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Climate change ambitions proved ‘futile’ as fossil fuel consumption hits new highs: report

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

Commenting on the latest edition of the Energy Institute’s World Energy Statistical Review, co-authored with KPMG and Kearney, Romain Debar, Director General of the Energy Transition Institute, stressed that green ambitions are “in vain” without steps that immediately affect global warming.

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

Despite these pledges, global primary energy consumption grew by 2 percent in 2023, surpassing its 10-year average and pre-Covid-19 levels, the report said.

“COP28 and the rhetoric of world leaders on the energy transition show an ambition to reduce the world’s dependence on fossil fuels. However, this ambition is futile unless it is matched with drastic and coordinated actions that result in a real and immediate impact on climate change mitigation,” Debar said.

The report said worldwide oil consumption rose to an unprecedented level in 2023, largely due to China’s relaxation of its strict zero-pandemic policy for COVID-19.

In addition, coal use has also reached new highs.

There were some signs of impact from climate policies, with renewables taking 14.6 percent of total primary energy consumption and nuclear power bringing the combined share of low-carbon sources to over 18 percent.

Oil and gas

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

“Oil consumption in the Asia-Pacific region increased by over 5 percent to 38 million barrels per day, while China’s refining capacity surpassed the US for the first time in history, making it the largest oil refining market by capacity,” the statement said.

The Middle East, with its significant oil reserves, has seen increased activity, contributing to global oil consumption exceeding 100 million barrels per day for the first time. This recovery was particularly pronounced in the Asia-Pacific region, where oil demand rose by over 5 percent to 38 million barrels per day.

While China’s energy sector has seen remarkable growth, the US has maintained higher throughput with overall utilization at 86.6 percent compared to the Asian nation’s 81.7 percent.

Natural gas prices have seen significant declines in Europe and Asia, down 30 percent from their 2022 peaks. However, global gas production remained relatively stable. The US has emerged as the largest exporter of liquefied natural gas, overtaking Qatar, and the Asia-Pacific region, particularly China and India, is fueling increased demand.

The report states that the European gas market experienced a significant shift in 2023. European gas demand fell 7 percent, following a 13 percent decline the previous year.

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

This rebalancing of gas supply has been greatly influenced by the ongoing conflict in Ukraine, which has encouraged European countries to seek alternative sources of energy.

Fuel, renewable energy and electricity

Renewable energy continued its rapid expansion, increasing six times the rate of total primary energy consumption, according to the Energy Institute, KPMG and Kearney.

The Middle East and Asia contributed to a 25 percent increase in global electricity demand. China’s online electricity storage capacity, which accounted for nearly 50 percent of the world’s total, exemplifies the region’s drive toward sustainable energy solutions.

Fossil fuel use appears to have peaked in advanced economies. Consumption in Europe has fallen below 70 percent of primary energy for the first time since the industrial revolution, boosted by reduced demand and the growth of renewable energy. In the US, fuel consumption has fallen to 80 percent of total primary energy.

EI CEO Nick Vaith pointed out that while transition progress is slow, different energy stories are unfolding across regions.

“In advanced economies, we see signs that demand for fossil fuels is peaking, in contrast to economies in the Global South for which economic development and improved quality of life continue to fuel fossil fuel growth,” he said.

Developing economies, however, face challenges in containing fuel growth. In India, for example, fuel consumption increased by 8 percent, now accounting for 89 percent of total energy consumption.

For the first time, India used more coal than Europe and North America combined. Africa recorded a decrease in primary energy consumption by 0.5 percent, with fossil fuels accounting for 90 percent of the total and renewable sources for 6 percent of electricity.

China’s recovery from COVID-19 has led to a 6 percent increase in fuel use, although its share of primary energy has been declining since 2011, reaching 81.6 percent in 2023.

Asia’s power plant also accounted for 55 percent of global renewable energy additions, surpassing Europe in per capita energy for the first time.

“In advanced economies, we see signs that demand for fossil fuels is peaking, in contrast to economies in the Global South for which economic development and improved quality of life continue to drive fossil fuel growth,” Waite said.

The EI CEO added: “Progress on the transition is slow, but the big picture masks the different energy stories happening in different geographies.

The EI Statistical Review of World Energy has been a key resource since 1952, providing comprehensive data on global energy markets.

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