The study includes the classification society’s most feasible route to achieving net-zero emissions by 2050 and limiting global warming to 1.5°C.
The world is a very long way off meeting these targets and the classification society labelled 2021 and 2022 as two lost years in the battle against emissions. Emission reductions of 8% every year are needed to reach net zero by 2050, and the classification society forecasts that the planet is currently on course to heat up by 2.2°C by 2100. Much greater policy intervention is required.
“The full policy toolbox must be unpacked, including higher carbon taxes and subsidies, stronger mandates, bans and financial incentive to encourage renewables to replace fossil fuels, and smarter regulation and standards,” DNV said.
The current energy crisis and concerns over supply security are highlighting the difference between Europe and the rest of the world. Gas consumption in Europe will fall dramatically as a result of the war in Ukraine, DNV said, and the continent will ‘double down’ on renewables and energy efficiency to increase its energy independence. Gas is likely to meet just 10% of energy demand by mid-century, compared with 25% today.
In lower-income regions, DNV identifies a different pattern. High energy and food prices are reversing the coal-to-gas switch and putting a dampener on decarbonisation investments. The classification society cites the Indian subcontinent as an example: that region’s share of gas in the energy mix is likely to fall from 11% to 7% over the next five years, while the share of coal will increase.
However, the latest report is not all doom and gloom. Remi Eriksen, DNV Group President and CEO, said: “The turbulence in the energy market does not dramatically alter the decarbonisation pathway towards mid-century. The strongest engine of the global energy transition is the rapidly reducing costs of solar and wind energy, which will outweigh the present short-term shocks to the energy system.”
DVV projects that non-fossil energy will nudge slightly above 50% by 2050 for the first time, largely as a result of green electricity production. This is likely to more than double over the next three decades by which time its share of the global energy mix will rise from 19% to 36%, according to DNV’s estimates. Solar PV and wind are the cheapest forms of green electricity in most locations and are expected to grow 20-fold and ten-fold by 2050, taking their share in electricity production to 38% and 31% respectively.
DNV notes that energy security is stirring new interest in nuclear power and forecasts a modest increase of 13% between now and mid-century. However, its share in the total electricity mix will still fall by 2050, from 10% today to 5%.
Eriksen stressed the need for robust policy. “With COP-27 approaching, it is important that policy makers recognise the huge opportunities inherent in decarbonising the energy mix in light of the mounting costs of climate change impact. The technology exists to achieve net-zero emissions by 2050, but for this to happen we must utilise the scope of the policy toolkit.”