Fossil-Fuel Demand Likely to Peak Before 2030 as Renewable Uptake Rises, IEA Says

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Global demand for fossil fuels is likely to peak before the end of the decade, with mounting shocks to the global energy system caused by geopolitical uncertainty hastening the move to renewable energy, according to the International Energy Agency. The IEA, a Paris-based group of some of the world’s biggest energy users, said demand for coal, oil and natural gas should all peak this decade, with increasing use of electric vehicles and renewable energy offsetting demand for carbon-based fuel sources.

The IEA said this is the first time it has forecast that demand for all three major fossil-fuel sources would peak before 2030, with much of the shift hastened by energy shocks such as the war in Ukraine and the current conflict in the Middle East. It cited the latter as an example of why energy systems need to be diversified and strengthened.

By 2050, half of Middle Eastern seaborne oil flows are likely to be sent to Asia, up from 40% today, it said. “The global energy crisis was not a clean energy crisis, but it has focused attention on the importance of ensuring rapid, people-centered and orderly transitions." A legacy of that crisis “may be to usher in the beginning of the end of the fossil-fuel era," it said Tuesday.

Under a scenario in which stated government policies increase renewable energy usage, the share of coal, oil and natural gas in the global energy supply should fall to 73% by 2030 from around 80%, where it has remained for decades, it said. In particular, the IEA said coal demand is likely to fall sharply within the next few years from a record level in 2022 due to lower coal-based power generation and increased use of electric-arc furnaces in steel production.