Energy transition

DNV Warns World Is Not Doing Enough To Avoid Climate Catastrophe

The company’s 2021 Energy Transition Outlook says the Earth likely will miss the 2°C goal of the Paris Agreement and the window to get back on track is closing rapidly.

A world globe balanced on the edge of a shelf
Credit: Richard Drury/Getty Images.

According to DNV’s just-released 2021 Energy Transition Outlook, the world is not meeting Paris ambitions and a rapidly shrinking window of opportunity exists to close the gap.

“Even if all electricity is ‘green’ from this day forward, the world will still fall far short of achieving the 2050 net-zero or the ‘well-below 2°C’ global warming ambitions of the COP21 Paris Agreement,” said DNV in a press release announcing the release of the report. “Despite every effort being made,” global emissions will reduce only 9% by 2030 and the planet will most likely reach global warming of 2.3°C by the end of this century, the firm said.

Key points made in the press release included the following:

  • Massive global expansion of electrification is underway, but it will not be enough to meet the Paris Agreement.
  • Hard-to-decarbonize sectors such as heavy industry, shipping, trucking, and aviation need significant research, development, and investment now.
  • Scaling of hydrogen could take 20 years, and, even if accelerated, it will arrive too late to have the impact needed today. Hydrogen is the energy carrier that holds the highest potential to tackle hard-to-abate emissions. However, the DNV forecast indicates hydrogen only starting to scale from the mid-2030s and, even then, only building to 5% of the energy mix by 2050.
  • The global pandemic is a “lost opportunity” to speed up the energy transition.

Remi Eriksen, DNV’s chief executive officer, said, “We’ve seen governments around the world take extraordinary steps to manage the effects of the pandemic and stimulate a recovery. However, I am deeply concerned about what it will take for governments to apply the resolution and urgency they have shown in the face of the pandemic to our climate. We must now see the same sense of urgency to avoid a climate catastrophe."

“Many of the pandemic recovery packages have largely focused on protecting, rather than transforming, existing industries,” Eriksen said, referring to “a lot of ‘building back’ as opposed to ‘building better.’"

He went on to add a hint of optimism. “Although this is a lost opportunity, it is not the last we have for transitioning faster to a deeply decarbonized energy system,” he said. He ended, however, with a mixed message.

“Extraordinary action will be needed to bring the hydrogen economy into full force earlier, but these are extraordinary times,” he said. “The window to avoid catastrophic climate change is closing soon, and the costs of not doing so is unimaginable.”

The following is a brief recap of the report’s highlights, divided into two categories:

Core Insights

  • The world is not meeting Paris ambitions, and there is a very short window to close the gap.
    • Global energy-related emissions will fall only 9% by 2030, and the 1.5°C carbon budget will be emptied by then.
    • DNV estimates the global average temperature increase to reach 2.3°C by end of the century.
  • Electrification is surging ahead, and renewables will outcompete all other energy sources.
    • Electrification of final energy demand will grow from 19% to a 38% share by 2050, powered mainly by solar and wind.
    • 50% of all passenger-vehicle sales will be electric vehicles in 2032.
    • Heat pump use will triple, providing 32% of heat in 2050 while consuming 9% of energy used for heating.
  • Efficiency gains lead to a flattening of energy demand from the 2030s.
    • Energy efficiency remains the greatest untapped resource against climate change.
    • Energy intensity [unit of energy per dollar of gross domestic product (GDP)] improvements at 2.4%/year outpace GDP growth during the coming 3 decades.
    • Efficiency gains are driven mainly by electrification.
  • Fossil fuels are gradually losing position but retain a 50% share in 2050.
    • Gas maintains its current position, oil demand halves, and coal falls to a third of current use by 2050.
    • Carbon capture and storage deployment is too slow, and only 3.6% of fossil carbon-dioxide emissions are abated in 2050.

New Insights for 2021

  • COVID-19 economic recovery spending is a lost opportunity.
    • Apart from the EU, COVID-19 stimulus packages are largely locking in carbon-intensive systems.
  • Variability and low power prices are not roadblocks to a renewable-based power system.
    • Power-to-X, storage, connectivity, demand response, and carbon pricing all will help solar photovoltaic and wind maintain their competitiveness.
    • Solar plus storage is emerging as a new power plant category that will provide 12% of all grid-connected electricity by 2050.
  • Decarbonizing hard-to-abate sectors requires far greater scaling of hydrogen, e-fuels, and biofuels.
    • Combined, hydrogen and e-fuels will cover only 5% of global energy demand by 2050.
    • Aviation, maritime, and heavy industry increase their relative share of emissions and remain heavy users of unabated fossil fuels.
  • Most hydrogen will be produced from dedicated renewables-based electrolyzers by 2050.
    • Green hydrogen will dominate over time, with 18% of hydrogen supply produced via electrolysis from cheap grid electricity and 43% from electrolysis using dedicated off-grid renewables.
    • Blue hydrogen will lose its cost advantage, providing only 19% of hydrogen supply for energy purposes.

DNV’s Energy Transition Outlook, now in its fifth year, was launched 2 months before the 2021 United Nations Climate Change Conference, known as COP26, takes place in Glasgow.

Find the report here.