IEA Net Zero 2050 Summary / Part 1

International Energy Agency’s reports are perfect references to understand the Energy Transition globally and in selected geographies. Yet, it needs considerable effort to read and comprehend most of them because of their massive sizes (usually >200 pages), many repetitions between the contents (perhaps due to the collaborative work of many authors and contributors).

Here in this first part of the summary, I tried to summarize the first chapter of the report that clarifies the current situation and forecasts on the existing actions and pledges of the governments. For easy reading, I formed the document in a Q&A style.

In the second part of this summary (here), I focused on the alternative Net Zero Emissions Scenario envisioned by IEA to reach zero emissions by 2050.

A Quick Synthesis

IEA report – first issued in April, 4th revision updated in October 2021 after CoP26 in November – is trying to define the current situation and then set a pathway for the huge amount of work needed to achieve a way to net-zero emissions (“NZE“) by 2050 ambitions into reality.

The first section of the report states that commitments made to date fall far behind what is needed to reach that ambition. It is stating that most of the government pledges are not yet underpinned by near-term policies and measures. Even if they can be fulfilled, they still lack to abate ~22 bn tons of worldwide CO2 emissions in 2050, resulting in a ~2.1°C temperature rise in 2100.

The report states that the path to NZE needs a worldwide effort to increase energy efficiency and increase electricity production at an unprecedented pace.

The technologies to reach mid-way 2030 targets already exist, though government policies need to be adapted. Around 90bn USD needs to be mobilized for demonstration projects (compared to 25bn USD budgeted as of 2021). Yet, the transition may create 14 million jobs at that time (compared to 5 million jobs lost at incumbent fossil-based industries). One strong area is mobility: by 2030 already 60% of car sales are expected to be electric and heavy truck sales will start to gain momentum. As a result, the number of public charging points is expected to rise from ~1 million today to 40 million in 2030, requiring annual investment reaching 90 billion USD in 2030. It is noted that energy transition will require mass quantities of critical materials like copper, cobalt. Manganese and various rare earth metals. This would be a loss recovery chance for the mining industry harmed by the reduction of fossil fuels, yet might also bring sort of a supply security risk.

On the other hand, in 2050, half of the CO2 reductions would come from technologies that do not exist at a commercial scale today. 90% of the total energy supply will be coming from renewable resources (just wind and solar accounting for nearly 70%) and half of the energy will be supplied as direct electricity. This would require high electricity system flexibility investments.

Contrarily, energy from fossil fuels would drop ⅕ of today in 2050; yet traditional energy security concerns would not demise since the suppliers will be concentrated in a small number of low-cost producers. This transition away from fossil fuels will result in tax revenue reductions from oil and gas retails, already up to 40% in 2030 compared to today.

IEA states that NZE by 2050 depends on CCUS heavily, which is expected to be deployed after 2030 with an incredible speed i.e. “Every month from 2030 onwards, ten heavy industrial plants are equipped with CCUS, three new hydrogen‐based industrial plants are built, and 2 GW of electrolyzer capacity are added at industrial sites”. Such massive growth needs a strong foundation in this decade: annual investment in CO2 pipelines and hydrogen infrastructure would increase from today’s 1bn USD to 40bn by 2030.

Q&A Net-Zero by 2050 Projections

What is the current CO2 emissions level?

In 2021, global emissions are expected to occur around 33 Gt. In 2020, due to Covid-19 pandemic emissions had decreased 5.8% compared to the previous year, but it means the majority of that reduction came back already; 2021 is only 1.2% lower than the 2019 level.

What is NDC?

In total 197 countries requested, and 191 already answered the request, to submit their Nationally Determined Contributions (NDC) under the Paris Agreement. The countries will update NDCs every 5 years progressively. Today NDCs cumulatively represent more than 90% of the global energy-related and industrial process CO2 emissions.

Are NDC and NZE Pledges the same thing?

The Intergovernmental Panel on Climate Change (IPCC) declared that in order to reach Global Warming of 1.5°C (compared to pre-industrial levels), net-zero emissions should be reached globally by mid-century or sooner. Accordingly, 44 countries have revised their NDC ambitions to reach NZE around 2050, 10 of which put this target as a legal obligation and further eight countries are proposing to their parliaments to do so. NZE ambitions account for 70% of global emissions so far. Having said that, only a few NZE pledges are supported by detailed policies and firm routes to implementation.

Meanwhile, NZE pledge does not mean that CO2 emissions need to hit zero; which may be impossible for certain sectors anyway. It means pledge envisages offset mechanisms for the remaining emissions, eg. by the absorption of emissions from forestry or land use, or by negative emissions arising from the use of bio-feedstock with Carbon Capture and Sequestration (CCS) or by Direct Air Capture (DAC) – capturing CO2 from the air.

How Business is responding to NZE?

As of February 2021, around 110 large energy consumer companies have announced their net-zero emissions targets. It should be noted that emission accounting and pledges may have different grounds than countries (eg. most companies’ pledges are based on GHG Protocol using voluntarily defined scopes).

What are the Base Line Data?

IEA compares the forecasts with the baseline data. The baseline is 2020, yet 2019 values are also important (excluding Covid-19 pandemic impact). The main indicators are Energy Supply, Energy consumption, electricity generation, electricity installed capacity, and CO2 emissions. The baseline data are set forth below:

Energy Supply

TES means Total Energy Supply, “equivalent to electricity and heat generation plus other energy sectors, plus total final consumption excluding electricity and heat“. In this definition “other energy sector” includes Hydrogen production, biofuels production, non‐renewable waste, and other sources to produce energy.

In 2019 TES was 612 EJ, reduced to 587 EJ in 2020. Among this, the portion of bioenergy was 65 EJ, 90% of it as solid biomass. However, today almost 40% of the biomass is used for traditional cooking usage which is inefficient and polluting.

Energy Consumption

Total Final Consumption (TFC) includes the following sectors: industry (energy use and feedstock), transport, buildings (residential, services, and non‐specified other), and other (agriculture and other non‐energy use). Energy demand from international marine and aviation bunkers is included in the transport. In 2019 TFC was 435 EJ, which was later reduced to 412 EJ in 2020.  The renewable energy share in TFC was 5% in 2020. Hydrogen usage in 2020, (mainly for refinery and chemicals production; 95% produced from fossil-based fuels) was less than 90 Mt.

Fuel Consumption

Coal consumption was 5.25bn ton-equivalent in 2020, oil demand was 90 m barrel/day and natural gas use was 3.9 Tm3 in the same year. The low‐emissions liquid fuels (eg. ammonia, synthetic fuels, liquid biofuels) consumption was 3.5 EJ (=1.6 million barrels of oil equivalent per day “mboe/d“), and the low-emission gases (eg. H2, synthetic methane, biogas, biomethane) consumption was at 2 EJ in 2020.

Green Energy in Mobility

Today, in the transportation sector, the electricity share among the total fuel consumption is 1.5% and the bioenergy share is ~4%. Hydrogen and hydrogen-based fuels are almost non-existent. In 2020, 5% of global passenger car sales have already shifted to EV.

Electricity Generation

It is provided on a gross basis (i.e. includes own use by the generator). In 2019 26,922 TWh and in 2020 26,778 TWh of electricity was produced. The share of renewable energy was 29% in 2020.

Electricity Installed

It is provided on a gross basis (i.e. includes own use by the generator). In 2019 7,484 GW and in 2020 7,795 GW installed electricity capacity was available.

CO2 Emissions

The total includes carbon dioxide emissions from the combustion of fossil fuels and non‐renewable wastes, from industrial and fuel transformation processes (process emissions) as well as CO2 removals. However, CO2 removals exclude CO2 utilized for biofuel or urea productions. IEA data also does not take into account CO2 equivalents of other greenhouse gases emissions. In 2019 35.9 Gt and in 2020 33.9 GT of CO2 was emitted.

Carbon Capture

The existing carbon capture volume is 40 Mt CO2.

What is the Population and Growth increase expectation?

The world population is expected to increase from 7.7bn in 2020 to 8.5bn in 2030, and 9.7bn in 2050. Nearly all of this increase is in emerging markets and developing countries. The world’s economy is assumed to return to pre‐crisis levels and the average annual GDP growth rate is expected ~3%. As a result, compared to 2020 (i.e. 128.3 trillion USD), by 2030 the world’s economy would become 43% larger, and by 2050 it would be 2.5 times as large.

What are different forecasts of IEA for the future?

IEA had simulated 2 cases and provided an alternative pathway to reach NZE.


STEPS (Stated Policies Scenario) is IEA’s projection assuming only specific policies (the ones that have been backed up by detailed government plans and legislations, having regulatory measures and interim targets) will be implemented.

2) APC:

The Announced Pledges Case (APC) assumes that all announced NZE pledges are realized in full and on time, and the policies of the countries that have not yet made NZE pledges are the same as in the STEPS.

3) NZE Scenario:

The Net‐Zero Emissions by 2050 Scenario shows what is needed for the global energy sector to achieve net‐zero CO2 emissions by 2050 in order to limit global warming to 1.5°C

What are the assumptions of STEP?
Energy Production and Consumption:

STEP expects TES to increase 30% and TFC to increase 35% by 2050, despite an annual average of 2.2% energy intensity improvement (i.e. energy use per GDP). Here, advanced economies reduce their energy use by ~5% to 2050, despite they increase their economic activity by 75% over the period. On the other hand, the emerging market and developing economies, increase energy usage by 50% to 2050, as a result of a 300% economic output increase between 2020 and 2050.

Coal in the energy supply mix is expected to fall ~15% by 2050. Oil demand first returns to the pre-pandemic level (98 mbpd), then further increases by 6% by 2030 and reaches a plateau. Natural gas demand first increases 18% by 2030 and then the increase reaches 46% in 2050. Nuclear energy grows by 15% between 2020 and 2030 (mainly growth in China) then stabilizes.

The electricity demand increases by 80% between 2020 and 2050; while 85% of this growth is coming from emerging markets and developing countries.

CO2 Emissions:

In this scenario, CO2 emissions increase to 36 Gt in 2030, and then it remains around this level by 2050. However, there is a clear difference between the performance of developing countries vs advanced economies. Advanced economies could achieve an emission decline of about ⅓ in 2050, whereas developing countries emit ⅕ more compared to today in 2040 due to population increase, urbanization, infrastructure investments, and economic growth, only after 2040 it starts to decline.

More than 50% of the emissions that would come from existing assets are related to electricity production, actually, 40% comes from existing coal‐fired power plants. For the rest, industry (mainly steel and cement) accounts for ~30%, transport accounts for ~10%, and the buildings sector accounts for ~5% of the emissions from existing assets. It is noted that emissions from the existing assets are also skewed towards the emerging markets and developing countries; since the assets in advanced economies are already close/reached the end of their lifetimes.

Eventually, STEP results in ~2.7°C temperature increase by 2100.

What are the assumptions of APC?
Energy Production and Consumption

APC expects TES to increase ~15% by 2050, as a result of a higher energy intensity improvement at an annual average of 2.6%. TFC increases by around 20% by 2050. The biggest reduction in energy demand is thanks to the shift to EVs, which accounts for ~35% of global passenger car sales by 2030 and ~50% in 2050.

In the energy supply mix, ​ the renewables increase their share from 12% in 2020 to 35% by 2050; 50% of this growth is coming from PV and wind whereas bioenergy contributes ~ 30% of it. Hydrogen and hydrogen‐based fuels reach 15 EJ (~125 mtpa H2 equivalent) in 2050, though it represents only 3% of the TFC, where ⅔ of this consumption is related to transportation. Nuclear’s share in the energy mix becomes 25% by 2030. On the other hand, coal drops significantly: it drops by 24% (from 5.3 bn ton eq. in 2020) in 2030 and drops by 50% to become less than 10% of TFC in 2050. The main contributor to this reduction is China’s NZE pledge by 2060. Oil demand settles around 10% less than the pre-pandemic level by 2025 (81 mbpd), then reduction further reaches 18% by 2050 (74 mbpd). Natural Gas demand first increases 11% by mid-decade (4.3 Tm3), then stabilizes there.

Electricity becomes the largest fuel used in all sectors except transportation so that Electricity generation increases massive 187% by 2050 reaching 50,000 TWh. The renewable share in electricity production increases from 29% in 2020 to 70% in 2050, with only PV and wind accounting for 50%, while Hydrogen and ammonia start to emerge as fuel inputs to electricity generation by around 2030.

CO2 Emissions

In the APC scenario, CO2 emissions first fall to 30 Gt in 2030, then to 22 Gt in 2050. The largest reduction is in the electricity sector with 60% between 2020 and 2050, despite the electricity demand nearly doubling as a result of electrified end-uses. The reductions in transport and industry sectors are less because the energy demand increase in the regions without NZE pledges is partially offsetting the reductions of the other regions.

In APC, the resulting global warming in 2100 is around ~2.1°C. It means that existing zero pledges, even fulfilled completely, would still leave 22 Gtons of energy‐related and industrial process CO2 emissions in 2050; therefore are still not adequate to reach net-zero emissions by 2050. 

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