The Global Energy and Climate Outlook (GECO) 2022 investigates how global energy trade shifts as the world moves to a low carbon economy.
While demand and hence trade of traditional fossil energy carriers will decline over time, we also look into how new trade opportunities emerge, e.g. for hydrogen.
GECO 2022 will present energy and emissions results for a Reference, NDC-LTS and 1.5C Scenario, and also feature detailed analysis on the trade of energy embodied in the trade of goods.
GECO 2022 - Energy, Greenhouse gas and Air pollutant emissions balances (available soon)
Projections with an energy-emissions model - using common socio-economic assumptions
Full report for 2022 available soon
Global energy mix and international energy trade
In a scenario that limits global warming to 1.5C at the end of the century, global emissions decrease rapidly over the coming decades, leading to an 80% emission reduction in 2050 compared to today. This is achieved primarily by reductions in fossil energy use – the share of fossil fuels in global energy supply decreases to 17% in 2050 in the 1.5C scenario and renewables take an increasing share –, reaching 77% in 2050.
Reduced fossil fuel trade and increased self-sufficiency
As global demand for fossil fuel declines, so does international trade in fossil fuels. When the world moves along a pathway that reaches the Paris climate targets, energy self-sufficiency increases, as renewables are traded less than fossil energy. The increase in trade of modern biomass is not able to offset the decline in fossil fuels.
More hydrogen and synthetic fuels
In GECO 2022, we also investigate the role of hydrogen and synthetic fuels. The use of hydrogen increases over time as hydrogen production becomes more competitive and will be used in applications where fossil energy is without alternative today (e.g. steel production, long distance transport). With rising demand, international trade in hydrogen is also expected to increase, but this will not compensate for the decline in fossil energy trade. Most of international trade in hydrogen will be mainly over shorter distances.
Hydrogen can also be processed into synthetic fuels, which are easier to ship than hydrogen. A large share of these synthetic fuels is expected to be produced in regions abundant in cheap renewable energy to be traded internationally. Due to their high cost, synthetic fuels will be mainly used in specific applications, such as aviation.