationofheatingandcooking.Electricityrises

fromabout35%ofhouseholdfuelbillsin2020to90%in2050,increasingthesensitivityof

householdstoelectricitypricesandconsumption.Increasingincomesmeanthathousehold

spendingonenergyasashareofdisposableincomedropsfrom4%in2020to2%in2050.

In emerging market and developing economies, there is a huge increase in demand for

modernenergyserviceslinkedtoexpandingpopulations,economicgrowth,risingincomes

anduniversal accessto electricity andclean cookingoptions. Asin advanced economies,

electricityaccountsforthevastmajorityofenergybillsin2050.Theuseofmoreefficient

appliancesandequipmentcurbssomeoftheincreaseindemand,buthouseholdbillsstill

increaseintheNZEbyover60%to2030andmorethandoubleby2050.Asapercentageof

disposable income, however, bills in emerging market and developingeconomies remain

around4%,andtherearelargesocialandeconomicbenefitsfromincreasedenergyuse.

Figure 4.15

⊳ Change in household spending on energy plus energy-related

investment in the NZE relative to 2020

IEA.Allrightsreserved.

Total household spending on energy increases modestly in emerging market and

developing economies, leaving over 90% of additional income available for other uses

Taking into account additional investment in electricity‐consuming equipment such as

efficient appliances and electric vehicles, spending on energy plus related investment is

USD1.30higherperdayperhouseholdgloballyin2050thanin2020intheNZE.Thismodest

increasemeansthatexpenditureonenergymakesupasmallershareofdisposableincome

in2050thanitdoestoday,thoughtheimpacts varybycountry.Inadvancedeconomies,

additionalinvestmentinelectrification,energyefficiencyandrenewableenergycostsabout

USD750perhouseholdby2030andUSD720in2050,whichisfullyoffsetbyreductionsin

the level of energy bills (Figure4.15). In emerging market and developing economies, a

‐2%

‐1%

‐1000

‐500

500

1000

2030 2050 2030 2050

USD(2019)

Other

Renewables

Energyefficiency

Electrification

Energybillper

Netchange

Netchangeshareof

Investmentrecovery

Variablecosts

disposableincome

(rightaxis)

household

Emergingmarketand

developingeconomies

Advanced

economies



Chapter 4 | Wider implications of achieving net-zero emissions 173

4

growingbasketofenergyservicesmeansincreaseduseofenergy,andtotalenergy‐related

householdspendingincreases.Additionalinvestmentmoderatesthechangeinenergybills,

withtheresultthattotalenergy‐relatedspendingtakes2percentagepointsmoreof

householddisposableincomein2030and1percentagepointmorein2050thantoday.

4.4.3 Behaviouralchanges

Behaviouralchangesplayanimportantpartinreducingenergydemandandemissionsinthe

NZE,especiallyinsectorswheretechnicaloptionsforcuttingemissionsarelimitedin2050.

While it is citizens and companies that modify their behaviour,thechangesaremostly

enabledbythepoliciesandinvestmentsmadebygovernments,andinsomeinstances,they

arerequiredbylawsorregulations.TheCovid‐19pandemichasincreasedgeneralawareness

ofthepotentialeffectivenessofbehaviouralchanges,suchasmask‐wearing,andworking

andschoolingathome.Thecrisisdemonstratedthatpeoplecanmakebehaviouralchanges

atsignificantspeedandscaleiftheyunderstandthechangestobejustified,andthatitis

necessaryforgovernmentstoexplainconvincinglyandtoprovideclearguidanceaboutwhat

changesareneededandwhytheyareneeded.

Figure 4.16

⊳ Emissions reductions from policy-driven and discretionary

behavioural changes by citizens and companies in the NZE

IEA.Allrightsreserved.

Three-quarters of the emissions saved by behavioural changes could be

directly influenced or mandated by government policies

Aroundthree‐quartersoftheemissionssavedbybehaviouralchangesbetween2020and

2050 in the NZE could be directly influenced or mandated by government policy

(Figure4.16).Theyincludemitigationmeasuressuchasphasingoutpollutingcarsfromlarge

cities and reducing speed limits on motorways. The other one‐quarter involves more

discretionary behavioural changes, such as reducing wasteful energy use in homes and

‐1500

‐1000

‐500

2030 2040 2050 2030 2040 2050

MtCO₂

Influencedormandatedbypolicies Discretionarybehaviouralchanges

Citizens Companies



174 International Energy Agency | Special Report

offices, though even these types of changes could be promoted through awareness

campaigns and other means. Around 10% of emissions savings directly influenced or

mandated by government policy would require new or redirected investment in

infrastructure.Forexample,theshiftintheNZEfromregionalflightstohigh‐speedrailwould

necessitatebuildingaround170000kilometresofnewtrackgloballyby2050(atriplingof

2020levels).

Behaviouralchangesmadebycitizensandcompaniesplayaroughlyequalroleinreducing

emissionsintheNZE.Mostchangesinroadtransportandenergy‐savinginhomeswould

dependonindividuals,whereastheprivatesectorhastheprimaryroleinreducingenergy

demand in commercial buildings and pursuing materials efficiency in manufacturing.

Companiescanalsoinfluencebehaviouralchangesindirectly,forexample,bypromotingthe

useofpublictransport by employees thatcommuteorencouraging workingfromhome.

However, a simple distinction between the role for individuals and companies masks a

complexunderlyingdynamic:itisultimatelycitizensasconsumersofenergy‐relatedgoods

andserviceswhoshapecorporatestrategies,butatthesametimecompaniesdomuchto

influenceandgenerateconsumerdemandthroughmarketingandadvertising.IntheNZE,

consumers and companies move together in adopting behavioural changes, with

governmentssettingthedirectionofthosechangesandfacilitatingthemviaeffectiveand

sustainedpolicysupport.

ThebehaviouralchangesintheNZEhappentodifferentextentsindifferent regions, and

reflectarangeofgeographicalandinfrastructureconstraints,aswellasexistingbehavioural

norms and cultural preferences. In countries with low rates of car ownership or energy

servicedemandinbuildings,manyofthebehaviouralchangesinadvancedeconomiesinNZE

wouldnotberelevantorappropriate.Asaresult,aroundhalfoftheemissionssavingsfrom

behaviouralchangesareinemergingmarketanddevelopingeconomies,despitearound95%

ofactivitygrowthinbuildingsandroadtransportbetween2020and2050occurringthere.

Nevertheless, there are significant opportunities in emerging market and developing

economies for materials efficiency and urban design to decouplegrowthineconomic

prosperityandenergyservicesfromincreasesinemissions.Forexample,around85%ofCO



emissionsreductionsfromcementandsteelmakingin2050areduetogainsinmaterials

efficiencyinemergingmarketanddevelopingeconomies.

Citiesareimportantto thebehaviouralchangesintheNZE.Urbandesigncanreducethe

averagecitydweller’scarbonfootprintbyupto60%byshaping lifestyle choices and

influencingday‐to‐daybehaviour.Forexample,compactcitieswithclusteredamenitiescan

shortenaveragetriplengths;digitalisationcanhelpsharedprivatemobilitytobecomethe

defactooptiontoaccommodatemuchofthegrowthinservicedemand;andurbangreen

infrastructurecanreducecoolingdemand(Feyisa,Dons&Meilby,2014).



Chapter 4 | Wider implications of achieving net-zero emissions 175

4

4.5 Governments

4.5.1 Energysecurity

Energysecurityisanimportantconsiderationforgovernmentsandthosetheyserve,andthe

pathwaytonet‐zeroemissionsmusttakeaccountofit.Concernsaboutenergysecurityhave

traditionally been associated with oil and natural gas supplies. The drop in oil and gas

demandandtheincreaseddiversityoftheenergysourcesusedintheNZEmayreducesome

risks,buttheydonotdisappear.Therearealsonewpotentialvulnerabilitiesassociatedwith

theneedtomaintainreliable,flexibleandsecureelectricitysystems,andwiththeincrease

in demand for raw minerals for clean energy technologies. Improving energy efficiency

remainsthecentralmeasureforincreasingenergysecurity–evenwithrapidgrowthinlow‐

emissionselectricitygeneration,thesafestenergysuppliesarethosethatarenotneeded.

Oilandgassecurity

NonewoilandnaturalgasfieldsarerequiredintheNZEbeyondthosealreadyapprovedfor

development,andsuppliesbecomeincreasinglyconcentratedinasmallnumberoflow‐cost

producers.Foroil,OPEC’sshareofglobaloilsupplygrowsfromaround37%inrecentyears

to52%in2050,alevelhigherthanatanypointinthehistoryofoilmarkets(Figure4.17).For

naturalgas,inter‐regionalliquefiednaturalgas(LNG)tradeincreasesfrom420bcmin2020

overthenextfiveyearsbutitthenfallstoaround160bcmin2050.Nearlyallexportsin2050

comefromthelowestcostandlowestemissionsproducers.Thismeansthattheimportance

ofensuringadequatesuppliesofoilandnaturalgastothesmoothfunctioningoftheglobal

energysystemwouldbequantitativelylowerin2050thantoday,butitdoesnotsuggestthat

theriskofashortfallinsupplyorsuddenpriceriseisnecessarilygoingtodiminish,anda

shortfallorsuddenpricerisewouldstillhavelargerepercussionsforanumberofsectors.

Figure 4.17

⊳ Global oil supply and LNG exports by region in the NZE



IEA.Allrightsreserved.

Increased reliance on OPEC and other producer economies suffering from falling

oil and gas revenues could pose a risk to supply security in consuming countries

10%

20%

30%

40%

50%

20

40

60

80

100

1971 2010 2050

ShareofOPEC(rightaxis)

Oil (mb/d)

OPEC

Non‐OPEC

100

200

300

400

500

1971 1990 2010 2030 2050

NorthAmerica Russia Australia

SoutheastAsia MiddleEast Africa

Other

LNGexports(bcm)



176 International Energy Agency | Special Report

Evenifthetimingandambitionofemissionreductionpoliciesareclear,thechangesinthe

NZEclearlyhaveimplicationsforproducersandconsumersalike.Manyproducereconomies

wouldseeoilandgasrevenuesdroptosomeofthelowesteverlevels(seesection4.2.2).

Even if these producers increasetheirmarketshare,anddiversify their economies and

sourcesoftaxrevenue,theyarelikelytostruggletofinanceessentialspendingatcurrent

levels.Thiscouldhaveknock‐oneffectsforsocialstability,andthatinturncouldpotentially

threatenthesmoothdeliveryofoilandgastoconsumingcountries.Movesonthepartof

producereconomiestogainmarketshareorafailuretomaintainupstreamoperationswhile

managingtheextremestrainsthatwouldbeplacedontheirfiscalbalancescouldleadto

turbulentandvolatilemarkets,greatlycomplicatingthetaskfacingpolicymakers.

Electricitysecurity

TherapidelectrificationofallsectorsintheNZE,andtheassociatedincreaseinelectricity’s

shareoftotalfinalconsumptionfrom20%in2020tonearly50%in2050,putselectricity

evenmoreattheheartofenergysecurityacrosstheworldthanitalreadyis(IEA,2020h).

Greaterrelianceonelectricityhasbothpositiveandnegativeimplicationsforoverallenergy

security. One advantage for energy‐importing countries is that they become more

self‐sufficient,sinceamuchhighershareofelectricitysupplyisbasedondomesticsources

intheNZEthanisthecaseforotherfuels.Howevertheincreasedimportanceofelectricity

meansthatanyelectricitysystem disruption would have larger impacts. Electricity

infrastructureisoftenmorevulnerabletophysicalshockssuchasextremeweatherevents

than pipelines and underground storage facilities, and climate change is likely to put

increasingpressureonelectricitysystems,forexamplethroughmorefrequentdroughtsthat

mightdecreasetheavailabilityofwaterforhydropowerandforcoolingatthermalpower

plants.Theresilienceofelectricitysystemsneedstobeenhancedtomitigatetheserisksand

maintainelectricitysecurity,includingthroughmorerobustcontingency planning, with

solutionsbasedondigitaltechnologiesandphysicalsystemhardening(IEA,2021b).

Cybersecuritycouldposeanevengreaterrisktoelectricitysecurityassystemsincorporate

moredigitalisedmonitoringandcontrolsinagrowingnumberofpowerplants,electricity

networkassetsandstoragefacilities.Policymakershaveacentralparttoplayinensuring

thatthecyberresilienceofelectricityisenhanced,andthereareanumberofwaysinwhich

theycanpursuethis(IEA,2021c).

Maintaining electricity security also requires a range of measures to ensure flexibility,

adequacyandreliabilityatall times.Enhancedelectricitysystemflexibilityisofparticular

importance as the share of variable renewables in the generation mix rises. As a

consequence,electricitysystemflexibilityquadruplesgloballyintheNZEinparallelwitha

morethantwo‐and‐ahalf‐foldincreaseinelectricitysupply.

Aportfolioofflexibilitysources

– including power plants, energy storage and demand response supported by electricity

Electricitysystemflexibilityisquantifiedherebasedonhour‐to‐hourrampingneeds,whichisonlyoneaspect

offlexibilitythatalsoincludesactionsonmuchshortertimescalestomaintainfrequencyandotherancillary

services.



Chapter 4 | Wider implications of achieving net-zero emissions 177

4

networks – is used to match supply and demand at all times of theyear,undervarying

weatherconditionsandlevelsofdemand.ThereisasignificantshiftintheNZEfromusing

coal‐ and gas‐fired power plants for the provision of flexibility to the use of renewables,

hydrogen,batterystorage,anddemand‐sideresponse(Figure4.18).

Figure 4.18

⊳ Electricity system flexibility by source in the NZE



IEA.Allrightsreserved.

To meet four-times the amount of hour-to-hour flexibility needs,

batteries and demand response step up to become the primary sources of flexibility

Electricity demand also becomes much more flexible as a result oftheuseofdemand

responsemeasures,e.g.toshiftconsumptiontotimeswhenrenewableenergyisplentiful.

Conventional sources of demand response such as moderating industry activities remain

important,butnewareasofdemandresponsesuchassmartchargingofEVsunlockvaluable

new ways of supplementing them.

 As the EV fleet expands in the NZE, EVs provide a

significant portion of total electricity system flexibility. Althoughthetechnologyalready

exists,theroll‐outofsmartcharginghasbeenslowtodateduetoinstitutionalandregulatory

barriers;thesehurdlesareovercomeintheNZE.Measuresarealsoimplementedtoensure

that the digitalisation of charging and other sources of flexibility does not compromise

cybersecurity,andthatpotentialsocialacceptanceissuesareaddressed.

Energystoragealsoplaysanimportantroleintheprovisionof flexibility in the NZE. The

deploymentofbatterystoragesystemsisalreadystartingtoaccelerateandtocontributeto

themanagementofshort‐durationflexibilityneeds,butthemassivescaleupto3100GWof

storagein2050(withfourhourdurationonaverage)envisagedintheNZEhingeson

overcomingcurrentregulatoryandmarketdesignbarriers.Pumpedhydropoweroffersan

attractivemeansofprovidingflexibilityoveramatterofhoursanddays,whilehydrogenhas

 Smartchargerssharereal‐time data with a centralised platform to allow system operators to optimise

chargingprofilesbasedonhowmuchenergythevehicleneedsoveraspecifiedspanoftime,howmuchis

available,thepriceofwholesaleelectricity,gridcongestionandotherparameters.

20% 40% 60% 80% 100%

2050

2020

2050

2020

Coal

Naturalgas

Oil

Hydrogen‐based

Nuclear

Hydro

Otherrenewables

Batteries

Demandresponse

Advanced

economies

Emerging marketand

developingeconomies



178 International Energy Agency | Special Report

thepotentialtoplayanimportantpartinlongertermseasonalstoragesinceitcanbestored

inconvertedgasstoragefacilitiesthathaveseveralordersofmagnitudemorecapacitythan

batterystorageprojects.

Dispatchablepowerisessentialtothesecuretransitionofelectricitysystems,andintheNZE

thiscomesincreasinglyfromlow‐emissionssources.Hydropowerprovidesasignificantpart

of flexibility in many electricity systems today, and this continues in the future, with

particularemphasisonexpandingpumpedhydrofacilities.Nuclearpowerandgeothermal

plants,thoughdesignedforbaseloadgeneration,alsoprovideadegreeofflexibilityinthe

NZE,butthereareconstraintsonhowmuchthesesourcescanbeexpanded.Thisleavesan

importantroleforthermalpowerplantsthatareequippedwithcarboncaptureoruselow‐

emissionsfuels.Forexample,theuseofsustainablebiomassorlow‐emissionsammoniain

existing coal plants offers a way of allowing these facilities to continue to contribute to

flexibilityandcapacityadequacy,whileatthesametimereducingCO

emissions.Additional

measureswillalsobenecessarytomaintainpowersystemstability(Box4.1).

Box 4.1

⊳ Power system stability with high shares of variable renewables

Stabilityisakeyfeatureofelectricitysecurity,allowingsystemstoremaininbalanceand

withstand disturbances such as sudden generator or grid outages. Historically,

conventional generators such as nuclear, hydro and fossil fuels have been central to

electricity system stability, providing inertia with rotating machines that allow stored

kineticenergytobeinstantlyconvertedintopowerincaseofasystemdisturbance,and

generatingavoltagesignalthathelpsallgeneratorsremainsynchronous.

Incontrast,newertechnologiessuchassolarPV,windandbatteriesareconnectedtothe

systemthroughconverters.Theygenerallydonotcontributetosysteminertiaandare

configured as “grid‐following” units, synchronising to conventional generators.

Maintainingsystemstabilitywillcallfornewapproachesastheshareofconverterbased

resources,andinparticularvariablerenewables,risesmuchhigherinelectricitysystems.

Thereisagrowingbodyofknowledgeandstudiesonstabilityinsystemswithhighshares

of variable renewables. For example, a recent joint study by the IEA and RTE, the

transmissionsystemoperatorinFrance,analysestheconditionsunderwhichitwouldbe

technicallyfeasibletointegratehighsharesofvariablerenewablesinFrance(IEA,2021d).

Basedonthefindingsofthisstudy:

 Oneoptiontoensurestabilityforanetzeropowersystemistomaintainaminimum

amountofconventionalgenerationfromlow‐carbontechnologiesduringhoursof

highsharesVREoutput.Thisapproachtomaintainstabilitycomesatthecostofsolar

andwindcurtailmentathighshares.

 Updatedgridcodescanbeusedtocallforvariablerenewablesand batteries to

provide fast frequency response services, which can help reducetheamountof

conventionalgenerationneededforstability.



Chapter 4 | Wider implications of achieving net-zero emissions 179

4

 Synchronouscondensersareabletoprovideinertiawithoutgeneratingelectricity.

The technology is already proven at GW‐scale in Denmark and also in South

Australia,butexperienceneedstobeexpandedatlargerscale.

 Grid‐formingconverterscanallowvariablerenewablesandbatteriestogeneratea

voltagesignal,thoughexperiencewiththisapproachneedstomovebeyondmicro‐

gridsandsmallislandstolargeinterconnectedsystems.

Demonstrationprojects,stakeholderconsultationsandinternationalcollaborationwill

becriticaltofullyunderstandthemeritsofeachofthesefourapproachesandthescope

foraportfolioofoptionsthatwould most cost‐effectively achievenetzeroemissions

whilemaintainingelectricitysecurity.

Electricitynetworkssupportandenabletheuseofallsourcesofflexibility,balancingdemand

andsupplyoverlargeareas.Timelyinvestmentingridstominimisecongestionandexpand

thesizeoftheareaswheresupplyanddemandarebalancedwillbecriticaltomakingthe

best use of solar PV and wind projects, and ensuring affordable and reliable supplies of

electricity.Expandinglong‐distancetransmissionalsomakesakeycontributionintheNZE,

sincealackofavailablelandneardemandcentresandotherfactorsmeannewsourcesof

generationareoftenlocatedinremoteareas.Itisimportantthatnewtransmissionsystems

are built with variable, bidirectional operation in mind in ordertomaximisetheuseof

availableflexibilitysources,andthatregulatoryandmarketarrangementssupportflexible

connections between systems. The key value of interconnections comes from

complementary electricity demand andwindpatterns:solarPVoutput is more highly

correlatedthanwindoverlargeareas.

TheNZEseesamajorincreaseindemandforcriticalmineralssuchascopper,lithium,nickel,

cobaltandrareearthelementsthatareessentialformanycleanenergytechnologies.There

areseveralpotentialvulnerabilitiesthatcouldhindertheadequatesupplyoftheseminerals

andleadtopricevolatility(IEA,2021a).Today’sproductionandprocessingoperationsfor

many minerals are highly concentrated in a small number of countries, making supplies

vulnerabletopoliticalinstability,geopoliticalrisksandpossibleexportrestrictions.Inmany

cases,therearealsoconcernsabout land‐use changes, competition for scarce water

resources,corruptionandmisuseofgovernmentresources,fatalitiesandinjuriestoworkers,

andhumanrightsabuses,includingtheuseofchildlabour.Newcriticalmineralprojectscan

havelongleadtimes,sotherapidincreaseindemandintheNZEcouldleadtoamismatch

intimingbetweensupplyanddemand.Theinternationaltradeandinvestmentregimeiskey

tomaintainingreliablemineralsupplies,butpolicysupportandinternationalco‐ordination

willbeneededtoensuretheapplicationofrigorousenvironmentalandsocialregulations.



180 International Energy Agency | Special Report

4.5.2 Infrastructure

Gettingtonet‐zeroemissionswillrequirehugeamountsofnewinfrastructureandlotsof

modifications to existing assets. Energy infrastructure is transformedintheNZEasall

countries and regions move from systems supporting the use of fossil fuels and the

distributionofconventionallygeneratedelectricitytosystemsbasedlargelyonrenewable

electricityandlow‐emissionsfuels.Inmanyemergingmarketanddevelopingeconomies,the

provisionoflargeamountsofinfrastructurewouldbenecessaryinthecomingdecadesin

anycase,creatingawindowofopportunitytosupportthetransitiontoanet‐zeroemissions

economy.Inall countries, governmentswill play a centralrole in planning, financingand

regulatingthedevelopmentofinfrastructure.Someofthemaininfrastructurecomponents

–electricitynetworksandEVcharging,pipelinessystemsforlow‐emissionsfuelsandCO

,

andtransportinfrastructure–arediscussedbelow.

TherapidincreaseinelectricitydemandintheNZEandthetransitiontorenewableenergy

callforanexpansionandmodernisationofelectricitynetworks (Figure4.19). This would

requireasharpreversalintherecenttrendofdeclininginvestment:failuretoachievethis

wouldalmostcertainlymaketheenergytransitionfornet‐zeroemissionsimpossible.Tariff

designandpermittingproceduresalsoneedtoberevisedtoreflectfundamentalchangesin

theprovisionandusesofelectricity.Someofthemainconsiderationsinclude:

 Long‐distancetransmission.MostofthegrowthinrenewablesintheNZEcomesfrom

centralisedsources.Yetthebestsolarandwindresourcesareofteninremoteregions,

requiringnewtransmissionconnections.Ultrahigh‐voltagedirectcurrentsystemsare

likelytoplayanimportantroleinsupportingtransmissionoverlongdistances.

 Localdistribution.Energyefficiencygainsinhouseholdsandwideruseofrooftopsolar

PVmeansurpluselectricitywillbeavailablemoreoften,whileelectricheatpumpsand

residential EV charging points will require electricity to be more widely available.

Togetherthesedevelopmentspointtotheneedforsubstantialincreasesindistribution

networkcapacity.

 Grid substations. The massive expansion of solar PV and wind requires new grid

substations: their capacity expands by more than 57000GW in the NZE by 2030,

doublingcurrentcapacityglobally.

 EVcharging.MajornewpublicchargingnetworksarebuiltintheNZE,includinginwork

places,highwayservicestationsandresidentialcomplexes,tosupportEVexpansionand

long‐distancedrivingonhighways.

 Digitalisationofnetworks.Withalargeincreaseintheuseofconnecteddevices,the

digitalisationofgridassetssupportsmoreflexiblegridoperations,bettermanagement

ofvariablerenewablesandmoreefficientdemandresponse.



Chapter 4 | Wider implications of achieving net-zero emissions 181

4

Figure 4.19 ⊳ Annual average electricity grid expansion, replacement and

substation capacity growth in the NZE



IEA.Allrightsreserved.

Grid and substation expansion is driven largely by the massive deployment of renewables

and electrification of end-uses, with a rising digital share of infrastructure

Note:Substationcapacityhereassumesactiveelectricityisequaltoapparentelectricity.

Pipelinescontinuetoplayakeyroleinthetransmissionanddistributionofenergyinthe

NZE:

 Giventherapiddeclineoffossilfuels,significantinvestmentinnewoilandgaspipelines

arenotneededintheNZE.Howeverinvestmentisneededtolinktheproductionoflow‐

emissionsliquidsandgaseswithconsumptioncentres,andtoconvertexistingpipelines

andassociateddistributioninfrastructurefortheuseoftheselow‐emissionsfuels.Some

low‐emissionsfuels,suchasbiomethaneandsynthetichydrogen‐basedfuels,canmake

useofexistinginfrastructurewithoutanymodifications,butpurehydrogenrequiresa

retrofitofexistingpipelines.Newdedicatedhydrogeninfrastructureisalsoneededin

the NZE, for example to move hydrogenproducedinremoteareaswith excellent

renewableresourcestodemandcentres.

 The expansionofCCUS in theNZErequiresinvestment in CO

transportand storage

capacity. By 2050, 7.6Gt of CO

 is captured worldwide, requiring a large amount of

pipeline and shipping infrastructure linking the facilities where CO

 is captured with

storage sites. Industrial clusters, including ports, may offer the best near‐term

opportunities to build CO

 pipeline and hydrogen infrastructure, as the various

industries in those clusters using the new infrastructure wouldbeabletosharethe

upfrontinvestmentneeds(Figure4.20).

20%

40%

60%

2

4

6

2016‐

2021‐

2031‐

2041‐

Millionkm

Refurbishments Renewablesanddemandincrease Shareofdigitalisation(rightaxis)

Gridexpansionandreplacements

4

8

12

2016‐

2021‐

2031‐

2041‐

ThousandGW

Gridsubstationcapacitygrowth



182 International Energy Agency | Special Report

Figure 4.20 ⊳ Illustrative example of a shared CO

pipeline in an

industrial cluster

IEA.Allrightsreserved.

Deployment of technologies like CCUS and hydrogen and their enabling infrastructure

would benefit strongly from a cross-sectoral approach in industrial clusters

Transformingtransportinfrastructurerepresentsbothachallengeandanopportunity.The

challengearisesfromthepotentialincreaseintheenergyandcarbonintensityofeconomic

growthduringtheinfrastructuredevelopmentphase.

Steelandcementarethetwomain

componentsofvirtuallyallinfrastructureprojects,buttheyare also among the most

challenging sectors to decarbonise. The opportunity comes from the scope that exists in

somecountriestodevelopinfrastructurefromscratchinawaythatiscompatiblewiththe

net zero goal. Countries undergoing rapid urbanisation today can design and steer new

infrastructuredevelopmenttowardshigherurbandensityandhigh‐capacitymasstransitin

tandemwithEVchargingandlow‐emissionsfuellingsystems.

Railhasanimportant part to play astransportinfrastructure is developed.TheNZEsees

large‐scaleinvestmentinallregionsinhigh‐speedtrainstoreplacebothlong‐distancecar

driving and short‐haul aviation.Italsoseeslarge‐scaleinvestment in all regions in track,

controlsystems,rollingstockmodernisationandcombinedfreightfacilitiestoimprovespeed

andflexibilityforjust‐in‐timelogisticaloperationsandthussupportashiftoffreightfrom

roadtorail,especiallyforcontainertraffic.

ThemodellingfortheNZEincorporatestheincreaseinsteelandcementthatisrequiredtobuildadditional

transport infrastructure (roads, cars and trucks) and energy infrastructure, e.g. power plants and wind

turbines.



Chapter 4 | Wider implications of achieving net-zero emissions 183

4

4.5.3 Taxrevenuesfromretailenergysales

Theslumpinthe consumptionoffossilfuelsrequiredtogetto net‐zeroemissionswould

resultinthelossofalargeamountoftaxrevenueinmanycountries,giventhatfuelssuchas

oil‐basedtransportfuelsandnaturalgasareoftensubjectto highexciseorotherspecial

taxes.Inrecentyears,energy‐relatedtaxesaccountedforaround4%oftotalgovernment

tax revenues in advanced economies on average and 3.5% in emerging market and

developingeconomies,buttheyprovidedasmuchas10%insomecountries(OECD,2020).

Figure 4.21

⊳ Global revenues from taxes on retail sales of oil and gas in the

NZE



IEA.Allrightsreserved.

Tax revenues slump from retail sales of oil and gas

Taxrevenuefromoilandnaturalgasretailsalesfallsbycloseto90%between2020and2050

intheNZE(Figure4.21).Governmentsarelikelytoneedtorely on some combination of

othertaxrevenuesandpublicspendingreformstocompensate.Sometaxationmeasures

focusedontheenergysectorcouldbeuseful.However,anysuchtaxeswouldneedtobe

carefully designed to minimise their impact on low‐income households, as poorer

householdsspendahigherpercentageoftheirdisposableincomeonelectricityandheating.

Optionsforenergy‐relatedtaxesinclude:

 CO

prices.TheseareintroducedinallregionsintheNZE,albeitatdifferentlevelsfor

countriesandsectors,whichprovideadditionalrevenuestreams.Thereductioninoil

andnaturalgasexcisetaxesismorethancompensatedoverthenext15yearsbyhigher

revenuesfromCO

pricesrelatedtothesefuelspaidbyendusersandothersectors,but

thesetoofallastheglobalenergysystemmovestowardsnet‐zeroemissions.

 Roadfeesandcongestioncharges.Thesewouldhavetheaddedbenefitofdiscouraging

drivingandencouragingswitchingtootherlesscarbon‐intensivemodesoftransport.

200

400

600

800

1000

2010 2020 2030 2040 2050

BillionUSD(2019)

Oilexcisetax

Naturalgasexcisetax



184 International Energy Agency | Special Report

 Increasing taxation onelectricity.Highertaxesonallelectricitysalescouldgenerate

substantialrevenues,especiallysincelargeincreasesinpriceoftenhavelittleeffecton

consumption.Thismightbecounterproductive,however,asitwouldreducethecost‐

effectivenessofbothEVsandheatpumps,whichcouldslowtheiradoption,although

thisriskcouldbemitigatedbytheintroductionofCO

prices.

Naturalgasiscurrentlylesstaxedthantransportfuelsinmostcountries.Introducingand

raising CO

 prices for natural gas used in buildings, mostly for heating, would accelerate

energyefficiencyimprovementsandboostgovernmentrevenues,althoughcarewouldbe

neededtoavoiddisproportionatelyimpactinglow‐incomehouseholds.Taxingnaturalgas

used in industry would improve the competitiveness of less carbon‐intensive fuels and

technologies such as hydrogen, but would run the risk of undermining the international

competitiveness of energy‐intensive sectors and carbon leakage intheabsenceof

co‐ordinatedglobalactionorbordercarbon‐taxadjustments.

4.5.4 Innovation

Without a major accelerationin clean energy innovation, reaching net‐zero emissions by

2050willnotbeachievable.Technologiesthatareavailableonthemarkettodayprovide

nearlyalloftheemissionsreductionsrequiredto2030intheNZEtoputtheworldontrack

for net‐zero emissions by 2050. However, reaching net‐zero emissions will require the

widespreaduseafter2030oftechnologiesthatarestillunderdevelopmenttoday.In2050,

almost50% of CO

emissionsreductionsintheNZEcomefromtechnologiescurrently at

demonstrationorprototypestage(Figure4.22).Thisshareisevenhigherinsectorssuchas

heavyindustryandlong‐distancetransport.Majorinnovationeffortsarevitalinthisdecade

sothatthetechnologiesnecessaryfornet‐zeroemissionsreachmarketsassoonaspossible.

Figure 4.22

⊳ Global CO

emissions changes by technology maturity category

in the NZE



IEA.Allrightsreserved.

While the emissions reductions in 2030 mostly rely on technologies on the market, those

under development today account for almost half of the emissions reductions in 2050

‐60

‐45

‐30

‐15

15

30

2030 2050

GtCO₂

Activity

Behaviour

Mature

Marketuptake

Demonstration

Largeprototype

Smallprototype/lab

Netreductions

Onthemarket

Underdevelo

ment



Chapter 4 | Wider implications of achieving net-zero emissions 185

4

InnovationcyclesforearlystagecleanenergytechnologiesaremuchmorerapidintheNZE

thanwhathastypicallybeenachievedhistorically,andmostcleanenergytechnologiesthat

havenotbeendemonstratedatscaletodayreachmarketsby2030atthelatest.Thismeans

thetimefromfirstprototypetomarketintroductionisonaverage20%fasterthanthefastest

energytechnologydevelopmentsinthepast,andaround40%fasterthanwasthecasefor

solarPV (Figure4.23).Technologies at the demonstration stage,such as CCUSin cement

productionorlow‐emissionsammonia‐fuelledships,arebroughtintothemarketinthenext

threetofouryears. Hydrogen‐based steel production,directaircapture (DAC) and other

technologiesatthelargeprototypestagereachthemarketinaboutsixyears,whilemost

technologiesatsmallprototypestage–suchassolidstaterefrigerant‐freecoolingorsolid

statebatteries–dosowithinthecomingnineyears.

Figure 4.23

⊳ Time from first prototype to market introduction for selected

technologies in the NZE and historical examples



IEA.Allrightsreserved.

Technology development cycles are cut by around 20%

from the fastest developments seen in the past

Note: H

 = hydrogen; CCUS = carbon capture, utilisation and storage; LED = light‐emittingdiode; Li‐ion =

lithium‐ion.

Sources:IEAanalysisbasedonCarbonEngineering,2021;Greco,2019;Tenova,2018;Gross,2018;European

CementResearchAcademy,2012;Kamaya,2011;Zemships,2008.

Anaccelerationofthismagnitudeisclearlyambitious.Itrequirestechnologiesthatarenot

yet available on the market to be demonstrated very quickly at scale in multiple

configurationsandinvariousregionalcontexts.Inmostcases,thesedemonstrationsarerun

in parallel in the NZE. This is in stark contrast with typical practice in technology

development:learningisusuallytransferredacrossconsecutivedemonstrationprojectsin

differentcontextstobuildconfidencebeforewidespreaddeploymentcommences.

Theaccelerationthatisneededalsorequiresalargeincreaseininvestmentindemonstration

projects.IntheNZE,USD90billionismobilisedassoonaspossibletocompleteaportfolio

1950 1960 1970 1980 1990 2000 2010 2020 2030

H₂ship

CCUSincementproduction

H₂directreducediron

Directaircapture

Solid‐statebattery

Solid‐statecooling

LEDs

Windpower

SolarPV

Li‐ionbattery

Smallprotoype Largeprototype Demonstration

Upto2020:

Remainingtimetomarket‐ NZE

Years fromprototypetomarket

Fasthistoricalexamples



186 International Energy Agency | Special Report

ofdemonstrationprojectsbefore2030:thisismuchmorethantheroughlyUSD25billion

budgeted by governments to 2030. Most of these projects are concerned with the

electrification of end‐uses, CCUS, hydrogen and sustainable bioenergy, mainly for long‐

distancetransportandheavyindustrialapplications.

Increasedpublicfundinghelps to managetherisks of such first‐of‐a‐kindprojectsandto

leverageprivateinvestmentinresearchanddevelopment(R&D)intheNZE.Thisrepresents

a reversal of recent trends: government spending on energy R&D worldwide, including

demonstrationprojects,hasfallenasashareofGDPfromapeakofalmost0.1%in1980to

just0.03%in2019.Publicfundingalsobecomesbetteralignedwiththeinnovationsneeded

to reach net‐zero emissions. In the NZE, electrification, CCUS, hydrogen and sustainable

bioenergyaccountfornearlyhalfofthecumulativeemissionsreductionsto2050.Justthree

technologiesarecriticalinenablingaround15%ofthecumulativeemissionsreductionsin

the NZE between 2030 and 2050: advanced high‐energy density batteries, hydrogen

electrolysersandDAC.

GovernmentsdriveinnovationintheNZE

Bringingnewenergytechnologiestomarketcanoftentakeseveral decades, but the

imperativeofreachingnet‐zeroemissionsgloballyby2050meansthatprogresshastobe

muchfaster.Experiencehasshownthattheroleofgovernmentiscrucialinshorteningthe

timeneededtobringnewtechnologytomarketandtodiffuseitwidely(IEA,2020i).The

governmentroleincludeseducatingpeople,fundingR&D,providingnetworksforknowledge

exchange,protectingintellectualproperty,usingpublicprocurementtoboostdeployment,

helping companies innovate, investing in enabling infrastructure and setting regulatory

frameworksformarketsandfinance.

Knowledgetransferfromfirst‐movercountriescanalsohelpintheaccelerationneeded,and

isparticularlyimportantintheearlyphasesofadoptionwhennewtechnologiesaretypically

notcompetitivewithincumbenttechnologies.Forexample,inthecaseofsolarPV,national

laboratoriesplayedakeyroleintheearlydevelopmentphaseintheUnitedStates,projects

supporteddirectlybygovernmentinJapancreatedmarketnichesforinitialdeploymentand

governmentprocurementandincentivepoliciesinGermany,Italy, Spain, United States,

China, Australia and India fostered a global market. Lithium‐ion (Li‐ion) batteries were

initiallydevelopedthroughpublicandprivateresearchthattookplacemostlyinJapan,their

firstenergy‐relatedcommercialoperationwasmadepossibleintheUnitedStates,andmass

manufacturingtodayisprimarilyinChina.

Manyofthebiggestcleanenergytechnologychallengescouldbenefitfromamoretargeted

approachtospeedupprogress(DiazAnadon,2012;Mazzucato,2018).IntheNZE,concerted

government action leverages private sector investment and leads to advances in clean

energytechnologiesthatarecurrentlyatdifferentstagesofdevelopment.

 To 2030, the focus of government action is on bringing new zero‐ or low‐emissions

technologiestomarket.Forexample,intheNZE,steelstartstobeproducedusinglow‐

emissionshydrogenatthescaleofaconventionalsteelplant,largeshipsstartto be



Chapter 4 | Wider implications of achieving net-zero emissions 187

4

fuelled by low‐emissions ammoniaand electric trucks begin operating on solid state

batteries.Inparallel,thereisrapid acceleration in the deployment of low‐emissions

technologiesthatarealreadyavailableonthe market but thathavenotyetreached

mass market scale, bringing down the costs of manufacturing, construction and

operatingsuchtechnologiesduetolearning‐by‐doingandeconomiesofscale.

 From 2030 to 2040, technology advances are consolidated to scale up nascent low‐

emissions technologies and expand clean energy infrastructure. Clean energy

technologies that are in the laboratory or at small prototype stagetodaybecome

commercial.Forexample,fuelsarereplacedbyelectricityincementkilnsandsteam

crackersforhighvaluechemicalsproduction.

 From2040to2050,technologiesataveryearlystageofdevelopmenttodayareadopted

in promising niche markets. By 2050, clean energy technologies thatareat

demonstrationorlargeprototypestagetodaybecomemainstreamforpurchasesand

new installations, and they compete with present conventional technologies in all

regions.Forexample,ultrahigh‐energydensitybatteriesareusedinaircraftforshort

flights.

4.5.5 Internationalco‐operation

The pathway to net‐zero emissions by 2050 will require an unprecedented level of

internationalco‐operationbetweengovernments.Thisisnotonlyamatterofallcountries

participatingineffortstomeetthenetzerogoal,butalsoofallcountriesworkingtogether

in an effective and mutually beneficial manner. Achieving net‐zero emissions will be

extremelychallengingforallcountries,butthechallengesaretoughestandthe solutions

leasteasytodeliverinlowerincomecountries,andtechnicalandfinancialsupportwillbe

essential to ensure the early stage deployment of key mitigation technologies and

infrastructureinmanyofthesecountries.Withoutinternationalco‐operation,emissionswill

notfalltonetzeroby2050.

Therearefouraspectsofinternationalco‐operationthatareparticularlyimportant(Victor,

GeelsandSharpe,2019).

 Internationaldemandsignalsandeconomiesofscale.Internationalco‐operationhas

beencriticaltothecostreductionsseeninthepastformanykeyenergytechnologies.

Itcanaccelerateknowledgetransferandpromoteeconomiesofscale.Itcanalsohelp

alignthecreationofnewdemandforcleanenergytechnologiesandfuelsinoneregion

withthedevelopmentofsupplyinotherregions.Thesebenefitsneedtobeweighed

against the importance of creating domestic jobs and industrial capacities, and of

ensuringsupplychainresilience.

 Managingtradeandcompetitiveness.Industriesthatoperateinanumberofcountries

need standardisation to ensure inter‐operability. Progress on innovation and clean

energytechnologydeploymentinsectorssuchasheavyindustryhasbeeninhibitedin

the past by uncoordinated national policies and a lack of internationally agreed



188 International Energy Agency | Special Report

standards. The development of such standards could accelerate energy technology

developmentanddeployment.

 Innovation,demonstrationanddiffusion.CleanenergyR&Dandpatentingiscurrently

concentrated in a handful of places: United States, Europe, Japan, Korea and China

accountedfor more than 90% ofclean energy patentsin 2014‐18. Progress towards

net‐zero emissions would be increasedbymovingswiftlytoextend experience and

knowledgeofcleanenergytechnologiesincountriesthatarenotinvolvedintheirinitial

development,andbyfundingfirst‐of‐a‐kinddemonstrationprojectsinemergingmarket

anddevelopingeconomies.Internationalprogrammestofunddemonstrationprojects,

especiallyinsectorswheretechnologiesarelargeandcomplex,wouldacceleratethe

innovationprocess(IEA,2020i).

 Carbondioxideremoval(CDR)programmes.CDRtechnologiessuchasbioenergyand

DACequippedwithCCUSareessentialtoprovideemissionsreductionsatagloballevel.

Internationalco‐operationisneededtofundandcertifytheseprogrammes,soasto

makethemostofsuitableland,renewable energy potential and storage resources,

wherevertheymaybe.Internationalemissionstradingmechanismscouldplayarolein

offsettingemissionsinsomesectorsorareaswithnegativeemissions,thoughanysuch

mechanismswouldrequireahighdegreeofco‐ordinationtoensuremarketfunctioning

andintegrity.

The NZE assumes that international co‐operation policies, measures and efforts are

introducedtoovercomethesehurdles.Toexplorethepotentialimplicationsofafailureto

doso,wehavedevisedaLowInternationalCo‐operationCase(Box4.2).Thisexamineswhat

wouldhappenifnationaleffortstomitigateclimatechangerampupinlinewiththelevelof

effortintheNZEbutco‐operationframeworksarenotdevelopedatthesamespeed.Itshows

thatthelackofinternationalco‐operationhas a majorimpactoninnovation,technology

demonstration,marketco‐ordinationandultimatelyontheemissionspathway.

Box 4.2

⊳ Framing the Low International Co-operation Case

TodeveloptheLowInternationalCo‐operationCase,technologiesandmitigationoptions

were assessed and grouped based on their current degree of maturity and the

importanceofinternationalco‐operationtotheirdeployment.Maturetechnologiesin

marketsthatarefirmlyestablishedandthathavea lowexposuretointernationalco‐

operation are assumed to have the same deployment pathways as in the NZE.

Technologiesandmitigationoptionswhereco‐operationisneededtoachievescaleand

avoidduplication,thathavealargeexposuretointernationaltradeandcompetitiveness,

thatdependonlargeandverycapital‐intensivedemonstrationprogrammes, or that

requiresupporttocreatemarketpullandstandardisationtoensureinter‐operability,are

assumedtobedeployedmoreslowly(MalhotraandSchmidt,2020).Comparedwiththe

NZE,thesetechnologiesaredelayedby5‐10yearsintheirinitialdeploymentinadvanced

economiesandby10‐15yearsinemergingmarketanddevelopingeconomies.



Chapter 4 | Wider implications of achieving net-zero emissions 189

4

Figure 4.24 ⊳ CO

emissions in the Low International Co-operation Case

and the NZE



IEA.Allrightsreserved.

Without international co-operation, the transition to net zero would be delayed by decades

Weak international co‐operation slows the deployment of mitigation options that are

currently in the demonstration phase (Figure4.24). This includes emissions reductions in

heavyindustry,trucks,aviation,shippingandCDR.Theenergytransitionproceedsunevenly

asaresult.Overthenext20yearsintheLowInternationalCo‐operationCase,emissions

declineatarapidbutstillslowerpacethanintheNZEinelectricitygeneration,cars,light

industryandbuildings.However,emissionsreductionsaremuchslowerinotherareas.After

themid‐2030s,thepaceofemissionsreductionsworldwideslowsmarkedlyrelativetothe

NZE,andthetransitiontonetzeroisdelayedbydecades.Justover40%ofthe15GtCO

2

of

emissionsremainingin2050areinheavyindustry,wheretheslowerpaceofdemonstration

and diffusion of mitigation technologies is particularly significant (Figure4.25). A further

one‐thirdoftheresidualemissionsin2050arefromaviation,shippingandtrucks.Herethe

slowerscaleupanddiffusionofadvancedbiofuels,hydrogen‐basedfuelsandhigh‐energy

densitybatterieshindersprogress.Theabsenceofco‐operationtosupportthedeployment

ofnewprojectsinemergingmarketanddevelopingeconomiesmeans that emissions

reductionstherearemuchslowerthanintheNZE.

These results highlight the importance for governments of strengthening international

co‐operation.Astrongpushisneededtoaccelerateinnovationandthedemonstrationof

keytechnologies,especiallyforcomplextechnologiesinemergingmarketanddeveloping

economies where costs for first‐of‐a‐kind projectsaregenerally higher, and to address

concernsaboutinternationaltradeandcompetitivenesssoastoensureajusttransitionfor

all.

10

20

30

40

2010 2030 2050 2070 2090

GtCO₂

NZE

LowInternationalCo‐operationCase



190 International Energy Agency | Special Report

Figure 4.25 ⊳ CO

emissions in the Low International Co-operation Case and

the NZE in selected sectors in 2050

IEA.Allrightsreserved.

emissions in 2050 in the Low International Co-operation Case

are concentrated in the industry and transport sectors

Note:Otherenergysector=fuelproductionanddirectaircapture.



‐2

2

4

6

8

Heavy

industry

Aviationand

shipping

Trucks Electricity

generation

Otherenergy

sector

Cars Light

industry

GtCO₂

LowInternationalCo‐operationCase NZE

ANNEXES



Annex A | Tables for scenario projections 193

AnnexA

Tables for scenario projections

Generalnotetothetables

ThisannexincludesglobalhistoricalandprojecteddatafortheNet‐ZeroEmissionsby2050

scenario for the following data sets: energy supply, energy demand, gross electricity

generation and electrical capacity, carbon dioxide (CO

) emissions from fossil fuel

combustionandindustrialprocesses,andselectedeconomicandactivityindicators.

ThedefinitionsforfuelsandsectorsareinAnnexC.Commonabbreviationsusedinthetables

include: EJ = exajoules; CAAGR = compound average annual growthrate;CCUS=carbon

capture,utilisationandstorage.ConsumptionoffossilfuelsinfacilitieswithoutCCUSare

classifiedas“unabated”.

Bothinthetextofthisreportandinthetables,roundingmayleadtominordifferences

betweentotalsandthesumoftheirindividualcomponents.Growthratesarecalculatedon

acompoundaverageannualbasisandaremarked“n.a.”whenthebaseyeariszeroorthe

valueexceeds200%.Nilvaluesaremarked“‐”.

TodownloadthetablesinExcelformatgoto:iea.li/nzedata.

Datasources

Theformalbaseyearforthescenarioprojectionsis2019,asthisisthelastyearforwhicha

completepicture of energy demandandproduction is available.However, wehaveused

morerecentdatawhenavailable,andweincludeour2020estimatesforenergyproduction

anddemandinthisannex.Estimatesfortheyear2020arebasedonupdatesoftheIEA’s

GlobalEnergyReviewreportswhicharederivedfromanumberofsources,includingthe

latestmonthlydatasubmissionstotheIEA’sEnergyDataCentre,otherstatisticalreleases

fromnationaladministrations,andrecentmarketdatafromtheIEAMarketReportSeries

thatcovercoal,oil,naturalgas,renewablesandpower.

Historical data for gross electrical capacity are drawn from the S&P Global Market

Intelligence World Electric Power Plants Database (March 2020 version) and the

InternationalAtomicEnergyAgencyPRISdatabase.

Definitionalnote:A.1.Energysupplyandtransformationtable

Totalenergysupply(TES)isequivalenttoelectricityandheatgenerationplus“otherenergy

sector”excludingelectricityandheat,plustotalfinalconsumption(TFC)excludingelectricity

andheat.TESdoesnotincludeambientheatfromheatpumpsorelectricitytrade.Solarin

TESincludessolarPVgeneration,concentratingsolarpowerandfinalconsumptionofsolar

thermal.OtherrenewablesinTESincludegeothermal,andmarine(tideandwave)energy

for electricity and heat generation. Hydrogen production and biofuels production in the

otherenergysectoraccountfortheenergyinputrequiredtoproducemerchanthydrogen

(mainlynaturalgasandelectricity)andfortheconversionlossestoproducebiofuels(mainly

primary solid biomass) used in the energy sector. While not itemised separately, non‐

renewablewasteandothersourcesareincludedinTES.



194 International Energy Agency | Special Report

Definitionalnote:A.2.Energydemandtable

Sectorscomprisingtotalfinalconsumption(TFC)includeindustry(energyuseandfeedstock),

transport,buildings(residential,servicesandnon‐specifiedother)andother(agricultureand

othernon‐energyuse).Energydemandfrominternationalmarineandaviationbunkersare

includedintransporttotals.

Definitionalnote:A.3.Electricitytables

Electricity generation expressed in terawatt‐hours (TWh) and installed electrical capacity

dataexpressedingigawatts(GW)arebothprovidedonagrossbasis(i.e.includesownuse

bythegenerator).Projectedgrosselectricalcapacityisthesum of existing capacity and

additions,lessretirements.Whilenotitemisedseparately,othersourcesareincludedintotal

electricitygeneration.

Definitionalnote:A.4.CO

emissionstable

Total CO

 includes carbon dioxide emissions from the combustion of fossil fuels and

non‐renewable wastes, from industrial and fuel transformation processes (process

emissions)aswellasCO

removals.ThreetypesofCO

removalsarepresented:

 Captured and stored emissions from the combustion of bioenergy and renewable

wastes(typicallyelectricitygeneration).

 Capturedandstoredprocessemissionsfrombiofuelsproduction.

 Capturedandstoredcarbondioxidefromtheatmosphere,whichisreportedasdirect

aircarboncaptureandstorage(DACCS).

The first two entries are often reported as bioenergy with carboncaptureandstorage

(BECCS).NotethatsomeoftheCO

capturedfrombiofuelsproductionanddirectaircapture

isusedtoproducesyntheticfuels,whichisnotincludedasCO

removal.

Total CO

 captured includes the carbon dioxide captured from CCUS facilities(suchas

electricitygenerationorindustry)andatmosphericCO

capturedthroughdirectaircapture

butexcludesthatcapturedandusedforureaproduction.

Definitionalnote:A.5.Economicandactivityindicators

The emission intensity expressed in kilogrammes of carbon dioxideperkilowatt‐hour

(kgCO

/kWh)iscalculatedbasedonelectricity‐onlyplantsandtheelectricitycomponentof

combinedheatandpower(CHP)plants.



Other abbreviations used include: PPP = purchasing power parity;GJ=gigajoules;

Mt=milliontonnes;pkm=passenger‐kilometres;tkm=tonnes‐kilometres; m

=square

metres.

Toderivetheassociatedelectricity‐onlyemissionsfromCHPplants,weassumethattheheatproductionof

aCHPplantis90%efficientandtheremainderofthefuelinputisallocatedtoelectricitygeneration.

Table A.1: Energy supply and transformation

Energysupply(EJ) Shares(%) CAAGR(%)

2019 2020 2030 2040 2050 2020 2030 2050

2020‐

2030

2020‐

2050

Totalenergysupply 612 587 547 535 543 100 100 100 ‐0.7 ‐0.3

Renewables 67 69 167 295 362 12 30 67 9.3 5.7

Solar 4 5 32 78 109 1 6 20 21 11

Wind 5 6 29 67 89 1 5 16 17 9.6

Hydro 15 16 21 27 30 3 4 6 2.9 2.2

Modernsolidbioenergy 31 32 54 73 73 5 10 14 5.3 2.8

Modernliquidbioenergy 4 3 12 14 15 1 2 3 14 4.9

Moderngaseousbioenergy 2 2 5 10 14 0 1 3 10 6.4

Otherrenewables 4 5 13 24 32 1 2 6 11 6.7

Traditionaluseofbiomass 25 25 ‐ ‐ ‐ 4 ‐ ‐ n.

a. n.a.

uclear 30 29 41 54 61 5 8 11

3.5 2.4

abatednaturalgas 139 136 116 44 17 23 21 3 ‐1.6 ‐6

aturalgaswithCCUS 0 1 13 31 43 0 2 8

37 16

Oil 190

173 137 79 42 29 25 8 ‐2.3

‐4.6

ofwhichnon‐energyuse 28 27 32 31 29 5 6 5 1.4 0.2

abatedcoal 160 154 68 16 3 26 12 1

‐7.9 ‐12

alwithCCUS 0 0 4 16 14 0 1 3

60 22

lectricityandheatsectors 233 230 240 308 371 100 100 100 0.4 1.6

Renewables 36 38 107 220 284 17 44 77 11 6.9

SolarPV 2 3 25 61 84 1 10 23 24 12

Wind 5 6 29 67 89 2 12 24 17 9.6

Hydro 15 16 21 27 30 7 9 8 2.9 2.2

Bioenergy 9 10 18 35 39 4 8 10 6.3 4.6

Otherrenewables 4 4 14 30 42 2 6 11 14 8.5

Hydrogen ‐ ‐ 5 11 11 ‐ 2 3 n.

mmonia ‐ ‐ 1 2 2 ‐ 0 0 n

.a.

Nuclear 30 29 41 54 61 13 17 16 3.5 2.4

abatednaturalgas 56 55 49 4 2 24 21 0

‐1.1

‐1

aturalgaswithCCUS ‐ ‐ 1 5 5 ‐ 1 1 n.

Oil 9

 8 2 0 0 4 1 0 ‐12

‐14

abatedcoal 102 100 30 0 0 43 12 0

‐11 ‐34

alwithCCUS 0 0 3 10 7 0 1 2

55 19

Otherenergysector 57 57 61 76 91 100 100 100 0.7 1.5

Hydrogenproduction ‐ 0 21 49 70 0 35 77 66 23

Biofuelsproduction 5 6 12 15 12 10 20 13 8 2.7

Annex A | Tables for scenario projections

195

Table A.2: Energy demand

Energydemand(EJ) Shares(%) CAAGR(%)

2019 2020 2030 2040 2050 2020 2030 2050

2020‐

2030

2020‐

2050

Totalfinalconsumption 435 412 394 363 344 100 100 100 ‐0.4 ‐0.6

Electricity 82 81 103 140 169 20 26 49 2.4 2.5

Liquidfuels 175 158 143 96 66 38 36 19 ‐1.0 ‐2.9

Biofuels 4 3 12 14 15 1 3 4 14 4.9

Ammonia ‐ ‐ 1 3 5 ‐ 0 1 n

.a.

Syntheticoil ‐ ‐ 0 2 5 ‐ 0 1 n.a. n.a.

il 171 154 129 77 42 37 33 12 ‐1.8 ‐4.2

Gaseousfuels 70 68 68 60 53 16 17 15

0.1 ‐0.8

Bio

methane 0 0 2 5 8 0 1 2

25 13

Hyd

rogen 0 0 6 12 20 0 2 6

54 20

yntheticmethane ‐ ‐ 0 1 4 ‐ 0 1 n.a

aturalgas 70 67 58 40 20 16 15 6

‐1.4 ‐4.0

olidfuels 92 89 61 46 35 22 16 10 ‐

3.6 ‐3.0

Biomass 39 39 24 25 25 9 6 7 ‐4.8 ‐1.4

al 53 50 38 21 10 12 10 3 ‐2.8

‐5.3

Heat 13

13 12 9 6 3 3 2 ‐

1.2 ‐2.7

Oth

er 3 3 7 11 15 1 2 4

8.2 5.2

Industr

y 162 157 170 169 160 100 100 100 0.8 0.1

Electricity 35 35 47 62 74 22 28 46 3.0 2.5

Liquidfuels 31 31 31 27 23 20 18 15 ‐0.2 ‐0.9

Oil 31 31 31 27 23 20 18 15 ‐0.2 ‐0.9

Gaseousfuels 32 32 35 34 28 20 21 18 1.0 ‐0.4

Biomethane 0 0 1 2 4 0 0 3 22 15

Hydrogen ‐ 0 3 4 5 0 2 3 44 15

Unabatednaturalgas 32 32 30 22 9 20 18 6 ‐0.5 ‐4.0

NaturalgaswithCCUS 0 0 1 5 7 0 1 4 38 18

Solidfuels 58 52 51 40 30 34 30 18 ‐0.3 ‐1.9

Biomass 10 9 15 19 20 6 9 13 5.2 2.8

Unabatedcoal 48 44 35 15 3 28 20 2 ‐2.3 ‐9.0

CoalwithCCUS 0 0 1 5 7 0 1 4 91 31

Heat 6 6 6 3 2 4 3 1 ‐1.2 ‐4.5

Other 0 0 1 3 4 0 1 2 33 14

Ironandsteel 36 33 37 36 32 21 22 20 1.1 ‐0.2

Chemicals 22 20 26 26 25 13 15 15 2.7 0.7

Cement 12 16 11 11 10 10 7 7 ‐3.3 ‐1.3

International Energy Agency | Special Report196

Table A.2: Energy demand

Energydemand(EJ) Shares(%) CAAGR(%)

2019 2020 2030 2040 2050 2020 2030 2050

2020‐

2030

2020‐

2050

Transport 122 105 102 85 80 100 100 100 ‐0.3 ‐0.9

Electricity 1 1 7 22 35 1 7 44 17 11

Liquidfuels 115 99 89 53 30 94 87 38 ‐1.0 ‐3.9

Biofuels 4 3

11 12 11

3

11 14 14 4.3

Oil 111 96 76 35 9 91 74 12 ‐2.2 ‐7.4

Gaseousfuels 5 5 6 10 15 5 6 18 2.1 3.7

Biomethane 0 0 1 1 2 0 0 2 23 11

Hydrogen 0 0 1 6 13 0 1 16 92 34

Naturalgas 5 5 4 2 0 5 4 0 ‐1.5 ‐11

Road 90 81 73 57 50 77 72 63 ‐0.9 ‐1.6

Passengercars 47 41 30 19 17 39 29 21 ‐3.1 ‐2.9

Trucks 27 25 28 24 22 24 27 28 1.1 ‐0.4

Aviation 14 8 13 13 14 8 13 18 4.6 1.7

Shipping 12 11 11 10 10 10 11 12 0.4 ‐0.3

Buildings 129 127 99 89 86 100 100 100 ‐2.4 ‐1.3

Electricity 43 42 45 51 57 33 46 66 0.7 1.0

Liquidfuels 13 13 9 4 2 10 10 2 ‐3.2 ‐6.0

Biofuels 0 0 0 1 1 0 0 1 26 12

Oil 13 13 9 4 1 10 9 1 ‐3.4 ‐7.7

Gaseousfuels 30 28 23 13 6 22 23 7 ‐2.1 ‐4.9

Biomethane 0 0 1 2 2 0 1 2 29 11

Hydrogen ‐ 0 2 2 2 0 2 2 103 27

Naturalgas 30 28 19 7 1 22 20 1 ‐3.8 ‐12

Solidfuels 34 34 10 7 6 27 10 7 ‐11 ‐5.5

Modernbiomass 5 5 9 7 6 4 9 7 6.9 0.9

Traditionaluseofbiomass 25 25 ‐ ‐ ‐ 20 ‐ ‐ n.a. n

.a.

al 4 4 1 0 0 3 1 0 ‐1

2 ‐21

Heat 7

7 6 5 4 5 6 5 ‐1.

2 ‐1.6

Oth

er 2 3 5 8 11 2 5 12 7.1

4.8

Residential 91 90 67 59 58 71 67 67 ‐3.0 ‐1.5

Services 38 36 32 30 28 29 33 33 ‐1.2 ‐0.9

Other 22 23 22 20 18 100 100 100 ‐0.5 ‐0.9

Annex A | Tables for scenario projections

197

Table A.3: Electricity

ElectricityGeneration(TWh) Shares(%) CAAGR(%)

2019 2020 2030 2040 2050 2020 2030 2050

2020‐

2030

2020‐

2050

Totalgeneration 26922 26778 37316 56553 71164 100 100 100 3.4 3.3

Renewables 7153 7660 22817 47521 62333 29 61 88 12 7.2

SolarPV 665 821 6970 17031 23469 3 19 33 24 12

Wind 1423 1592 8008 18787 24785 6 21 35 18 9.6

Hydro 4294 4418 5870 7445 8461 17 16 12 2.9 2.2

Bioenergy 665 718 1407 2676 3279 3 4 5 7.0 5.2

ofwhichBECCS ‐ ‐ 129 673 842 ‐ 0 1 n.a. n.a.

CSP 14 14 204 880 1386 0 1 2 31 17

Geothermal 92 94 330 625 821 0 1 1

13 7.5

Marine 1 2 27 77 132 0 0 0 28 14

uclear 2792 2698 3777 4855 5497 10 10 8

3.4 2.4

Hyd

rogen‐based ‐ ‐ 875 1857 1713 ‐ 2 2 n.

ossilfuelswithCCUS 1 4 459 1659 1332 0 1 2

61 21

alwithCCUS 1 4 289 966 663 0 1 1

54 19

aturalgaswithCCUS ‐ ‐ 170 694 669 ‐ 0 1 n

.a.

abatedfossilfuels 16941 16382 9358 632 259 61 25 0 ‐

5.4 ‐13

Coal 9832 9426 2947 0 0 35 8 0 ‐11 ‐40

aturalgas 6314 6200 6222 626 253 23 17 0

0.0 ‐10

il 795 756 189 6 6 3 1 0 ‐13 ‐15

ElectricalCapacity(GW) Shares(%) CAAGR(%)

2019 2020 2030 2040 2050 2020 2030 2050

2020‐

2030

2020‐

2050

Totalcapacity 7484 7795 14933 26384 33415 100 100 100 6.7 5.0

Renewables 2707 2994 10293 20732 26568 38 69 80 13 7.5

SolarPV 603 737 4956 10980 14458 9 33 43 21 10

Wind 623 737 3101 6525 8265 9 21 25 15 8.4

Hydro 1306 1327 1804 2282 2599 17 12 8 3.1 2.3

Bioenergy 153 171 297 534 640 2 2 2 5.7 4.5

ofwhichBECCS ‐ ‐ 28 125 152 ‐ 0 0 n.a. n.a.

CSP 6 6 73 281 426 0 0 1 28 15

Geothermal 15 15 52 98 126 0 0 0

13 7.4

Marin

e 1 1 11 32 55 0 0 0

34 16

uclear 415 415 515 730 812 5 3 2

2.2 2.3

Hyd

rogen‐based ‐ ‐ 139 1455 1867 ‐ 1 6 n.

ossilfuelswithCCUS 0 1 81 312 394 0 1 1

66 25

alwithCCUS 0 1 53 182 222 0 0 1

59 22

aturalgaswithCCUS ‐ ‐ 28 130 171 ‐ 0 1 n.

abatedfossilfuels 4351 4368 3320 1151 677 56 22 2 ‐2

‐

6.0

oal 2124 2117 1192 432 158 27 8 0 ‐5.6 ‐8.3

Naturalgas 1788 1829 1950 679 495 23 13 1 0.6 ‐4.3

il 440 422 178 39 25 5 1 0 ‐8.3 ‐9.0

Batterystorage 11 18 585 2005 3097 0 4 9

42 19

International Energy Agency | Special Report198

Table A.4: CO

emissions

CAAGR(%)

2019 2020 2030 2040 2050

2020‐

2030

2020‐

2050

TotalCO

35926 33903 21147 6316 0

‐4.6 n.a.

Combustionactivities(+) 33499 31582 19254 6030 940 ‐4.8 ‐11

Coal 14660 14110 5915 1299 195 ‐8.3 ‐13

Oil 11505 10264 7426 3329 928 ‐3.2 ‐7.7

Naturalgas 7259 7138 5960 1929 566 ‐1.8 ‐8.1

Bioenergyandwaste

75 71 ‐48 ‐528 ‐748 n

.a.

Industr

yremovals(‐) 1 1 214 914 1186

75 28

Bio

fuelsproduction 1 1 142 385 553

68 24

Directaircap

ture ‐ ‐ 71 528 633 n.

lectricityandheatsectors 13821 13504 5816 ‐81 ‐369 ‐8.1

n.a.

oal 10035 9786 2950 102 69 ‐11 ‐15

Oil 655 628 173 6 6 ‐12 ‐14

aturalgas 3131 3089 2781 268 128 ‐1.0

‐10

Bio

energyandwaste ‐ ‐ ‐87 ‐457 ‐572 n.

Otherenerg

ysector* 1457 1472 679 ‐85 ‐368 ‐7.4

n.a.

inalconsumption* 20647 18928 14723 7011 1370 ‐2.5 ‐8.4

Coal 4486 4171 2935 1186 117 ‐3.5 ‐11

Oil 10272 9077 6973 3242 880 ‐2.6 ‐7.5

Naturalgas 3451 3332 2668 1453 303 ‐2.2 ‐7.7

Bioenergyandwaste 75 71 40 ‐70 ‐176 ‐5.6 n.a.

Industry* 8903 8478 6892 3485 519 ‐2.0 ‐8.9

Ironandsteel 2507 2349 1778 859 220 ‐2.7 ‐7.6

Chemicals 1344 1296 1199 654 66 ‐0.8 ‐9.5

Cement 2461 2334 1899 906 133 ‐2.0 ‐9.1

Transport 8290 7153 5719 2686 689 ‐2.2 ‐7.5

Road 6116 5483 4077 1793 340 ‐2.9 ‐8.9

Passengercars 3121 2746 1626 547 85 ‐5.1 ‐11

Trucks 1835 1721 1614 890 198 ‐0.6 ‐6.9

Aviation 1019 621 783 469 210 2.4 ‐3.5

Shipping 883 800 705 348 122 ‐1.3 ‐6.1

Buildings 3007 2860 1809 685 122 ‐4.5 ‐10

Residential 2030 1968 1377 541 108 ‐3.5 ‐9.2

Services 977 892 432 144 14 ‐7.0 ‐13

TotalCO

removals

1 1 317 1457 1936 79 29

TotalCO

captured

40 40 1665 5619 7602 45 19

*Includesindustrialprocessemissions.

emissions(MtCO

)

199

Annex A | Tables for scenario projections

Table A.5: Economic and Activity Indicators

Indicator CAAGR(%)

2019 2020 2030 2040 2050

2020‐

2030

2020‐

2050

Population(million) 7672 7753 8505 9155 9692 0.9 0.7

GDP(USD2019billion,PPP) 134710 128276 184037 246960 316411 3.7 3.1

GDPpercapita(USD2019,PPP) 17558 16545 21638 26975 32648 2.7 2.3

TES/GDP(GJperUSD1000,PPP) 4.543 4.578 2.973 2.164 1.716 ‐4.2 ‐3.2

TFC/GDP(GJperUSD1000,PPP) 3.231 3.208 2.139 1.468 1.086 ‐4.0 ‐3.5

TESpercapita(GJ) 79.77 75.74 64.33 58.38 56.03 ‐1.6 ‐1.0

intensityofelectricitygeneration

(kgCO

perkWh)

0.468 0.438 0.138 ‐0.001 ‐0.005 ‐11 n.a.

Activity CAAGR(%)

2019 2020 2030 2040 2050

2020‐

2030

2020‐

2050

Industrialproduction

Primarychemicals(Mt) 538 529 641 686 688 1.9 0.9

Steel(Mt) 1869 1781 1937 1958 1987 0.8 0.4

Cement(Mt) 4215 4054 4258 4129 4032 0.5 ‐0.0

15300 14261 15775 19159 24517 1.0 1.8

26646 25761 38072 49756 59990 4.0 2.9

8506 5474 10271 11573 14566 6.5 3.3

Transport

Passengercars(billionvkm)

Trucks(billiontkm)

Aviation(billionpkm)

Shipping(billiontkm)

107225 109153 155621 209905 291032 3.6 3.3

Buildings

Servicesfloorarea(millionm

)

49670 49825 58867 68576 78157 1.7 1.5

Residentialfloorarea(millionm

)

190062 192558 235745 290696 345183 2.0 2.0

Millionhouseholds 2095 2116 2435 2765 3051 1.4 1.2

International Energy Agency | Special Report

200



Annex B | Technology costs 201

AnnexB

Technology costs

Electricitygeneration

Table B.1 ⊳ Electricity generation technology costs by selected region

in the NZE

 Financing

rate

(%)

 Capitalcosts

($/kW)

Capacityfactor

(%)

Fuel,CO



andO&M

($/MWh)

LCOE

($/MWh)



All 2020 2030 2050 2020 2030 2050 2020 2030 2050 2020 2030 2050

UnitedStates  

Nuclear 8.0 5000 4800 4500 90 80 75 30 30 30 105 110 110

Coal 8.0 2100 2100 2100 20 n.a. n.a. 90 170 235 220 n.a. n.a.

GasCCGT 8.0 1000 1000 1000 55 25 n.a. 50 80 105 70 125 n.a.

SolarPV 3.7 1140 620 420 21 22 23 10 10 10 50 30 20

Windonshore 3.7 1540 1420 1320 42 43 44 10 10 10 35 35 30

Windoffshore 4.5 4040 2080 1480 42 46 48 35 20 15 115 60 40

EuropeanUnion 

Nuclear 8.0 6600 5100 4500 75 75 70 35 35 35 150 120 115

Coal 8.0 2000 2000 2000 20 n.a. n.a. 120 205 275 250 n.a. n.a.

GasCCGT 8.0 1000 1000 1000 40 20 n.a. 65 95 120 100 150 n.a.

SolarPV 3.2 790 460 340 13 14 14 10 10 10 55 35 25

Windonshore 3.2 1540 1420 1300 29 30 31 15 15 15 55 45 40

Windoffshore 4.0 3600 2020 1420 51 56 59 15 10 5 75 40 25

China 

Nuclear 7.0 2800 2800 2500 80 80 80 25 25 25 65 65 60

Coal 7.0 800 800 800 60 n.a. n.a. 75 135 195 90 n.a. n.a.

GasCCGT 7.0 560 560 560 45 35 n.a. 75 100 120 90 115 n.a.

SolarPV 3.5 750 400 280 17 18 19 10 5 5 40 25 15

Windonshore 3.5 1220 1120 1040 26 27 27 15 10 10 45 40 40

Windoffshore 4.3 2840 1560 1000 34 41 43 25 15 10 95 45 30

India 

Nuclear 7.0 2800 2800 2800 70 70 70 30 30 30 75 75 75

Coal 7.0 1200 1200 1200 50 n.a. n.a. 35 50 75 65 n.a. n.a.

GasCCGT 7.0 700 700 700 55 50 n.a. 45 45 50 55 60 n.a.

SolarPV 5.8 580 310 220 20 21 21 5 5 5 35 20 15

Windonshore 5.8 1040 980 940 26 28 29 10 10 10 50 45 40

Windoffshore 6.6 2980 1680 1180 32 37 38 25 15 10 130 70 45

Notes:O&M=operationandmaintenance;LCOE=levelisedcostof electricity; kW = kilowatt; MWh =

megawatt‐hour;CCGT=combined‐cyclegasturbine;n.a.=notapplicable.CostcomponentsandLCOEfigures

arerounded.

Sources:IEAanalysis;IRENARenewableCostingAlliance;IRENA(2020).



202 International Energy Agency | Special Report

 Major contributors to the LCOE include: overnight capital costs; capacity factor that

describes the average output over the year relative to the maximum rated capacity

(typical values provided); the cost of fuel inputs; plus operation and maintenance.

Economiclifetimeassumptionsare25yearsforsolarPV,onshoreandoffshorewind.

 Weightedaveragecostsofcapital(WACC)reflectanalysisforutility‐scalesolarPVinthe

WorldEnergyOutlook2020(IEA,2020)andforoffshorewindfromtheOffshoreWind

Outlook2019(IEA,2019).OnshorewindwasassumedtohavethesameWACCasutility‐

scalesolarPV.AstandardWACCwasassumedfornuclearpower,coal‐andgas‐fired

powerplants(7‐8%basedonthestageofeconomicdevelopment).

 Fuel,CO

andO&Mcostsreflecttheaverageoverthetenyearsfollowingtheindicated

dateintheprojections.

 Thecapitalcostsfornuclearpowerrepresentthe“nth‐of‐a‐kind”costsfornewreactor

designs,withsubstantialcostreductionsfromthefirst‐of‐a‐kindprojects.

Batteriesandhydrogen

Table B.2 ⊳ Capital costs for batteries and hydrogen production

technologies in the NZE

 2020 2030 2050

Batterypacksfortransportapplications(USD/kWh) 130‐155 75‐90 55‐80

Low‐temperatureelectrolysers(USD/kW

) 835‐1300 255‐515 200‐390

NaturalgaswithCCUS(USD/kWH

) 1155‐2010 990‐1725 935‐1625

Notes:kWh=kilowatt‐hour;kW

e

= kilowattelectric;CCUS=carbon capture, utilisation and storage; H

=

hydrogen.CapitalcostsforelectrolysersandhydrogenproductionfromnaturalgaswithCCUSareovernight

costs.

Source:IEAanalysis.



Annex C | Definitions 203

AnnexC

Definitions

This annex provides general information on terminology used throughout this report

including:unitsandgeneralconversionfactors;definitionsoffuels,processesandsectors;

regionalandcountrygroupings;andabbreviationsandacronyms.

Units

Area km

 squarekilometre

 Mha millionhectares

 

Batteries Wh/kg Watthoursperkilogramme

 

Coal Mtce milliontonnesofcoalequivalent(equals0.7Mtoe)

 

Distance km kilometre

 

Emissions ppm partspermillion(byvolume)

 tCO

 tonnesofcarbondioxide

 GtCO

‐eq gigatonnesofcarbon‐dioxideequivalent(using100‐yearglobal

warmingpotentialsfordifferentgreenhousegases)

 kgCO

‐eq kilogrammesofcarbon‐dioxideequivalent

 gCO

/km grammesofcarbondioxideperkilometre

 kgCO

/kWh kilogrammesofcarbondioxideperkilowatt‐hour

 

Energy EJ exajoule

 PJ petajoule

 TJ terajoule

 GJ gigajoule

 MJ megajoule

 boe barrelofoilequivalent

 toe tonneofoilequivalent

 ktoe thousandtonnesofoilequivalent

 Mtoe milliontonnesofoilequivalent

 MBtu millionBritishthermalunits

 kWh kilowatt‐hour

 MWh megawatt‐hour

 GWh gigawatt‐hour

 TWh terawatt‐hour

 

Gas bcm billioncubicmetres

 tcm trillioncubicmetres

 

Mass kg kilogramme(1000kg=1tonne)

 kt kilotonnes(1tonnex10

)

 Mt milliontonnes(1tonnex10

)

 Gt gigatonnes(1tonnex10

)

 



204 International Energy Agency | Special Report

Monetary USDmillion 1USdollarx10



 USDbillion 1USdollarx10



 USDtrillion 1USdollarx10



 USD/tCO

 USdollarspertonneofcarbondioxide

 

Oil kb/d thousandbarrelsperday

 mb/d millionbarrelsperday

 mboe/d millionbarrelsofoilequivalentperday

 

Power W watt(1joulepersecond)

 kW kilowatt(1wattx10

)

 MW megawatt(1wattx10

)

 GW gigawatt(1wattx10

)

 TW terawatt(1wattx10

)

Generalconversionfactorsforenergy

 

Multipliertoconvertto:

 

EJ Gcal Mtoe MBtu GWh

Convertfrom:

EJ 1 238.8x10

 23.88 9.47.8x10

 2.778x10



Gcal 4.1868x10

‐9

1 10

‐7

 3.968 1.163x10

‐3



Mtoe 4.1868x10

‐2

10

 1 3.968x10

 11630

MBtu 1.0551x10

‐9

 0.252 2.52x10

‐8

 1 2.931x10

‐4



GWh 3.6x10

‐6

 860 8.6x10

‐5

 3412 1

Note:Thereisnogenerallyaccepteddefinitionofboe;typicallytheconversionfactorsusedvaryfrom7.15to

7.40boepertoe.

Currencyconversions

Exchangerates

(2019annualaverage)

1USdollar(USD)

equals:

BritishPound 0.78

ChineseYuanRenminbi 6.91

Euro 0.89

IndianRupee 70.42

IndonesianRupiah 14147.67

JapaneseYen 109.01

RussianRuble 64.74

SouthAfricanRand 14.45

Source:OECDNationalAccountsStatistics:purchasingpowerparitiesandexchangeratesdataset,July2020.



Annex C | Definitions 205

C

Definitions

Advancedbioenergy:Sustainablefuelsproducedfromnon‐foodcropfeedstocks,whichare

capableofdeliveringsignificantlifecyclegreenhousegasemissionssavingscomparedwith

fossil fuel alternatives, and which do not directly compete withfoodandfeedcropsfor

agriculturallandorcauseadversesustainabilityimpacts.Thisdefinitiondiffersfromtheone

usedfor“advancedbiofuels”inUSlegislation,whichisbasedonaminimum50%lifecycle

greenhousegasreductionandwhich,therefore,includessugarcaneethanol.

Agriculture:Includesallenergyusedonfarms,inforestryandforfishing.

Agriculture, forestry and other land use (AFOLU) emissions: Includes greenhouse gas

emissionsfromagriculture,forestryandotherlanduse.

Ammonia(NH

):Isacompoundofnitrogenandhydrogen.Itcanbeuseddirectlyasafuelin

directcombustionprocess,andinfuelcellsorasahydrogencarrier.Tobealow‐carbonfuel,

ammoniamustbeproducedfromlow‐carbonhydrogen,thenitrogenseparatedviathe

Haberprocess,andelectricityneedsaremetbylow‐carbonelectricity.

Aviation:Thistransportmodeincludesbothdomesticandinternationalflightsandtheiruse

ofaviationfuels.Domesticaviationcoversflightsthatdepartandlandinthesamecountry;

flightsformilitarypurposesarealsoincluded.Internationalaviationincludesflightsthatland

inacountryotherthanthedeparturelocation.

Back‐upgenerationcapacity:Householdsandbusinessesconnectedtoamainpowergrid

mayalsohaveback‐upelectricitygenerationcapacitythat,intheeventofdisruption,can

provide electricity. Back‐up generators are typically fuelled with diesel or gasoline and

capacitycanbeaslittleasafewkilowatts.Suchcapacityisdistinctfrommini‐gridandoff‐

gridsystemsthatarenotconnectedtoamainpowergrid.

Biodiesel:Diesel‐equivalent,processedfuelmadefromthetransesterification(achemical

processthatconvertstriglyceridesinoils)ofvegetableoilsandanimalfats.

Bioenergy: Energy content in solid, liquid and gaseous products derived from biomass

feedstocksandbiogas.Itincludessolidbiomass,liquidbiofuelsandbiogases.

Biogas:Amixtureofmethane,carbondioxideandsmallquantitiesofothergasesproduced

byanaerobicdigestionoforganicmatterinanoxygen‐freeenvironment.

Biogases:Includebiogasandbiomethane.

Biomethane:Biomethaneisanear‐puresourceofmethaneproducedeitherbyupgrading

biogas(aprocessthatremovesanyCO

andothercontaminantspresentinthebiogas)or

through the gasification of solid biomass followed by methanation.Itisalsoknownas

renewablenaturalgas.

Buildings: The buildings sector includes energy used in residential, commercial and

institutionalbuildingsandnon‐specifiedother.Buildingenergyuseincludesspaceheating

andcooling,waterheating,lighting,appliancesandcookingequipment.



206 International Energy Agency | Special Report

Bunkers:Includesbothinternationalmarinebunkersandinternationalaviationbunkers.

Capacity credit:Proportionofthecapacitythatcanbereliablyexpectedtogenerate

electricityduringtimesofpeakdemandinthegridtowhichitisconnected.

Carboncapture,utilisationandstorage(CCUS):TheprocessofcapturingCO

emissionsfrom

fuel combustion, industrial processes or directly from the atmosphere. Captured CO



emissionscanbestoredinundergroundgeologicalformations,onshoreoroffshoreorused

asaninputorfeedstocktocreateproducts.

Clean energy: Includes renewables, energy efficiency, low‐carbon fuels, nuclear power,

batterystorageandcarboncapture,utilisationandstorage.

Cleancookingfacilities:Cookingfacilitiesthatareconsideredsafer,moreefficientandmore

environmentally sustainablethan the traditional facilities thatmakeuseofsolidbiomass

(such as a three‐stone fire). This refers primarily to improved solid biomass cookstoves,

biogassystems,liquefiedpetroleumgasstoves,ethanolandsolarstoves.

Coal:Includesbothprimarycoal(includinglignite,cokingandsteamcoal)andderivedfuels

(includingpatentfuel,brown‐coalbriquettes,coke‐ovencoke,gascoke,gas‐worksgas,coke‐

ovengas,blastfurnacegasandoxygensteelfurnacegas).Peatisalsoincluded.

Concentrating solar power (CSP): Solar thermal power/electric generation systems that

collectandconcentratesunlighttoproducehightemperatureheattogenerateelectricity.

Conventional liquid biofuels:Fuelsproducedfromfoodcropfeedstocks.Theseliquid

biofuelsarecommonlyreferredtoasfirstgenerationandincludesugarcaneethanol,starch‐

basedethanol,fattyacidmethylesther(FAME)andstraightvegetableoil(SVO).

Decomposition analysis: Statistical approach that decomposes an aggregate indicator to

quantifytherelativecontributionofasetofpre‐definedfactorsleadingtoachangeinthe

aggregate indicator. This report uses an additive index decomposition of the type

LogarithmicMeanDivisiaIndex(LMDI).

Demand‐sideintegration(DSI):Consistsoftwotypesofmeasures:actionsthatinfluence

loadshapesuchasenergyefficiencyandelectrification;andactionsthatmanageloadsuch

asdemand‐sideresponse.

Demand‐sideresponse(DSR):Describesactionswhichcaninfluencetheloadprofilesuchas

shifting the load curve in time without affecting the total electricity demand, or load

shedding such as interrupting demand for short duration or adjusting the intensity of

demandforacertainamountoftime.

Dispatchable generation:Referstotechnologieswhosepoweroutputcanbereadily

controlled‐increasedtomaximumratedcapacityordecreasedtozero‐inordertomatch

supplywithdemand.

Electricitydemand:Definedastotalgrosselectricitygenerationlessownusegeneration,

plusnettrade(importslessexports),lesstransmissionsanddistributionlosses.

Annex C | Definitions 207

C

Electricitygeneration:Definedasthetotalamountofelectricitygeneratedbypoweronlyor

combined heat and power plants including generation required for own use. This is also

referredtoasgrossgeneration.

Energy sector CO

 emissions: Carbon dioxide emissions from fuel combustion (excluding

non‐renewablewaste).Notethatthisdoesnotincludefugitiveemissionsfromfuels,CO



fromtransport,storageemissionsorindustrialprocessemissions.

EnergysectorGHGemissions:CO

emissionsfromfuel

combustionplusfugitiveandvented

methane,andnitrousoxide(N

O)emissionsfromtheenergyandindustrysectors.

Energyservices:Seeusefulenergy.

Ethanol:Referstobio‐ethanolonly.Ethanolisproducedfromfermentinganybiomasshigh

incarbohydrates.Today,ethanolismadefromstarchesandsugars,butsecond‐generation

technologieswillallowittobemadefromcelluloseandhemicellulose,thefibrousmaterial

thatmakesupthebulkofmostplantmatter.

Fischer‐Tropschsynthesis:Catalyticproductionprocessfortheproductionofsyntheticfuels.

Naturalgas,coalandbiomassfeedstockscanbeused.

Gases:Includesnaturalgas,biogases,syntheticmethaneandhydrogen.

Geothermal:Geothermalenergyisheatderivedfromthesub‐surfaceoftheearth.Water

and/orsteamcarrythegeothermalenergytothesurface.Dependingonitscharacteristics,

geothermal energy can be used for heating and cooling purposes or be harnessed to

generatecleanelectricityifthetemperatureisadequate.

Heat(end‐use):Canbeobtainedfromthecombustionoffossilorrenewablefuels,direct

geothermalorsolarheatsystems,exothermicchemicalprocessesandelectricity(through

resistanceheatingorheatpumpswhichcanextractitfromambientairandliquids).This

category refers to the wide range of end‐uses, including space and water heating, and

cookinginbuildings,desalinationandprocessapplicationsinindustry.Itdoesnotinclude

coolingapplications.

Heat (supply): Obtained from the combustion of fuels, nuclear reactors, geothermal

resourcesandthecaptureofsunlight.Itmaybeusedforheatingorcooling,orconverted

intomechanicalenergyfor transportor electricitygeneration.Commercialheatsoldis

reportedundertotalfinalconsumptionwiththefuelinputsallocatedunderelectricityand

heatsectors.

Hydrogen:Hydrogenisusedintheenergysystemtorefinehydrocarbonfuels and as an

energycarrierinitsownright.Itisalsoproducedfromother energy products for use in

chemicalsproduction.Asanenergycarrieritcanbeproducedfromhydrocarbonfuelsor

fromtheelectrolysisofwaterwithelectricity,andcanbeburnedorusedinfuelcellsfor

electricityandheatinawidevarietyofapplications.Tobelow‐carbonhydrogen,eitherthe

emissionsassociatedwithfossil‐basedhydrogenproductionmustbeprevented(forexample

by carbon capture, utilisation and storage) or the electricity input to hydrogen produced

fromwatermustbelow‐carbonelectricity.Inthisreport,final consumption of hydrogen



208 International Energy Agency | Special Report

includesdemandforpurehydrogenandexcludeshydrogenproducedandconsumedonsite

by the same entity. Demand for hydrogen‐based fuels such as ammonia or synthetic

hydrocarbonsareconsideredseparately.

Hydrogen‐based fuels: Include ammonia and synthetic hydrocarbons (gases and liquids).

Hydrogen‐basedisusedinfigurestorefertohydrogenandhydrogen‐basedfuels.

Hydropower:Theenergycontentoftheelectricityproducedinhydropowerplants,assuming

100%efficiency.Itexcludesoutputfrompumpedstorageandmarine(tideandwave)plants.

Industry:Thesectorincludesfuelusedwithinthemanufacturingandconstructionindustries.

Keyindustrybranchesincludeironandsteel,chemicalsandpetrochemicals,cement,and

pulpandpaper.Consumptionoffuelsforthetransportofgoodsisreportedaspartofthe

transportsector,whileconsumptionbyoff‐roadvehiclesisreportedunderindustry.

International aviation bunkers: Includes the deliveries of aviation fuels to aircraft for

international aviation. Fuels used by airlines for their road vehicles are excluded. The

domestic/internationalsplitisdeterminedonthebasisofdepartureandlandinglocations

andnotbythenationalityoftheairline.Formanycountriesthisincorrectlyexcludesfuels

usedbydomesticallyownedcarriersfortheirinternationaldepartures.

Internationalmarinebunkers:Coversfuelsdeliveredtoshipsofallflagsthatareengagedin

internationalnavigation.Theinternationalnavigationmaytakeplaceatsea,oninlandlakes

andwaterways,andincoastalwaters.Consumptionbyshipsengagedindomesticnavigation

isexcluded.Thedomestic/internationalsplitisdeterminedonthebasisofportofdeparture

andportofarrival,andnotbytheflagornationalityoftheship.Consumptionbyfishing

vesselsandbymilitaryforcesisexcludedandincludedinresidential,servicesandagriculture.

Investment:Allinvestmentdataandprojectionsreflectspendingacross thelifecycleofa

project,i.e.thecapitalspentisassignedtotheyearwhenitisincurred.Investmentsforoil,

gasand coal includeproduction, transformation and transportation;thoseforthepower

sector include refurbishments, uprates, new builds and replacementsforallfuelsand

technologies for on‐grid, mini‐grid and off‐grid generation, as well as investment in

transmissionanddistribution,andbattery storage.Investmentdataarepresentedinreal

termsinyear‐2019USdollarsunlessotherwisestated.

Light‐dutyvehicles(LDV):includepassengercarsandlightcommercialvehicles(grossvehicle

weight<3.5tonnes).

Liquidbiofuels:Liquidfuelsderivedfrombiomassorwastefeedstocksandincludeethanol

andbiodiesel.Theycanbeclassifiedasconventionalandadvancedliquidbiofuelsaccording

tothebioenergyfeedstocksandtechnologiesusedtoproducethemandtheirrespective

maturity. Unless otherwise stated, liquid biofuels are expressed in energy‐equivalent

volumesofgasolineanddiesel.





Annex C | Definitions 209

C

Liquids:Includesoil,liquidbiofuels(expressedinenergy‐equivalentvolumesofgasolineand

diesel),syntheticoilandammonia.

Low‐carbon electricity: Includes renewable energy technologies, hydrogen‐based

generation, nuclear power and fossil fuel power plants equippedwithcarboncapture,

utilisationandstorage.

Low‐emissions fuels: Include liquid biofuels, biogas and biomethane, hydrogen, and

hydrogen‐basedfuelsthatdonotemitanyCO

fromfossilfuelsdirectlywhenusedandalso

emitverylittlewhenbeingproduced.

Marine:Representsthemechanicalenergyderivedfromtidalmovement,wavemotionor

oceancurrentandexploitedforelectricitygeneration.

Merchanthydrogen:Hydrogenproducedbyonecompanytoselltoothers;equivalentto

hydrogenreportedintotalfinalconsumption.

Mini‐grids:Smallgridsystemslinkinganumberofhouseholdsorotherconsumers.

Modernbioenergy:Includesmodernsolidbiomass,liquidbiofuelsandbiogasesharvested

fromsustainablesources.Itexcludesthetraditionaluseofbiomass.

Modern energy access: Includes household access to a minimum level of electricity;

householdaccesstosaferandmoresustainablecookingandheatingfuels,andstoves;access

thatenablesproductiveeconomicactivity;andaccessforpublicservices.

Modernrenewables:Includesallusesofrenewableenergywiththeexceptionoftraditional

useofsolidbiomass.

Modern solid biomass:Referstotheuseofsolidbiomass in improved cookstoves and

moderntechnologiesusingprocessedbiomasssuchaspellets.

Naturalgas:Comprisesgasesoccurringindeposits,whetherliquefiedorgaseous,consisting

mainlyofmethane.Itincludesboth“non‐associated”gasoriginatingfromfieldsproducing

hydrocarbonsonlyingaseousform,and“associated”gasproducedinassociationwithcrude

oilaswellasmethanerecoveredfromcoalmines(collierygas).Naturalgasliquids(NGLs),

manufacturedgas(producedfrommunicipalorindustrialwaste,orsewage)andquantities

ventedorflaredarenotincluded.Gasdataincubicmetresareexpressedonagrosscalorific

valuebasisandaremeasuredat15°Candat760mmHg(“StandardConditions”).Gasdata

expressedintonnesofoilequivalent,mainlyforcomparisonreasonswithotherfuels,areon

anetcalorificbasis.Thedifferencebetweenthenetandthegrosscalorificvalueisthelatent

heatofvaporisationofthewatervapourproducedduringcombustionofthefuel(forgasthe

netcalorificvalueis10%lowerthanthegrosscalorificvalue).

Naturalgasliquids(NGLs):Liquidorliquefiedhydrocarbonsproducedinthemanufacture,

purificationandstabilisationofnaturalgas.Thesearethoseportionsofnaturalgaswhich

arerecoveredasliquidsinseparators,fieldfacilitiesorgasprocessingplants.NGLsinclude

butarenotlimitedtoethane(whenitisremovedfromthenaturalgasstream),propane,

butane,pentane,naturalgasolineandcondensates.

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210 International Energy Agency | Special Report

Networkgases:Includesnaturalgas,biomethane,syntheticmethaneandhydrogenblended

inagasnetwork.



Non‐energyuse:Fuelsusedforchemicalfeedstocksandnon‐energyproducts.Examplesof

non‐energyproductsincludelubricants,paraffinwaxes,asphalt,bitumen,coaltarsandoils

astimberpreservatives.

Nuclear:Referstotheprimaryenergyequivalentoftheelectricityproducedbyanuclear

plant,assuminganaverageconversionefficiencyof33%.

Off‐gridsystems:Stand‐alonesystemsforindividualhouseholdsorgroupsofconsumers.

Offshorewind:Referstoelectricityproducedbywindturbinesthatareinstalledinopen

water,usuallyintheocean.

Oil:Oilproductionincludesbothconventionalandunconventionaloil.Petroleumproducts

include refinery gas, ethane, liquid petroleum gas, aviation gasoline, motor gasoline, jet

fuels,kerosene,gas/dieseloil,heavyfueloil,naphtha,white spirit, lubricants, bitumen,

paraffin,waxesandpetroleumcoke.

Otherenergysector:Coverstheuseofenergybytransformationindustriesandtheenergy

losses in converting primary energy into a form that can be usedinthefinalconsuming

sectors.Itincludeslossesbygasworks,petroleumrefineries,coalandgastransformation

andliquefaction,biofuelsproductionandtheproductionofhydrogenandhydrogen‐based

fuels.Italsoincludesenergyownuseincoalmines,inoilandgasextraction,indirectair

capture, in biofuels production and in electricity and heat production. Transfers and

statisticaldifferencesarealsoincludedinthiscategory.

Powergeneration:Referstofueluseinelectricityplants,heatplantsandcombinedheatand

power(CHP)plants.Bothmainactivityproducerplantsandsmallplantsthatproducefuel

fortheirownuse(auto‐producers)areincluded.

Productiveuses:Energyusedtowardsaneconomicpurpose:agriculture,industry,services

andnon‐energyuse.Someenergydemandfromthetransportsector,e.g.freight,couldalso

beconsideredasproductive,butistreatedseparately.

Renewables:Includesbioenergy,geothermal,hydropower,solarphotovoltaics (PV),

concentratingsolarpower(CSP),windandmarine(tideandwave)energyforelectricityand

heatgeneration.

Residential:Energyusedbyhouseholdsincludingspaceheatingandcooling,waterheating,

lighting,appliances,electronicdevicesandcookingequipment.

Services: Energy used in commercial facilities, e.g. hotels, offices, catering, shops, and

institutionalbuildings,e.g.schools,hospitals,offices.Energyuseinservicesincludesspace

heatingandcooling,waterheating,lighting,equipment,appliancesandcookingequipment.

Shalegas:Naturalgascontainedwithinacommonlyoccurringrockclassifiedasshale.Shale

formationsarecharacterisedbylowpermeability,withmorelimitedabilityofgastoflow

through the rock than is the case with a conventional reservoir. Shale gas is generally

producedusinghydraulicfracturing.



Annex C | Definitions 211

C

Shipping/navigation: This transport sub‐sector includes both domestic and international

navigationandtheiruseofmarinefuels.Domesticnavigationcoversthetransportofgoods

orpersonsoninlandwaterwaysandfornationalseavoyages(startsandendsinthesame

countrywithoutanyintermediateforeignport).Internationalnavigationincludesquantities

of fuels delivered to merchant ships (including passenger ships) of any nationality for

consumptionduringinternationalvoyagestransportinggoodsorpassengers.

Solarphotovoltaic(PV):Electricityproducedfromsolarphotovoltaiccells.

Solid biomass: Includes charcoal, fuelwood, dung, agricultural residues, woodwasteand

othersolidwastes.

Steamcoal:Typeofcoalthatismainlyusedforheatproductionorsteam‐raisinginpower

plantsand,toalesserextent,inindustry.Typically,steamcoalisnotofsufficientqualityfor

steelmaking.Coalofthisqualityisalsocommonlyknownasthermalcoal.

Syntheticmethane:Low‐carbonsyntheticmethaneisproducedthroughthemethanationof

low‐carbonhydrogenandcarbondioxidefromabiogenicoratmosphericsource.

Synthetic oil: Low‐carbon synthetic oil produced through Fischer Tropsch conversion or

methanolsynthesisfromsyngas,amixtureofhydrogen(H

)andcarbonmonoxide(CO).

Total energy supply (TES): Represents domestic demand only and is broken down into

electricityandheatgeneration,otherenergysectorandtotalfinalconsumption.

Totalfinalconsumption(TFC):Isthesumofconsumptionbythevariousend‐usesectors.

TFCisbrokendownintoenergydemandinthefollowingsectors: industry (including

manufacturing and mining), transport, buildings (including residential and services) and

other (including agriculture and non‐energy use). It excludes international marine and

aviationbunkers,exceptatworldlevelwhereitisincludedinthetransportsector.

Totalfinalenergyconsumption(TFEC):Isavariabledefinedprimarilyfortrackingprogress

towardstarget7.2oftheUNSustainableDevelopmentGoals.Itincorporates total final

consumption(TFC)byend‐usesectorsbutexcludesnon‐energyuse.Itexcludesinternational

marineandaviationbunkers,exceptatworldlevel.Typicallythisisusedinthecontextof

calculatingtherenewableenergyshareintotalfinalenergyconsumption(Indicator7.2.1of

theSustainableDevelopmentGoals),whereTFECisthedenominator.

Totalprimaryenergydemand(TPED):Seetotalenergysupply

Traditionaluseofsolidbiomass:Referstotheuseofsolidbiomasswithbasictechnologies,

suchasathree‐stonefire,oftenwithnoorpoorlyoperatingchimneys.

Transport:Fuelsandelectricityusedinthetransportofgoodsorpeoplewithinthenational

territoryirrespectiveoftheeconomicsectorwithinwhichtheactivityoccurs.Thisincludes

fuelandelectricitydeliveredtovehiclesusingpublicroadsorforuseinrailvehicles;fuel

deliveredtovesselsfordomesticnavigation;fueldeliveredtoaircraftfordomesticaviation;

and energy consumed in the delivery of fuels through pipelines. Fuel delivered to

international marine and aviation bunkers is presented only at the world level and is

excludedfromthetransportsectoratadomesticlevel.



212 International Energy Agency | Special Report

Trucks: Includes medium trucks (gross vehicle weight 3.5‐15 tonnes) and heavy trucks

(>15tonnes).

Usefulenergy:Referstotheenergythatisavailabletoend‐userstosatisfytheirneeds.This

isalsoreferredtoasenergyservicesdemand.Asresultoftransformationlossesatthepoint

ofuse,theamountofusefulenergyislowerthanthecorrespondingfinalenergydemandfor

mosttechnologies.Equipmentusingelectricityoftenhashigherconversionefficiencythan

equipmentusing other fuels, meaningthat fora unit of energy consumed electricitycan

providemoreenergyservices.

Wind:electricityproducedbywindturbinesfromthekineticenergyofwind.

Woodyenergycrops:Short‐rotationplantingsofwoodybiomassforbioenergyproduction,

suchascoppicedwillowandmiscanthus.



Variablerenewableenergy(VRE):Referstotechnologieswhosemaximumoutputatany

timedependsontheavailabilityoffluctuatingrenewableenergyresources.VREincludesa

broadarrayoftechnologiessuchaswindpower,solarPV,run‐of‐riverhydro,concentrating

solarpower(wherenothermalstorageisincluded)andmarine(tidalandwave).

Zero‐carbon‐ready buildings: A zero‐carbon‐ready building is highly energy efficient and

eitherusesrenewableenergydirectly,oranenergysupplythatcanbefullydecarbonised,

suchaselectricityordistrictheat.

Zero‐emissionsvehicles(ZEVs):VehicleswhicharecapableofoperatingwithouttailpipeCO



emissions(batteryelectricvehiclesandfuelcellvehicles).

Regionalandcountrygroupings

Advancedeconomies:OECDregionalgroupingandBulgaria,Croatia,Cyprus

1,2

,Maltaand

Romania.

Africa:NorthAfricaandsub‐SaharanAfricaregionalgroupings.

AsiaPacific:SoutheastAsiaregionalgroupingandAustralia,Bangladesh,China,India,Japan,

Korea, Democratic People’s Republic of Korea, Mongolia, Nepal, NewZealand, Pakistan,

SriLanka,ChineseTaipei,andotherAsiaPacificcountriesandterritories.



Caspian:Armenia,Azerbaijan,Georgia,Kazakhstan,Kyrgyzstan,Tajikistan,Turkmenistanand

Uzbekistan.

CentralandSouthAmerica:Argentina,PlurinationalStateofBolivia(Bolivia),Brazil,Chile,

Colombia,CostaRica,Cuba,Curaçao,DominicanRepublic,Ecuador,ElSalvador,Guatemala,

Haiti, Honduras, Jamaica, Nicaragua, Panama, Paraguay, Peru, Suriname, Trinidad and

Tobago,Uruguay,BolivarianRepublicofVenezuela(Venezuela),andotherCentralandSouth

Americancountriesandterritories.



China:Includesthe(People'sRepublicof)ChinaandHongKong,China.



Annex C | Definitions 213

C

Figure C.1 ⊳ Main country groupings



Note:Thismapis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.

Developing Asia: Asia Pacific regional grouping excluding Australia, Japan, Korea and

NewZealand.

Emerging market and developing economies: All other countries not included in the

advancedeconomiesregionalgrouping.

Eurasia:CaspianregionalgroupingandtheRussianFederation(Russia).

Europe:EuropeanUnionregionalgroupingandAlbania,Belarus,BosniaandHerzegovina,

North Macedonia, Gibraltar, Iceland, Israel

, Kosovo, Montenegro, Norway, Serbia,

Switzerland,RepublicofMoldova,Turkey,UkraineandUnitedKingdom.

European Union: Austria, Belgium, Bulgaria, Croatia, Cyprus

1,2

, Czech Republic, Denmark,

Estonia,Finland,France,Germany,Greece,Hungary,Ireland,Italy, Latvia, Lithuania,

Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovak Republic, Slovenia,

SpainandSweden.

IEA (International Energy Agency): OECD regional grouping excluding Chile, Colombia,

Iceland,Israel,Latvia,LithuaniaandSlovenia.

LatinAmerica:CentralandSouthAmericaregionalgroupingandMexico.

MiddleEast:Bahrain,IslamicRepublicofIran(Iran),Iraq,Jordan,Kuwait,Lebanon,Oman,

Qatar,SaudiArabia,SyrianArabRepublic(Syria),UnitedArabEmiratesandYemen.

Non‐OECD:AllothercountriesnotincludedintheOECDregionalgrouping.

Non‐OPEC:AllothercountriesnotincludedintheOPECregionalgrouping.



214 International Energy Agency | Special Report

NorthAfrica:Algeria,Egypt,Libya,MoroccoandTunisia.

NorthAmerica:Canada,MexicoandUnitedStates.

OECD (Organisation for Economic Co‐operation and Development): Australia, Austria,

Belgium, Canada, Chile, Colombia, Czech Republic, Denmark, Estonia, Finland, France,

Germany, Greece, Hungary, Iceland, Ireland, Israel, Italy, Japan, Korea, Latvia, Lithuania,

Luxembourg,Mexico,Netherlands,NewZealand,Norway,Poland,Portugal,SlovakRepublic,

Slovenia,Spain,Sweden,Switzerland,Turkey,UnitedKingdomandUnitedStates.

OPEC(OrganisationofthePetroleumExportingCountries):Algeria,Angola,Republicofthe

Congo(Congo),EquatorialGuinea,Gabon,theIslamicRepublicofIran(Iran),Iraq,Kuwait,

Libya, Nigeria, Saudi Arabia, United Arab Emirates and Bolivarian Republic of Venezuela

(Venezuela).

SoutheastAsia:BruneiDarussalam,Cambodia,Indonesia,LaoPeople’sDemocraticRepublic

(Lao PDR), Malaysia, Myanmar, Philippines, Singapore, Thailand and VietNam. These

countriesareallmembersoftheAssociationofSoutheastAsianNations(ASEAN).

Sub‐SaharanAfrica:Angola,Benin,Botswana,Cameroon,RepublicoftheCongo(Congo),

Côted’Ivoire,Democratic Republic oftheCongo, Eritrea, Ethiopia, Gabon, Ghana,Kenya,

Mauritius,Mozambique,Namibia,Niger,Nigeria,Senegal,SouthAfrica,SouthSudan,Sudan,

UnitedRepublicofTanzania(Tanzania),Togo,Zambia,ZimbabweandotherAfricancountries

andterritories.



Countrynotes

NotebyTurkey:Theinformationinthisdocumentwithreferenceto“Cyprus”relatestothesouthernpartof

theisland. Thereisnosingleauthority representingbothTurkishandGreek Cypriotpeopleontheisland.

TurkeyrecognisestheTurkishRepublicofNorthernCyprus(TRNC).Untilalastingandequitablesolutionis

foundwithinthe contextoftheUnitedNations,Turkeyshallpreserveitspositionconcerning the“Cyprus

issue”.

NotebyalltheEuropeanUnionMemberStatesoftheOECDandtheEuropeanUnion:TheRepublicofCyprus

isrecognisedby allmembersof the UnitedNations with theexceptionof Turkey.Theinformation inthis

documentrelatestotheareaundertheeffectivecontroloftheGovernmentoftheRepublicofCyprus.

Individualdataarenotavailableandareestimatedinaggregatefor:Afghanistan,Bhutan,CookIslands,Fiji,

French Polynesia, Kiribati, Macau (China), Maldives, New Caledonia, Palau, Papua New Guinea, Samoa,

SolomonIslands,Timor‐LesteandTongaandVanuatu.

Individualdataarenotavailableandareestimatedinaggregatefor:Anguilla,AntiguaandBarbuda,Aruba,

Bahamas, Barbados, Belize, Bermuda, Bonaire, British Virgin Islands, Cayman Islands, Dominica, Falkland

Islands (Malvinas), French Guiana, Grenada, Guadeloupe, Guyana, Martinique, Montserrat, Saba, Saint

Eustatius,SaintKittsandNevis,SaintLucia,SaintPierreandMiquelon,SaintVincentandGrenadines,Saint

Maarten,TurksandCaicosIslands.

ThestatisticaldataforIsraelaresuppliedbyandundertheresponsibilityoftherelevantIsraeliauthorities.

TheuseofsuchdatabytheOECDand/ortheIEAiswithoutprejudicetothestatusoftheGolanHeights,East

JerusalemandIsraelisettlementsintheWestBankunderthetermsofinternationallaw.

6

Individualdataarenotavailableand areestimatedin aggregatefor:Burkina Faso,Burundi,CaboVerde,

Central African Republic, Chad, Comoros, Djibouti, Kingdom of Eswatini, Gambia, Guinea, Guinea‐Bissau,

Lesotho,Liberia,Madagascar,Malawi,Mali,Mauritania,Réunion,Rwanda,SaoTomeandPrincipe,Seychelles,

SierraLeone,SomaliaandUganda.



Annex C | Definitions 215

C

AbbreviationsandAcronyms

AFOLU agricultureforestryandotherlanduse

APC AnnouncedPledgesCase

ASEAN AssociationofSoutheastAsianNations

BECCS bioenergyequippedwithCCUS

BEV batteryelectricvehicles

CCUS carboncapture,utilisationandstorage

CDR carbondioxideremoval

CFL compactfluorescentlamp

 methane

CHP combinedheatandpower;thetermco‐generationissometimesused

CNG compressednaturalgas

CO carbonmonoxide

 carbondioxide

‐eq carbon‐dioxideequivalent

COP ConferenceofParties(UNFCCC)

CSP concentratingsolarpower

DAC directaircapture

DACCS directaircapturewithcarboncaptureandstorage

DER distributedenergyresources

DSI demand‐sideintegration

DSO distributionsystemoperator

DSR demand‐sideresponse

EAF electricarcfurnaces

EHOB extra‐heavyoilandbitumen

ETP EnergyTechnologyPerspectives

EU EuropeanUnion

EV electricvehicle

FCEV fuelcellelectricvehicle

GDP grossdomesticproduct

GHG greenhousegases

GTL gas‐to‐liquids

HEFA hydrogenatedestersandfattyacids

ICE internalcombustionengine

IEA InternationalEnergyAgency

IIASA InternationalInstituteforAppliedSystemsAnalysis

IMF InternationalMonetaryFund

IOC internationaloilcompany

IPCC IntergovernmentalPanelonClimateChange

LCC

LDVs

LowCCUSCase

light‐dutyvehicles

LCV light‐commercialvehicle

LED light‐emittingdiode

216 International Energy Agency | Special Report

LNG

LPG

MEPS

NDCs

NEA

NGLs

NGV

NOC

X

O

NZE

OECD

OPEC

PHEV

PLDV

PM

2.5



PPP

PV

R&D

RD&D

SAF

SDG



SR1.5

STEPS

T&D

TES

TFC

TFEC

TPED

UEC

UN

UNDP

UNEP

UNFCCC

UK

US

VRE

WEO

WHO

ZEV

liquefiednaturalgas

liquefiedpetroleumgas

minimumenergyperformancestandards

NationallyDeterminedContributions

NuclearEnergyAgency(anagencywithintheOECD)

naturalgasliquids

naturalgasvehicle

nationaloilcompany

nitrogenoxides

nitrousoxide

Net‐ZeroEmissionsScenario

OrganisationforEconomicCo‐operationandDevelopment

OrganizationofthePetroleumExportingCountries

plug‐inhybridelectricvehicles

passengerlight‐dutyvehicle

particulatematter

fineparticulatematter

purchasingpowerparity

photovoltaics

researchanddevelopment

research,developmentanddemonstration

sustainableaviationfuel

SustainableDevelopmentGoals(UnitedNations)

sulphurdioxide

IPCCSpecialReportontheimpactsofglobalwarmingof1.5°C

abovepre‐industriallevels

StatedPoliciesScenario

transmissionanddistribution

totalenergysupply

totalfinalconsumption

totalfinalenergyconsumption

totalprimaryenergydemand

unitenergyconsumption

UnitedNations

UnitedNationsDevelopmentProgramme

UnitedNationsEnvironmentProgramme

UnitedNationsFrameworkConventiononClimateChange

UnitedKingdom

UnitedStates

variablerenewableenergy

WorldEnergyOutlook

WorldHealthOrganization

Zero‐emissionsvehicle



Annex D | References 217

AnnexD

References

Chapter1:Announcednetzeropledgesandtheenergysector

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greenhousegasemissions,https://ec.europa.eu/clima/policies/strategies/2050_en.

IEA (International Energy Agency) (2021), Global Energy Review 2021,

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–(2020b),WorldEnergyOutlook2020,https://www.iea.org/reports/world‐energy‐outlook‐

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–(2020c), Energy Technology Perspectives 2020, https://www.iea.org/reports/energy‐

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–(2020c), World Energy Balances 2020 edition: database documentation,

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IPCC(IntergovernmentalPanelonClimateChange)(2018),GlobalWarmingof1.5°C.AnIPCC

SpecialReportontheimpactsofglobalwarmingof1.5°Cabovepre‐industriallevels,IPCC,

https://www.ipcc.ch/sr15/.

WRI and WBCSD (World Resources Institute and World Business Council for Sustainable

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Chapter2:Aglobalpathwaytonet‐zeroCO₂emissionsin2050

Amann, M. et al. (2011), "Cost‐effective control of air quality and greenhouse gases in

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e‐nationale.fr/dyn/15/textes/l15b2005_proposition‐loi.



218 International Energy Agency | Special Report

Aydin,E.,D.BrounenandN.Kok(2018),"Informationprovisionandenergyconsumption:

Evidence from a field experiment", Energy Economics, Vol. 71, pp. 403‐411.,

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Byars,M.,Y.WeiandS.Handy(2017),State‐LevelStrategiesforReducingVehicleMilesof

Travel,https://bit.ly/2LvA6nn.

Climate Assembly United Kingdom (2020), The path to net zero,

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https://propositions.conventioncitoyennepourleclimat.fr/.

DEFRA(UKDepartmentforEnvironment,Food&RuralAffairs)(2012),Londoncongestion

charge detailed assessment, https://uk‐air.defra.gov.uk/assets/documents/reports/cat09/

0505171128_London_Congestion_Charge_Detailed_Assessment.doc.

European Commission (2021), Urban Access Regulations in Europe,

https://urbanaccessregulations.eu/countries‐mainmenu‐147.

Frank, S. (2021), "Land‐based climate changemitigation potentialswithintheagendafor

sustainable development", Environmental Research Letters, Vol. 16/2, https://doi.org/

10.1088/1748‐9326/abc58a.

IEA (International Energy Agency) (2021), The Role of Critical Minerals in Clean Energy

Transitions, IEA, https://www.iea.org/reports/the‐role‐of‐critical‐minerals‐in‐clean‐energy‐

transitions.

–(2020a), World Energy Balances 2020 edition: database documentation,

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growth.

–(2020c), World Energy Investment, 2020, https://www.iea.org/reports/world‐energy‐

investment‐2020.

–(2020d),EnergyTechnologyPerspectives2020:SpecialReportonCleanEnergyInnovation,

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–(2019),TheFutureofRail,https://www.iea.org/reports/the‐future‐of‐rail.

IMF(InternationalMonetaryFund)(2020a),June2020:ACrisisLikeNoOther,AnUncertain

Recovery, https://www.imf.org/‐/media/Files/Publications/WEO/2020/Update/June/

English/WEOENG202006.ashx

–(2020b),WorldEconomicOutlookDatabase,April2020Edition,WashingtonDC.



Annex D | References 219

D

IPCC(IntergovernmentalPanelonClimateChange)(2019),ClimateChangeandLand:AnIPCC

Special Report on Climate Change, Desertification, Land Degradation, Sustainable Land

Management, Food Security, and Greenhouse Gas Fluxes in Terrestrial Ecosystems,

https://www.ipcc.ch/srccl/.

–(2018),GlobalWarmingof1.5°C.AnIPCCSpecialReportontheimpactsofglobalwarming

of1.5°Cabovepre‐industriallevelsandrelatedglobalgreenhousegasemissionpathways,in

thecontextofstrengtheningtheglobalresponsetothethreatofclimatechange,sustainable

developmentandeffortstoeradicatepoverty,https://www.ipcc.ch/sr15/.

–(2014),ClimateChange2014:SynthesisReport,ContributionofWorkingGroupsI,IIandIII

totheFifthAssessmentReportoftheIntergovernmentalPanelon Climate Change,

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Laxton, D. et al. (2010), The Global Integrated Monetary and Fiscal Model (GIMF) –

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~/media/Websites/IMF/imported‐full‐text‐pdf/external/pubs/ft/wp/2010/_wp1034.ashx.

Martin, Shaheen and Lidiker (2010), "Carsharings impact on household vehicle holdings:

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UNDESA(UnitedNationsDepartmentofEconomicandSocialAffairs)(2019),2019Revision

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https://doi.org/10.1111/gcbb.12614.



220 International Energy Agency | Special Report

Chapter3:Sectoralpathwaystonet‐zeroemissionsby2050

IEA (International Energy Agency) (2021a), The Role of Critical Minerals in Clean Energy

Transitions, https://www.iea.org/reports/the‐role‐of‐critical‐minerals‐in‐clean‐energy‐

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–(2021b),GlobalEVOutlook2020,https://www.iea.org/reports/global‐ev‐outlook‐2021.

–(2020a), The Oil and Gas Industry in Energy Transitions, https://www.iea.org/reports/

the‐oil‐and‐gas‐industry‐in‐energy‐transitions.

–(2020b),EnergyTechnologyPerspectives2020,IEA,https://www.iea.org/reports/energy‐

technology‐perspectives‐2020.

–(2019), NuclearPowerinaCleanEnergySystem, https://www.iea.org/reports/nuclear‐

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of Maritime Transport 2018, UNCTAD, https://unctad.org/en/PublicationsLibrary/

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Chapter4:Widerimplicationsofachievingnet‐zeroemissions

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European Cement Research Academy (2012), ECRA CCS Project: Report on phase III,

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Feyisa,Dons&Meilby(2014),"Efficiencyofparksinmitigatingurbanheatislandeffect:an

example from Addis Ababa", Landscape and Urban Planning, Vol. 123, pp. 87–95,

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content/uploads/2020/09/GLPGP‐Potential‐for‐BioLPG‐Production‐and‐Use‐as‐Clean‐

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Greco,A.etal.(2019),"Areviewofthestateoftheartofsolid‐statecaloriccoolingprocesses

at room‐temperature before 2019", International Journal of Refrigeration, pp. 66‐88,

https://doi.org/10.1016/j.ijrefrig.2019.06.034.

Gross,R.(2018),“Howlongdoesinnovationandcommercialisation in the energy sector

take? Historical case studies of the timescale from invention to widespread

commercialisationintheenergysupplyandend‐usetechnology”,EnergyPolicy,Vol.123,pp.

682‐299,https://doi.org/10.1016/j.enpol.2018.08.061.



Annex D | References 221

D

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Transitions, https://www.iea.org/reports/the‐role‐of‐critical‐minerals‐in‐clean‐energy‐

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–(2021d),Conditionsandrequirementsforthetechnicalfeasibilityofapowersystemwitha

highshareofrenewablesinFrancetowards2050,https://www.iea.org/reports/conditions‐

and‐requirements‐for‐the‐technical‐feasibility‐of‐a‐power‐system‐with‐a‐high‐share‐of‐

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–(2020a), World Energy Investment, 2020, https://www.iea.org/reports/world‐energy‐

investment‐2020.

–(2020b),SustainableRecovery:WorldEnergyOutlookSpecialReport,https://www.iea.org/

reports/sustainable‐recovery.

–(2020c),EnergyTechnologyPerspectives:SpecialReportonCarbonCaptureUtilisationand

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–(2020d), OutlookforBiogasandBiomethane:Prospectsfororganicgrowth,

https://www.iea.org/reports/outlook‐for‐biogas‐and‐biomethane‐prospects‐for‐organic‐

growth.

–(2020e),TheOilandGasIndustryinEnergyTransitions,https://www.iea.org/reports/the‐

oil‐and‐gas‐industry‐in‐energy‐transitions.

–(2020f),WorldEnergyOutlook2020,https://www.iea.org/reports/world‐energy‐outlook‐

2020.

–(2020g), The Role of CCUS in Low‐Carbon Power Systems, https://www.iea.org/

reports/the‐role‐of‐ccus‐in‐low‐carbon‐power‐systems.

–(2020h), Power Systems in Transition, https://www.iea.org/reports/power‐systems‐in‐

transition/electricity‐security‐matters‐more‐than‐ever.

–(2020i),EnergyTechnologyPerspectives2020:SpecialReportonCleanEnergyInnovation,

https://www.iea.org/reports/clean‐energy‐innovation.

–(2019a),TheFutureofHydrogen,https://www.iea.org/reports/the‐future‐of‐hydrogen.

–(2019b), Offshore Wind Outlook 2019, https://www.iea.org/reports/offshore‐wind‐

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