RIYADH: “Drastic and coordinated actions” are needed to reduce the global reliance on fossil fuels, a climate think tank leader has warned after a new analysis showed oil and coal consumption are at record levels.
Commenting on the latest edition of the Statistical Review of World Energy by the Energy Institute, co-authored with KPMG and Kearney, Romain Debarre, managing director of the Energy Transition Institute, stressed that green ambitions are “futile” without moves that immediately impact global warming.
Countries worldwide have pledged to transform their energy systems following global deals, such as the Paris Agreement, and decisions at COP28 in Dubai – which concluded last December with a landmark agreement among 198 parties, signaling a new era of climate action.
Despite these pledges, global primary energy consumption increased by 2 percent in 2023, surpassing its 10-year average and pre-COVID-19 levels, according to the report.
“COP28 and rhetoric from world leaders on the energy transition demonstrates the ambition to reduce the world’s fossil fuel dependency. However, this ambition is futile unless it is matched with drastic and coordinated actions resulting in real and immediate impact on climate change mitigation,” said Debarre.
The report noted that oil consumption across the world surged to unprecedented levels in 2023, largely due to China’s relaxation of its stringent zero-COVID-19 policies.
Alongside this, coal use also hit new highs.
There were some signs of climate policies having an impact, with renewables’ share of total primary energy consumption up 14.6 percent, and nuclear power bringing the combined share of low-carbon sources to over 18 percent.
Oil and gas
Caption
The 73rd annual edition explained that as supply chain issues eased, most markets returned to their pre-2019 trends, marking 2023 as a year of notable recovery.
“The Asia Pacific region saw an increase of over 5 percent to 38 million barrels per day in oil consumption, while China’s refining capacity exceeded the US for the first time ever, making it the largest oil refining market by capacity,” the release said.
The Middle East, with its substantial oil reserves, saw increased activity, contributing to global oil consumption exceeding 100 million bpd for the first time. This rebound was especially pronounced in the Asia Pacific region, where oil demand rose by over 5 percent to 38 million bpd.
While China’s energy sector witnessed remarkable growth, the US retained higher throughput with an overall utilization of 86.6 percent compared to the Asian country’s 81.7 percent.
Natural gas prices saw significant declines in Europe and Asia, dropping 30 percent from their 2022 peaks. However, global gas production remained relatively stable. The US emerged as the largest exporter of liquefied natural gas, overtaking Qatar, with the Asia Pacific region, particularly China and India, driving increased demand.
The report noted that the European gas market experienced a significant shift in 2023. European gas demand fell by 7 percent, following a 13 percent decline the previous year.
Russia’s share of EU gas imports plummeted to 15 percent, down from 45 percent in 2021, as LNG imports outpaced piped gas for the second consecutive year.
This rebalancing of gas supply has been largely influenced by the ongoing conflict in Ukraine, which has prompted European countries to seek alternative energy sources.
Fuel, renewable energy, and electricity
Renewable energy continued its rapid expansion, growing six times the total primary energy consumption rate, as per the Energy Institute, KPMG, and Kearney.
The Middle East and Asia contributed to a 25 percent increase in global electricity demand. Grid-scale battery electricity storage capacity in China, which accounted for nearly 50 percent of the worldwide total, exemplified the region’s push toward sustainable energy solutions.
Fossil fuel use appears to have peaked in advanced economies. Europe’s use dropped below 70 percent of primary energy for the first time since the Industrial Revolution, driven by reduced demand and renewable power growth. The US saw fuel consumption fall to 80 percent of total primary energy.
EI CEO Nick Wayth pointed out that while the transition’s progress is slow, diverse energy stories are unfolding across regions.
“In advanced economies, we observe signs of demand for fossil fuels peaking, contrasting with economies in the Global South for whom economic development and improvements in quality of life continue to drive fossil fuel growth,” he said.
Emerging economies, however, face challenges in curbing fuel growth. In India, for example, fuel consumption rose by 8 percent, now representing 89 percent of total energy use.
For the first time, India used more coal than Europe and North America combined. Africa saw a 0.5 percent decline in primary energy consumption, with fossil fuels accounting for 90 percent of the total and renewables for 6 percent of electricity.
China’s post-COVID-19 recovery led to a 6 percent rise in fuel use, though its share of primary energy has been declining since 2011, reaching 81.6 percent in 2023.
The Asian powerhouse also accounted for 55 percent of global renewable energy additions, surpassing Europe in energy per capita for the first time.
“In advanced economies, we observe signs of demand for fossil fuels peaking, contrasting with economies in the Global South for whom economic development and improvements in quality of life continue to drive fossil growth,” Wayth said.
The EI CEO added: “The progress of the transition is slow, but the big picture masks diverse energy stories playing out across different geographies.”
The EI Statistical Review of World Energy has been a key resource since 1952, providing comprehensive data on global energy markets.
