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Fossil fuel and carbon output still rising globally

The United Nations is launching its report of progress by countries to get to “net zero” ahead of the start of the COP26 climate conference in Glasgow. It thinks moves have been too pedestrian.

| 4 min read

The European Union (EU) and US will be told by the United Nations (UN) that they are taking insufficient steps, China and India highly insufficient and Russia critically insufficient, according to press reports. These are the top five producers of carbon dioxide in the world.

The world is still very dependent on fossil-fuel energy. As we enter the last few days before COP 26, the world has experienced the shock of shortages of primary energy, alongside regional declines in wind and solar power. This has made many countries rush to buy more gas and coal for electricity generation. China has announced new coal mines and new coal power stations to come to keep pace with her needs. Germany has been having an argument about whether to keep its coal-based power stations going until 2038 – or whether it can bring forward closures.

The leading western companies making a living from producing coal, oil and gas are in transition to a greener future, yet they are still encountering increased world demand for their traditional products. Oil demand worldwide was 85 million barrels a day (mbpd) in 2006. It reached almost 100 mbpd just before the pandemic. It is forecast to exceed that level, making new highs more than 100 mbpd from next year onwards.

Old king coal

World coal output ten years ago was 2,317 million tons. This year, according to the International Energy Agency (IEA), it is expected to hit 3,843 million tons, an increase of 65%. China has led the growth with a 220% rise, whilst advanced countries have cut their use by 37%. Germany, Poland and Czechia in the EU remain substantial miners and users.

The annual BP study of world energy markets shows that, in the ten years to 2019, world coal output grew at 1.6% a year. This was led by Asian growth of 2.9%. Natural gas too saw increasing extraction and usage, rising by more than a fifth over the same time period. As a result of growth in coal, oil and gas, carbon dioxide emissions have also been rising worldwide. For the world as a whole over the last ten years, growth has been at 1.4% annually, with Asian growth of 2.6% offset slightly by European reductions of 1.1% a year and North America falls of 0.4% a year.

China accounted for 28% of world carbon dioxide output in 2019, the US 14.5%, India 7% and Russia 4.6%, with the EU the other member of the “top-five club”. India has been growing carbon dioxide output at 4.5% a year over the last decade, as living standards start to rise from low levels. Vietnam has increased its carbon dioxide by 10.9% as it industrialises. This makes reaching a winning world agreement more difficult, as three of the top five producers are China, India and Russia, not rich, advanced western countries determined to curb carbon output.

China is backed by various developing countries who think they need to be allowed to increase their carbon output to narrow the gap with western living standards. The more the carbon output base of the emerging world and China increases, the more difficult it will be to lower total world carbon dioxide emissions anytime soon.

A better time for oil groups – for now

Markets have given a better run to the oil and gas sector in recent months, spurred by the sharp leap in energy prices and by the short-term need for more oil, gas and coal to fuel the power stations and factories of the modern world. It also reflects the underlying reality that, for the next few years at least, much of the world is going to want more fossil-fuel energy to power its growth.

Meanwhile, in carbon conscious Europe and America, attention will concentrate on the competing technologies to power factories, power electricity stations and heat buildings. There are still disagreements and issues to be resolved over which are the best ways to deliver carbon-free fuel to transport and heating – and what are the best ways of storing electrical energy once generated. There is likely to be space for new nuclear, for large scale batteries, for hydrogen as well as for wind, solar and hydropower. Even in Europe and America, for the next decade at least, there will need to be fossil-fuel options on standby – if not in use – as the new technologies are proven and scaled up.

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Fossil fuel and carbon output still rising globally

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