Global demand for natural gas is set to rebound strongly in 2021 and will continue on such trajectory, International Energy Agency (IEA) warns.
Stressing on the urgency of this condition, the new report indicates that this will likely be the case if governments do not implement strong policies to move the world onto a path towards net-zero emissions by mid-century.
The report notes that global gas demand will rise by 3.6 per cent before easing to an average growth rate of 1.7 per cent over the next three years, reaching 7 per cent by 2024 above 2019 pre-Covid levels.
The growth in demand of natural gas in 2021 reflects sustained economic recovery from the COVID-19 crisis. That said, in the next couple of years, it’s likely to be driven in equal proportions by economic activity and the replacement of gas with more polluting fuels such as coal and oil. These other fuels will be dominant in sectors such as electricity generation, industry and transport.
Based on the report, the industrial sector plays a pivotal role in medium-term gas demand growth, accounting for about 40 per cent of the total increase between 2020 and 2024.
Moreover, the region forecast to have the highest of gas demand between 2020 and 2024 is the Asia Pacific region driven by China and India as well as emerging markets in South and South-East Asia.
Getting on track of zero-emissions
Therefore the report recommends the need for new measures to accelerate further the need for fuel substitution and efficiency gains. By this, the world can get on track for net-zero emissions by 2050, the report highlights. According to the report, this is especially the case in more mature markets, where much of the potential for choosing coal or oil above gas has already been realized.
“The rebound in gas demand shows that the global economy is recovering from the shock of the pandemic and that gas is continuing to replace more emissions-intensive fuels,” said Keisuke Sadamori, the IEA’s Director of Energy Markets and Security.
“But stronger policies need to be implemented to put global gas demand on a path in line with reaching net-zero emissions by 2050 while still fostering economic prosperity. These include measures to ensure gas is used more efficiently. At the same time, the gas industry needs to significantly step up efforts to shift to cleaner and low-carbon gases– and to act quickly and effectively to address needless methane emissions.”
Keisuke Sadamori, the IEA’s Director of Energy Markets and Security.
Accordingly, the report examines how the gas industry can reduce its quantum of emissions and align with net-zero emissions objectives.
Key areas for action include continuing to reduce the intensity of the industry’s greenhouse gas emissions all along the value chain, supporting the development of low-carbon gases, and developing carbon management solutions to minimize emissions from combustion.
Particularly, reducing methane emissions is an efficient way in terms of both time and cost of narrowing the industry’s emission capacities. Based on IEA’s Methane Tracker shows, there is as much as 40 per cent of current methane emissions that could be avoided at no net cost.
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