Is the IEA Net-Zero Scenario Radical?

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Some in the oil industry have criticized the International Energy Agency's (IEA) new net-zero report for being too radical. Pathways to net-zero emissions by 2050 are indeed "narrow and extremely challenging," the IEA acknowledges in the report. But other institutions, notably oil companies, have produced similarly ambitious scenarios aimed at reaching carbon neutrality by midcentury (NE Feb.18'21). They all imply radical assumptions on energy efficiency improvement, renewable energy growth, carbon capture and negative emissions solutions (see tables). So how do they compare with the IEA's net-zero emissions (NZE) scenario? One outcome made the headlines: Under the NZE, no investment in new oil and gas supply is needed (PIW May28'21). The NZE is indeed one of the most extreme scenarios in terms of oil and gas demand, right after Greenpeace's Advanced Energy Revolution scenario assuming that, by 2050, fossil fuels would only survive for non-energy applications such as chemicals. But BP's Net-Zero and the Intergovernmental Panel on Climate Change's (IPCC) 1.5° scenarios are not far behind. Oil and gas demand respectively falls by 57% and 61% over 2020-50, versus 67% in the NZE. By contrast, oil and gas consumption only drops by one-third in the IEA's Sustainable Development and Equinor's Rebalance scenarios, and by a mere 10% in TotalEnergies' Rupture and Royal Dutch Shell's Sky 1.5 (NE Oct.8'20). Differences Explored The main reason for these differences lies in the scenarios' targets. The NZE, Greenpeace and, to a large extent, BP's Net-Zero aim at reaching carbon neutrality by 2050 with limited or no use of negative emissions. The other Paris-compliant scenarios allow either neutrality to be reached between 2060-70, substantial negative emissions to be used, or a combination of both as in Shell’s Sky 1.5. The Paris Agreement does not call for net zero by 2050 but for "holding the increase in the global average temperature to well below 2°C above pre-industrial levels and pursuing efforts to limit the temperature increase to 1.5°C above pre-industrial levels." This involves achieving carbon neutrality "in the second half of this century," the agreement states. The problem with allowing late carbon neutrality is it increases the risk that the 1.5°C target is overshot. This would require huge -- and arguably unrealistic -- amounts of negative emissions after 2050 to keep global warming below 1.5°C in 2100. The main options for providing negative emissions are technologies such as direct air capture (DAC) and bioenergy with carbon capture and storage (BECCS), and natural offsets through afforestation and reforestation. The IEA excluded the latter from the NZE because, while potentially cost effective for the hardest to decarbonize applications, forestry solutions are controversial. Critics argue for example that, while forests take many years to capture a certain amount of carbon dioxide, they do not last forever and are liable to risks such as fires, droughts or just bad management (NE Apr.1'21). The IEA similarly assumed "low reliance" on BECCS, which poses acceptability issues related to biomass cultivation, and DAC, which is unproven (NE Nov.26'20). With the exception of Shell, a fervent supporter of nature-based offsets that counts on them for 6 billion tons of captured CO2 by 2050 in the Sky 1.5, oil companies refrain from explicitly including offsets in their scenarios (NE Feb.18'21). Equinor for example says that BECCS, DAC and forestry could play a role after 2050 while arguing that balancing the availability of land for regular harvesting of biofuel crops against the need for forest protection and land use requirement for food supply is a "complex issue." Total leaves the issue of "residual emissions" -- a huge 8 billion tons of CO2 by 2050 -- "to be addressed with nature-based solutions and future technologies" such as DAC. Conventional CCS, used to capture CO2 from fossil fuels at factories or power plants where it is produced, is extensively implemented in most scenarios. The NZE is among the most ambitious ones in this regard. It assumes 6.2 billion tons of captured CO2 by 2050, just behind Total's 7.5 billion tons but ahead of most IPCC scenarios and those of BP, Shell and Equinor. While CCS is technically and economically feasible, it is unlikely to grow beyond select industrial applications and a few billion tons per year for a variety of reasons, particularly social acceptability, says Jean-Philippe Desmartin, head of responsible investment at Edmond de Rothschild Asset Management (NE Nov.19'20). The IEA tested a low-carbon capture variant of the NZE halving the amount of CCS to levels comparable to those in the BP Net-Zero and Shell Sky 1.5. It would require more electricity and even less oil and gas than in the base NZE. Even More Radical The most radical scenario from an oil and gas point of view is Greenpeace's Advanced Energy Revolution. When published in 2015, it was seen as extravagant and attracted little comments from the industry. Yet it could offer a preview of future mainstream scenarios. It assumes carbon neutrality no later than 2050 and excludes any form of carbon capture or negative emissions, which effectively translates to plain zero instead of net-zero emissions, and thus the quasi elimination of fossil fuels by 2050 (NE Apr.29'21). It involves multiplying today's solar and wind capacity by 20 over 2020-50 instead of 10-15 in other scenarios. This may look excessive but only means 10% growth per year. Solar photovoltaic grew by more than 30% per year over the past decade (NE May13'21). Growth will inevitably slow down as installed capacity keeps expanding, but it is very difficult to predict how much.

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