Norway’s Equinor Calls for Faster Climate Action
Significantly stronger climate action is urgently needed to meet global warming goals, Norway’s state-owned oil and gas company Equinor warned in a report released June 6.
Current action is far from enough to put the world on a path to keep global warming well below 2 °C, the company said in a statement.
“Global emissions increased in 2018 to reach an all-time high – and the longer this continues, the stronger measures will be necessary to reach common goals. The need is ever more urgent for rapid and significant change,” the review of possible macroeconomic and energy market developments towards 2050 reads.
“The world is progressing on ensuring access to energy for more people. We also see record growth in new renewables. However, as time goes by without reductions in global CO2 emissions, the path to a sustainable future becomes ever more challenging,” says Equinor’s chief economist Eirik Waerness.
Achieving the targets of the Paris Agreement demands rapid and significant policy tightening, global co-operation, technology development and substantial changes in business and consumer behaviour, the report said.
The changes in global energy systems have to be unprecedented and far-reaching, it added. By 2050, around 50% of electricity should come from solar and wind, compared with 7% in 2018. Ninety percent of the global car fleet should be electric, compared with just 1% now.
“Transforming the energy systems is key, but we also need massive energy efficiency gains and much more carbon capture, utilisation and storage (CCUS),” said Waerness. “For every year going by without a peak in global energy-related emissions, the challenge of reducing emissions fast becomes almost exponentially greater.”
Total global energy demand grew by 2.3% in 2018, the fastest since 2010. Global consumption relies on around 100mn barrels of oil and 11bn m3 of gas every day. To reach the ambitions from Paris, Equinor’s report said peak oil demand must be reached “soon”. Projected demand in 2050 in the report’s three different scenarios ranges between 52mn-118mn barrels of oil and 9bn-13bn m3/day.
Existing oil and gas fields are not sufficient to meet this demand, Equinor notes. New resources must be brought on stream, but consistently with climate action targets. The report points at hydrogen as offering strong potential.
Interest in hydrogen as a zero-carbon fuel is on the rise. The report shows how hydrogen could become a clean alternative for the industry, heating and transport sectors that cannot easily be electrified and also an energy storage opportunity, potentially providing an additional lever to reduce global CO2 emissions.
“We want the global energy mix to transform in a sustainable direction, and we want to take part in the shaping of such a future. That is why we are developing toward a broad energy company, producing oil and gas with ever lower emissions while building a strong position within new energy solutions,” said Equinor CEO Eldar Saetre.
Equinor notes that the analysis “feeds into” its strategic priorities, but does not reflect the company’s views or strategy.
The same day, the International Energy Agency praised UK reforms promoting decarbonisation and innovation in clean energy technologies. The replacement of coal-fired generation capacity in particular has helped the country cut energy-related CO2 emissions by 40% since 1990. By 2030, the UK is forecast to see its share of variable renewables pass 50%.
“The UK has shown real results in terms of boosting investment in renewables, reducing emissions and maintaining energy security,” said the IEA’s executive director Fatih Birol. “It now faces the challenge of continuing its transition while ensuring the resilience of its energy system.”
Advisers to the UK government the Climate Change Committee say the country could be carbon-free by 2050, but there will be an economic and political cost in meeting the UK's decarbonising goals and it is not certain how society will react. Subsidies for cleaner boilers, for example, mean less money available for public services.
Finance minister Philip Hammond has told prime minister Theresa May, in a letter seen by the Financial Times, that "the total cost of transitioning to a zero-carbon economy is likely to be well in excess of £1 trillion." It would also leave some industries economically uncompetitive unless competing countries took the same action, he said.