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PARIS, France (AFP) — Fuel consumption will contract barely this 12 months because of excessive costs and Russian cuts to Europe, with solely sluggish progress over coming years as shoppers swap to alternate options, the IEA mentioned Tuesday.
The Worldwide Vitality Company chopped its forecast for international fuel demand by greater than half in its newest quarterly report on fuel markets.
It now expects progress of simply 3.4 % by 2025, a rise of 140 billion cubic meters (bcm) from 2021 ranges, which is lower than the 175 bcm bounce in demand registered in 2021 alone.
“The results of Russia’s invasion of Ukraine on international fuel costs and provide tensions, in addition to its repercussions on the longer-term financial outlook, are reshaping the outlook for pure fuel,” mentioned the IEA.
“Right this moment’s file costs and provide disruptions are damaging the fame of pure fuel as a dependable and reasonably priced power supply, casting uncertainty on its prospects, notably in creating nations the place it had been anticipated to play a rising function in assembly rising power demand and power transition targets,” it added.
Whereas Russia has lower provides to Europe and European nations have pledged to wean themselves off Russian fuel, the influence rapidly rippled all through the world.
European nations try to make up the shortfall by importing extra liquefied pure fuel (LNG) shipped by tanker, which the IEA mentioned is creating provide tensions and resulting in demand destruction in different markets.
It warned that the scramble for LNG risked not solely inflicting financial hurt to different extra value delicate importers, however pushing up costs and thus contributing to extra revenues for Russia.
“On this context, an accelerated phase-out of Russian fuel ought to primarily give attention to lowering fuel demand and scaling up domestically produced low-carbon gases” akin to biogas, biomethane, and inexperienced hydrogen, mentioned the IEA.
The IEA, which advises power importing nations on coverage, mentioned in its new forecast for decrease fuel demand progress that solely a fifth of the discount got here from anticipated effectivity positive aspects and substituting renewables for fuel.
“Our forecast’s decrease fuel demand progress in comparison with final 12 months doesn’t assure an accelerated transition to internet zero emissions, as the majority of the revision comes from decrease GDP and gas switching relatively than by sooner gas-to-electricity conversion and effectivity positive aspects,” mentioned the report.
The IEA mentioned extra inexperienced power transition measures would, in extra to their long-term influence in lowering emissions, ease strain on fuel costs globally by lowering provide tensions whereas additionally delivering short-term enhancements in air high quality by quickening the transfer away from coal.
“Essentially the most sustainable response to right this moment’s international power disaster is stronger efforts and insurance policies to make use of power extra effectively and to speed up clear power transitions,” IEA director for power markets and safety Keisuke Sadamori mentioned in a press release.
© Agence France-Presse
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