BloombergNEF has published its latest New Energy Outlook report, examining three progress pathways to reach net-zero globally by 2050. Here, edie summaries what will need to change to deliver this low-carbon trajectory.
The global transition to net-zero emissions is a daunting and disruptive task, but one that is filled with opportunities provided nations move quickly enough. Some research suggests that the world could “technically and economically” transition to net-zero by 2050 for the cost of less than 1% of global GDP annually through to mid-century.
While 2050 is a little under 30 years away, the world is in a race against time to set up the mechanisms designed to reach net-zero. Every year of inaction adds to the bill of reaching net-zero.
According to BNEF’s latest New Energy Outlook report, the costs of reaching net-zero globally by 2050 would range between $92trn trillion and $173trn over the next thirty years. This is largely dependent on a range of different scenarios – labelled green, red and gray by BNEF – that all achieve net-zero through a different mixture of technologies and solutions.
“The capital expenditures needed to achieve net-zero will create enormous opportunities for investors, financial institutions and the private sector, while creating many new jobs in the green economy,” BNEF’s chief executive Jon Moore said.
With BNEF estimates stating that annual investments into global decarbonisation efforts will need to more than double – rising from $1.7trn currently to between $3.1trn and $5.8trn – a range of solutions are primed to help deliver the transition.
Here, edie summarises how the world can reach net-zero emissions by 2050, according to BNEF.
BNEF’s analysis is based on sectoral emissions budgets that outline how different parts of the economy need to decarbonise by 2050. The analysis suggests that global energy-related emissions need to fall 30% below 2019 levels by 2030, and 75% by 2040, to reach net-zero in 2050. This, according to BNEF, accounts for a 1.75C budget for global emissions and would require a 3.2% reduction annually to 2030. In contrast, emissions have risen globally by almost 1% annually from 2015 to 2020.
The report notes that the power sector needs to decarbonise at the highest pace over the next decade, reducing emissions by 57% compared to 2019 levels and then by 89% by 2040. BNEF notes that this can be delivered by renewable energy and electrification, by that clean hydrogen, carbon capture solutions and modular nuclear plants can all play a key role in helping other sectors decarbonise.
Road transport emissions, for example, need to be reduced by 11% by 2030 and then by 80% by 2040 compared to a 2019 baseline. A 14% reduction in emissions can be achieved by utilising electricity across transport and by providing low-carbon heat for buildings and industry.
The circular economy also has a role to play. Increase the efficiency and recycling levels of steel, aluminum and plastics can account for a 2% drop in emissions. This, however, would require an increase in the recycled volume of aluminum by 67%, steel 44% and plastics 149% by 2030 from 2019 levels.
Better building efficiency and growth of bioenergy for sustainable aviation fuel and shipping can deliver emissions reductions of 0.5% and 2% respectively.
BENF notes that “commercially available abatement technologies” will need to be deployed in each sector to reach net-zero by 2050. Under a “gray” scenario where coal and gas is used and fossil fuels account for 52% of primary energy in 2050, carbon capture and storage captures more than 174 gigatons of carbon dioxide by 2050. The green and red scenarios see demand for fossil fuels reach zero by 2050, replaced by renewables, electricity and hydrogen.
The red scenario prioritises nuclear and sees more than 7,000GW of new capacity added by 2050 – about a 19 times increase on current levels.
The report also breaks down how much additional capacity of clean technology solutions will be needed to reach net-zero by 2050.
According to the analysis, 505GW of additional wind power needs to be added annually through to 2030 – more than five times the current capacity levels for 2020. Alongside wind, 455GW of solar PV is needed annually, which is more than three times the current total.
To deal with the intermittency of renewables, around 245GWh of battery storage will be required annually. This is 26 times greater than current levels.
Decarbonising transport will require 35 million electric vehicles (EVs) added to the roads each year – 11 times greater than current levels – while sustainable aviation fuels will need to account for 18% of aircraft fuel by 2030.
For heat, 18 million heat pumps should be installed annually, while increasing electricity use for low-temperature heating requirements in industry by 78% should also be prioritised.
New demand for hydrogen in 2050 varies based on the scenarios. In the gray scenario, there are 190 million tonnes of hydrogen produces, compared to 1,318 million tonnes under the green scenario. For the green scenario, hydrogen accounts for 22% of total energy consumption, compared with around 0.002% today.
With many parts of the world still relying on fossil fuels for crucial access to power, BNEF states that coal-fired power generation needs to fall by 72% by 2030, with around 70% of plants – with a capacity of more than 1,400GW – retired in the same timeframe.