New emissions data offers ‘little encouragement’ for green transition

Good morning and welcome back to Energy Source, coming to you from New York, where the city swelters in its first heatwave of the season. 

Nearly 80 million people were under alerts in the US north-east and midwest yesterday as temperatures in some municipalities reached record highs in a test to the country’s rickety power grid.

In other news, the Financial Times has a new Big Read this morning on Russia’s grip on nuclear power. Despite sanctions on its economy, the Kremlin continues to be an unrivalled exporter of nuclear power plants, building more than half of all reactors under construction globally. Read how Moscow is using these projects to wield global influence.

Today’s Energy Source dives into the latest Statistical Review of World Energy, the industry’s annual stocktake of global energy consumption. The report was published for more than 70 years by BP before it was passed over to the Energy Institute last year. The oil major remains a contributor.

Data Drill looks at a new analysis from the World Bank showing gas flaring is at a four-year high.

Thanks for reading,

Amanda

New report offers sobering view of the energy transition

Every year the Statistical Review of World Energy offers a behemoth of data on the state of the global energy market. This year’s findings highlight the world’s insatiable demand for energy and the need to speed up the pace of decarbonisation. 

Here are our four main takeaways from this year’s report: 

Fossil fuel consumption — and emissions — are at record highs

Countries burnt record amounts of oil and coal last year, sending global fossil fuel consumption and emissions to all-time highs, the Energy Institute reported. Oil demand grew 2.6 per cent, surpassing 100mn barrels per day for the first time. 

Meanwhile, the share of fossil fuels in the energy mix declined slightly by half a percentage point, but still made up more than 81 per cent of consumption. 

While EI’s estimates are largely in line with the International Energy Agency’s, its authors offer a more sombre view of the pace of the energy transition compared with the Paris-based watchdog.

“Today’s new data provides little encouragement in terms of global climate change mitigation,” said Nick Wayth, chief executive of EI. “Arguably, the transition has not even started.” 

But the outlook is uneven . . . 

The future for fossil fuels varies drastically based on where you look. In advanced economies like Europe and the United States, fossil fuel demand is likely to have peaked, says EI. 

Fossil fuel consumption in Europe fell nearly 6 per cent in 2023 from the previous year, making up less than 70 per cent of the continent’s energy mix for the first time since the industrial revolution. Gas demand fell 7 per cent, with a milder than expected winter, efficiency upgrades and changes to consumer behaviour driving the decline. 

In the US, fossil fuel demand dipped almost 2 per cent, making up 80 per cent of the energy mix. EI suggests the decline in fossil fuel demand in the world’s largest oil-producing country may continue regardless of who wins the November election. Former president Donald Trump has promised to double down on fossil fuels if re-elected and allow producers to “drill, baby drill”. 

But Wayth told reporters earlier this week that “regardless of who resides at the White House, the US seems likely to follow the European trend”.  

A different view from India and Africa 

The picture looks completely different in the global south. India ramped up its fossil fuel consumption by 8 per cent last year, consuming more coal than Europe and North America combined, says EI. 

In Africa, the continent’s energy consumption declined overall at a time when the rest of the world is burning more and more energy, a reflection of its growing energy poverty crisis. Africa’s energy demand, 90 per cent of which comes from fossil fuels, fell by 0.5 per cent last year.

“At the moment it seems that Africa can neither carbonise nor decarbonise,” said Wayth, warning that the stark transitions between advanced economies and their developing counterparts put global efforts to combat climate change at risk.

“The danger of accepting this polarised, multi-speed trend as inevitable is that it doesn’t match up to the urgency of what the climate science is telling us.” 

China is driving global renewables growth 

Renewable power generation reached a record high in 2023, jumping 12 per cent from the year prior, according to EI, with China making up more than a third of the total supply, excluding hydropower.

The world’s largest energy consumer and carbon emitter is rapidly deploying renewable power, making up more than 60 per cent of global installations last year. While China consumes about 82 per cent of its energy from fossil fuels, its emissions intensity has continued to decrease even as the country increases its appetite for energy, falling 15 per cent over the past decade.

Data Drill

Oil and gas producers are burning excess gas at four-year highs, says a new report from the World Bank this morning. 

Global gas flaring jumped 7 per cent last year, reaching 148bn cubic metres, the highest since 2019 and a reversal of the downward trend observed in the past two years, the report said. The increase in flaring is estimated to have contributed an additional 23mn tonnes of carbon dioxide emissions.

Russia, Iran, Iraq and the United States lead the world in flaring volumes, making up a little more than half of all gas burnt. The US saw one of the largest annual increases in flaring, with volumes up 21 per cent from the previous year. 

Fifty fossil fuel companies pledged to stop routine flaring by the end of the decade at the COP28 conference in Dubai last year. The burning of excess gas releases substantial amounts of carbon dioxide and methane, a potent greenhouse gas, into the atmosphere.

Job moves

• Western Energy Services appointed Gavin Lane as chief financial officer of the Canadian oilfield services company. Lane joins from Indigena Drilling.

• Gregory Cameron will succeed Christopher Bohn as executive vice-president and chief financial officer of CF Industries, a producer of hydrogen and nitrogen products.

• Linda Heller will join Solid Power, a battery start-up, as chief financial officer and treasurer. Heller joins from Swell Energy.

• Petrobras has appointed Fernando Melgarejo as chief financial officer, Sylvia dos Anjos as chief of exploration and production and Renata Baruzzi as chief of engineering, technology and innovation of the Brazilian state-controlled oil company.

• Louisiana Republican congressman Garret Graves, who serves on the US House Natural Resources Committee, said he would not seek re-election.

Power Points

Energy Source is written and edited by Jamie Smyth, Myles McCormick, Amanda Chu, Tom Wilson and Malcolm Moore, with support from the FT’s global team of reporters. Reach us at energy.source@ft.com and follow us on X at @FTEnergy. Catch up on past editions of the newsletter here.