Navigating market and political uncertainties in the age of energy transition

Net Zero

Roadmap

A Global Pathway to

Keep the 1.5 °C Goal

in Reach

2023 Update

INTERNATIONAL ENERGY

AGENCY

IEA member

countries:

Austral ia

Austria

Belgium

Canada

Czech Republic

Denmark

Estonia

Finland

France

Germany

Greece

Hungary

Ireland

Italy

Japan

Korea

Lithuania

Luxembourg

Mexico

Netherlands

New Zealand

Norway

Poland

Portugal

Slovak Republic

Spain

Sweden

Switzerland

Republic of Türkiye

United Kingdom

United States

The European

Commission also

participates in the

work of the IEAIEA association

countries:

Argentina

Brazil

China

Egypt

India

Indonesia

Kenya

Morocco

Senegal

Singapore

South Africa

Thailand

UkraineThe IEA examines the

full spectrum

of energy issues

including oil, gas

and coal supply and

demand, renewable

energy technologies,

electricity markets,

energy efficiency,

access to energy,

demand side

management and

much more. Through

its work, the IEA

advocates policies

that will enhance the

reliability, affordability

and sustainability of

energy in its

31 member countries,

13 association

countries and

beyond.

Please note that this

publication is subject to

specific restrictions that limit

its use and distribution. The

terms and conditions are

available online at

www.iea.org/t&c/

This publication and any

map included herein are

without prejudice to the

status of or sovereignty

over any territory, to the

delimitation of international

frontiers and boundaries and

to the name of any territory,

city or area.

Source: IEA.

International Energy Agency

Website: www.iea.orgRevised version, November

2024

Information notice found at:

www.iea.org/corrections

Foreword 3

Foreword

The publication of the first Net Zero Roadmap by the International Energy Agency (IEA) in

May 2021 was a landmark moment for the energy and climate world, setting out what would

need to happen in the global energy sector in the years and decades ahead to limit global

warming to 1.5 °C. The interest in the report was huge. The world finally had an authoritative

benchmark for what a clear pathway to net zero energy sector CO 2 emissions by 2050 would

look like – something against which th e proliferation of net zero pledges could be compared.

The significance of the report was reflected by the massive number of readers it attracted online. It quickly became our most viewed and downloaded publication ever, a sign of the

strong demand for clear and unbiased analysis , translating the temperature goals of the Paris

Agreement into practical milestones for the global energy sector. Our Roadmap became a

reference point for governments, companies, investors and civil society, helping inform

discussi ons and decision- making on pursuing secure, inclusive and affordable transitions to

clean energy.

Much has happened since its launch two and half years ago: first, the strong and carbon -

intensive economic recovery from the Covid crisis; then, the global en ergy crisis triggered by

Russia’s invasion of Ukraine. The negative consequences of these major events include the

rise of global energy -related carbon dioxide emissions to a new record in 2022 and increased

investment in new fossil fuel projects.

However , we have also seen some extremely positive developments, most notably the rapid

progress of key clean energy technologies, such as solar PV and electric vehicles, backed by

significant policy efforts to advance them further. Recognising the importance of these

industries of the future for energy security and economic competitiveness, countries around

the world are seeking to boost their clean technology manufacturing capacities, driving a

resurgence in industrial policy. Innovation is also accelerating, strengthening the pipeline of

technologies that will be needed to complete the world’s journey to net zero.

At the same time, the case for climate action is stronger than ever. July 2023 was the hottest month on record – and 2023 as a whole appears likely to become the hottest year. Severe

wildfires, droughts, floods and storms further underlined that the climate crisis is with us and that the costs are mounting. Politically, this year is an important test for the Paris Agreement,

with the first Global Stockt ake at the COP28 Climate Conference providing a comprehensive

assessment of where things stand five years on. To succeed, it needs to set a course for all countries to step up to meet the challenge.

With this in mind, the IEA is therefore providing a 2023 update to our Net Zero Roadmap, drawing on the latest data and analysis to map out what the global energy sector would need

to do, especially in the crucial period between now and 2030, to play its part in keeping the

1.5 °C goal in reach. The findings are clear: while the global pathway to net zero by 2050 we

mapped out previously has narrowed, it is still achievable. It is too soon to give up on 1.5 °C.

And I would like to underscore that net zero by 2050 globally doesn’t mean net zero by 2050

for every c ountry. In our pathway, advanced economies reach net zero sooner to allow

emerging and developing economies more time.

IEA. CC BY 4.0.

4 International Energy Agency | Net Zero Roadmap Among the wealth of insights contained in this report, I would like to highlight one message

in particular: in an era of international tensions, governments need to separate climate from

geopolitics. Meeting the shared goal of preventing global warming from going beyond critical thresholds requires stronger cooperation not fragmentation. Climate change is indifferent to

geopolitical rivalri es and national boundaries – in its causes and its effects. What matters is

emissions, regardless of which country produces them, calling for leadership on collaborative

efforts to tackle them. As this Roadmap makes clear, we have the proven technologies a nd

policies to reduce those emissions quickly enough this decade to keep 1.5 °C in reach. All

countries need to work together to make that happen or we all lose in the end.

I hope the insights this report offers will inform international discussions going into COP28

and beyond . For the rigorous and incisive analysis it contains, I’d like to thank my colleagues

who led the work, Laura Cozzi and Timur Gül, and their excellent teams.

Dr Fatih Birol

Executive Director

International Energy Agency

IEA. CC BY 4.0.

Acknowledgements 5 Acknowledgements

This International Energy Agency report was designed and directed by Laura Cozzi , Director

for Sustainability, Technology and Outlooks, and Timur Gül, Chief Energy Technology Officer.

The lead authors and co‐ordinators of the analysis were Araceli Fern ández and

Thomas Spencer . Analytical teams were led by Stéphanie Bouckaert (demand) ,

Christophe McGlade (fossil fuels supply), Uwe Remme (hydrogen and alternative fuels

supply) and Bren t Wanner (power) . Davide D’Ambrosio was also part of the core team.

The other main authors and modellers were:

Caleigh Andrews (employment) , Oskaras Alšauskas (transport) , Yasmine Arsalane (lead

on economic outlook, power), Heymi Bahar (renewables), Praveen Bains (bioenergy ),

Simon Bennett (hydrogen, innovation ), Jose Berm údez Mené ndez (lead on hydrogen),

Sara Budin is (carbon capture, utilisation and storage), Eric Buisson (critical minerals),

Olivia Chen (co‐le

ad on buildings , equity ), Leonardo Collina (industry), Elizabeth Connelly

(co‐le

ad on transport, electrification), Daniel Crow ( lead on climate modelling, behaviour) ,

Amrita Dasgupta (critical minerals), Tomás de Oliverira Bredariol ( fossil fuels , methane ),

Chiara Delmastro (co‐le

ad on buildings), Stavroula Evangelopoulou (hydrogen),

Mathilde Fajardy (carbon capture, utilisation and storage), Víctor Garc ía Tapia (buildings) ,

Alexandre Gouy (industry , critical minerals ), Will Hall (low‐emi

ssions standards ),

Paul Hugues (co‐le

ad on industry), Jérôme Hilaire (lead fossil fuel modelling) ,

Mathilde Huismans (transport) , Bruno Idini (employment), Hyeji Kim (transport),

Tae ‑Yoon Kim (critical minerals , energy security ), Martin Kueppers (industry , decomposition

analysis ), Jean -Baptiste Le Marois (innovation ), Peter Levi (co‐lea

d on industry , clean energy

technology ), Luca Lo Re (Nationally Determined Contributions and pledges ),

Shane McDonagh (transport) , Rafael Martinez Gordon (buildings), Yannick Monschauer

(energy efficiency , affordability ), Faidon Papadimoulis (decomposition analysis ), Francesco

Pavan (hydrogen), Diana Perez Sanchez (industry), Apostolos Petropoulos (co‐le

ad on

transport), Amalia Pizarro (hydrogen), Ryszard Pospiech (fossil fuel modelling, data

management) , Arthur Rogé (data science), Gabriel Saive ( Nationally Determined

Contributions and pledges ), Richard Simon ( clean energy technology , industry), Leonie Staas

(buildings , behaviour ), Cecilia Tam (finance), Jacob Teter (transport) , Tiffany Vass (clean

energy technology , industry), Anthony Vautrin (buildings), Daniel Wetzel (lead on

employment) and Wonjik Yang (data visualisation) .

Marina Dos Santos and Eleni Tsoukala provided essential support.

Edm

und Hosker carried editorial responsibility. Trevor Morgan provided writing support.

Debra Justus was the copy ‐ed

itor.

Ot

her key contributors from across the IEA were: France d’Agrain, Tanguy de Bienassis,

Clara Camarasa, Laurence Cret, Carl Greenfield, Alexandra Hegarty, Teo Lombardo,

Jeremy Moorhouse , Alana Rawlins Bilbao, Melanie Slade and Fabian Voswinkel .

IEA. CC BY 4.0.

6 International Energy Agency | Net Zero Roadmap Valuable comments and feedback were provided by Tim Gould (Chief Energy Economist),

other IEA senior management and numerous other colleagues , in particular Mary Warlick,

Keisuke Sadamori, Dan Dorner, Nick Johnstone, Toril Bosoni, Paolo F

...

Net Zero

Roadmap

A Global Pathway to

Keep the 1.5 °C Goal

in Reach

2023 Update

INTERNATIONAL ENERGY

AGENCY

IEA member

countries:

Austral ia

Austria

Belgium

Canada

Czech Republic

Denmark

Estonia

Finland

France

Germany

Greece

Hungary

Ireland

Italy

Japan

Korea

Lithuania

Luxembourg

Mexico

Netherlands

New Zealand

Norway

Poland

Portugal

Slovak Republic

Spain

Sweden

Switzerland

Republic of Türkiye

United Kingdom

United States

The European

Commission also

participates in the

work of the IEAIEA association

countries:

Argentina

Brazil

China

Egypt

India

Indonesia

Kenya

Morocco

Senegal

Singapore

South Africa

Thailand

UkraineThe IEA examines the

full spectrum

of energy issues

including oil, gas

and coal supply and

demand, renewable

energy technologies,

electricity markets,

energy efficiency,

access to energy,

demand side

management and

much more. Through

its work, the IEA

advocates policies

that will enhance the

reliability, affordability

and sustainability of

energy in its

31 member countries,

13 association

countries and

beyond.

Please note that this

publication is subject to

specific restrictions that limit

its use and distribution. The

terms and conditions are

available online at

www.iea.org/t&c/

This publication and any

map included herein are

without prejudice to the

status of or sovereignty

over any territory, to the

delimitation of international

frontiers and boundaries and

to the name of any territory,

city or area.

Source: IEA.

International Energy Agency

Website: www.iea.orgRevised version, November

2024

Information notice found at:

www.iea.org/corrections

Foreword 3

Foreword

The publication of the first Net Zero Roadmap by the International Energy Agency (IEA) in

May 2021 was a landmark moment for the energy and climate world, setting out what would

need to happen in the global energy sector in the years and decades ahead to limit global

warming to 1.5 °C. The interest in the report was huge. The world finally had an authoritative

benchmark for what a clear pathway to net zero energy sector CO 2 emissions by 2050 would

look like – something against which th e proliferation of net zero pledges could be compared.

The significance of the report was reflected by the massive number of readers it attracted online. It quickly became our most viewed and downloaded publication ever, a sign of the

strong demand for clear and unbiased analysis , translating the temperature goals of the Paris

Agreement into practical milestones for the global energy sector. Our Roadmap became a

reference point for governments, companies, investors and civil society, helping inform

discussi ons and decision- making on pursuing secure, inclusive and affordable transitions to

clean energy.

Much has happened since its launch two and half years ago: first, the strong and carbon -

intensive economic recovery from the Covid crisis; then, the global en ergy crisis triggered by

Russia’s invasion of Ukraine. The negative consequences of these major events include the

rise of global energy -related carbon dioxide emissions to a new record in 2022 and increased

investment in new fossil fuel projects.

However , we have also seen some extremely positive developments, most notably the rapid

progress of key clean energy technologies, such as solar PV and electric vehicles, backed by

significant policy efforts to advance them further. Recognising the importance of these

industries of the future for energy security and economic competitiveness, countries around

the world are seeking to boost their clean technology manufacturing capacities, driving a

resurgence in industrial policy. Innovation is also accelerating, strengthening the pipeline of

technologies that will be needed to complete the world’s journey to net zero.

At the same time, the case for climate action is stronger than ever. July 2023 was the hottest month on record – and 2023 as a whole appears likely to become the hottest year. Severe

wildfires, droughts, floods and storms further underlined that the climate crisis is with us and that the costs are mounting. Politically, this year is an important test for the Paris Agreement,

with the first Global Stockt ake at the COP28 Climate Conference providing a comprehensive

assessment of where things stand five years on. To succeed, it needs to set a course for all countries to step up to meet the challenge.

With this in mind, the IEA is therefore providing a 2023 update to our Net Zero Roadmap, drawing on the latest data and analysis to map out what the global energy sector would need

to do, especially in the crucial period between now and 2030, to play its part in keeping the

1.5 °C goal in reach. The findings are clear: while the global pathway to net zero by 2050 we

mapped out previously has narrowed, it is still achievable. It is too soon to give up on 1.5 °C.

And I would like to underscore that net zero by 2050 globally doesn’t mean net zero by 2050

for every c ountry. In our pathway, advanced economies reach net zero sooner to allow

emerging and developing economies more time.

IEA. CC BY 4.0.

4 International Energy Agency | Net Zero Roadmap Among the wealth of insights contained in this report, I would like to highlight one message

in particular: in an era of international tensions, governments need to separate climate from

geopolitics. Meeting the shared goal of preventing global warming from going beyond critical thresholds requires stronger cooperation not fragmentation. Climate change is indifferent to

geopolitical rivalri es and national boundaries – in its causes and its effects. What matters is

emissions, regardless of which country produces them, calling for leadership on collaborative

efforts to tackle them. As this Roadmap makes clear, we have the proven technologies a nd

policies to reduce those emissions quickly enough this decade to keep 1.5 °C in reach. All

countries need to work together to make that happen or we all lose in the end.

I hope the insights this report offers will inform international discussions going into COP28

and beyond . For the rigorous and incisive analysis it contains, I’d like to thank my colleagues

who led the work, Laura Cozzi and Timur Gül, and their excellent teams.

Dr Fatih Birol

Executive Director

International Energy Agency

IEA. CC BY 4.0.

Acknowledgements 5 Acknowledgements

This International Energy Agency report was designed and directed by Laura Cozzi , Director

for Sustainability, Technology and Outlooks, and Timur Gül, Chief Energy Technology Officer.

The lead authors and co‐ordinators of the analysis were Araceli Fern ández and

Thomas Spencer . Analytical teams were led by Stéphanie Bouckaert (demand) ,

Christophe McGlade (fossil fuels supply), Uwe Remme (hydrogen and alternative fuels

supply) and Bren t Wanner (power) . Davide D’Ambrosio was also part of the core team.

The other main authors and modellers were:

Caleigh Andrews (employment) , Oskaras Alšauskas (transport) , Yasmine Arsalane (lead

on economic outlook, power), Heymi Bahar (renewables), Praveen Bains (bioenergy ),

Simon Bennett (hydrogen, innovation ), Jose Berm údez Mené ndez (lead on hydrogen),

Sara Budin is (carbon capture, utilisation and storage), Eric Buisson (critical minerals),

Olivia Chen (co‐le

ad on buildings , equity ), Leonardo Collina (industry), Elizabeth Connelly

(co‐le

ad on transport, electrification), Daniel Crow ( lead on climate modelling, behaviour) ,

Amrita Dasgupta (critical minerals), Tomás de Oliverira Bredariol ( fossil fuels , methane ),

Chiara Delmastro (co‐le

ad on buildings), Stavroula Evangelopoulou (hydrogen),

Mathilde Fajardy (carbon capture, utilisation and storage), Víctor Garc ía Tapia (buildings) ,

Alexandre Gouy (industry , critical minerals ), Will Hall (low‐emi

ssions standards ),

Paul Hugues (co‐le

ad on industry), Jérôme Hilaire (lead fossil fuel modelling) ,

Mathilde Huismans (transport) , Bruno Idini (employment), Hyeji Kim (transport),

Tae ‑Yoon Kim (critical minerals , energy security ), Martin Kueppers (industry , decomposition

analysis ), Jean -Baptiste Le Marois (innovation ), Peter Levi (co‐lea

d on industry , clean energy

technology ), Luca Lo Re (Nationally Determined Contributions and pledges ),

Shane McDonagh (transport) , Rafael Martinez Gordon (buildings), Yannick Monschauer

(energy efficiency , affordability ), Faidon Papadimoulis (decomposition analysis ), Francesco

Pavan (hydrogen), Diana Perez Sanchez (industry), Apostolos Petropoulos (co‐le

ad on

transport), Amalia Pizarro (hydrogen), Ryszard Pospiech (fossil fuel modelling, data

management) , Arthur Rogé (data science), Gabriel Saive ( Nationally Determined

Contributions and pledges ), Richard Simon ( clean energy technology , industry), Leonie Staas

(buildings , behaviour ), Cecilia Tam (finance), Jacob Teter (transport) , Tiffany Vass (clean

energy technology , industry), Anthony Vautrin (buildings), Daniel Wetzel (lead on

employment) and Wonjik Yang (data visualisation) .

Marina Dos Santos and Eleni Tsoukala provided essential support.

Edm

und Hosker carried editorial responsibility. Trevor Morgan provided writing support.

Debra Justus was the copy ‐ed

itor.

Ot

her key contributors from across the IEA were: France d’Agrain, Tanguy de Bienassis,

Clara Camarasa, Laurence Cret, Carl Greenfield, Alexandra Hegarty, Teo Lombardo,

Jeremy Moorhouse , Alana Rawlins Bilbao, Melanie Slade and Fabian Voswinkel .

IEA. CC BY 4.0.

6 International Energy Agency | Net Zero Roadmap Valuable comments and feedback were provided by Tim Gould (Chief Energy Economist),

other IEA senior management and numerous other colleagues , in particular Mary Warlick,

Keisuke Sadamori, Dan Dorner, Nick Johnstone, Toril Bosoni, Paolo Frankl, Dennis Hesseling,

Brian Motherway, Alessandro Blasi, Hiro Sakaguchi and Pablo Hevia ‐Ko

ch.

Th

anks go to the IEA Communications and Digital Office for their help to produce the report

and website materials, particularly Jethro Mullen, Poeli Bojorquez, Curtis Brainard,

Hortense De Roffignac, Astrid Dumond, Merve Erdil, Grace Gordon, Julia Horowitz,

Oliver Joy, Robert Stone, Julie Puech, Clara Vallois, Lucile Wall and Therese Walsh . The IEA

Office of the Legal Counsel, Office of Management and Administration and Energy Data

Centre provided assistance throughout the preparation of the report.

Va

luable input to the analysis was provided by: David Wilkinson (independent consultant).

Support for the modelling of air pollution and associated health impacts was provided by Peter Rafaj, Gregor Kiesewetter, Laura Warnecke, Katrin Kaltenegger, Jessica Slater,

Chris Heyes, Wolfgang Schöpp, Fabian Wagner and Zbigniew Klimont (International Institute

for Applied Systems Analysis). Valuable input to the modelling and analysis of greenhouse

gas emissions from land use, a griculture and bioenergy production was provided by

Nicklas Forsell, Zuelclady Araujo Gutierrez, Andrey Lessa

‐De

rci‐Au

gustynczik, Stefan Frank,

Pekka Lauri, Mykola Gusti and Petr Havlík (International Institute for Applied Systems Analysis). Advice related to the modelling of global climate impacts was provided by

Jared Lewis, Zebedee Nicholls (Climate Resource) and Malte Meinshausen (Climate Resource

and University of Melbourne).

Th

is work was supported by the Clean Energy Transitions Programme, the IEA’s flagship

initiative to transform the world’s energy system to achieve a secure and sustainable future for all.

IEA. CC BY 4.0.

Acknowledgements 7

Peer reviewers

Many senior government officials and international experts provided input and reviewed

preliminary drafts of the report. Their comments and suggestions were of great value. They

include:

Doug Arent National Renewable Energy Laboratory, United States

Florian Ausfelder Dechema

Adam Baylin ‐Stern Carbon Engineering

Christoph Beuttler Climeworks

Sama Bilbao Y Leon World Nuclear Association

Diane Cameron Nuclear Energy Agency

Rebecca Collyer European Climate Foundation

Delphine Eyraud Permanent Representation of France to the OECD

Nicklas Forsell International Institute for Applied Systems Analysis

Hiroyuki Fukui Toyota

Oliver Geden German Institute for International and Security Affairs

Bernd Hackmann United Nations Climate Change

Ryo Hamaguchi United Nations Climate Change

Yuya Hasegawa Ministry of Economy, Trade and Industry, Japan

Harald Hirschhofer TCX Fund

Ronan Hodge Glasgow Financial Alliance for Net Zero

Christina Hood Compass Climate

Dave Jones EMBER

Vijayalaxmi Jumnoodoo United Nations Climate Change

Ken Koyama Institute of Energy Economics, Japan

Francisco Laveron Iberdrola

Emilio Lèbre La Rovere Universidade Federal do Rio de Janeiro

Joyce Lee Global Wind Energy Council

Ritu Mathur NITI Aayog , Government of India

Malte Meinhausen University of Melbourne, Australia

Vincent Minier Schneider Electric

Steve Nadel American Council for an Energy‐Efficient Economy,

United States

Yasuko Nishimura Ministry of Foreign Affairs of Japan

Thomas Nowak European Heat Pump Association

Henri Paillere International Atomic Energy Agency

Glen Peters CICERO

Stephanie Pfeifer Institutional Investors Group on Climate Change

IEA. CC BY 4.0.

8 International Energy Agency | Net Zero Roadmap

Cédric Philibert French Institute of International Relations, Centre for Energy &

Climate

Vicky Pollard Directorate ‐General for Climate Action , European Commission

Andrew Purvis World Steel Association

Anshari Rahman GenZero

Julia Reinaud Breakthrough Energy

Toshiyuki Sakamoto Institute of Energy Economics, Japan

Vivian Scott UK Climate Change Committee

Stephan Singer Climate Action Network International

Jim Skea Imperial College London, Chair, Intergovernmental Panel on

Climate Change

Sandro Starita European Aluminium Association

Wim Thomas Independent consultant

Fridtjof Fossum Unander Aker Horizons

Noé Van Hulst International Partnership for Hydrogen and Fuel Cells in the

Economy

Markus Wråke Swedish Energy Research Centre

The work reflects the views of the International Energy Agency Secretariat , but does not

necessarily reflect those of individual IEA member countries or of any particular funder,

supporter or collaborator. None of the IEA or any funder, supporter or collab orator that

contributed to this work makes any representation or warranty, express or implied, in respect of the work’s contents (including its completeness or accuracy) and shall not be responsible for any use of, or reliance on, the work.

This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area.

Comments and questions are welcome and should be addressed to:

Laura Cozzi and Timur Gül

Directorate of Sustainability, Technology and Outlooks

International Energy Agency

9, rue de la Fédération

75739 Paris Cedex 15

France

E‐mail: i eanze2050@iea.org

www.iea.org

IEA. CC BY 4.0.

Table of Contents 9

Table of Contents

Foreword ................................................................................................................................. 3

Acknowledgements ................................................................................................................. 5

Executive summary ............................................................................................................... 13

Progress in the clean energy transition 19

1.1 The context .................................................................................................... 20

1.2 Bending the emissions curve ......................................................................... 23

1.3 Nationally Determined Contributions and Net Zero Emissions Pledges ....... 31

1.3.1 Nationally Determined Contributions ............................................... 31

1.3.2 Net zero emissions pledges ............................................................... 32

1.4 Clean energy technologies ............................................................................ 35

1.4.1 Deployment ....................................................................................... 35

1.4.2 Supply chains ..................................................................................... 41

1.4.3 Costs and performance ...................................................................... 48

1.4.4 Innovation .......................................................................................... 50

A renewed pathway to net zero emissions 55

2.1 Overview of the NZE Scenario ....................................................................... 56

2.1.1 Scenario design .................................................................................. 56

2.1.2 Emissions and temperature trends ................................................... 62

2.1.3 Key mitigation levers ......................................................................... 66

2.2 Energy trends ................................................................................................ 72

2.2.1 Total energy supply ........................................................................... 72

2.2.2 Fuel supply ......................................................................................... 75

2.2.3 Electricity generation ......................................................................... 79

2.2.4 Final energy consumption ................................................................. 84

2.3 Net zero emissions guide ............................................................................... 90

Low-emissions sources of electricity ............................................................. 91

Unabated fossil fuel s in electricity generation .............................................. 92

Road transport ............................................................................................... 93

Shipping and aviation .................................................................................... 94

Steel and aluminium ...................................................................................... 95

Cement .......................................................................................................... 96

Primary chemicals ......................................................................................... 97

1

2

IEA. CC BY 4.0.

10 International Energy Agency | Net Zero Roadmap

Space heating ................................................................................................ 98

Space cooling ................................................................................................. 99

Energy efficiency and behaviour al change .................................................. 100

Hydrogen ..................................................................................................... 101

Carbon capture, utilisation and storage ...................................................... 102

Bioenergy ..................................................................................................... 103

Energy access and air pollution ................................................................... 104

Fossil fuel supply ......................................................................................... 105

Making the NZE Scenario a reality 107

3.1 Achieving deep emissions reductions by 2030 ............................................ 108

3.1.1 Triple renewables capacity .............................................................. 108

3.1.2 Double the rate of energy intensity improvements ........................ 116

3.1.3 Accelerate electrification ................................................................. 124

3.1.4 Reduce methane emissions ............................................................. 129

3.2 Accelerate long lead time options ............................................................... 132

3.2.1 Carbon capture, utilisation and storage .......................................... 132

3.2.2 Hydrogen and hydrogen- based fuels ............................................... 136

3.2.3 Bioenergy ......................................................................................... 141

3.2.4 Infrastructure ................................................................................... 146

3.3 Consequences of further delays for the clean energy transition ................ 149

3.3.1 The world has already delayed too long to avoid hard choices ....... 150

3.3.2 Implications of not raising climate ambitions to 2030 .................... 151

3.3.3 What would it take to bring temperatures back below 1.5 °C? ...... 152

3.3.4 Implications for the oil and natural gas industry ............................. 156

Secure, equitable and co -operative transitions 157

4.1 Introduction ................................................................................................. 158

4.2 Energy security ............................................................................................ 158

4.2.1 Bridging the gap between critical mineral supply and demand ...... 158

4.2.2 Scaling up clean energy technologies and scaling back fossil fuels

need to be well synchronised .......................................................... 162

4.2.3 Fossil fuel markets shrink, but vigilance is still needed ................... 163

3

4

IEA. CC BY 4.0.

Table of Contents 11

4.3 Equity ........................................................................................................... 165

4.3.1 Accelerating clean energy deployment in emerging market and

developing economies ..................................................................... 165

4.3.2 Enhancing clean energy affordability .............................................. 169

4.3.3 Managing the employment transition ............................................. 172

4.4 International co -operation .......................................................................... 173

4.4.1 Addressing financing barriers in emerging economies .................... 173

4.4.2 Enhancing ambitions through the United Nations Framework Convention on Climate Change and Global Stocktake .................... 179

4.4.3 Accelerating clean energy technology deployment ........................ 181

Annexes

Annex A. Tables for scenario projections ............................................................................ 191

Annex B. Definitions ............................................................................................................ 201

Annex C. References ........................................................................................................... 217

IEA. CC BY 4.0.

Executive Summary 13

Executive Summary

In 2021 , the IEA published its landmark report, Net Zero by 2050: A Roadmap for the Global

Energy Sector. Since then, the energy sector has seen major shifts. Based on the latest data

on technologies, markets and policies, this report presents an updated version of the Net Zero

Emissions by 2050 (NZE) Scenario ; a pathway, but not the only one, for the energy sector to

achieve net zero CO 2 emissions by 2050 and play its part, as the largest source of greenhouse

gas emissions, in achieving the 1.5 ° C goal.

The path to 1. 5 °C has narrowed, but clean energy growth is keeping it open

The case for transforming the global energy system in line with the 1.5 °C goal has never

been stronger. August 2023 was the hottest on record by a large margin, and the hottest

month ever after July 2023. The impacts of climate change are increasingly frequent and severe, and scientific warnings about the dangers of the current pathway have become stronger than ever.

Global carbon dioxide (CO

2) emissions from the e nergy sector reached a new record high

of 37 billion tonnes (Gt) in 2022 , 1% above their pre -pandemic level, but are set to peak

this decade . The speed of the roll -out of key clean energy technologies means that the IEA

now projects that demand for coal, oil and natural gas will all peak this decade even without

any new climate policies. This is encouraging, but not nearly enough for the 1.5 °C goal .

Positive developments over the past two years include s olar PV installations and electric

car sales tracking in line with the milestones set out for them in our 2021 Net Zero by 2050

report. In response to the pandemic and the global energy crisis triggered by Russia’s

invasion of Ukraine, governments aroun d the world announced a raft of measures designed

to promote the uptake of a range of clean energy technologies. Industry is ramping up quickly

to supply many of them . If fully implemented, currently announced manufacturing capacity

expansions for solar PV and batteries would be sufficient to meet demand by 2030 in this

update of the NZE Scenario.

We have the tools needed to go much faster

Ramping up renewables, improving energy efficiency, cutting methane emissions and

increasing electrification with technologies available today deliver more than 80% of the

emissions reductions needed by 2030. The key actions required to bend the emissions curve

sharply downwards by 2030 are well understoo d, most often cost effective and are taking

place at an accelerating rate. The scaling up of clean energy is the main factor behind a decline of fossil fuel demand of over 25% this decade in the NZE Scenario. But well -designed

policies, such as the early retirement or repurposing of coal -fired power plants, are key to

facilitate declines in fossil fuel demand and create additional room for clean energy to expand. In the NZE Scenario, strong growth in clean energy and other policy measures together lead to e nergy sector CO

2 emissions falling by 35% by 2030 compared to 2022.

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14 International Energy Agency | Net Zero Roadmap

Renewables and efficiency are key to drive fossil fuel demand down

Tripling global installed renewables capacity to 11 000 gigawatts by 2030 provides the

largest emissions reductions to 2030 in the NZE Scenario. Renewable electricity sources, in

particular solar PV and wind, are widely available, well understood, and often rapidly

deployable and cost effective . Current policy settings already put advanced economies and

China on track to achieve 85% of their contribution to th is global goal, but stronger policies

and international support are required in other emerging market and developing economies. For all countries, speeding up permitting, extending and modernising electricity grids,

addressing supply chain bottlenecks, and securely integrating variable renewables are

critical .

Doubling the annual rate of energy intensity improvement by 2030 in the NZE Scenario

saves the energy equivalent of all oil consumption in road transport today, reduces

emissions, boosts energy security and improves affordability. Although the mix of priorities

will differ by country, at the global level energy intensity improvements stem from three

equally important actions: improving the technical efficiency of eq uipment such as electric

motors and air conditioners; switching to more efficient fuels, in particular electricity, and clean cooking solutions in low -income countries; and using energy and materials more

efficiently.

These two actions reduce fossil fuel demand, enabling continued adherence to a key milestone of our 2021 report: an immediate end to new approvals of unabated coal plants.

Accelerating electrification and cutting methane are also essential

Booming technologies like electric vehicles and heat pumps drive electrification across the energy system, providing nearly one -fifth of the emissions reductions to 2030 in the NZE

Scenario. Recent growth puts electric car sales on track to account for two -thirds of new car

sales by 2030 – a critical mi lestone in the NZE Scenario. Announced production targets from

car makers underscore that this high share is achievable. Heat pump sales increased by 11% globally in 2022, and many markets, notably in the European Union, are already tracking

ahead of the r oughly 20% annual growth rate needed to 2030 in the NZE Scenario. China

remains the world’s largest market for heat pumps.

Cutting methane emissions from the energy sector by 75% by 2030 is one of the least cost

opportunities

to limit global warming in the near term . Strong reductions in both energy

sector CO 2 and methane emissions are essential to meeting the 1.5 °C goal. Without efforts

to reduce methane emissions from fossil fuel supply, global energy sector CO 2 emissions

would need to reach net zero by around 2045, with important implications for equitable

pathways. Reducing methane emissions from oil and natural gas operations by 75% costs

around USD 75 billion in cumulative spending to 2030, equivalent to just 2% of the net

income received by the oil a nd gas industry in 2022. Much of this would be accompanied by

net cost savings through the sale of captured methane.

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Executive Summary 15

Innovation is already delivering new tools and lowering their cost

In the 2021 NZE Scenario, technologies not available on the market at the time delivered

nearly half of the emissions reductions needed in 2050 to reach net zero; that number has

fallen to around 35% in this update. Progress has been rapid: for example, the first

commercialisation of sodium -ion batteries was announced for 2023, and commercial -scale

demonstrations of solid oxide hydrogen electrolysers are now underway .

But we still need to do much more, notably on infrastructure

Today much of the momentum is in small, modular clean energy technologies like solar PV and batteries, but these alone are not sufficient to deliver net zero emissions. It will also

require: large new, smarter and repurposed infrastructure networks; large quantities of low -

emissions fuels; technologies to capture CO

2 from smokestacks and the atmosphere; more

nuclear power; and large land areas for renewables.

Electricity transmission and distribution grids need to expand by around 2 million

kilometres each year to 2030 to meet the needs of the NZE Scenario. Building grids today

can take more than a decade, with permitting a particularly time -consuming bottleneck . The

same is true for other kinds of energy infrastructure. Policy makers, industry and civil society

need to work together to nurture a “build big ” mentality and to expedite decision making,

while preserving public engagement and respecting environmental safeguards.

Carbon capture, utilisation and storage (CCUS) , hydrogen and hydrogen- based fuels , and

sustainable bioenergy are critical to achieve net zero emissions; rapid progress is needed

by 2030. The history of CCUS has largely been one of underperformance. Although the recent

surge of announced projects for CCUS and hydrogen is encouraging, the majority have yet to reach final investment decision and need further policy support to boost demand and facilitate new enabling infrastructure.

Increasing clean energy investment in developing countries is vital

The world is set to invest a record USD 1.8 trillion in clean energy in 2023 : this needs to

climb to around USD 4.5 trillion a year by the early 2030s to be in line with our pathway.

Clean energy investment is paid back over time through lower fuel bills. By 2050, energy

sector investment and fue l bills are lower than today as a share of global GDP. The sharpest

jump in clean energy investment is needed in emerging market and developing economies other than China, where it surges sevenfold by the early 2030s in the NZE Scenario. This will

require stronger domestic policies together with enhanced and more effective international

support. Annual concessional funding for clean energy in emerging market and developing

economies will need to reach around USD 80-100 billion by the early 2030s.

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16 International Energy Agency | Net Zero Roadmap

As clean energy expands and fossil fuel demand declines in the NZE Scenario,

there is no need for investment in new coal, oil and natural gas

Stringent and effective policies in the NZE Scenario spur clean energy deployment and cut

fossil fuel demand by more than 25% by 2030 and 80% in 2050. Coal demand falls from

around 5 800 million tonnes of coal equivalent (Mtce) in 2022 to 3 250 Mtce by 2030 and

around 500 Mtce by 2050. Oil declines from around 100 million barrels per day (mb/d) to

77 mb/d by 2030 and 24 mb/d by 2050. Natural gas demand drops from 4 150 billion cubic

metres (bcm) in 2022 to 3 400 bcm in 2030 and 900 bcm in 2050.

No new long- lead time upstream oil and gas projects are needed in the NZE Scenario,

neither are new coal mines , mine extensions or new unabated coal plants. Nonetheless,

continued investment is required in existing oil and gas assets and already approved projects .

Sequencing the decline of fossil fuel supply investment and the increase in clean energy investment is vital if damaging price spikes or supply gluts are to be avoided.

The drop in fossil fuel demand and supply reduces traditional risks to energy security, but

they do not disappear – especially in a complex and low trust geopolitical environment. In

the NZE Scenario, higher cost producers are squeezed out of a declining market and supply starts to concentrate in large resource -holders whose economies are m ost vulnerable to the

process of change. But attempts by governments to prioritise domestic production must

recognise the risk of locking in emissions that could push the world over the 1.5 °C threshold ;

and that, if the world is successful in bringing dow n fossil demand quickly enough to reach

net zero emissions by 2050, new projects would face major commercial risks.

The net zero emissions transition must be secure and affordable

Particular attention needs to be paid to bridging the looming supply and demand gap for

critical minerals. Announced mining projects for minerals such as nickel and lithium fall short

of booming demand in the NZE Scenario in 2030. New projects, innovative extraction

techniques, more recycling and material -efficient design can help to bridge this gap.

Extraordinary advances in clean energy technology supply chains have kept the door to net

zero emissions open, but have been accompanied by a high degree of geographical concentration. The mining and refining of critical minerals are similarly highly concentrated.

This presents an increased risk of disruption, such as from geopolitical tensions, extreme weather events or a simple industrial accident. While more diverse and resilient supply chains are highly desirable, the pace at which clean energy must be scaled up will be even

harder to achieve without open supply chains.

As electricity becomes the “ new oil” of the global energy system in the NZE Scenario,

secure electricity supplies become even more important. The hugely increased need for

electricity system flexibility requires massive growth of battery energy storage and demand response; expanded, modernised and cybersecure transmission and distribution grids, and more dispatchable low -emissions capacity, including fossil fuel capacity with CCUS,

hydropower, biomass, nuclear, and hydrogen and ammonia -based plants.

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Executive Summary 17

By 2030 in the NZE Scenario, total household energy expenditure in emerging market and

developing economies decreases by 12% from today’s level , and even more in advanced

economies . The decrease reflects large energy and cost savings from energy efficiency and

electrification. However, policy makers need to support households, particularly low -income

ones, to meet the often higher upfront costs of clean energy technologies.

There is no low international co -operation route to limit warming to 1.5 °C

and no slow route either

By 2035, emissions need to decline by 80% in advanced economies and 60% in emerging

market and developing economies compared to the 2022 leve l. Current Nationally

Determined Contributions are not in line with countries’ own net zero emissions pledges, and those pledges are not sufficient to put the world on a pathway to net zero emissions by

2050. COP28 and the first Global Stocktake under the Paris Agreement provide a key

opportunity to enhance ambition and implementation.

As part of an equitable pathway to the global goal of net zero emissions by 2050 , almost

all countries need to bring forward their targeted net zero dates. In the NZE Scenari o,

advanced economies take the lead and reach net zero emissions by around 2045 in aggregate; China achieves net zero emissions around 2050; and other emerging market and developing economies do so only well after 2050. The NZE Scenario is a global but

differentiated pathway: each country will follow its own route based on its resources and

circumstances. However, all must act much more strongly than they are today. The net zero

pathway achieves full access to modern forms of energy for all by 2030 through annual investment of nearly USD 45 billion per year — just over 1% of energy sector investment .

Our Delayed Action Case shows that failure to increase ambition to 2030 would create

additional climate risks and make achieving the 1.5 °C goal dependant on the massive

deployment of carbon removal technologies which are expensive and unproven at scale .

Nearly 5 Gt CO

2 would have to be removed from the atmosphere every year during the

second half of this century. If carbon removal technologies fail to deliver at such scale,

returning the temperature to 1.5 °C would not be possible. Removing carbon from the

atmosphere is costly and uncertain. We must do everything possible to stop putting it there

in the first place.

The fierce urgency of now

The energy sector is changing faster than many people think, but much more needs to be done and time is short. Momentum is coming not just from the push to meet climate targets but also f rom the increasingly strong economic case for clean energy, energy security

imperatives, and the jobs and industrial opportunities that accompany the new energy economy. Yet, momentum must be accelerated to be in line with the 1.5 °C goal and to

ensure that the process of change works for everyone. Above all, this needs to be a unified

effort in which governments put tensions aside and find ways to work together on what is

the defining challenge of our time. All of us , and in particular future generations, will

remember with gratitude those who act upon the urgency of now.

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Chapter 1 | Progress in the cl ean energy transition 19

Chapter 1

Progress in the clean energy transition

Bending the curve

• The IEA ’s landmark report Net Zero by 2050: A Roadmap for the Global Energy Sector

was published in 2021 . It translate s the goal of limiting global warming to 1.5 degrees

Celsius ( °C) into a concrete roadmap for the global energy sector. In the two years

since then, the energy sector has undergone major shifts.

• Energy sector CO 2 emissions remain worryingly high, reaching a new record of

37 gigatonnes ( Gt) in 2022. Instead of starting to fall as envisaged in the 2021 report ,

demand for fossil fuels has increased – spurred by the energy crisis of 2022 after

Russia’s invasion of Ukraine – and so have investments in supply. Progress on energy

access has stalled while millions of people still lack access to electricity and clean

cooking , notably in sub-Saharan Africa .

• On a brighter note, clean energy technology adoption surged at an unprecedented

pace over the last two years . Solar PV capacity additions increased by nearly 50%, and

currently track ahead of the trajectory envisaged in the 2021 version of our Net Zero

Emissions by 2050 Scenario (NZE Scenario) . Electric car sales expanded 240% and

stationary battery installations by 200% since 2020 . We now estimate that global

manu facturing capacities for solar PV and electric vehicle batteries would be sufficient

to meet projected demand in 2030 in the updated NZE Scenario , if announced

projects proceed . This progress reflects cost reductions for key clean energy

technologies – solar PV, wind, heat pumps and batteries – which fell by close to 80%

on a deployment weighted average basis between 2010 and 2022 .

• Driven by policies, expanding markets , and falling costs, clean energy technologies are

shifting the outlook for emissions even under current policies. In the Stated Policies

Scenario, emissions are now projected to be 7.5 Gt lower in 2030 than in our 2015

Pre-Paris Baseline Scenario, of which policy driven expansions of solar PV and wind

account for 5 Gt and electric vehicles for nearly 1 Gt. This shift in the outlook means

that the p rojected warming of 2.4 °C in 2100 under current policy settings, through

still worryingly high, is now 1 °C lower than before the Paris Agreement in 2015 .

• Nearly 90% of countries have updated their first Nationally Determined Contribution

(NDC) under the Paris Agreement. If countries deliver in line with their revised NDCs,

emissions in 2030 will be around 5 Gt lower than under the first round of ND Cs. But

more needs to be done to be on course by 2030 to deliver announced longer -term

net zero pledges or our NZE Scenario . Both advanced economies and emerging

market and developing economies need to strengthen ambition. F air and e ffective

international co -operat ion is urgently needed to unlock clean energy investment in

emerging market and developing economies other than in China. SUMMARY

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20 International Energy Agency | Net Zero Roadmap

1.1 The context

Net Zero by 2050: A Roadmap for the Global Energy Sector was published in 2021 (IEA,

2021a) . It translates the goal of limiting global warming to 1.5 °C into a concrete roadmap

for the global energy sector. It describe s a pathway, not the definitive pathway, to the goal

of net zero emissions by 2050. It takes into account countries’ varying circumstances and

challenges.

An update of that roadmap is the focus of this report . It is based on recent developments in

technolog ies, markets, policies and investment, and identifies what governments and other

stakeholders need to do to keep alive the goal of net zero emissions by 2050. The importance

of that goal has been underlined by a number of recent climate -related disasters , with 2023

seeing the hottest July and hottest August ever recorded.

Figure 1.1 ⊳ Global energy sector CO 2 emissions, 2000-2022

IEA. CC BY 4.0.

Global energy sector emissions have not fallen in the last two years,

as envisaged in our 2021 roadmap, but instead have risen to record levels

The energy sector has undergone major shifts in the two years since the release of our 2021

report. Energy sector emissions have remained stubbornly high, reaching a new record of

37 gigatonnes (Gt) of carbon dioxide ( CO 2) in 2022 , 1% above the 2019 level (Figure 1.1).1

Even with the very strong economic rebound in advanced economies since the Covid -19

pandemic, their emissions in 2022 were around 4% below the pre -pandemic level. By

contrast, i n emerging market and developing economies emissions were around 4.5%

(roughly 1 Gt) abov e the 2019 level . This rise was largely driven by the People's Republic of

1 Unless otherwise specified, energy sector emissions in this report refer to CO 2 emissions from fossil fuel

combustion , industrial processes , and fugitive and flaring CO 2 from fossil fuel extraction . 10 20 30 40

2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022Gt CO₂

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Chapter 1 | Progress in the clean energy transition 21

1 China (hereinafter China) , wh ere emissions increased 7% between 2019 and 2022, relative

to a 2% increase in other emerging market and de veloping economies .

Since the publication of the original Net Zero by 2050 report, concerns about energy security

have become more acute, in large part due to the invasion of Ukraine by the Russian

Federation (hereinafter Russia) in 2022 , which precipitated an unprecedented global energy

crisis. Pric es for energy commodities surged to five - to ten-times their historical levels in

some instances, adding to the inflationary pressures that had been building in the wake of

the Covid -19 pandemic. The crisis spurred an increase in clean energy deployment and

investment , but also in investment in fossil fuel supply . Concerns about energy security will

remain an important consideration in the development of policy frameworks that shape

investment decisions.

Increasing geopolitical fractures have also stoked energy security concerns about the

pronounced concentration in a small number of countries of both mining and processing of

critical mineral s and clean energy technology manufacturing. In response, several countries

introduced measures that aim to promote the development of domestic supply chains. Such

measures should help to scale up the supply of clean energy technologies but could also put

at risk the benefits of global supply chains. More broadly, increased geopolitical

fragmentation highlights the need for fair and effective international co -operation to achieve

the clean energy transition.

Although fossil fuel demand has not yet started to fall , deployment and investment in some

clean energy technology supply chains has risen very rapidly since the 2021 Net Zero by 2050

report . This is partly thanks to stronger policy support in post- Covid -19 economic recovery

packages and partly due to policy response s to the global energy crisis . Recent rates of

growth for solar photovoltaics ( PV) adop tion and electric vehicles (EVs) sales have been

particularly impressive. If all announced projects are realised , manufacturing capacity for

solar PV will exceed the level required in 2030 in our 2021 Net Zero Emissions by 2050 (NZE)

Scenario , and capacity for EV batteries will come very close to requirements . Progress in

technologies such as wind power and carbon capture, utilisation and storage (CCUS) has

been less rapid. Overall, recent progress on clean energy technologies has been encouraging,

although much more remains to be done to get the world on track with the roadmap in the

NZE Scenario.

This report is being published in an important year for global climate change diplomacy. The sixth assessment cycle of the Intergovernmental Panel on Climate Change (IPCC) recently set out with greater clarity than ever before both the danger s of exceeding the 1.5 °C limit and

the availability and cost effectiveness of a range of emission s reduction options . Alongside

the IPCC scientific stocktaking, a political r eview of the progress towards internationally

agreed climate goals concludes this year in the form of the first Global Stocktake under the

Paris Agreement (see Spotlight) .

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22 International Energy Agency | Net Zero Roadmap

First global stocktake under the Paris Agreement

The Global Stocktake (GST) is a process under the Paris Agreement designed to provide

a regular assessment of collective progress towards the long -term goals of the

Agreement in order to inform subsequent updates of Nationally Determined

Contributions and enhance international co -operation on climate action. The first

stocktake (GST1) started at 26th Conference of the Parties ( COP ) in 2021 and is expected

to conclude at COP28 in 2023. Countries and other stakeholders have submitted more

than 170 000 pages of input to t he GST1. The 1.5 °C goal is a central priority of countr y

submissions, as is the enhancement of climate finance ( Figure 1.2 ).

Figure 1.2 ⊳ Key aspects of energy transition mentioned in

Global Stocktake submissions by region

IEA. CC BY 4.0.

Just transitions, renewables and action on fossil fuels are priority topics in the

first global stocktake, alongside climate finance and the 1.5 °C goal

Note: C & S America = Central and South America; Europe = the geographical region, not the European

Union. 20% 40% 60% 80% 100%Atmospheric removalOther low-emissions

techn.Hard-to-abate sectorsTechnology transferAction on fossil fuelsRenewablesJust transitions1.5 °C goalClimate finance

Percent of submissions

Africa Asia Pacific C & S America Europe Eurasia Middle East North AmericatechnologySPOTLIGHT

IEA. CC BY 4.0.

Chapter 1 | Progress in the clean energy transition 23

1 The energy sector is a central component of the GST1 country submissions: 96% of the

181 countries included in our analysis indicate that mitigation action in the energy sector

is a priority. Around 65% of countries, representing around 60% of globa l CO 2 emissions,

indicate that just transitions, renewables and action on fossil fuels are priority topics for

the energy sector. Other areas such as atmospheric removals are not yet perceived as

priority for the GST1 by all countries.

At COP28, the GST1 w ill move to the final, political phase. How the outcomes of the GST1

process influence the ambition of the next round of NDCs, expected in 2025 ahead of

COP30, will be the acid test of its success.

This report presents an updated NZE Scenario that takes account of an in -depth, sector -by-

sector assessment of developments since 2021. It enhances the detail of what is needed to

make the NZE Scenario a reality by region and technology. The analysis is presented in four

chapters.

 Chapter 1 provides an ov erview of key developments in the energy sector in recent

years. It takes stock of progress in the energy transition and development of clean energy technologies .

 Chapter 2 presents an updated NZE Scenario. It sets out some of the key differences

with the 2021 version and provides high level “dashboards” to show how each sector

and technology needs to contribute.

 Chapter 3 assesses in more depth how key sectors and technologies can make the

progress assumed in the updated NZE Scenario and looks at the impli cations of not

reaching the ambitious milestones set out for 2030.

 Chapter 4 focusses on the critical importance of energy security, equity and enhanced

global co -operation for the pathway set out in the NZE Scenario.

1.2 Bending the emissions curve

Considera ble progress has been made in deploying clean energy technologies and lowering

their cost, which is altering the emissions outlook for the energy sector. IEA projections for

global CO 2 emissions from the energy sector in the Stated Policies Scenario (STEPS) have been

progressively revised downward compared with our Pre -Paris Baseline Scenario (IEA, 2021b) .

The Pre-Paris Baseline Scenario considered government policies in place in 2015 when the

Paris Agreement on climate change was negotiated. On the basis of these policies, it

projected a rise in average global temperature of 3.5 °C by 2100. In the latest version of the

STEPS, the equivalent figure is 2.4 °C. This reflect s progress made in the transition to a lower

emissions energy system since 2015, although it still falls far short of what is needed to meet

the temperature goals of the Paris Agreement.

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24 International Energy Agency | Net Zero Roadmap

Box 1.1 ⊳ IEA scenarios

This repo rt is based on an updated and revised Net Zero Emissions by 2050 Scenario

(NZE Scenario), which sets out a pathway for the global energy sector to achieve net zero

CO 2 emissions by 2050. ( Chapter 2 provides a description of the design of the NZE

Scenario. )

Three other scenarios are employed as benchmarks against which the NZE Scenario is

compared:

 The Stated Policies Scenario (STEPS ) projects energy demand and supply and their

implications for emissions taking account of established and planned policies and

regulations. It incorporates the most recent available data and projections on

technology costs , manufacturing capacity and the industrial strategies of countries

and companies operating in the energy sector.

 The Announced Pledges Scenario (APS ) assumes that all climate commitments made

by governments around the world, including a ll those set out in NDCs and long -t erm

net zero emissions pledges, are met in full and on time.

 The Pre-Paris Baseline Scenario was produced in 2015. It is based on the policies

that were in place at the time ; it does not incorporate additional policy intentions

and targets since then . It corresponds to the Current Policies Scenario set out in the

2015 edition of the W orld Energy Outlook .

Detailed projections and analysis of the updated STEPS and APS will be included in the

World Energy Outlook 2023 , to be released in October .

World

Global energy sector emissions were 37 gigatonnes (Gt) in 2022 – a record high and a 5%

increase from 2015. Nonetheless , progress since the 2015 Paris Agreement means that the

outlook in the STEPS sees emissions peak by the middle of this decade and fall to around

35 Gt by 2030 , which is well below the level of around 43 Gt projected in the Pre -Paris

Baseline Scenario (Figure 1.3). To put this in perspective, th is 7.5 Gt difference is equal to the

current combined energy sector emissions of the United States and European Union.

Three technologies contribute the bulk of the emissions reductions in the STEPS relative to

the Pre -Paris Baseline Scenario: solar PV, wind and EVs.2 Solar PV is projected to reduce

emissions by around 3 Gt in 2030, roughly equivalent to the emissions from all the world’s

cars on the road today. Wind power reduces emissions by around 2 Gt in 2030 and EV s by

around 1 Gt.3 The latter reflects replacement of internal combustion engine (ICE) vehicles by

2 STEPS refers to the 2023 version of the scenario in this report unless otherwise specified.

3 The decomposition analysis in this section is based on direct emissions, with indirect emissions allocated to

the electricity sector.

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Chapter 1 | Progress in the clean energy transition 25

1 EVs which are increasingly powered by lower emissions electricity generation sources.

Together numerous other smaller changes across all sectors reduce emissions by a further

1.5 Gt.

Figure 1.3 ⊳ Global energy sector CO 2 emissions in the Pre-Paris Baseline

Scenario and STEPS, 2015-2030

IEA. CC BY 4.0.

Solar PV, wind power and EVs reduce emissions by 6 Gt in 2030

in the STEPS relative to the Pre -Paris Baseline Scenario

Note: Other includes all other levers with downward or upward effects on the emissions difference between

the Pre-Paris Baseline Scenario and the 2023 STEPS projections , as detailed in Figures 1.5 -1.8.

In the Pre -Paris Baseline Scenario, only modest deployment of clean energy technologies was

projected to 2030, based on the policies in place in 2015 ( Figure 1.4). Wind power and solar

PV were projected to account for less than 10% of global electricity generation in 2030, nearly

four times lower than in the STEPS. E Vs are projected to continue recent spectacular growth,

accounting for more than one -third of car sales in 2030 in the STEPS compared with a small

fraction in the Pre -Paris Baseline Scenario.

A significant strengthening of government policies in major economies is at the heart of this improvement. For example, successive five- years plans in China have progressively raised

ambitions for solar PV and driven down global costs. Offshore wind deployment in Europe

kick-started a global industry. EV targets, and fuel -economy and CO

2 emissions standards in

the European Union and China – and more recently in the United States – have driven a major

transformation in the industrial strategies of car and truck manufacturers. Similarly, electric two/three -wheelers and buses have seen significant uptake in India and other emerging

market and developing economies thanks to policy support, increasing economic

competitiveness and limited infrastructure needs. The United States, through the Inflation

Reduction Act (IRA) adopted in 2022, has provided unprecedented funding to support 30354045

2015 2030Gt CO₂

2022Pre-Paris Baseline

STEPS -2023Solar PVWindElectric vehiclesOther

IEA. CC BY 4.0.

26 International Energy Agency | Net Zero Roadmap deployment and reduce costs for a range of low -emissions technologies, notably CCUS and

hydrogen. Progress across all sectors in other regions has also helped bend the global

emissions curve. The following sections focus on key developments in selected economies which together account for over 60% of energy -related emissions today.

Figure 1.4 ⊳ Wind power and solar PV in electricity generation, and electric

cars in car sales, Pre-Paris Baseline Scenario and STEPS, 2030

IEA. CC BY 4.0.

Key clean energy technologies by 2030 in the STEPS have increased progressively

since 2015 reflecting stronger policies and technological advances

Note s: Wind and solar PV refer to the share of total electricity generation. E lectric cars refer to the share of

passenger light -duty vehicle sales.

United States

In the United States, CO 2 emissions in 2030 are 1.7 Gt lower in the outlook in the current

STEPS than in the Pre -Paris Baseline Scenario , with solar PV and wind together account ing

for around 0.8 Gt of the reduction ( Figure 1.5). A larger switch from coal to natural gas for

electricity generation accounts for around a n additional 340 million tonnes ( Mt) of CO 2

emissions reductions by 2030. The increased renewables projections reflect federal

government subsidies , post Covid -19 recovery spending , carbon -free electricity targets in an

increasing number of states, and large -scale support provided for a range of clean energy

technologies by the IRA. Among other s, the IRA includes substantial funding for energy

efficiency measures in the buildings sector, manufacturing of low -emissions technologies

and CCUS projects.

In the transport sector, the projected share of electric cars in total car sales in 2030 increase s

from less than 10% in the Pre-Paris Baseline Scenario to 50% in the STEPS. This upward

revision reflects public charging infrastructure funding under the Infrastructure Investment

and Jobs Act , new eligibility requirements for EV tax credits under the IRA, more stringent 5%10%15%20%

2015Solar PV

Pre-Paris Baseline:5%10%15%20%

2017 2019 2021 2023Wind

STEPS edition of:10%20%30%40%Electric cars

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Chapter 1 | Progress in the clean energy transition 27

1 national fuel-economy standards, and more aggressive electrification strategies of car and

truck manufacturers . Increased deployment of EV s accounts for 200 Mt of additional CO 2

emission reductions by 2030 . However, these reductions are partially offset by an increase

in the market share of sports utility vehicles (SUVs), which are less fuel efficient than standard

passenger cars.

Figure 1.5 ⊳ Energy sector CO 2 emissions in the United States in the Pre-Paris

Baseline Scenario and STEPS, 2030

IEA. CC BY 4.0.

Nearly half of the emissions reductions in 2030 between the Pre -Paris Baseline Scenario and

the 2023 STEPS are due to accelerated deployment of renewables in the power sector

Note s: Other electricity includes nuclear, hydropower , emissions intensity of heat generation and electricity

sector efficiency. O ther transport includes changes in the fuel economy of ICE vehicles and the deployment of

biofuels. Buildings and indust ry refer to direct emissions in these sectors.

European Union and United Kingdom

In the European Union and United Kingdom, CO 2 emissions projections in the STEPS are

around 0.9 Gt lower than in the 2015 Pre-Paris Baseline Scenario (Figure 1.6). Two -thirds of

the difference in 2030 are due to increased shares of wind and solar PV in electricity

generation , driven by a range of new incentives and targets . A number of coal phase -out

targets introduced in major European countries such as Germany, Italy and the United

Kingdom between 2018 and 2020 also contribute to lower projected emissions in the electricity sector in the STEPS.

The building s sector makes a big contribution to lower e missions, with CO

2 emissions 150 Mt

lower in the STEPS than in the p re-Paris Baseline Scenario in 2030 thanks in part to the

revised EU Energy Performance of Buildings Directive as well as new and expanded incentives

for energy efficiency retrofits . An acc elerated deployment of heat pumps under the

REPowerEU Plan and a range of fossil fuel boiler bans also contribute to a smaller share of 3 4 5 6Gt CO₂Solar PV

Wind

More coal-to-gas switching

Electricity demand

Other electricity

Electric vehicles

Road activity

Other transport

Buildings

Industry

Other2022Electricity

Transport

Other sectors2030

Pre-Paris

baseline

2030

STEPS

IEA. CC BY 4.0.

28 International Energy Agency | Net Zero Roadmap

fossil fuels in heating demand in buildings, which is nearly 10 percentage points lower in 2030

in the STEPS than in the Pre -Paris Baseline Scenario .

The transport sector contributes through a ccelerated deployment of E Vs, which reduce

emissions by more than 100 Mt in 2030 compared with the 2015 projections . From a small

fraction of annual cars sales by 2030 in the Pre -Paris Baseline Scenario , the projected share

of electric cars increases to nearly two -in-three new cars in the STEPS , driven by new CO 2

standards, forthcoming bans on new ICE vehicles , EV incentives and investment in charging

infrastructure . As in the Unit ed States, however, slower improvements in road transport fuel

economy due to increasing SUV sales partially offset this gain.

In industry, strengthening of the E uropean Union Emissions Trading Scheme is projected to

lead to larger savings from energy -intensive industries in 2030 than previously projec ted,

though much of this is outweighed by higher projections for industrial activity .

Figure 1.6 ⊳ Energy sector CO 2 emissions in the European Union and the

United Kingdom in the Pre-Paris Baseline Scenario and STEPS, 2030

IEA. CC BY 4.0.

Two-thirds of the emissions reductions in 2030 between the Pre -Paris Baseline Scenario

and the STEPS in Europe are due to accelerated deployment of wind and solar PV

Note s: Other electricity includes nuclear, hydropower , emissions intensity of heat generation and electricity

sector efficiency. O ther transport incudes the fuel economy of ICE vehicles and the deployment of biofuels.

Buildings and industry refer to direct emissions in these sectors.

China

CO 2 emissions in China are projected to be around 1.2 Gt lower in 2030 in the STEPS than in

the Pre -Paris Baseline Scenario ( Figure 1.7). Solar PV and wind are the main drivers . In the

Pre-Paris Baseline Scenario, w ind and solar PV account for slightly less than 10% of total

electricity generation in 2030; in the STEPS they a ccount for more than one -third. This change 1.52.02.53.03.5Gt CO₂Solar PV

Wind

More coal-to-gas switching

Electricity demand

Other electricity

Road EVs

Road activity

Other transport

Buildings

Industry

Other20222030

Pre-Paris

baseline

2030

STEPSElectricity

Transport

Other sectors

IEA. CC BY 4.0.

Chapter 1 | Progress in the clean energy transition 29

1 reflects more ambitious renewables deployment goals in successive five-year plans and an

increase from 20% to 25% in the updated NDC in the planned share of non-fossil fuel sources

in primary energy by 2030.

Figure 1.7 ⊳ Energy sector CO 2 emissions in China in the Pre-Paris

Baseline Scenario and STEPS, 2030

IEA. CC BY 4.0.

Emissions in China in 2030 in the STEPS are projected to be 1.2 Gt lower than in the Pre -Paris

Baseline Scenario, though rising coal demand partially offset s reductions from renewables

Note s: Other electricity includes nuclear, hydropower , emissions intensity of heat generation and electricity

sector efficiency. O ther transport incudes the fuel economy of ICE vehicles and the deployment of biofuels.

Buildings and industry refer to direct emissions in these sectors.

EVs are projected to reduce CO 2 emissions by around 250 Mt by 2030 in China in the STEPS

relative to the Pre -Paris Baseline Scenario. Electric cars account for a tiny share of total car

sales by 2030 in the Pre -Paris Baseline Scenario , but for two -thirds of all new car sales in the

STEP S. In 2016, the government set a planning target for New Energy Vehicles (largely EV s)

to reach 12% of total vehicle sales in 2020 . In 2020, it set a new target of 20% of new vehicle

sales in 2025 supported by large purchase subsidies and tax exemptions . These measure s,

together with continued policy support to promote EV manufacturing and high levels of EV

sales in recent years , have led to successive upwards revisions in the STEPS projections of

the EV share in total vehicle sales in 2030.

China’s drive to increase electrification in the transport, buildings and industry sectors ,

together with strong demand growth in the manufacturing and residential sectors, has led

to rapidly rising electricity demand . Between 2015 and 2022, China’s electricity generati on

increased at more than 6% per year, faster than the rate of GDP growth . The massive

expansion of China’s low -emissions electricity generation during this period was not

sufficient to meet demand, leading to an increase in coal- fired power generation. As a result, 10 12 14 16Gt CO₂Solar PV

Wind

Less coal-to-gas switching

Electricity demand

Other electricity

Electric vehicles

Road activity

Other transport

Buildings

Industry

Other2022Electricity

Transport

Other sectors2030

Pre-Paris

baseline

2030

STEPS

IEA. CC BY 4.0.

30 International Energy Agency | Net Zero Roadmap

China’s share in global coal- fired power generation increased by 10 percentage points during

these years. This growth in coal -fired electricity generation moderate s the emissions

reduction s in the STEPS relative to the Pre -Paris Baseline Scenario by 2030. I n the longer

term, however, China’s early electrification of energy consumption will also bring lower CO 2

emissions in end -use sectors as power generation continues to decarbonise.

India

Projected CO 2 emissions in India in 2030 are 1.3 Gt lower in the STEPS than the Pre -Paris

Baseline Scenario ( Figure 1.8). The share of solar PV in power generation increases eightfold,

saving nearly 400 Mt of emissions in 2030 in STEPS . In the Pre -Paris Baseline Scenario, wind

and solar PV account for less than 10% of total generation in 2030; in the STEPS, this rises to

arou nd 25%. A key reason is the adoption in 2021 of a 500 gigawatt (GW) target for no n-

fossil fuel capacity by 2030. Compared with solar PV, wind power has made less progress,

with projections for capacity deployment by 2030 in the STEPS only slightly larger than expected in Pre -Paris Baseline Scenario. This reflects a lack of progress in resolving land

acquisition and tariff setting issues related to wind power developments.

Figure 1.8 ⊳ Energy sector CO 2 emissions in India in the Pre-Paris

Baseline Scenario and STEPS, 2030

IEA. CC BY 4.0.

India sees major emission s reduction s from solar PV ; lower GDP growth in STEPS

as a result of the pandemic also reduces projected emissions

Note s: other electricity includes nuclear, hydropower , emissions intensity of heat generation and electricity

sector efficiency. O ther transport incudes the fuel economy of ICE vehicles and the deployment of biofuels .

Buildings and industry refer to direct emissions in these sectors.

Changes in macroeconomic assumptions account for part of the difference in emissions

between the Pre- Paris Baseline Scenario and the STEPS. India’s GDP took a significant hit in 2 3 4 5Gt CO₂Solar PV

Wind

Less coal-to-gas switching

Electricity demand

Other electricity

Road EVs

Road activity

Other transport

Buildings

Industry

Other20222030

Pre-Paris baseline

2030

STEPSElectricity

Transport

Other sectors

IEA. CC BY 4.0.

Chapter 1 | Progress in the clean energy transition 31

1 the Covid -19 pandemic, and the subsequent growth projected in the STEPS is not sufficient

to recover lost ground. Therefore , GDP in 2030 is slightly lower in the STEPS than in the

Pre-Paris Baseline Scenario. As a result, i ndustrial production and electricity demand are also

somewhat lower , as are projected emissions in both the industry and electricity sectors.

1.3 Nationally Determined Contributions and

Net Zero Emissions Pledges

Despite the progress in recent years, national commitments to reduce emissions collectively

fall short of what is required by 2030 to bring global emissions down to a level in line with

achieving net zero emissions by 2050. In addition, the various commitments are not yet

underpinned by sufficiently strong and comprehensive policies to give confidence that they

will be successfully delivered. Both a dvanced economies and emerging market and

developing economies need to strengthen their implementation of pledges and to raise their level o f ambition, including through the submission of stronger NDCs at the international

level (see Chapter 4).

1.3.1 Nationally Determined Contributions

The Paris Agreement require s all countries to submit Nationally Determined Contributions

(NDCs) that set out their climate targets . As of July 2023, 168 NDCs ha d been submitted,

covering 195 Parties to the U nited Nations Framework Convention on Climate Change

(UNFCCC).4 Successive Conferences of the Parties (COPs) have encouraged countries to

update their first NDCs to increase their ambition. So far, n early 90% of NDCs have been

updated since the first submission.

The revisions have led to a significant reduction in targeted emissions in 2030 totalling

around 5 Gt, if all targets conditional on international support are reached ( Figure 1.9).5

According to IEA analysis, advanced economies were projected to emit slightly less than

10 Gt of CO 2 emissions from fuel combustion in 2030 under the first round of NDCs; revised

NDCs have lowered this by around 2.1 Gt, or around 20%. Full implementation of NDCs in

advanced economies would still see emissions of around 5.5 tonnes per capita in 2030, about

1 tonne per capita more than the current world average, but about 2 tonnes less than in

China today. In emerging market and developing economies, the picture is somewhat different. In aggregate, revised NDCs in emerging market and developing economies lowered

emissions compared to their first NDCs by 2.8 Gt, mostly driven by revisions unconditional on financial support.

4 194 countries and one region, the E uropean Union , whose member states submit a joint NDC.

5 The analysis in this section refers to emissions from fuel combustion and excludes industrial process

emissions and international bunkers. It considers that conditional mitigation pledges put forward by some

developing economies in their NDCs are fully achieved.

IEA. CC BY 4.0.

32 International Energy Agency | Net Zero Roadmap

Figure 1.9 ⊳ CO 2 emissions from fuel combustion implied by NDCs and

in IEA scenarios by region, 2030

IEA. CC BY 4.0.

Revised NDCs boost the reduction in targeted emissions by around 5 Gt CO 2 in 2030 ,

this is far short of what is needed to be on track for net zero emissions by 2050

However, IEA analysis suggests that planned energy policies in emerging market and

developing economies are already more ambitious in the aggregate than their NDCs indicate ,

particularly in the case of conditional NDCs . Their emissions in the STEPS in 2030 are

accordingly lower , by 1 Gt, than under their revised un conditional NDCs. The picture is

reversed in advanced economies, where emissions in 2030 are nearly 0. 7 Gt higher in the

STEPS than in revised NDCs, implying that the policies currently in place are inadequate to

meet stated NDCs , let alone longer -term net zero emissions pledges.

1.3.2 Net zero emissions pledges

As of September 2023, net zero emissions pledges6 cover more than 85 % of global energy -

related emissions and nearly 90 % of global GDP. To date, 94 countries and the E uropean

Union have pledge d to meet a net zero emissions target. Some countries have also

communicated their net zero emissions pledges to the UNFCCC in the form of long ‑term

low‑emissions strategies . These strategies do not have the same legal force under the Paris

Agreement as NDCs, but they are important as they provide a signal of country ambition s to

contribute to the collective goal of net zero emissions.

Increasing numbers o f countries have adopted a net zero emissions target in national law.

Collectively, they currently account for about one -fifth of global energy sector emissions. The

6 Net zero emissions pledges and targets here include climate neutrality ( all greenhouse gases ) and carbon

neutrality (CO 2 only) objectives. As of August 2023, out of the 88 net zero emissions pledges formulated by

countries, 83% have a target comprising all greenhouse gases and 17% a target on only CO 2 emissions. 4 8 12

First

NDCsRevised

NDCsSTEPS APS NZE

Conditional UnconditionalAdvanced economiesGt CO₂

+ 10 20 30

First

NDCsRevised

NDCsSTEPS APS NZEEmerging market and developing economies

IEA. CC BY 4.0.

Chapter 1 | Progress in the clean energy transition 33

1 advanced economies in Asia Pacific and Europe are the leaders in this regard: 100% of

ener gy-related emissions are covered by a net zero emissions target in national law in

advanced economies in the Asia Pacific region and about 80% in Europe, including through

the EU Climate Law ( Figure 1.10 ).7

Figure 1.10 ⊳ Energy- related CO 2 emissions covered by a government

net zero emissions pledge by type and by region

IEA. CC BY 4.0.

The bulk of emissions are covered by some form of net zero emissions pledge

in all regions except the Middle East and North Africa

Note: Asia Pacific - AE includes Australia , Korea, Japan and New Zealand ; MENA includes the Middle East and

North Africa country groups.

The majority of emissions in emerging market and developing economies in Central and

South America, Eurasia, North America and s ub-Saharan Africa are covered by net zero

emissions pledge s, but mostly in a non -legally binding policy document or in an oral pledge.

In the Middle East and North Africa (MENA), 1 1 countries out of 1 7 have yet to adopt a net

zero emissions target : if Egypt, Iran an d Algeria adopted such a target , they would collectively

cover almost 90 % of CO 2 energy -related emissions in the MENA region .

The overwhelming majority of net zero emissions pledges cover all sectors of an economy,

and all cover the energy sector. However, as many countries include the land use, land -use

change and forestry sector in their projections, and account for this as an emissions sink, the pace of emissions reduction in the energy sector is usually slower than in the IEA scenarios. Setting more transparent net zero emissions targets, for instance by specifying the absolute

level of emission reductions foreseen by the goal year and, separately, the level of emission

removals, would help bring more clarity and trust to the process.

7 This 80% coverage refers to the geographical region of Europe, not just the European Union . 20% 40% 60% 80% 100%Asia Pacific - AE

Developing Asia

Central and South America

Europe

Eurasia

MENA

North America

Sub-Saharan Africa

In law Policy document Oral pledge No pledge

IEA. CC BY 4.0.

34 International Energy Agency | Net Zero Roadmap

Countries have varying starting points and levels of responsibility and capabilit ies.

Consequently , they have adopted various timeframes for the ir net zero emissions pledges.

In general, advanced economies have put forward net zero emissions pledges with the

earliest target year s. About 30% of current global energy -related CO 2 emissions are covered

by net zero emissions pledges by 2050 or sooner , but the share is close to 95% in those

countries in the highest decile of global income distribution, e.g. Finland ( climate neutral by

2035), Iceland and Austria (climate neutral by 2040), and Germany and Sweden ( climate

neutral by 2045) ( Figure 1.11 ).

Figure 1.11 ⊳ Energy sector CO 2 emissions covered by net zero emissions

targets by net zero year and per capita income group

IEA. CC BY 4.0.

Ambition of net zero emissions target dates tends to correlate with development levels;

almost all countries would need to bring the date forward to align with the NZE Scenario

Note: GDP = gross domestic product; PPP = purchasing power parity.

The picture is more mixed in other deciles. Some countries in the top 30 -40% of the global

income distribution have net zero emissions targets after 2050 or no target at all , such as

Kuwait and Qatar (no target), and Bahrain and Saudi Arabia ( climate neutral by 2060). Some

countries mov ed their target year forward. For instance , in 2021 Germany advanced its

climate neutrality goal from 2050 to 20 45 and Brazil from 2060 to 2050 . In its updated NDC ,

China pledged to peak its emissions before 2030 and to target carbon neutrality by 2060 at

the latest .

25 00050 00075 000100 000

25%50%75%100%

1 2 3 4 5 6 7 8 9 10

USD (2021, PPP)

Global income decile

< 2050 2050 > 2050 No target GDP per capita (right axis)

IEA. CC BY 4.0.

Chapter 1 | Progress in the clean energy transition 35

1 1.4 Clean energy technologies

Development and deployment of clean energy technologies have progressed significantly

since the adoption of the Paris Agreement in 2015 , boosted recently by stimulus spending

related to the Covid -19 pandemic, the response from governments and investors to t he

global energy crisis, and growing commercial and geopolitical competition for markets and

supply chains.

1.4.1 Deployment

Mass manufactured technologies are leading the way

The deployment of many clean energy technologies has accelerated markedly since 2015

(Figure 1.12 ) (IEA, 2023a) . Mass manufactured technologies have seen the fastest growth,

benefiting from standardisation and short lead times. For example, between 2015 and 2022:

 Solar PV capacity additions increased by more than 400%, with almost 1 terawatt ( TW)

of capacity added, nearly equivalent to the total installed electricity capacity in the

European Union .

 Electric car sales increased by nea rly 2 000%, with over 25 million sold over the period,

equivalent to more than all the cars on the road in Canada.

 Residential heat pump sales increased by 225%, with approximately 600 GW sold,

approximately equivalent to the entire residential heating capacity in Russia.

 Stationary battery storage capacity additions increased by 2 500%, with nearly 45 GW

installed, approximately equivalent to the total installed electricity capacity in

Argentina .

The acceleration in clean technology deployment has been particularly strong in the l ast two

years. Around one -third of all PV solar deployment to date took place in 2021 and 2022, and

the figures are even higher for some other clean energy technologies: about 60% for both

electric car sales and for the installation of stationary batteries. Actual i nstallations for solar

PV in 2022 and estimated installations for 2023 track ahead of the level projected in the IEA

Net Zero by 2050 report in 2021 (IEA, 2021a) . Emerging technologies such as electrolysers

for hydrogen production are also moving forward, with total global installed electrolyser

capacity more than doubl ing in the l ast two years, reaching nearly 700 megawatt s (MW ) in

2022. Manufacturing capacity fo r clean energy technologies is scaling up quickly, suggesting

that deployment will continue to increase strongly in the coming years.

Important and impressive as this progress is, there is much more to be done. The slow pace

of the turnover of the stock of most types of energy -related equipment means that there is

a considerable lag between a technology becoming dominant in new deployment s and that

technology becoming dominant in the overall operating stock, underlining the urgent need

for continued action to further boost deployment in the near term to be on track to reach

net zero emissions by 2050 (see Chapter 3).

IEA. CC BY 4.0.

36 International Energy Agency | Net Zero Roadmap

Figure 1.12 ⊳ Global installations of selected clean energy technologies,

2010-2022

IEA. CC BY 4.0.

Deployment of a number of key clean technologies has

accelerated significantly since the Paris Agreement in 2015

Moreover, deployment has been uneven across regions, with the strongest progress in

regions with supportive policy environments , and strong financial and technical capabilities.

From 2015 to 2022, advanced economies and China together accounted for over 95% of

global electric car and heat pumps sales and nearly 8 5% of combined wind and solar capacity

additions (Figure 1.1 3). Nevertheless, s ome technologies have expanded strongly in some

other countries. For instance, India has seen particularly rapid progress in solar PV

deployment.

The rapid growth in clean energy technologies has occurred in parallel with a trend towards

declining deployment of new fossil fuel- based equipment in several areas . Fossil fuel-based

electricity capacity additions peaked in 2012 and declin ed to less than half their peak level

by 2022, while sales of ICE vehicles peaked in 2017 with a 25% decline from this peak by

2022. As a result, clean energy technologies have expanded in both absolute terms and

market share . 100 200 300

2010 2022Solar PV additions (GW)

4 8 12

2010 2022Electric car sales (million vehicles)

40 80 120

2010 2022Residential heat pump

sales (GW)

8 16 24

2010 2022Battery storage additions

(GW)

IEA. CC BY 4.0.

Chapter 1 | Progress in the clean energy transition 37

1 Figure 1.13 ⊳ Share of the global deployment of selected clean energy

technologies in a dvanced economies and China , 2010 and 2022

IEA. CC BY 4.0.

Deployment of clean energy technologies remains highly

concentrated in China and advanced economies

Notes: Solar PV and wind indicate capacity additions . Electric cars and heat pumps indicate sales.

Box 1.2 ⊳ Comparative pace of the clean energy transition

Comparing current events to what happened in the past is not without pitfalls, as no

historical analogy is a perfect fit. Nonetheless, looking at how technologies went from

niche to mass deployment in the past is a useful way to contextualise the changes

underway for clean energy technologies.

Some technologies experienced remarkably rapid growth in the past (Figure 1.14). For

instance, US aircraf t production rose by an annual average of 75% between 1939 and

1944, driven by a seismic shift to a wartime economy. The Ford Model T achieved a n

annual average production growth rate of 34% in the 1910s, thanks to innovation in mass

production and the assembly line. These transitions were truly transformational,

kick‑starting the commercial aviation industry and the advent of affordable cars.

EV batteries and solar PV have also experienced rapid deployment growth by historical

standards. Average annual deployment growth of EV batteries between 2010 and 2020

was 70%, with solar PV at 24%. Although this level of deployment growth is slightly less

than achieved in the case of US aircraft production between 1939 and 1944, the annual

average cost reduction for both EV batteries (19%) and solar PV modules (18%), powered

by high levels of standardisation in manufacturing, outstrip the average cost declines

seen in both U S aircraft production from 1942 -1945 and the Ford Model T in the 1910s. 20%40%60%80%100%

2010 2022 2010 2022 2010 2022 2010 2022 2010 2022Rest of

world

China

Advanced

economiesSolar PV Population Wind Heat pumps Electric cars

IEA. CC BY 4.0.

38 International Energy Agency | Net Zero Roadmap

There have been even faster examples of technology transitions, though arguably less

comparable. For example, computer memory prices reduced each year by an average of

about 35% betwee n both 1980 -1990 and 1990 -2000 (McCallum, 2023) .

Figure 1.14 ⊳ Deployment growth and cost reduction of clean energy

technologies, 2010-2020 relative to selected historic al

technology transitions

IEA. CC BY 4.0.

Batteries and s olar PV have progressed at rates comparable

to some of the most rapid historic technology transitions

Note: The dataset s for US Aircraft production in WWII runs from 1939 to 1944 for average annual

deployment growth and from 1942 to 1945 for average annual cost reduction.

Sources : Lafond, Greenwald and Farmer (2022); Zeitlin (1995); Abernathy and Wayne (1974); Grubler

Nakicenovic and Victor, (1999).

Other technologies such as wind so far have followed a somewhat slower average

deployment trajectory , comparable to past transition s such as the introduction of gas

turbines in the 1970s , while still exhibiting annual growth rates of 10 -20%.

Although progress on some clean technologies compares favourably to historic

transformational examples, the example of US WWII aircraft production in particular

suggest s that even faster deployment could be achieved through more research and

development ( R&D ) funding and more concerted government action. 20%40%60%80%Average annual

deployment growth

-20%-15%-10%-5%EV batteries

(2010-20)

Solar PV modules

(2010-20)

Wind onshore

(2010-20)

Wind offshore

(2010-20)

US WWII aircraft

(1939-44/1942-45)

Ford Model T

(1910-20)

Gas turbines

(1970-80)

Average annual

cost reduction

IEA. CC BY 4.0.

Chapter 1 | Progress in the clean energy transition 39

1 Plans for l arge- scale technology projects are starting to increase rapidly

Large -scale technologies, such as CCUS, liquid biofuel or hydrogen -based steel production,

have seen slower deployment over the l ast decade than smaller mass manufactured and

modular technologies. For example, less new CO 2 capture capacity was added betwee n 2015

and 2022 than between 2010 and 2015. Large -scale technologies usually need to be tailored

to site -specific conditions and, due to their large unit sizes, offer fewer opportunities for

learning -by-doing advances than smaller and more modular technolo gies. This tends to mean

slower cost improvements . Some large -scale technologies are not yet available on the

market , which also hinders immediate commercial deployment.

Figure 1.15 ⊳ Global CO 2 capture project pipeline, 2010-2023

IEA. CC BY 4.0.

There has been strong growth in the project pipeline for CO 2 capture in recent years,

implying that installed capacity is set to rise significantly

Notes: Includes all facilities with a capacity larger than 0.1 Mt CO 2 per year. Q2 = second quarter. Under

construction = a final investment decision has been announ ced and construction is ongoing or imminent.

Advanced development = project is at f ront -end engineering and design stage and/or engineers have been

contracted and/or engineering, procurement, and construction have been announced.

In recent years, howev er, the number of announced projects for large -scale technologies has

increased significantly . For example, the number of CCUS projects in the pipeline nearly

tripled in 2021 and have nearly doubled again since then (Figure 1.15), driven by stronger

policy support, particularly in the United States (IEA, 2023b) . If all projects in the pipeline

were realised, CO 2 capture capacity would expand more than eight -fold, rising from about

45 Mt today to reach nearly 400 Mt per year i n 2030 , and CO 2 storage capacity would

increase to comparable levels (see Chapter 3). However, so far only about 5 % of announced

projects have reached the final investment decision stage . Rapid acceleration of the

deployment of large -scale, site -specific t echnologies will require additional policy support,

including through measures to encourage investment in key enabling infrastructure such as 100 200 300 400

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023

Q2

Operating Under construction Advanced development Concept and feasibilityNumber of projects

IEA. CC BY 4.0.

40 International Energy Agency | Net Zero Roadmap

CO 2 storage facilities, to facilitate the demonstration and commercialisation of emerging

technologies, and to create larger and more international markets for low-emission s

products .

Box 1.3 ⊳ Clean Technology Deployment Index

It can be hard to grasp the nature and extent of the changes taking place in the global

energy system and benchmark them against what needs to happen to meet the goals of

the Paris Agreement. Th e difficulty is increased by the size and complexity of the system

and by the slow rate of turnover of the huge stocks of often long -lived energy -related

infrastructure and equipment.

In order to provide a succinct and high -level summary of the rate of change, this report

has created a Clean Technology Deployment Index (CTDI). The CTDI has bee n developed

by:

 Gather ing data on the historical annual deployment of clean energy technologies

and provid ing an estimate of expected deployment in 2023.

 Index ing the historical annual values for each technology to the annual average

deployment of that technology in the NZE Scenario in the period 2028 -2032.

 Weighting each technology according to its share in global emissions reductions in

the NZE Scenario in 2030 (see Chapter 2, section 2.1.3).

This methodology means that the CTDI gives an aggregate measure of how far current

clean energy deployment levels are from the level required in 2030 in the NZE Scenario.

An index value of 100 would mean that clean energy deployment captured in the index

collectively reaches the level required in 2030. The estimated index value for 2023 of just

over 30 implies that current levels of deployment of clean energy technologies are about

one-third of the level required in 2030 in the NZE Scenario (Figure 1.16).

Between 2010 and 2023, deployment of clean energy technologies as measured by the

CTDI rose at an average annual rate of around 13%, leading the index value to increase

by 5-times over the period. There has been a clear acceleration in recent years, with clean

energy technology deployment more than doubling between 2019 and the 2023

estimate , achieving an average annual growth rate of over 20%. This compares to an

average annual growth rate of just under 20% needed from 2023 to 2030 to align with

the NZE pathway .

The CTDI needs to be interpreted with a degree of caution. One reason is that the

composition of clean energy technology deployment matters as much as the rate. Surging

ahead on one techno logy and falling behind on another might lead to a short -term boost

in the CTDI score without putting the energy system as a whole on a pathway to net zero

emissions by mid -century. In addition, the NZE Scenario is one pathway to net zero

emissions by 2050, and benchmarking current clean technology deployment against the

needs of alternative pathways would yield somewhat different results . Nonetheless, the

IEA. CC BY 4.0.

Chapter 1 | Progress in the clean energy transition 41

1 CTDI has value in showing the acceleration in deployment seen in recent years, as well as

in giving an indication of the levels of deployment needed over the course of this decade

to be on track to reach net zero emissions by mid -century.

Figure 1.16 ⊳ Clean Technology Deployment Index

IEA. CC BY 4.0.

Deployment of clean technologies has increased significantly since 2010

Notes: CCUS = carbon capture, utilisation and storage. 2023e = estimated values for 2023 based on the

latest available data by technology and project pipeline data.

1.4.2 Supply chains

Clean energy technology supply chains have been scaling up rapidly in recent years. Progress

has been particularly fast in the manufacturing segment, where countries are competing to

secure a place in the new global energy economy. For example, the nascent manufacturing

sector s of solar PV in the early 2000s and of batteries in the 2010s have become vast

industries (IEA, 2023c) . The speed of expansion has exceeded what was expected just a few

years ago, which has boosted hopes of getting the energy transition as a whole on track for

net zero emissions by 2050 (see Chapter 2).

Manufacturing capacity for some critical technologies is expanding rapidly

Clean technology manufacturing capacity posted strong year -on-year growth rates in 2022

for batteries (+72%), solar PV (+39%), electrolysers (+26%) and heat pumps (+13%). This

momentum shows no sign of slowing in the near term given the pipeline of announced

manufacturing projects continuing to expand rapidly ( Figure 1.17 ). In the first quarter of

2023 alone, new announce ments of solar PV manufacturing projects would increase

projected outpu t by around 60% in 2030 ; the projected increase for batteries would be

around 25% and for electrolysers around 30 % (IEA, 2023d) . 10 20 30

2010 2015 2020 2023eNZE 2028 -2032 = 100Hydrogen

Biofuels

CCUS

Heat pumps

Efficient appliances

EVs

Nuclear

Other renewables

Wind

Solar

IEA. CC BY 4.0.

42 International Energy Agency | Net Zero Roadmap

Figure 1.17 ⊳ Announced manu facturing project throughput and

deployment of key technologies in the NZE Scenario, 2030

IEA. CC BY 4.0.

If all announced projects proceed , solar PV manufacturing would exceed and batteries

manufacturing would get very close to the 2030 levels required in the NZE Scenario

Notes: 2022 production values reflect actual utilisation rates. A utilisation rate of 85% is used for both existing

and announced manufacturing capacity in 2030. Increased utilisation indicates that utilisation of existing

manufacturing capacity increases from current rates, which can be relatively low in some cases, to 85%.

Committed refers to projects that either have reached a final investment decision or are under construction .

Announced projects indicate announcements through first- quarter 2023. Note that data is available for

announced electrolyser manufacturing projects as of second -quarter 2023 in the Global Hydrogen Review

2023 (IEA, 2023e) .

If all announced solar PV module manufacturing projects are realised, their combined output,

together with that from the increased utilisation of existing manufacturing capacity would exceed the deployment needs of the updated NZE Scenario in 2030 by around 30%. EV and

grid storage battery needs for 2030 would also be almost fully met under the same

considerations. Caution is needed however as many announced projects have not yet

reached a final investment decision or started construction. Only around 25% of the

announced projects for solar PV manufacturing capacity worldwide can be considered

committed. The equivalent figure for batteries is around 30% and about 5% for electrolysers.

Growth in manufacturing capacity for key wind turbine components – nacelles, towers and

blades – was much slower at around 2% in 2022. Some wind manufacturers are struggling to

boost output due to supply chain disruptions and higher costs resulting from the effects of

the Covid -19 pandemic and Russia’s invasion of Ukraine. This follows a period of falling costs

and rapid expansion in the wind industry prior to 2020. Additional policy support would help the wind power sector to overcome these challenges and play the critical role envisaged for it in the NZE Scenario. 50%100%150%

Solar PV Batteries Wind Heat

pumpsElectrolysers2022

With increased

utilisation

Commited

PreliminaryNZE 2030 deploymentProduction

Announced projects

IEA. CC BY 4.0.

Chapter 1 | Progress in the clean energy transitio n 43

1 While the clean technology manufacturing base is expanding rapidly, it remains hig hly

concentrated geographically ; the majority of current and announced manufacturing projects

are in China . Yet, r ecent policy changes are beginning to expand project pipelines elsewhere.

There have been notable increases in the project pipeline for batter y production facilities in

the United States, driven in large part by the incentives provided by the IRA. Mean while the

Production Linked Incentive (PLI) programme in India is providing a boost to domestic

manufacturing, including through the provision of nearly USD 2.4 billion under the second

phase of the High Efficiency Solar PV Modules PLI that began in October 2022 and

USD 2.5 billion under the Advanced Chemistry Cell Battery Storage PLI announced in late

2021. Among key measures in the European Union , the Net Zero Industry Act (NZIA),

announced in March 2023, proposes measures to strengthen clean technology

manufacturing in the E uropean Union .

In addition, o ther countries are providing support to promote clean technology

manufacturing . Recent initiatives include USD 1.8 billion in subsidies for battery

manufacturing in Japan’s Green Transformation (GX) initiative ; a refundable tax credit for

30% of investment cost in new manufacturing equipment for key clean technologies in

Canada’s 2023 Budget ; USD 5 billion in loans and guarantees from the Export- Import Bank of

Korea and state -owned Korea Trade Insurance to advance domestic battery manufacturing :

and in Australia, USD 2 billion for domestic clean technology manufacturing via the National

Reconstruction Fund. More diverse and resilient supply chains will help strengthen security .

Clean technology markets are booming

The combined global market for five key clean energy technologies – solar PV, wind,

batteries, electrolysers and heat pumps – surged to just under USD 300 billion dollars in

2022, a nearly 20% increase over the previous year. This was fuelled by rapid growth in

capacity and sales , though it also reflect s unit cost increases for some technologies in 2022

resulting from supply chain disruptions and energy and commodity price inflation. Sales were concentrated in major markets, notably China, North America and the European Union. EV

batteries and stationary st orage applications contributed 65% of the market growth in 2022,

mainly due to the huge global increase in electric car sales from almost 7 million in 2021 ( 9%

of global car sales) to over 10 million in 2022 (1 4% of global car sales ).

The market size of th ese five technologies has almost tripled since 2010, a period during

which their unit costs declined on a combined deployment weighted average basis by around

80% ( Figure 1.18 ). Absent these cost declines, an extra USD 1 trillion in spending would have

been needed in 2022 to achieve the level of deployment in that same year .

IEA. CC BY 4.0.

44 International Energy Agency | Net Zero Roadmap

Figure 1.18 ⊳ Global market size of selected clean energy technologies,

2010-2022

IEA. CC BY 4.0.

The global market for five key clean technologies – solar PV, wind, batteries,

electrolysers and heat pumps – has almost tripled over the past decade

Progress in expanding supply chain capacity has been uneven

Large quantities of critical minerals are required for clean energy technologies and their

supporting infrastructure , ranging from wind turbines and EV batteries to CO 2 pipelines and

power grids. Since clean energy technologies already account for high shares of total demand

of these minerals (between about 1 5-55% for lithium, cobalt, nickel and copper today) ,

continuing growth in the deployment of the se technologies hinges on rapid expansions in

secure and sustainable critical mineral supply chains.

Critical minerals extraction and processing capacity has increased significantly over the last

decade in response to rising clean energy and other demands . Between 2010 and 2022,

lithium mining output rose by a factor of five , and nickel and cobalt by a factor of two. Growth

has been particularly strong in recent years, with lithium mining output expanding by about

80% between 2020 and 2022, and output of nickel increas ing by about 35% and cobalt by

about 40% over the same period (IEA, 2023f) . Despite this growth in supply, markets have

been tight as a result of rapid demand growth , especially for batteries. Lithium prices have

shown the largest volatility, with internation al price markers increasing more than five-fold

between the first half of 2020 and 2022.

Investors are responding to these price spikes . The pipeline of announced projects for the

extraction and processing of key critical minerals point s to continued expansion in supply this

decade. For example, announced projects to expand lithium extraction capacity increased by

14% for lithium between the end of 2022 and the second quarter of 2023 . Anticipated supply

based on announced extraction projects would meet approximately 90% of demand levels in 100 200 300

2010 2015 2020 2022Electrolysers

Heat pumps

Batteries

Wind

Solar PVBillion USD (2022, PPP)

IEA. CC BY 4.0.

Chapter 1 | Progress in the clean energy transition 45

1 2030 in the updated NZE Scenario for copper, 8 0% for nickel, 6 5% for lithium, and 85 % for

cobalt ( Figure 1.19 ).8 (Chapter 4 explores critical minerals supply and demand in more detail

in the context of the needs of the NZE Scenario ).

Figure 1.19 ⊳ Production from existing and announced extraction projects

for key critical minerals relative to NZE Scenario requirements

in 2030

IEA. CC BY 4.0.

Anticipated supply from the current pipeline of announced projects for

key critical minerals would provide at least 65% of 2030's NZE Scenario requirements

Notes: This figure shows primary demand and supply of critical minerals, excluding secondary production.

‘Anticipated supply’ is expected future production based on expert judgement from third- party data providers.

Expectations in commodity prices can have a large impact on the expected supply; a higher price might lead

to more supply coming online. At the same time, unexpected delays in financing , permitting or construction

could delay projects and yield lower supply. The value is therefore lower than the sum of all announced

projects.

One risk arises from the way that global supply is set to remain highly concentrated among

a small number of countries and companies. More diverse supply chains would increase

supply resilience . A different kind of risk comes from lengthy project lead times for new

supplies. Mining projects, including exploration, permitting and construction, can often take

more than a decade. Yet, the fastest mining developments can have a lead time of five years

or less from discovery to the start of production , e.g. the Nova -Bollinger mine in Australia

which produces nickel, cobalt and copper, even though ramping up production to full

capacity typically takes up to another three to four years when using established techniques.

This suggests that there is still enough time to further scale u p supply to meet NZE Scenario

needs by 2030, even if the timelines are becoming very tight. Meanwhile c ontinued R&D

could help to reduce the need to use critical minerals for which supplies are constrained.

8 Mineral processing tends to follow similar trends as extraction. 25%50%75%100%

Copper Nickel Lithium CobaltAnticipated supply

Production in 2022NZE needs in 2030

IEA. CC BY 4.0.

46 International Energy Agency | Net Zero Roadmap

Further increases in investment are urgently needed in the near term, as are government

efforts to diversify supply chains, reduce lead times and reduce material demand by

promoting recycling and innovation (see Chapter 4).

Energy access and energy security

Energy access

The S ustainable Development Goals (SDGs) were adopted in 2015, alongside the Paris

Agreement . We are now halfway between the year the goals were adopted and their

2030 target year. For the energy sector, the SDGs set the objective of achieving full

energy acces s by 2030 both for electricity and clean cooking .9 In 2015, about 15% of the

global population did not have access to electricity and about 35% did not have access to

clean cooking ( Figure 1.20 ). In 2022, those numbers had fallen to 10% and around 30%

respectively.

Figure 1.20 ⊳ Population without access to modern energy by region, 2010-

2022

IEA. CC BY 4.0.

Today n early one- in-ten people worldwide do not have access to electricity

and nearly one -in-three still lack access to clean cooking technologies

Yet progress has been very uneven a mong regions. In developing Asia, the population

without access to electricity has fallen from about 20% in 2010 to less than 5% in 2022

(though this is still more than 120 million people). The large increase in access to

9 Clean cooking is defined here as cooking facilities that use modern fuels and technologies, including natural

gas, liquefied petroleum gas (LPG), electricity and biogas, or improved biomass cookstoves (ICS) that have

considerably lower emissions and higher efficiencies than traditional three -stone fires . 400 8001 2001 600

2010 2014 2018 2022ElectricityMillion people

8001 6002 4003 200

2010 2014 2018 2022Clean cooking

Sub-Saharan AfricaDeveloping AsiaRest of worldSPOTLIGHT

IEA. CC BY 4.0.

Chapter 1 | Progress in the clean energy transition 47

1 electricity that this represents was led particularly by India and Indonesia, which together

have seen the number of people without access to electricity fall by more than

300 million since 2015. On the other hand, s ub-Saharan Africa has been going in the

wrong direction, despite some individual countries making progress earlier in the decade

until the Covid -19 pandemic and 20 22 energy crisis , and the total population without

access to electricity has slightly increas ed in recent years.

Substantial gains in clean cooking are evident in developing Asia, where the share of the

population without access to clean cooking solutions has declined from more than 40%

to less than 30% since 2015. This has been led by strong gains in India, China and

Indonesia, where nearly half a billion people gained access to clean co oking technologies

in the last seven years ( equivalent to about 7 000 people per hour). In sub-Saharan Africa,

however, population growth has outpaced progress : while the share of the population

without access to clean cooking has been gradually falling, the absolute number of people

without access has been steadily climbing due to rapid population growth . Nearly

1 billion people in Africa still cook with dirty and dangerous fuels that have severe

negative consequences for health and liv elihoods.

The pandemic and the global energy crisis of 2022 were a major setback to progress on

energy access. With energy prices skyrocketing, we estimate that in 2022 some 75 million

people who recently gained access to electricity lost the ability to pa y for it , and that

almost 100 million people worldwide may have been pushed back into reliance on

firewood and charcoal for cooking instead of cleaner, healthier alternatives.

Energy security

Russia’s invasion of Ukraine in early 2022 triggered a surge in energy prices (Figure 1.21) .

Natural gas p rices on the European benchmark briefly reached an all -time high of

USD 99 per million British thermal units ( MBtu ), almost 20 -times higher than their 2016-

2020 average (the highest monthly average reached in 2022 was USD 6 4/MBtu) . Buyers

with little capacity to pay were priced out of the market , and countries such as

Bangladesh and Pakistan experienced blackouts due to fuel shortages. Prices for coal also

climbed to unprecedented levels, reaching monthly averages as high as USD 350-

420/tonne , or five -to six-times the 2016-2020 EU average. In some cases, p ower plants

and regions dependent on imported coal were forced to curtail purchases. These high

prices fed into electricity prices in many markets. Governments around the world spent

more than USD 500 billion in 2022 to mitigate the impact of high prices on consumers.

The energy crisis exacerbated existing inflationary pressures, and the world experienced

a synchroni zed inflationary upswing unprecedented since the energy crises of the 1970s

(IEA, 2022a).

IEA. CC BY 4.0.

48 International Energy Agency | Net Zero Roadmap

Figure 1.21 ⊳ Benchmark international fossil fuel prices, 2020-2023

IEA. CC BY 4.0.

Fossil fuel prices skyrocketed on international markets during the 2022 energy crisis ,

feeding into high electricity prices and further inflaming inflation

Note s: bbl = barrel. Prices shown are monthly averages.

The energy crisis accelerated both clean energy deployment and investment , as well as

investment in fossil fuel in response to concerns about the availability and affordability

of energy supplies. Clean energy investment increased by about 15%, to reach around

USD 1.6 trillion in 2022 and is set to continue to rise rapidly . At the same time, investment

in fossil energy climbed by nearly 10%, to reach around USD 1 trillion and looks set to

increase again in 2023 .

Disruptions in recent years have put the spotlight on the security of critical mineral and

clean energy manufacturing supply chains. Prompted by rapid demand growth and

significant supply concentration, governments have been taking action such as legislation

that aims to increase domestic supply of key clean energy technologies and related inputs

such as the Inflation Reduction Act in the United States and the Net Zero Industry Act in

the European Union , and through programmes such as the Production Linked Incentives

in India . This has had the positive effect of significant increases in the potential supply of

clean energy technologies, while at the same time raising concerns about potentia l

market distortions and the extent of public fiscal commitment s.

1.4.3 Costs and performance

Over the l ast decade, considerable advances in clean energy technologies have cut costs,

improved performance and reduced material input requirements. Costs for selected mass

manufactured clean energy technologies – including solar PV, wind, heat pumps and

batteries , have fallen by close to 80% in aggregate (Figure 1.22 ). 40 80 120 160

Jan

2020Aug

2023

BrentOilUSD/bbl

20 40 60 80

Jan

2020Aug

2023

Europe United StatesNatural gasUSD/MBtu

100 200 300 400

Jan

2020Aug

2023

Europe JapanCoalUSD/t

IEA. CC BY 4.0.

Chapter 1 | Progress in the clean energy transition 49

1 Figure 1.22 ⊳ Equipment cost, performance and material needs per unit for

selected clean energy technologies, 2010-2022

IEA. CC BY 4.0.

Deployment boosted cost reductions and improved the

performance of clean energy technologies in a virtuous cycle

Notes: Index values in 2010 = 100%. Equipment cost excludes engineering, procurement, construction and

installation costs , and is in real terms . Weighted a verage equipment cost compares the costs of the annual

deployment of selected mass manufactured clean energy technologies , i.e. solar PV, onshore and offshore

wind, heat pumps and batter ies in aggregate to the costs as if there had been no cost reduction s since 2010.

Sources: IEA analysis based on BNEF, (2022); VDMA, (2021) ( 2023); IEA,( 2022a) ; IEA, (2023a) ; SPV Market

Research, (2022) ; RTS, (2021) ; PV InfoLink, ( 2022) .

Notably, solar PV demonstrates impressive cost declines. Typically, as deployment increases,

the learning rate for a given technology (defined as the fall in unit cost associated with a doubling of cumulative deployment) tends to decrease. For solar PV modules, however, the learning rate since 2006 of around 40% is actually higher than the average since the 1970s of

around 25%, largely thanks to economies of scale in manufacturing and efficiency

improvements (VDMA, 2023) (IEA, 2020a) (K avlak, McNerney and Trancik, 2018) .

Costs declines have been more modest for other technologies. For example, heat pump unit

costs fell by only around 5% on average over the 2010 -2022 period, partly because the

manufacturing process was already mature. L arge -scale site -tailored technologies, such as

carbon capture, also exhibit slower cost declines. Slower deployment has provided fewer opportunities for learning. Furthermore, the site -specific and bespoke nature of large -scale

projects means that knowledge and experience gained may not always be applicable to other

projects. This limits the potential for standardisation such that cost declines are likely to be

more modest even in the longer term.

Cost s have started to increase rather than decrease in the last two years for some clean

technologies such as solar PV and batteries, reflecting inflationary pressure and , in particular,

surging costs for critical minerals (IEA, 2023g) . This period of cost increases is likely to be

100%125%150%175%200%225%

2010 2022

Battery energy density

LED efficiency

Solar cell efficiency

20%40%60%80%100%

2010 2022

Lithium use in EVs

Polysilicon use in Solar PV

Silver use in Solar PV

20%40%60%80%100%

2010 2022

Onshore wind

Solar PV

Batteries

Weighted averageEquipment cost Performance Material needs

IEA. CC BY 4.0.

50 International Energy Agency | Net Zero Roadmap

temporary, as was the case for a similar period of inflation and high material costs in

2007 ‑2009 and given that the critical mineral supply project pipeline has begun to rapidly

expand in response to increased demand . The risk of future volatility in raw material prices

can be mitigated by continuing to develop resilient and secure supply chains (see Chapter 4).

Considerable technology performance improvements have contributed to increase the

attractiveness of technologies for consumers and reduce critical mineral requirements. For

example, d riven in part by changes in composition and chemistries, the sales weighted

average energy density of batteries doubled since 2010 from around 90 Watt hour per

kilogramme ( Wh/kg ) to around 190 Wh/kg in 2023 (BNEF, 2023) . This ha s enabled increased

driving ranges for EVs and a reduce d use of lithium by about 30% per k ilowatt -hour

(IEA, 2023h).

Solar PV cells are another example of technology performance improvements. In 2010, on

average 14% of the solar energy hitting a solar panel was converted to electricity ; by 2022,

that figure had risen by half to 21% efficiency . This gain helped bring about a 60% reduction

in the use of polysilicon and an 80% reduction in the use of silver in the av erage solar PV cell

since 2010. Since polysilicon and silver make up around 20-30% of solar PV module costs,

this level of improved efficiency and the related material savings have been an important

contributor to declining costs. With more advanced cell designs and tandem technologies

such as silicon perovskites entering the market, average efficiency is expected to improve

even more in the coming years.

1.4.4 Innovation

Innovation has a critical role to play in reaching net zero emissions, especially in sectors such

as heavy industry and long -distance transport where emissions are hard to abate because

low-emissions technologies or processes are not yet readily available . Considerable progress

has been made in recent years to address pressing innovation gaps, an d this has resulted in

upgrades in the technology readiness level of some critical clean energy technologies

(Figure 1.23) . Selected illustrative examples of innovation progress in recent years include

the following areas.

 Power generation : New commercial -scale designs of small modular nuclear reactors are

expected to come online this decade in China, Europe and North America ; floating

offshore wind parks are getting bigger than ever with parks of several hundred MW

announced for 2025 -2026, also announced are a 1 GW offshore installation in China for

2027 and a 6 GW project in Korea for 2030; perovskite solar cells are nearing 30%

efficiency, with several firms in China, Europe and the United States competing to

commercialise the first modules.

 Low-emissions hydrogen supply : Commercial -scale demonstration s of solid oxide

electrolyser s are underway . The two large demonstrators started operating in 2023.

 Road transport: Sodium -ion batteries for EVs are being scaled up , moving from

prototypes pre -2021 to first -of-a-kind commercial production in China in 2023 .

IEA. CC BY 4.0.

Chapter 1 | Progress in the clean energy transition 51

1  Heavy industry : Scaling up carbon capture via direct separation in cement production is

under way ( a final investment decision taken for LEILAC -2 with production of

100 kilotonnes [kt] of CO 2 per year ); 100% electrolytic hydrogen -based direct reduced

iron production could soon be demonstrated at industrial scale (HYBRIT, the most

advanced project for this technology, produced fossil -free steel for the first time in

Sweden in November 2021); small- scale use of carbon -free aluminium in consumer

goods is moving ahead (ELYSIS, Canada, expects first -of-a-kind demonstration of

commercial production by 2026 before moving to industrial production).

 Critical minerals : Bioleaching for electronic waste recycling and metal recovery is

moving to first -of-a-kind commercial operat ion ( this technique has been used in the

mining industry for years and now is being considered to recover critical minerals from

batteries ); direct lithium extraction from geothermal brine is at the pre -commercial

demonstration stage .

 Direct air capture : In Iceland, a first -of-a-kind 4 kt CO 2/year project has begun capturing

CO 2 from the air and storing it underground with plans to ex pand to 36 kt CO 2/year as

part of a broader effort to demonstrate multi -megatonne capacity by 2030.

A 0.5 Mt/year plant is under construction in the United States and aims to begin

operations in 2025.

 Aviation: Regional electric planes with up to 30 passengers are being designed with

commercial flights expected before 2030 ; electric vertical take -off and landing mode ls

are being demonstrated; hydrogen -powered aircraft designs are being developed ,

though they are at an earlier stage and operations are not expected to begin until after

2030.

 Shipping : The first industrial plant that convert s biogas into low -emission s bio-liquefied

natural gas for use as drop -in fuel to replace heavy fuel oil is set to begin operations in

2023 (FirstBio2Shipping, Netherlands, which received funding from the European Union

Innovation Fund ). Several major ship engine makers are in the final stages of developing

ammonia two -stroke engines for commercialisation by 2025 ; large methanol -powered

container ships are being delivered for the first time in 2023 just as electrolytic

hydrogen -based methanol commercial production starts ; and small -scale hydrogen fuel

cell ferries began operating in Norway and the United States in 2023.

For a comprehensive overview of the full suite of technologies and projects related to clean

energy innovation, see the IEA Clean Energy Technology Guide .10

10 The IEA Clean Energy Technology Guide contains information on more than 550 individual technology

designs and components that can contribute to getting on track with the NZE Scenario, with indications of

technology maturity and major R&D and demonstration activities (https://www.iea.org/articles/etp -clean -

energy- technology- guide) .

IEA. CC BY 4.0.

52 International Energy Agency | Net Zero Roadmap

Figure 1.23 ⊳ Evolution of technology readiness levels for selected

clean energy technologies

IEA. CC BY 4.0.

Significant advances in clean energy technology development have been made in recent

years , but much remains to be done to put the world on a net zero emissions pathway

Note s: TRL = Technology Readiness Level; H 2 = hydrogen; DRI = d irect reduced iron. For 100% electrolytic

H2-based DRI steelmaking, R&D related to using hydrogen in steelmaking has been taking place for decades,

including at one commercial plant in the 1990s relying largely on hydrogen . In this figure , the focus is

specifically on 100% electrolytic H2.

Public and corporate spending on energy R&D has been increasing despite the pandemic and

macroeconomic crises (IEA, 2023g) (Figure 1.24). Governments allocated nearly

USD 44 billion to energy R&D in 2022, more than 80 % of which was earmarked for clean

energy, compared with around USD 30 billion in 2015 , when 70% of the total was for clean

energy . Much of the increase in public energy -related R&D over the last few years is in Ch ina,

which is now the largest spender in this area. Advanced economies account for most of the

rest. The emerging market and developing economies excluding China together accounted

for just 5% of the global total in 2022.

Energy R&D spending by globally listed companies exceeded USD 130 billion in 2022, an

increase of 25% from 2020. Spending by companies developing renewables increased on

average by 25% each year between 2020 and 2022 compared with 5% per year over the

2010- 2020 period . The R&D budgets of major oil and gas companies have remained more or

less flat since 2010. Aviation, rail and shipping were badly hit by the Covid -19 crisis and their

R&D spending has not increas ed much since. By contrast, R&D spending recovered quickly in

chemicals, cement and iron and steel , although a relatively low share of energy R&D budgets

in industrial sectors is directed to clean energy, indicating further opportunities to increase

spending .

The role of start -ups in clean energy innovation is also growing and has shown impressive

resilience in th e face of recent macroeconomic crises (IEA, 2023g). Clean energy venture TRL

1 2 3 4 5 6 7 8 9 10 11

1920 1940 1960 1980 2000 2020Grid-scale onshore wind

Grid-scale solar PV

Lithium-ion battery

Sodium-ion battery

Cement direct separation

carbon capture

100% electrolytic H₂ -based

DRI steelmakingConcept

and small

prototypeLarge

prototypeMarket

uptake

DemonstrationMature

IEA. CC BY 4.0.

Chapter 1 | Progress in the clean energy transition 53

1 capital investment nearly doubled between 2010 and 2020 and has more than doubled again

since then. Total investment reached USD 7 billion for early -stage start -ups and

USD 35 billion for growth stage start -ups in 2022, with notable growth in investment in EVs

and batteries, hydrogen, renewables and energy efficiency.

The number of global patents in low- emission s energy technologies has been rising over the

last two decades, while for fossil fuels it has been declining since 2015 (IEA, 2021c). Between

2005 and 2018, for example, patenting in batteries increased 14% annually on average, four

times faster than the average of all technology fields (IEA, 2020b) . Clean technologies

accounted for nearly 80% of all patents related to hydrogen production in 2020 (IEA, 2023i).

Figure 1.24 ⊳ Global public and corporate spending on energy R&D and

venture capital investment in clean energy start- ups, 2010-2022

IEA. CC BY 4.0.

Energy R&D spending by governments and corporat ions, and

clean energy venture capital investment have grown substantially

Note: MER = market exchange rate.

20%40%60%80%100%

10 20 30 40 50

2010 2022

Share in clean energy (right axis)Billion USD (MER, 2022)Governments Listed companies Venture capital

10 20 30 40 50

2010 202220%40%60%80%100%

30 60 90 120 150

2010 2022

IEA. CC BY 4.0.

Chapter 2 | A renewed pathway to net zero emissions 55

Chapter 2

A renewed pathway to n et zero emissions

Net z ero emissions guide

• The Net Zero Emissions by 2050 Scenario (NZE Scenario) relies on the deployment of

a wide portfolio of low -emission s technologies and emission s reduction options to

reach net zero CO 2 from the energy sector by 2050, but it also depends on a high

degree of global co -operation and collaboration. Advanced economies take the lead

and reach net zero emissions by 2045 in aggregate in the NZE Scenario , China by 2050

and other emerging market and developing economies after 2050. The

comprehensive NZE Scenario update presented here reflects real -world progress

since our Net Zero by 2050 : A Roadmap for the Global Energy Sector report in 2021

and a continuous assessment of feasibility across sectors and technologies, but it is

not the only pathway to reach the goal of net zero emissions by 2050 .

• Taken together, s olar photovoltaic s (PV) and electric vehicles (EVs) provide one -third

of the emissions reductions t o 2030 in the updated NZE Scenario. The share of electric

cars in total car sales soars to more than 65% by 2030 , and solar PV capacity increases

fivefold from today. The announced manufacturing pipeline for solar PV and batteries

is projected to be suffic ient to meet the NZE Scenario deployment needs to 2030.

Demand for oil and gas declines by around 20% by 2030 – fast enough that no new

long lead time conventional oil and gas projects need to be approved for

development . Low-emission s electricity rises so rapidly that no new unabated coal

plants beyond those under construction at the start of 2023 are built .

• Technologies under development are essential to achieve net zero emissions .

Progress in clean energy innovation over the past t wo years, such as on battery

chemistries , and the even stronger market momentum of commercial technologies

such as solar PV, have had a tangible impact . In our 2021 report , the share of

emissions reductions in 2050 from technologies under development was almost half:

that figure has now fallen to around 35% in our updated NZE Scenario.

• The extraordinary surge in global manufacturing capacity for solar PV and batteries

underpin s their more significant role in the period to 2030. Capacity additions of wind

have been revised downwards relative to the 2021 NZE Scenario , but wind is still

critical to reach net zero emissions ; further policy support is required to help

overcome challen ges in wind power deployment . The role of nuclear power has been

revised upwards given recent policy support.

• Hydrogen and hydrogen- based fuels and carbon capture, utilisation and storage

(CCUS ) have an important part to play to reduce emissions in heavy industry and long -

distance transport . In the 2023 NZE Scenario, they provide one-fifth of all emissions

reductions between 2030 and 2050. But the part they play is smaller than in the 2021

version, particularly in the near term . This reflect s slow er technological and market

development progress than envisaged in 2021 and stronger electrification prospects . SUMMARY

IEA. CC BY 4.0.

56 International Energy Agency | Net Zero Roadmap

2.1 Overview of the NZE Scenario

2.1.1 Scenario design

This report sets out an updated NZE Scenario – referred to as the 2023 NZE Scenario – that

takes into account the key changes that have occurred since 2021 in energy policies,

technologies, markets and supply chains. It reflects the latest IEA data that track energy

policies; developments in the deploy ment and innovation of more than 550 clean energy

technologies; supply chain capacities for critical minerals and clean energy technology manufacturing; and progress towards the more than 400 milestones presented in the 2021

Net Zero by 2050 report (IEA, 2021a) . The NZE Scenario pathway achieves net zero CO

2

emissions from the energy sector by 2050 , leading to limited overshoot of the 1.5 °C limit set

out in the 2015 Paris Agreement, but the increase in global average temperature fall s below

1.5 °C by 2100.1

The 2023 NZE Scenario:

 Describes a pathway for the global energy sector to reach net zero emissions of CO 2 by

2050 by deploying a wide portfolio of clean energy technologies and without offsets

from land -use measures. Decisions about technology deployment are driven by costs,

technology maturity, market conditions, available infrastructure and policy preferences.

Building on the IEA 2021 NZE roadmap analysis, t his report evaluates t he balance of

technology deployment taking into consideration progress and setbacks over the last

two years (Spotlight). It also provides an in -depth analysis of the current trajectory of

key technologies and mitigation options, and what it would take to put the world on track for the NZE Scenario (see Chapter 3).

 Priorit ises an orderly transition that aims to safeguard energy security through strong

and co -o

rdinated policies and incentives that enable all actors to anticipate the rapid

change s required , and to minimise energy market volatility and stranded assets. Rapid

deployment of clean energy technologies and energy efficiency is at the core of this

transition. The NZE Scenario is underpinned by detailed analysis of project lead times

for minerals supplies and clean energy technologies as part o f efforts to ensure the

feasibility of th e deployment . There is , however, inevitably a risk of bottlenecks

emerging for some technologies, which underscores the importance of measures to

enhance material reuse and recycling and to drive down the material intensity of clean

energy technologies.

 Recognises that achieving net zero energy sector CO 2 emissions by 2050 depends on fair

and effective global co -operation. The pathway to net zero emissions by 2050 is very

narrow. A ll countries are required to contrib ute to deliver the desired outcomes;

advanced economies tak e the lead and reach net zero emissions earlier in the NZE

Scenario than emerging market and developing economies . Global access to electricity

1 High overshoot refers to an increase in global average temperature to above 1.6 °C, but below 1.8 °C above

pre-industrial levels and a subsequent fall to below 1.5 °C (IPCC, 2023).

IEA. CC BY 4.0.

Chapter 2 | A renewed pathway to net zero emissions 57

2 and clean cooking is achieved by 2030 in line with established Sustainable Development

Goals . Rapid and major reductions in methane emissions from the oil, gas and coal

sectors help to buy some time for less abrupt CO 2 reductions in emerging market and

developing economies . Without these redu ctions, global energy sector CO 2 would need

to reach net zer o by around 2045, with important implications for equitable pathways.

Global collaboration facilitate s the development and adoption of ambitious policies,

drive s down clean technology costs , and s cales up diverse and resilient global supply

chains for critical minerals and clean energy technologies. Enhanced financial support to

emerging market and developing economies plays a critical part in this collaboration.

Key changes since the 2021 version of the NZE Scenario

The IEA tracks hundreds of thousands of energy sector datapoints that cover elements

ranging from policy development s, technology deployment , investment and supply

chains to infrastructure, innovation and costs. This data -driven approach feeds the model

used to develop the NZE Scenario, which also factors in the various circumstances of

individual countries and regions in great detail. This allows the NZE Scenario to take

account of the feasibility of s caling up emissions reduction options at the speed and scale

required across various regions, sectors and technologies, and to integrate concerns

about equity (Box 2.1) .

In the Net Zero by 2 050 report in 2021, we noted that the precise pathway for the

tran sition would be uncertain (IEA, 2021a), stating “… some of these milestones will be

met, others will not, and some technologies will fail to deliver and others will surprise us

– technology deployment rarely ever follows an idealised trajectory” (IEA, 2021 b).

The main differences between this 2023 NZE Scenario and the 2021 version are

(Table 2.1):

 While the goal of net zero energy sector CO 2 emissions by 2050 is retained , emissions

to 2030 are higher in this edition of the scenario, reflecting the extremely strong

rebound in economic activity and emissions in the wake of the Covid -19 pandemic,

as well as the failure to act in recent years at the speed envisaged in our origi nal

report.

 Total energy demand in 2030 is slightly higher in the 2023 NZE version , reflect ing the

post -pandemic rebound in economic activity and slower progress than envisaged in

implementing strong energy efficiency policies. E nergy efficiency continues to play

a critical role in the 2023 NZE Scenario (see Chapter 3).

 Near -term use of coal is higher in th e 2023 NZE Scenario to reflect both the desire

to plot a more equitable pathway for emerging market and developing economies ,

which dominate global coal use , as well as the energy security concerns around

natural gas sparked by Russia’s invasion of Ukraine. SPOTLIGHT

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58 International Energy Agency | Net Zero Roadmap

Table 2.1 ⊳ Selected indicators in the 2021and 2023 NZE Scenarios

2021 version 2023 version

Peak

warming 2100

warming Peak

warming 2100

warming

Median temperature increase (°C) Consistent

with IPCC C1

scenarios 1.4 Consistent

with IPCC C1

scenarios 1.4

2030 2050 2030 2050

Total net energy sector CO 2 emissions (Gt) 21.1 0.0 24.0 0.0

Share of unabated fossil fuels in

total energy supply (%) 58% 11% 62% 11%

Total final consumption (EJ) 390 340 410 340

Solar PV capacity additions (GW) 630 630 820 820

Wind capacity additions (GW) 390 350 320 350

Share of EVs in car sales (%) 60% 90% 65% 95%

Total CO 2 capture (Gt) 1.8 7.7 1.0 6.1

Total CO 2 removal (Gt) 0.3 1.9 0.2 1.7

Installed stationary battery capacity (GW) 590 3 100 1 020 4 200

Share of electricity in

total final consumption (%) 26% 49% 28% 53%

Share of H 2 and H 2-based fuels in

total final consumption (%) 2% 10% 1% 8%

Notes: IPCC = Intergovernmental Panel on Climate Change. Gt = gigatonnes; EJ = exajoules; GW =

gigawatts; EVs = electric vehicles; H 2 = hydrogen. IPCC C1 scenarios are scenarios assessed by the IPCC

which keep warming b elow 1.5 °C with no or limited overshoot . Unabated fossil fuels includes fossil fuels

used for non -energy purposes.

 Solar PV take s a more prominent role in the 2023 NZE Scenario , though reductions

in projected wind capacity additions mean that the combined share of wind and

solar PV in total generation is very similar in both NZE Scenario versions , at around

40% by 2030. This reflects the surge in solar PV installations and manufacturing

capacity s ince 2021 report . Correspondingly, the boost in solar PV generation spurs

the need for additional stationary battery storage to ensure security of supply.

 Electric vehicles (EVs) also have a n even more prominent role in the 2023 NZE

Scenario. This reflects both a significant uptick in EV sales and progress in scaling up

manufac turing supply chains. This electrification in road transport t ogether with

accelerated progress in heat pump deployment in buildings and rising market

confidence in technologies such as 100% electrolytic hydrogen -based direct reduced

iron production, resul ts in more rapid growth in the share of electricity in final

energy consumption.2

 Near -term deployment is slower for some technologies in the 2023 NZE Scenario ,

e.g. wind, hydrogen and carbon capture, utilisation , and storage (CCUS) . This reflect s

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Chapter 2 | A renewed pathway to net zero emissions 59

2 supply chain constraints , delay s in scaling up project pipeline s and related

infrastructure, and sluggish progress in the development of market frameworks for

less mature technologies . For some of these technologies, the downward revision is

based on recen t investment trends from technology manufacturers against other

low-emission s alternatives . One example is a reduced role for hydrogen- fuelled

trucks.

Some of the changes since the 2021 version of the NZE Scenario are helpful in terms of

achieving the obje ctives while others are not. Overall, the path to achieving net zero

emissions by 2050 in the 2023 NZE Scenario is a steeper one than in the 2021 version and

requires more to be done after 2030. But the path remains open . The latest

Intergovernmental Panel on Climate Change ( IPCC) reports underscore the increasing

urgency of achieving net zero emissions (IPCC, 2023).

Box 2.1 ⊳ Integrating equity into the NZE Scenario design

Reaching net zero emissions by 2050 requires action on the part of all countries. Different

countries have varying starting points , capacities , and resource endowments .

Differentiated pathways are delineated in the NZE Scenario as an essential design

principle (Figure 2.1) . Advanced economies take the lead and reach net zero emissions

by around 2045 as a group , consistent both with their higher financial capacities and

responsibility for historical emissions. With per capita emissions above those of advanced

economies today, China achiev es net zero emissions around 2050 in the NZE Scenario ;

other emerging market and developing economies reach it only well after 2050. The

global net zero CO 2 emissions target is achieved thanks to net negative emissions in

advanced economies, with remaining residual gross emissions concentrated in emerging

mark et and developing economies other than China.

Determined action , particularly in advanced economies and in large oil and gas producing

countries , cause oil and natural gas emissions of both CO 2 and methane to fall faster in

the NZE Scenario than in compar able scenarios assessed by the IPCC. Emissions from coal

fall more slowly in the NZE Scenario than in comparable scenarios assessed by the IPCC

reflecting a less abrupt transition in emerging market and developing economies, which

today are responsible for more than 80% of global coal use. As a result, emissions in

advanced economies fall nearly two-times faster in the current decade than emissions in

emerging market and developing economies.

Successful achievement of universal access to electricity and clean cooking by 2030 in

line with Sustainable Development Goal 7 is a key pillar of the NZE Scenario. This hinges

on both enhanced financial support by the international community and stronger

2 Final energy consumption reflects the energy form that is brought to an industrial site, which is electricity in

the case of captive hydrogen produced onsite at iron and steel facilit ies to reduce iron ore.

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60 International Energy Agency | Net Zero Roadmap

domestic policies in countries that lack full access. In addition to bringing important

benefits for health and gender equality, achieving SDG 7 yields a net reduction in

greenhouse gas emissions and air pollution, by reducing the incomplete combustion of

biomass and deforestation.

Figure 2.1 ⊳ Gross emissions and removals, and net emissions by

aggregated region in the NZE Scenario, 2010-2050

IEA. CC BY 4.0.

As a group, advanced economies reach net zero emissions before emerging market

and developing economies, and also achieve net negative emissions by 2050

Note: Gt CO 2 = gigatonnes of carbon dioxide; EMDE = emerging market and developing economies .

In emerging market and developing economies other than China, the NZE pathway

requires clean energy investment to increase nearly seven fold by the early 2030s

compared to recent averages. Such mobilisation of capital requires frameworks that

attract the private sector as well as international public support. E quitable pathways

within countries also have a part to play in getting to net zero emissions . These aspects

are discussed in Chapter 4.

Key socio -economic assumptions

The NZE Scenario sees the transformation of the energy sector taking place at the same time

as a large increase in the global population and economy (Table 2.2). By 2030, the world

population is project ed to reach over 8.5 billion and almost 10 billion by 2050 .3 Nearly all of

the increase is in emerging market and developing economies, including around 1.1 billion

more people in Africa by 2050. In parallel, the global economy continues to recover from

recent crises . Growth is expected to slow somewhat in the near term , but the size of the

global economy is projected to roughly double by 2050.

3 This is in line with the median variant of the United Nations population projections (UN DESA, 2022) . -202468101214

2010 2030 2050Gt CO2Advanced economies

Gross

emissionsNet emissions

Gross removals-40481216202428

2010 2030 2050Emerging market and developing

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Chapter 2 | A renewed pathway to net zero emissions 61

2 Table 2.2 ⊳ Key socio-economic assumptions in the NZE Scenario, 2022-2050

2022 2030 2040 2050

World population (million people) 7 950 8 520 9 161 9 681

China 1 420 1 4 10 1 372 1 307

India 1 417 1 5 15 1 612 1 670

Advanced economies 1 415 1 4 41 1 461 1 460

Rest of world 3 698 4 1 54 4 716 5 244

World GDP (USD trillion, 2022 , PPP ) 164 207 270 339

Energy prices (USD , 2022, MER )

IEA crude oil (USD per barrel) 98 42 3 0 25

Natural gas (USD/MBtu)

United States 5.1 2.4 2 .4 2.4

European Union 32.3 4.3 4 .2 4.1

China 13.7 5.9 5.3 5.3

Japan 15.9 5.5 5 .3 5.3

Steam coal (USD/tonne)

United States 53 27 2 4 23

European Union 290 57 45 43

Japan 336 65 5 1 47

Coastal China 205 64 5 4 49

CO 2 prices for electricity, industry and

energy production (USD/t CO 2)

Advanced economies 140 2 05 250

Emerging market and developing economies

(with net zero emissions pledges) 90 1 60 200

Selected emerging market and developing

economies (without net zero emissions pledges) 25 8 5 180

Other emerging market and developing

economies 15 3 5 55

Note: PPP = purchasing power parity; MER = market exchange rate; MBtu = million British thermal units.

Energy price projections are subject to a high level of uncertainty. In IEA scenarios prices are

designed to reflect an equilibrium between supply and demand. In the NZE Scena rio, a rapid

drop in oil and natural gas demand lowers prices to the operating cost of the marginal project

needed to meet demand. As a result, international fossil fuel prices fall significantly, with the

oil price dropping below USD 50 per barrel by 2030 .

All regions introduce pricing of CO 2 emissions alongside other policies designed to bring

about clean energy transitions in the NZE Scenario . Carbon pricing is i mplemented first in

advanced economies , which see prices ris e on average to USD 250 per tonne of carbon

dioxide ( t CO 2) by 2050. M ajor emerging market and developing economies with net zero

emissions pledges, such as China , Brazil and Indonesia, see prices reach USD 200/t CO 2 by

2050. Carbon prices are lower in the rest of the world.

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62 International Energy Agency | Net Zero Roadmap

2.1.2 Emissions and temperature trends

CO 2 emissions from the energy sector in the NZE Scenario fall steeply from 37 gigatonnes

(Gt) in 2022 to 24 Gt in 2030, a reduction of around 35%. By 2035, emissions fall to around

13.5 Gt, or nearly 65% below the 2022 level ( Figure 2.2). Atmospheric removals through

direct air capture and storage (DACS) and bioenergy with carbon capture and storage (B ECCS)

start to scale up rapidly and reach around 0.6 Gt in 2035 and 1.7 Gt in 2050. Total energy

sector CO 2 emissions reach net zero in 2050, with residual gross emissions balanced by gross

removals from the atmosphere through BECCS and DACS . This is achieved without offsets

from land -use measures . Total greenhouse gas (GHG) emissions from all sectors are reduced

by around 40% by 2030 and by 60% by 2035.

Figure 2.2 ⊳ Energy sector gross emissions and removals, total net CO 2

emissions, and net emissions by sector in the NZE Scenario,

2010-2050

IEA. CC BY 4.0.

Energy sector CO 2 emissions are reduced 65% by 2035 and reach net zero by 2050, with

residual emissions of 1.7 Gt balanced by atmospheric removals of the same magnitude

Total energy -related emissions reach 2. 3 gigatonnes of carbon dioxide ( Gt CO 2) in advanced

economies by 2035, 4.2 Gt CO 2 in China and around 6 Gt CO 2 in other emerging market and

developing economies. A dvanced economies reach net zero emissions by around 2045,

China by 2050 and other emerging market and developing economies only well after 2050 .

On a sector basis, electricity sees CO 2 emissions fall the most , with emissions almost halving

between 2022 and 2030 as renewables and other low-emissions sources of electricity

generation are deployed rapidly and unabated fossil fuel -based generation decl ines. Other

sectors, where low -emission s options are still being developed or ramped up , are slower to

decrease emissions. Nevertheless , emissions from all sectors peak in the near term. Sectoral -50510152025303540

2010 2030 2050Gt CO₂

Gross emissionsNet emissions

Gross removals-20246810121416

2010 2030 2050Electricity

IndustryTransport

OtherBuildings

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Chapter 2 | A renewed pathway to net zero emissions 63

2 emission decreases between 2022 and 2030 are 20% in industry , around 25% in transport

and around 40% in buildings .

Between 2030 and 2040, the electricity sector reaches very low levels of emissions in the

NZE S cenario , with advanced economies reaching net zero emissions from the sector in

aggregate in 2035 . This milestone is reached in 2045 in emerging market and developing

economies , which is five years later than in the 2021 version of the NZE S cenario . Many

technologies still being developed today, such as those that support the electrification of

heavy industry or zero emissions ships, begin to be deployed quickly in th e 2030 -2040 decade

which leads to replacement or retrofitting of existing assets.

Though emissions in the industry and transport sectors both shrink by over 60% between

2022 and 2040, the se two sectors remain responsible for close to 90% of residual emissions

in 2040. Even by 2050, residual CO 2 emissions from fuel combustion are concentrated in the

industry (0. 2 Gt) and transport (0.6 Gt) sectors.

By 2050, the electricity, buildings , and o ther transformation sectors account for 0.4 Gt of

residual emissions, and industrial processes for around a further 0.4 Gt. These emissions are

counteracted by atmospheric carbon dioxide removal through BECCS and DACS, which

account for 1 Gt and 0. 7 Gt of removals respectively.

The IEA models the consequences of its scenarios for climate change using the MAGICC

climate model , which is widely used in IPCC assessments.4 The g lobal mean temperature rise5

above pre -industrial levels stand s today at around 1.2 °C. In the NZE Scenario, this rises to a

peak of just below 1.6 °C around 2040, and then gradually falls to around 1.4 °C in 2100

(Figure 2.3). This reduction in temperature from the peak is caused by two effects. First is

strong reductions in methane emissions to 2050. Second is that temperatures are also

reduced after reaching net zero CO 2 emissions as the land and oceans draw down

atmospheric carbon in line with the latest generation of Earth system models (MacDougall

et al., 2020). These effects are consistent with the Working Group I contribution to the IPCC’s

Sixth Assessment Report and each contribute a bout 0.1 °C of cooling between 2040 -2100.

The NZE Scenario therefore meets the criteria of a limited overshoot 1.5 °C pathway as

defined by the IPCC . By contrast, the IEA Stated Policies Scenario (STEPS) sees energy sector

4 Most energy -r elated greenhouse gases (GHG) in IEA scenarios are modelled using t he IEA’s GEC M odel

(h

ttps://www.iea.org/reports/global- energy- and- climate- model) . Significant sources of other GHG, e.g., black

carbon , as well as GHG related to land use consistent with IEA scenarios are modelled by the International

Institute of Applied Systems Analysis (IIASA). The MAGICC model supplements all remaining types and sources

of GHG using the scenario database published as part of the IPCC Special Report on Global Warming of 1.5 °C

(IPCC, 2018).

5 Unless otherwise stated, temperature rise estimates quoted in this section refer to the median temperature

rise, meaning that there is a 50% probability of remaining below a given temperature rise. All changes in

temperatures are relative to 1850 -1

900 and match the IPCC Sixth Assessment Report definition of warming of

0.85 °C between 1995 -2

014 ( IPCC, 2021). Modelled temperature rise estimates reflect anthropogenically

induced trends but do not capture natural modes of variability, such as those connected t o the El Niño

Southern Oscillation (Berkeley Earth , 2023).

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64 International Energy Agency | Net Zero Roadmap

CO 2 emissions fall only moderately to 30 Gt by 2050. As a consequence, global warming

continues to worsen , with the temperature rise exceeding 1.9 °C around 2050 and heading

towards 2.4 °C in 2100 . Inhere nt uncertainties in the Earth ’s response to future warming

mean that there is about a one -third probability of warming exceeding 2.6 °C in the STEPS in

2100; in the NZE Scenario there is just over a one -third probability of exceeding 1.5 °C in

2100.

Figure 2.3 ⊳ Median warming in the STEPS and NZE Scenario, 2020-2100

IEA. CC BY 4.0.

Rapid emission cuts moderate warming below 1.5 °C by 2100 with low overshoot in the

NZE Scenario, while temperatures in STEPS reach 2.4 °C by 2100 and continue rising

Note s: STEPS = Stated Policies Scenario. S haded area represents the 33 -67% confidence interval. S olid line

represents median warming.

Source: IEA analysis based on Climate Resource and MAGICC 7 .5.3.

Rapid reductions in g reenhouse gases other than CO 2 are also essential to curb the global

temperature rise. Less than 60% of the warming avoided to 2050 in the NZE Scenario

compared to the ST EPS is due to CO 2 emissions cuts. Reduced emissions of methane make

up almost 40% and cuts to other GHG such as nitrous di oxide (N 2O) and fluorinated gases

account for the remainder. Rapid reductions in these other gases are essential to curb global

temperature increases (Figure 2.4) .

Sectors other than energy also have an important part to play in cutting emissions . Rapid

cuts in GHG emissions from other sectors, such as agriculture, forestry and other land use

(AFOLU) and waste treatment, account for just under 30% of the warming avoided in the

NZE Scenario compared to the STEPS to 2050 , based on IEA modelling with the MAGICC

climate model . For example, parallel action to stop deforestation and improve the

management of exi sting forests brings CO 2 emissions from land use to net zero by about 2030

in the NZE Scenario, and improvements in livestock husbandry alongside efficiency gains in 0.51.01.52.02.53.0

2020 2040 2060 2080 2100°C

STEPS

NZE

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Chapter 2 | A renewed pathway to net zero emissions 65

2 crop management and fertili ser use contribute to cuts in AFOLU -related N2O and methane

emissions of around 1 0% and 35% respectively in 2050 compared to the levels in the STEPS.

Figure 2.4 ⊳ Global warming avoided in the NZE Scenario relative to the STEPS

by greenhouse gas and source, 2022-2050

IEA. CC BY 4.0.

Reductions in CO 2 emissions are responsible for less than 60% of the

warming avoided to 2050 in the NZE Scenario relative to the STEPS

Source: IEA analysis based on Climate Resource and MAGICC 7.5.3.

Box 2.2 ⊳ Effects of global warming at 1.2 °C degrees temperature rise

In summer of this year , Earth ha d the hottest three -month period ever recorded , and it

is now likely that 2023 will be the hottest year on record (Carbon Brief, 2023) . To date,

the global average temperature has increased to around 1.2 °C above pre -industrial

levels (Berkeley Earth , 202 3). This is already having an effect in every region a round the

world . The increasing frequency and intensity of heatwaves, drought s, storms and floods

are in line with predictions made in the IPCC Assessment Reports. It has bee n estimated

that hot temperature extremes that would have occurred once in 50 years without

human influence are now about five -times more likely to occur (IPCC, 2023) . In its most

recent assessment report, the IPCC concludes that “the scale of recent changes across

the climate system as a whole […] are unprecedented over many centuries to many

thousands of years” (IPCC, 2023) .

Recent extreme weather events have led to increasingly widespread concern about a

“climate crisis”. India and Pakistan were hit by disastrous flooding in 2022. Over the

summer of 2023, an extreme heat wave hit s outhern Europe and other parts of the world;

in China and the U nited States , temperatures reached over 52 °C. More than 30 million

acres were charred by wildfires in Canada by mid -2023 , and the Horn of Africa is

experiencing the longest and most severe drought on record. 25%50%75%100%Bygreenhouse gas

CO2MethaneOther gasesN2O

25%50%75%100%Bysource

Fossil fuels

and cementOther sources

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66 International Energy Agency | Net Zero Roadmap

These extreme weather events take a very high large toll on people, ecosystems and

economies . Almost 62 000 heat -related deaths were recorded in Europe in 2022. In

Pakistan, flood ing in 2022 killed over 1 700 people , and damaged the lives of millions

more . In 2023, many months after the flooding, more than 8 million people still live near

contaminated flood waters and are consequently exposed to disease. Health risks can

also occur indirectly, for example through smog from wildfires travel ling large distances.

These events also cause serious financial damage and weaken economic prosperity. In

the United States, wil dfires caused around USD 81.6 billion i n damage from 2017 to 2021,

a nearly ten -fold i ncrease over the previous five -year period, while the effects of the

droughts experienced in South America in 2023 are estimated to have reduced GDP in

Argentina in 2023 by three p ercentage points .

There is a rapidly closing window to secure a liveable and sustainable future for all. Deep,

rapid and sustained cuts in CO 2 emissions to net zero can limit future warming, but

societies will have to adapt to the effects of the climate change that is alrea dy happening.

2.1.3 Key mitigation levers

By m itigation measure

Meeting energy sector net zero emissions by 2050 requires using all available measures to

reduce emissions ( Figure 2.5). In the near term , almost all emissions reductions are delivered

by technologies and measures that are available, scalable and cost effective today.

First among these is the rapid deployment of solar PV and wind, which together account for

4 Gt of CO 2 of emissions reductions by 2030. This is equivalent to the combined emissions of

the European Union, Japan and Korea today.

The next largest driver of emissions reductions is electrification . As the electricity sector is

increasingly decarbonised, it delivers emissions reductions through the expanding

deployment of technologies like EVs and heat pumps in buildings and light industr ies. In the

NZE Scenario, electrification both deliver s significa nt energy demand savings and reduce s

emissions by around 3 Gt by 2030 . Measures such as more efficient end -uses of emissions -

intensive materials and reduced material intensity of production also contribute to near -

term emissions reductions, as do behavioural changes on the part of consumers such as

reducing indoor temperatures and driving speeds on highways. This diverse portfolio of

measures cuts emissions by more than 2 Gt in 2030. Without such measures to reduce

wasteful material and energy use, the transition would be much more challenging (Box 2.3 ).

Fuel switching also contributes to emissi ons reductions through to 2030 in the NZE Scenario .

This includes switching from fossil fuels to additional renewable options such as bioenergy,

hydro power , solar thermal and geothermal , as well as increasing the use of nuclear power

technology and switchi ng from coal to natural gas. These measures together provide more

than 3 Gt of emissions reductions by 2030. E nergy efficiency improvements of equipment,

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Chapter 2 | A renewed pathway to net zero emissions 67

2 appliances, trucks, planes and building envelopes reduce emissions further by slightly less

than 2 Gt. Hydrogen and CCUS take time to scale up even in the NZE Scenario, but together

they deliver a further 1 Gt of reductions by 2030.

Figure 2.5 ⊳ CO 2 emissions reductions by mitigation measure in the

NZE Scenario, 2022-2050

IEA. CC BY 4.0.

Expansion of solar PV, wind and other renewables , energy intensity improvements and

direct electrification of end -uses combined contribute 80% of emission reduction s by 2030

Note s: Activity = energy services demand changes from economic and population growth . CCUS includes

BECCS and DACS.

The outlook changes in the period to 2050. Getting emissions to net zero requires active

measures in emissi on-intensive sectors such as steel, cement and long -distance transport.

Together CCUS , hydrogen and hydrogen -based fuels a ccount for one-fifth of emissions

reductions in the 2030 to 2050 period . The contribution made by electrification increases , as

EVs co me to dominate the stock of not just cars and motorbikes but also trucks, and as

electrification expands further in the buildings and industry sectors. As a result,

electrification accounts for nearly one -quarter of the emissions reductions seen in the 203 0-

2050 period .

For the period 2022 to 2050, the largest total contribution to emissions reductions in the

energy sector is from solar PV and wind, which account for 25% of all cumulative emissions

reductions in the NZE Scenario . In addition , measures to reduce demand through increased

energy efficiency, more efficient use of materials and behavioural change together account

for a further almost 25%. Expanding electrification in the transport, industry and buildings

sectors provides 20% of abate ment as electricity generation is progressively decarbonised .

Increased bioenergy and other fuel shifts account for slightly less than 20% , and hydrogen

and CCUS account for slightly less than 15%. 10 20 30 40

2022 2030 2050Activity

Behaviour and

avoided demand

Energy efficiency

Wind and solar PV

Bioenergy

Hydrogen

Electrification

Other fuel shifts

CCUSEmission changes over timeGt CO₂Mitigation measures

25%50%75%100%Cumulative savings

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68 International Energy Agency | Net Zero Roadmap

Box 2.3 ⊳ Without behavioural changes, clean energy technologies would

have to accelerate even more rapidly

Clean energy technologies are deployed at unprecedented speed in the NZE Scenario,

but many CO 2-intensive energy assets will still be in use in 2030 . Reducing their emissions

or replacing them depends on scaling up novel or complex low -emission s solutions and

deploying them around the world , and that will take time. In the NZE Scenario,

behavioural changes cut around 1 Gt CO 2 from emissions -intensive assets which are still

in use in 2030. (Chapter 3 provides more details of what these changes are and how they

can be implemented ).

In the absence of energy demand reductions from behaviour c hange , achieving the same

emissions reductions in end -uses would require ramping up low -emission s technologies

at staggering speed (Figure 2.6) . In av i ation, t he use of sustainable aviation fuel ( SAF)

would need to increase more than twice as fast as in the NZE Scenario, reaching about

4 exajoules ( EJ) by 2030 and accounting for a bout 25% of the aviation fuel market. In road

transport, the use of more EVs would require an additional 1. 3 million tonnes ( Mt) of

critical minerals by 2030 – roughly the amount of critical minerals used in the EV sector

today. In buildings, h eat pumps would need to provide about 35% of heating demand in

2030, whereas it is 20% in the NZE Scenario , meaning that heat pump sales would need

to rise from 10% of all heating equipment sales today to 50% by 2026 .

Figure 2.6 ⊳ Energy transition levers with and without behavioural change

in the NZE Scenario

IEA. CC BY 4.0.

Other mitigation levers offer alternatives to behavioural changes,

but the additional p ace of uptake required would be very challenging

Note s: SAF = sustainable aviation fuel . Cooling efficiency is measured as the ratio of service demand over

final energy consumption, which reflects efficiency of both building envelopes and equipment . Critical

minerals in this figure refer to the demand for battery manufacturing for EVs. 1234

2010

2022

2030

Historical NZE Additional without behavioural changesEJSAF Critical minerals Cooling efficiency Heat pumps share

3 6 9 12

2010

2022

2030Million tonnes

1.01.11.21.31.4

2010

2022

2030Index = 2010

10%20%30%40%

2010

2022

2030

IEA. CC BY 4.0.

Chapter 2 | A renewed pathway to net zero emissions 69

2 By technology readiness level

The share of emissions reductions in the NZE S cenario in 2050 from technologies at either

demonstration or prototype stage, i.e. not yet available on the market , has been reduced

from a round half in the 2021 NZE Scenario to around 35% in th e 2023 version (Figure 2.7).

Figure 2.7 ⊳ Comparison of CO 2 emissions reductions in 2050 relative to base

year by technology maturity in the 2021 and 2023 NZE Scenarios

IEA. CC BY 4.0.

Emissions reductions by 2050 from technologies in demonstration or prototype stage have

been reduced from almost half in the 2021 NZE to around 35% in the 2023 NZE Scenario

Note: 2020 is the reference base year for the 2021 v ersion of the NZE Scenario and 2022 is the base year for

the 2023 NZE Scenario.

This change reflects two factors in particular. First, there has been considerable progress on

clean energy innovation in the last few years, with important technology upgrades in several

sectors, including the commercialisation of a number of technologies ( Figure 2.8).6 Second,

there are differences in the rate of deployment for some clean technologies in the 2023

NZE Scenario rela tive to the 2021 version to reflect changing technology and market trends.

Key selected examples of changes since 2021 that are reflected in the 2023 NZE Scenario

include :

 Road transport: Today b attery electric passenger cars and lithium -ion batteries are

much more widespread than they were in 2021, and markets are maturing even though

they still need support in many cases. Cost reductions and standardisation for

6 For more information on technology development and progress, see: Tracking Clean Energy Progress

(https://www.iea.org/reports/tracking -clean -energy -progress -2023) an d the Clean Tech Guide, an interactive

database of over 550 individual technology designs and components across the whole energy system

(https://www.iea.org/data -and-statistics/data -tools/etp -clean -energy- technology- guide). 20% 40% 60% 80% 100%

NZE-2023NZE-2021

Behaviour Mature Market uptake Demonstration Prototype

IEA. CC BY 4.0.

70 International Energy Agency | Net Zero Roadmap

commercial lithium- ion batteries in particular have strengthened the business cas e for

electromobility over other options across all segments of road transport. T he first

commercialisation of cars powered by sodium -ion batteries was announced in China for

2023 ; this technology was still at prototype stage in 2021 . Other innovative batt ery

chemistries, for example with higher energy density for heavy -duty applications, are

emerging, although some , such as solid -state batteries , are still at the prototyp e stage

and are experiencing delays in production. If delays persist, further advance s in lithium-

ion battery technology might decrease the competitive advantage of these emerging

concepts and reduce their future role. Electric vehicle charging infrastructure is

expanding rapidly . Developments in ultra -fast electric charging and battery swa pping as

well as hydrogen refuelling for heavy -duty vehicles are making some progress . Overall,

the decarbonisation of road transport in the 2023 NZE Scenario relies around

ten percentage points less on technologies under development in 2050 than the 2021

assessment . For example, the share of fuel cell electric heavy -duty vehicles on the road

in 2050 is 25- 40% lower in the 2023 NZE Scenario than in the 2021 version, with the

extent of the reduction varying by segment.

 Power generation: Electricity generation from solar PV and wind in 2050 is 13% higher

in the 2023 NZE Scenario than in the 2021 version . This reflects the establishment of

crystalline solar PV modules and onshore wind technology designs on the market, and

increases the scale of advanced designs such as floating offshore wind turbines . Long

duration storage is making progress through advances in battery technology and

demonstration projects in thermal and mechanical storage for power . On the other

hand, fossil fuel-based electricity generation from facilities equipped with CCUS – a n

area currently with several technologies at demonstration stage – is moving more slowly

than projected in 2021 . The contribution of CCUS to emissions reductions in power

generation by 2050 has been reduced by around 40% in the 2023 NZE Scenario.

 Heavy industry : Recently t here has been significant progress in 100% electrolytic

hydrogen -based direct reduced iron steelmaking, which accounts for nearly half of iron-

based steel production by 2050 in the 2023 NZE Scenario . Progress is evident too in

cement production, both on carbon capture through indirect calcination , and on

alternatives to conventional raw materials and clinker . CCUS applications for a broad

range of chemicals are maturin g from prototyp e to demonstration stage s. Pilot projects

for full electrification of hydrocarbon cracking are making progress . The pipeline of

projects for low- emission s ammonia production has expanded rapidly since 2021,

mostly electrolytic and some via steam methane reforming with CCUS . Progress is also

noted in batteries for heat storage , which could assist variable electricity generation to

provide constant high -temperature heat or high- pressure steam.

 Non- road transport: Small electric aircraft for regional distance flight s are close to being

demonstrated for the first time. Production of low -emission s aviation fuels is ramping

up. Large prototypes of ammonia -fuelled ships are being built, methanol -powered

container ships are being delivered , and small -scale hydrogen fuel cell ferries are

starting operations .

IEA. CC BY 4.0.

Chapter 2 | A renewed pathway to net zero emissions 71

2 Figure 2.8 ⊳ Technology readiness level for selected technologies

relative to technology maturity targets in the NZE Scenario

IEA. CC BY 4.0.

Accelerating clean energy innovation has delivered important technology upgrades

in the last few years, although much remains to be done to achieve net zero pathways

Notes: H2 = hydrogen; DRI = d irect reduced iron. For H 2-based DRI steelmaking, R&D on incorporating hydrogen

into steelmaking has been taking place for decades, including at one commercial plant since the 1980s that

relies largely on hydrogen. However here we highlight specifically 100% electrolytic-H 2 production. Future

years shown in the graph refer to the year when a given technology reaches commercial operation in the NZE

Scenario.

Box 2.4 ⊳ Announced manufacturing output for solar PV and batteries would

deliver around a third of all the emissions reductions required in the

NZE Scenario in 2030

Solar PV and batterie s are two of the most critical technologies to decarbonis e the energy

system. Together the y deliver around one-third of the emissions reductions needed in

the NZE Scenario in 2030. In 2022, solar PV capacity additions and electric car sales – a

key driver of battery demand – expanded by rates equivalent to the average compound

annual growth needed to me et the requirements for 2030 in the NZE Scenario .

Manufacturers are gearing up to supply rapidly rising demand ( Figure 2.9 ). In 2022 alone,

total installed manufacturing capacity jumped by nearly 40% for solar PV and almost 60%

for batteries , of which most was for EVs with a small share for grid storage. The pipeline

of announced projects is also skyrocketing. As of first -quarter 2023, total manufacturing

throughput from existing and announced projects in 2030 for both solar PV and batteries

would be about 75% higher than when considering announced projects as of the end of

2021. If all these projects proceed and are completed on time, producti on from existing 202120212021 202220222022

202020222023 2023

2023

20212025 -2027 2025 2025 -2028 2028 -2030 2035

1 2 3 4 5 6 7 8 9 10 11

Sodium-ion

batterySolid oxide

H₂

electrolysersDirect

separation

CCS in cement100%

electrolytic

H₂-DRISmall modular

reactorsConcept

and small

prototypeLarge

prototypeMarket

uptake

DemonstrationMature

IEA. CC BY 4.0.

72 International Energy Agency | Net Zero Roadmap

and announced manufacturing capacity w ould exceed demand in 2030 in the

NZE Scenario for solar PV, and just about meet demand for batteries.

Figure 2.9 ⊳ Solar PV and battery manufacturing throughput, from existing

capacity and announced projects compared to deployment

in 2030 in the NZE Scenario

IEA. CC BY 4.0.

Massive growth in the last two years is apparent in both installed

and announced capacity for solar PV and battery manufacturing

Notes: Batteries include batteries for EVs and grid storage. ‘Increased utilisation ’ indicates that utilisation

of existing m anufacturing capacity increases from actual rates to 85%. A utilisation rate of 85% is used for

announced projects. For 'As of March 2023', 'Actual' and 'With increased utilisation' are considering

production from existing capacity in 2022, and 'Announced projects' are as of the end of March 2023.

2.2 Energy trends

2.2.1 Total energy supply

The NZE Scenario projects increasing use of low -emission s energy sources in place of

unabated fossil fuels (Figure 2.10 ). Between 2022 and 2030, low -emission s sources increase

by over 110 EJ, equivalent to the current total energy supply of the United States and Japan

combined. Over the remainder of this decade, the increase in low- emission s energy sources

is led by modern bioenergy in its solid, liquid and gaseous forms. Wind and solar PV also

increase strongly, although the share in primary energy is not the best indicator to reflect

their role in the energy system given that they have lower conversion losses .

Total demand for fossil fuels falls by slightly more than one -quarter, or 140 EJ, by 2030. Coal

falls the most at slightly less than 75 EJ refle cting the higher level of maturity of emissions

reduction technologies in electricity generation which today accounts for most coal use. This 50%100%150%

Actual With increased utilisation Announced projectsSolar PV Batteries

NZE 2030 deployment

ProductionAs of 2021 As of March 2023 As of 2021 As of March 2023

IEA. CC BY 4.0.

Chapter 2 | A renewed pathway to net zero emissions 73

2 decline in coal demand is much less than in comparable scenarios assessed by the IPCC (see

Box 2.1). Oil demand de clines by around 39 EJ. Natural gas drops the least, around 26 EJ,

partly reflecting its increasing use in combination with CCUS to produce hydrogen.

Figure 2.10 ⊳ Change s in total energy supply by source in the NZE Scenario,

2022–2050

IEA. CC BY 4.0.

NZE Scenario relies on a huge increase in low- emission s sources of energy supply and

energy intensity improvements ; demand for unabated fossil fuels declines by 2030

Note s: TUOB = traditional use of biomass. Unabated coal, oil and natural gas refer to the use of these fuels for

combustion purposes without CCUS .

The rising use of fossil fuels combined with CCUS is far smaller than the decline of unabated

fossil fuels. Unabated fossil fuel demand falls by around 150 EJ to 2030, while the use of fossil

fuels combined with CCUS increases by around 7.5 EJ to 2030 , despite the strong push on

CCUS se en in the NZE S cenario (see Chapter 3).

Total energy supply is nearly 10% lower or 60 EJ in 2030 than in 2022, even with global

econom ic growth of over one-quarter . This implies dramatic progress in reducing energy

intensity from about 2% per year today to over 4% by 2030 . Improving technical efficiency in

appliances, motors and building envelopes is key, but a substantial portion of this

acceleration in intensity improvement results from a shift to more efficient energy carriers

such as electricity . Behavioural changes also contribute to reduc ed energy demand.

After 2030 t he pattern of energy supply continues to evolve rapidly and it is transformed by

2050 . Solar, including solar thermal and solar PV, provide s nearly 140 EJ in 2050, which is

almo st equivalent to the total energy supply of unabated natural gas today. Modern

bioenergy provides around 100 EJ and wind around 85 EJ. Overall, renewable sources

provide more nearly three -quarter s of total energy supply by 2050. Abated fossil fuels with

CCUS account for a further 5%. Unabated fossil fuels, excluding those used for non -energy -500-2500250500

2022 2025 2030 2035 2040 2045 2050Other

TUOB

Other renewables

Solar

Wind

Modern bioenergy

Hydro

Nuclear

Fossil fuel non-energy use

Natural gas: with CCUS

Oil: with CCUS

Coal: with CCUS

Unabated natural gas

Unabated oil

Unabated coal

Total energy supplyEJ

IEA. CC BY 4.0.

74 International Energy Agency | Net Zero Roadmap

purposes , decline from around three -quarters of total energy supply in 2022 to around 5%

by 2050. Their emissions are offset through carbon removal technologies. In tot al, including

non-energy uses, fossil fuels account for less than one-fifth of total energy supply in 2050,

reversing their share today in which fossil fuels account for about four -fifths of total energy

supply, including non -energy uses.

Changes from the 2021 NZE Scenario

The 2023 NZE Scenario represents three broad differences in the composition of total energy

supply relative to the 2021 version (Figure 2.11 ).

Figure 2.11 ⊳ Changes in total energy supply by source in the 2021 and

2023 NZE Scenarios in 2030 and 2050

IEA. CC BY 4.0.

The 2023 NZE Scenario projects slightly higher coal use in the near term and lower use of

CCUS, and a higher share of solar PV in total energy supply in the long term

First, unabated fossil fuels account for a somewhat higher share of total energy supply in

2030 than in the 2021 Net Zero Scenario version . For example, although unabated coal drops

by around 45% to 2030 compared to levels of use in 2022, its share in total energy supply in

2030 is four percentage points higher in the 2023 NZE Scenario than it was in the 2021

version . This reflects developments since the 2021 version , notably the unexpectedly strong

rebound in total energy demand post Covid -19 pandemic . It also reflects adjustments to the

design of the scenario, which aims to give more time to emerging market and developing

economies to transition to clean energy (see Box 2.1 ). While coal and oil use in 2030 is higher

in the 2023 NZE Scenario than in 2021, natural gas use is somewhat lower because of energy

security concerns arising from the global energy crisis .

Second, the long -term share of solar in total energy supply is higher than in the 2021 version

(section 2.2.3 ). Third, the share of fossil fuels with CCUS , notably natural gas, is lower than in -8-6-4-202468

2030 2050Change in percentage pointsOther

Traditional use of biomass

Other renewables

Solar

Wind

Modern bioenergy

Hydro

Nuclear

Fossil non-energy use

Natural gas: with CCUS

Oil: with CCUS

Coal: with CCUS

Unabated natural gas

Unabated oil

Unabated coal

IEA. CC BY 4.0.

Chapter 2 | A renewed pathway to net zero emissions 75

2 the 2021 NZE Scenario . This reflects a downward revision to hydrogen demand, caused in

part by boosted confidence in the possibility that direct electrification can play a larger role

in uses such as trucking. It also reflects a rebalancing towards electrolytic hydrogen

production and away from production using natural gas with CCUS ; this takes account of the

slow pace of current progress on the development of CCUS. In the 2023 NZE Scenario,

reduced CCUS deployment is compensated by more renewables and electrification .

2.2.2 Fuel supply

Fossil fuels

Oil, natural gas and coal accounted for around four -fifths of total energy supply worldwide

in 2022. 7 The surge in clean energy investment in the NZE Scenario – from USD 1.8 trillion in

2023 to USD 4.5 trillion in the early 2030s – drives sharp declines in fossil fuel demand. The

share of fossil fuels in total energy supply drops below two -thi

rds by 2030 and to less than

one-fifth in 2050. Coal demand declines by 45%, and oil and natural gas by around 20 % to

2030 ( Fig

ure 2.12 ).

Figure 2.12 ⊳ Oil, natural gas and coal supply by region in the NZE Scenario,

2010-2050

IEA. CC BY 4.0.

Declines in demand can be met without approving new, long lead time upstream

conventional oil and gas projects, new coal mines or mine lifetime extensions

Note: mb/d = million barrels per day; bcm = billion cubic metres; Mtce = million tonnes of coal equivalent;

C & S America = Central and South America.

7 Further information on oil and natural gas is forthcoming this year with the World Energy Outlook Special

Report: The Role of the Oil and Gas Industry in Net Zero Transitions. 20 40 60 80 100

2010 2050

Asia Pacific Middle East North America Eurasia Africa C & S America Europe1 0002 0003 0004 0005 000

2010 20501 5003 0004 5006 0007 500

2010 2050Coal (Mtce) Natural gas (bcm) Oil (mb/d)

IEA. CC BY 4.0.

76 International Energy Agency | Net Zero Roadmap

Coal demand falls quickly in the 2020s, declining by 7% on average each year to 2030 from

5 800 million tonnes of coal equivalent (Mtce) in 2022 to 3 300 Mtce in 2030 and less than

500 Mtce in 2050. Oil demand drops from 97 million barrels per day (mb/d) in 2022 to

77 mb/d in 2030 and 24 mb/d in 2050. Demand for natural gas falls from 4 160 b illion cubic

metres (b cm) in 2022 to 3 400 bcm in 2030 , and 920 bcm in 2050.

Just under 90 EJ of fossil fuels are consumed in 2050 in the NZE Scenario. One -third of this,

including 60% of natural gas and 80% of coal, is used in facilities equipped with CCUS.

A further 40% , including 70% of oil , is consumed in applications where the carbon is

embodied in the product and there are no direct CO 2 emissions , e.g. chemical feedstocks,

lubricants, paraffin waxes and asphalt. The remaining 25% is used in sectors wher e clean

energy technologies are least feasible and cost effective, for example , oil accounts for around

20% of fuel use in aviation in 2050 in the NZE Scenario. The unabated combustion of fossil

fuels results in 1.4 Gt CO 2 emissions in 2050 which are fully balanced by removal of CO 2 from

the atmosphere through BECCS and DACS.

The sharp decline in f ossil fuel d emand in the NZE Scenario mean s that no new conventional

long lead time oil and gas projects are approved for development after 2023 , and that there

are no new coal mines or coal mine lifetime extensions . The pace of decline in oil and gas

demand in the 2030s may also mean that a number of high cost projects come to an end

before they reach the end of their technical lifetimes.

Investment in exi sting fossil fuel supply projects , however , is still needed in the NZE Scenario

to ensure that supply does not fall faster than the decline in demand. This includes the use

of in -fill drilling and improved management of reservoirs as well as some enhanced oil

recovery and tight oil drilling to avoid a sudden near -term drop in supply. Investment is also

undertaken to reduce the emissions intensity of remaining fossil fuel operations, especially to tackle methane emissions and flaring. In the NZE Scenario, this leads to a 50% reduction in the global average GHG emissions intensity of oil and gas production between 2021 and 2030 , and to almost zero emissions from oil and gas operations soon after 2040.

A large and sustained surge in clean energy investment is what remove s the need for new

fossil fuel projects in the NZE Scenario : reducing fossil fuel supply investment in advance of,

or instead of, policy action and investment to reduce demand would not lead to the same outcomes. Prolo nged high prices would result if the decline in fossil fuel investment in this

scenario were to precede the expansion of clean energy and the action to cut overall energy

demand that are also set out in this scenario. This would reduce the chances of an or derly

transition to net zero emissions by 2050 and underlines the importance of action to secure

the kind of surge in investment in clean energy and the demand reductions that are seen in

the NZE Scenario.

What has changed since the 2021 NZE Scenario ?

Natu ral gas plays less of a role in th e 2023 NZE Scenario than in the 2021 version . Natural g as

use is 10% lower in 2030 and 45% lower in 2050 than in the 2021 version . Price spikes in 2022

have shaken confidence in natural gas as an affordable alternative to coal or oil, especially

among some import -dependent emerging market and developing economies. Much l ess

IEA. CC BY 4.0.

Chapter 2 | A renewed pathway to net zero emissions 77

2 natural gas is also used to produce low-emission s hydrogen than was the case in the 2021

NZE Scenario .

On the suppl y side, additional oil and gas projects approved since the 2021 NZE Scenario are

likely to add around 4 mb/d and 170 bcm of production in 2030 (mainly in the Middle East

and South America) . This additional supply and the increased pace of reduction in natu ral

gas demand in the NZE Scenario in the 2030s and 2040s now means that some production is

closed before fields have reached the end of their technical lifetimes. Russia’s invasion of

Ukraine is also relevant here . The drop in Russian production to date ( Russian natural gas

production in 2022 was 100 bcm lower than in 2021) is smaller than the additional

production from new projects that have recently been approved for development.

Governments are rightly concerned about energy security, but new conventional field

approvals cannot provide immediate relief for tight markets and may well make the later

stages of the transition even more challenging.

Low-emission s fuels

The supply of low -e mission s fuels , including modern bioenergy, hydrogen and hydrogen -

ba

sed fuels , increases rapidly in the NZE Scenario (Fi

gure 2.13 ). The y play an important role

in reducing emissions , notably those from long -distance transport and heavy industry . In the

NZE Scenario, demand for low -emission s hydrogen and hydrogen -based fuels rises fastest,

albeit from a low starting point , with an average annual growth rate of 80% to 2030 and 9%

between 2030 and 2050 . However, in absolute terms, solid bioenergy also increases its

contribution to clean energy supply substantially . Demand for solid bioenergy increases by

15 EJ by 2030, equivalent to 500 Mtce.

Figure 2.13 ⊳ Low-emissions fuel demand in the NZE Scenario, 2010-2050

IEA. CC BY 4.0.

Gaseous low -emissions fuels – including hydrogen – increase at the fastest rate

in the NZE Scenario, but solid fuels increase nearly as much in absolute terms

Notes: H 2 = hydrogen. Liquid, gaseous and solid refer to the phase of the fuel at the point of use or conversion.

Transformation losses are those incurred during conversion from one low -emissions fuel to another and

exclude upstream energy losses associated with producing the converted fuel. Demand for hydrogen is

inclusive of what is met by captive production onsite at industrial and refining faciliti es. 2010 2050Gaseous

20 40 60 80

2010 2050

Modern bioenergy H₂ and H₂ -based fuels Transformation lossesLiquidEJ

2010 2050Solid

IEA. CC BY 4.0.

78 International Energy Agency | Net Zero Roadmap

Modern solid bioenergy is mostly used today for industrial purposes . By 2050 , however,

power generation accounts for 40% of the total, ahead of industry at 30% and inputs to liquid

and solid biofuels at 20%. A round 24 EJ or 40% of current bioenergy consumption comes

from the traditional use of biomass , but this is phased out by 2030 in the NZE Scenario as full

access to modern cooking technologies is achieved (see Chapter 3).

Modern liquid biofuel demand , including gaso line, diesel , marine and aviation fuels that

derive their energy content primarily from biogenic non-electricity source s, increases by

200% before peaking around 2040. Afterwards the continued phase -out of internal

combustion engine cars means that it is le ss in demand as a bl ending fuel for road v ehicles,

and this reduction in demand outweighs steady increases in demand for maritime and

aviation uses.

Gaseous bioenergy, including biogas and biomethane, becomes a highly valuable component of the energy system in the NZE Scenario by 2030 , notably in the power sector . This is in part

because it is the most cost -effective direct substitute for natural gas, an attribute that has

taken on a significant energy security dimension since the Russian invasion of Ukraine in early 2022. By 2050, biogas from anaerobic digestors and other production techniques take on a

wide variety of roles because it offer s one of the cheapest wa ys to meet rising demand for

clean, gaseous fuels for flexible power generation, industrial heat, hydrogen production and ,

potentially , maritime fuel. In addition, they are able to provide sustainable carbon inputs to

hydrogen- based fuels. However, the acc essible resource base for biogas production is

limited, which in effect rations its use.

L

ow ‐emission s hydrogen production increases from 0. 6 Mt ( 75 petajoules ) today to 70 Mt in

2030 and 420 Mt in 2050. Of the low ‐emission s hydrogen produced in 2050, 80% is produced

via water electrolysis, and nearly all the re mainder from fossil fuels equipped with CCUS.

From around 1 GW today, the installed capacity of electrolysers reaches 5 90 GW in 2030, a

rate of growth that could be within reach if all the projects currently planned are taken

forward, including early stage projects . By 2050 , 3 300 GW of electrolysis capacity and

15 000 terawatt -hours ( TWh ) of electricity are used to produce low- emission s hydrogen ; the

electricity required is more than half of today’s total global electricity demand . Around 80%

of total hydrogen and hydrogen -b

ased fuel use in 2050 is for industry and transport, with

roughly one third of total low ‐emission s hydrogen in 2050 being co nverted to low -emission s

hydrogen ‐based transport fuels. Synthetic kerosene produced from hydrogen (and

combined with a non ‐fossil fuel source of CO 2) provides around 40% of energy use in the

aviation sector, and ammonia and hydrogen provide more than 60% of energy use in

shipping.

What has changed since the 2021 NZE Scenario ?

Overall, the level of low -emission s hydrogen in 2050 is broadly similar in the 2023 NZE

Scenario compared with the 2021 version, indicating that it retains its competitive position

as a leading option to reduce fossil fuel use in certain sectors. However, as support from

governments and potential low -emission s hydrogen users has not ramped up at the pace

envisaged by the 2021 NZE S cenario, the corresponding 2030 level has been adjusted

IEA. CC BY 4.0.

Chapter 2 | A renewed pathway to net zero emissions 79

2 downwards to reflect what can still be achieved this decade. In addition, the sources of low -

emission s hydrogen have been somewhat rebalanced : the sluggishness of progress on CCUS

outside North America, coupled with a higher emphasis on reducing natural gas demand in

some regions, has led to a reduction in the amount of hydrogen produced with fossil fuels

and CCUS in the NZE Scenario .

2.2.3 Electricity generation

Overview

Global electricity generation increases over two -a nd-a-h alf-t imes in the NZE Scenario from

2022 to 2050, growing significantly faster over this period (3.5 % per year) than over the past

decade (2. 5%). The electrification of end- uses ranging from EVs to space heating to industrial

production, combined with economic development and population growth, drive s this

growth and raise s the share of electricity in final consumption from 20% in 2022 to almost

30% in 2030 and more than 50% in 2050. In addition, hydrogen production via electrolysis

increases rapidly in the NZE Scenario and account s for almost 20% of global electricity

demand in 2050.

Figure 2.14 ⊳ Global electricity sector emissions and CO ₂ intensity of

electricity generation in the NZE Scenario, 2010-2050

IEA. CC BY 4.0.

Electricity sector reaches net zero emissions in advanced economies

in aggregate in 2035, in China around 20 40 and globally before 2045

Note: g CO 2 /kWh = grammes of carbon dioxide per kilowatt- hour; other EMDE = emerging market and

developing economies excluding China.

Low-e mission sources of electricity – renewables, nuclear, fossil fuel s with CCUS, hydrogen

and ammonia – expand rapidly in the NZE Scenario, overtaking unab ated fossil fuels just after

2025 and reaching 71 % of total generation by 2030, almost twice the share in 2022.

Electricity sectors in advanced economies , in aggregate, reach net zero emissions by 2035 in - 200 200 400 600 800g CO₂/kWh

2035 2030 2022

1Gt CO2 Annual emissions:2050 2040 2045Advanced

economiesChina

Other EMDECO2intensity

- 4 4 8 12 16

2010 2030 2050Gt CO₂

Coal Natural gas

Oil Non-renewable waste

Bioenergy with CCUSEmissions

IEA. CC BY 4.0.

80 International Energy Agency | Net Zero Roadmap

the NZE Scenario, around 2040 in China and by 2045 in other emerging market and

developing economies (Figure 2.14 ). In each case , electricity is the first energy sector to reach

net zero emissions, creating opportunities for electrification in other sectors to further drive

down emissions.

The first of four key milestones for the electricity sector in the NZE Scenario is the tripling of

global renewables capacity by 2030 from the level of 3 630 GW in 2022 (Figure 2.15 ). This

leads to the share of renewables in electricity generation rising from 30% in 2022 to about 60% in 2030. By 2050 in the NZE Scenario, the total installed capacity of renewables is eight -

times the level in 2022, and it generates near ly 90% of global electricity supply.

Figure 2.15 ⊳ Key milestones for the electricity sector in the NZE Scenario,

2022-2050

IEA. CC BY 4.0.

Renewables capacity triples and grid investment doubles by 2030, unabated coal is

phased out by 2040 in the NZE Scenario and nuclear capacity more than doubles by 2050

The second key milestone for the electricity sector is the doubling of grid investment s by

2030. In the NZE Scenario, electricity transmission and distribution grids expand to meet the

growing demands of electrification, connect thousands of new renewable energy projects,

and reinforce systems that need to adapt to changing system dynamics. Global annual

investment in grids to 2030 reaches USD 680 billion , and it remains at a high level through to

2050. Close to 70% of this investment is for distribution grids with the aim of expanding,

strengthening and digitalising networks. In addition to the scaling up of investment,

regulatory and policy reforms facilitate timely and efficient development and modernisation

of grids to support clean energy transitions .8

The third key milestone for the electricity sector is a 95 % reduction by 2040 in the unabated

use of fossil fuels to generate electricity which includes the complete phas e out of unabated

8 Electricity Grids and Secure E nergy Transitions , a forthcoming IEA report, will be published in late 2023. 300 600 900

2022

2030

2040

2050x 2Nuclear

(GW)

6 12 18

2022

2030

2040

2050Fossil fuels unabated

(thousand TWh)

-95%Oil

Natural gas

Coal 10 20 30

2022

2030

2040

2050x 3Renewables

(thousand GW)

400 8001 200

2022

2030

2040

2050x 2Grids investment

(Billion USD 2022, MER)

IEA. CC BY 4.0.

Chapter 2 | A renewed pathway to net zero emissions 81

2 coal. Emissions from unabated coal were nearly 10 Gt CO 2 in 2022, making up almost 75% of

the electricity sector total and 27% of total energy sector emissions. Despite a temporary

boost from the energy crisis , the share of unabated coal in global electricity generation falls

rapidly in the NZE Scenario from 36% in 2022 to 13% in 2030, and to zero by 2040 and

beyond. Coal phase -outs are already underway , and over 90 countries representing nearly

all coal-fired power in the world have either committed to phase out unabated coal

specifically or set net zero emissions targets (IEA, 2022a) . Low-

emission s sources of

generation rise so rapidly that no new unabated coal plants beyond th e 150 GW under

construction at the start of 2023 are built in the NZE Scenario. Emissions from u nabated

natural gas use for electricity generation were 2.8 Gt CO 2 in 2022, contributing just over 20%

of electricity sector emissions, while oil use led to a further 0.5 Gt of emissions . Unabated

natural gas declines by over 80% by 2040 in the NZE Scenario, and large -scale oil-fired power

plants are fully phased out by then .

T

he fourth key milestone for the electricity sector is for nuclear power to more than double

from 417 GW in 2022 to 916 GW in 2050 . Despite this growth, the share of nuclear power in

generation declines slightly in the NZE Scenario from 9% in 2022 to 8% in 2050. After three

decades of modest growth, a changing policy landscape is opening opportunities for a nuclear comeback. As a means of pursuing emissions reductions targets and addressing energy security concerns, several countries have announced strategies that include a

significant role for nuclear power, including Canada, China, France, India, Japan, Korea, Poland, United Kingdom and United States. At the start of 2023, nuclear reactors totalling 64 GW were under construction in 18 countries around the world. In the longer term, m ore

than 30 countries which accept nuclear power today increase their use of nuclear power in

the NZE Scenario .

To achieve the overall doubling of nuclear capacity by 2050, an average of 26 GW of new

capacity comes online every year from 2023 to 2050 in the NZE Scenario , some of which is

needed to offset retirements (Figure 2.16 ). This calls for average annual investment of over

USD 100 billion, which is triple the level in recent years. Following the completion of projects

already underway, the peak of expansion com es in the 2030s, whe n an annual average of

33 GW of new nuclear capacity comes online , marking a new high for the nuclear industry.

China leads the way in nuclear power expansion, accounting for one -third of all new nuclear

capacity to 2050 in the NZE Sce nario, with other emerging market and developing economies

accounting for almost a nother one-third . In advanced economies, where reactors have been

in operation on average for over 35 years, nuclear capacity additions rise over time largely

to offset the retirement of existing reactors , though lifetime extensions continue to play an

indispensable role as part of a cost -effective approach to achieving net zero emissions by

2050 (IEA, 2022b) . All regions increasingly draw on advanced nuclear technologies, including

new large reactor designs (generation III+ and IV) and small modular reactors . While the

biggest opportunity for nuclear power is in the electricity sector, new nuclear power in this

scenario helps to decar bonise heat and to supply low- emissions hydrogen .

IEA. CC BY 4.0.

82 International Energy Agency | Net Zero Roadmap

Figure 2.16 ⊳ Nuclear power capacity and average annual capacity additions

in the NZE Scenario, 1990-2050

IEA. CC BY 4.0.

Nuclear power capacity more than doubles to over 900 GW by 2050,

with recent policy decisions opening opportunities for a nuclear comeback

Solar PV and wind are the leading means of cutting electricity sector emissions: their

combined global share of electricity generation increases from 12% in 2022 to 40% by 2030

and 70% by 2050. Solar PV additions expand almost fourfold to 820 GW by 2030, one -quarter

of which is dedicated to the production of hydrogen. Wind additions reach 320 GW by 2030 ,

more than 30% of which is offshore , and with just over 10% of all wind dedicated to hydrogen

production . Solar PV becomes the largest source of electricity by 2030 and holds that position

through to 2050 ; wind becomes the second -largest source (Figure 2.17 ).

Rising shares of solar PV and wind put a premium on pow er system flexibility and stability in

the NZE Scenario . Hourly flexibility needs quadruple between today and 2050 due to new

demand patterns and to the variable output of solar PV and wind. Seasonal variability also

increase s in many regions in the NZE Scenario, calling on hydro power , low-emission s thermal

plants and new forms of long duration storage, including hydrogen. In addition, the high

shares of inverter -based resources , such as wind, solar PV and batteries , increase system

stability challenges .

In

the NZE Scenario, natural gas -fi

red generation peaks in the mid -2020s before starting a

long -te

rm decline. Even as output falls, however, natural gas -fi

red capacity remains a critical

source of power system flexibility in many markets, particularly to address seasonal flexibility

needs. Capacity additions of hydropower and other dispatchable renewables triple by 2030

to over 125 GW, expanding the supply of both low- emission s electricity and flexibility.

Stationary utility -scale battery storage is a relatively new source of flexibility, and it expands

36-f

old in the NZE Scenario by 2030. Batteries are well suited to provide power system 200 400 600 8001 000

1990

2000

2010

2020

2030

2040

2050

Advanced economies China Other emerging market and developing economiesInstalled capacityGW

8 16 24 32 40

1970s

1980s

1990s

2000s

2010s

2020s

2030s

2040sAverage annual capacity additions

IEA. CC BY 4.0.

Chapter 2 | A renewed pathway to net zero emissions 83

2 flexibility on the scale of seconds, minutes or hours, and can bolster the stability and

reliability of electricity networks by providing fast frequency response. By 2030, global

utility -scale battery capacity reaches 1 000 GW in the NZE Scenario and accounts for about

15% of all dispatchable power capacity. Pumped hydro is already well established as an

important form of storage ; other forms of storage , including thermal and gravity -b

ased

systems, are now under development . Expanding fleets of EVs and the increased

electrification of end -uses also provide increasing scope for demand response measures to

provide flexibility . Alongside this, t he NZE Scenario sees the deployment of existing an d new

technologies to support system stability : these include synchronous condensers, flexible

alternating current ( AC) transmission systems, grid -forming inverters and fast frequency

response capabilities.

Figure 2.17 ⊳ Total installed capacity and electricity generation by source

in the NZE Scenario, 2010-2050

IEA. CC BY 4.0.

Solar PV and wind lead decarbonisation of the electricity sector, becoming the largest

sources of electricity by 2030, complemented by nuclear and other low -emissions sources

What changed compared to 2021 NZE Scenario ?

The 2023 NZE Scenario includes a faster and larger increase in solar PV than the 2021 version

(Figure 2.18 ). Solar PV capacity additions in 2030 are 30% higher than in the 2021 version,

reflecting recent market acceleration and the rapid scaling up of manufacturing capabilities

(see Chapter 1). Nuclear power expansion also proceeds more vigorously, with almost 15 %

more capacity in 2050 in the updated NZE Scenario than in the 2021 version , reflecting

strengthened policy support in leading markets and brighter prospects for small modular

reactors. On the other hand, wind power increases less strongly in the 2023 NZE Scenario,

and 2030 capacity additions in 2030 are 20% lower than in the 2021 version due to limited

plans globally to expand manufacturing and challenging financial conditions across the 10 20 30 40

2010 2023 2030 2040 2050

Solar PV Wind Hydro

Bioenergy and waste Other renewables Nuclear

Hydrogen and ammonia Fossil fuels with CCUS Coal unabated

Natural gas unabated Oil BatteriesInstalled capacityThousand GW

10 20 30 40

2010 2030 2050Thousand TWhElectricity generation

IEA. CC BY 4.0.

84 International Energy Agency | Net Zero Roadmap

supply chain. Hydrogen and ammonia also play a smaller role than in the 2021 version as a

result of continuing high costs and competition for potential end -uses. The ro le of carbon

capture in reducing emissions from fossil fuel power plants has also diminished mainly due

to a lack of new projects.

Figure 2.18 ⊳ Global changes in electricity generation in the 2023 N ZE

Scenario relative to the 2021 version, 2030 and 2050

IEA. CC BY 4.0.

Recent developments in generation are included in the 2023 NZE Scenario with increases in

solar PV and nuclear , and less wind, hydrogen, CCUS and BECCS than the 2021 version

2.2.4 Final energy consumption

Overview

Today, global total final energy consumption is 442 EJ. Emerging market and developing

economies account for 60% and advanced economies for 36%, with the remainder used in

aircraft and ships for international travel and seaborne trade. Fossil fuels, led by oil, account

for two -thirds of global total final consumption, electricity for a fifth and bioenergy9 for a

tenth. The remainder is district heat , solar thermal, geo thermal and non -renewable wastes

combusted in industrial processes.

By 2030, the share of fossil fuels in final consumption falls 9 percentage points in the

NZE Scenario, although they still account for more than half of the total ( Figure 2.19 ). The

decline of fossil fuels is faste st in advanced economies, where their share in final

consumption falls by more than 15 percentage points to 2030 in the light of action to boost

EVs, hea t pumps and modern bioenergy, and to moderate energy demand through energy

efficiency and behaviour change.

9 Including renewable wastes. -4 000-2 00002 0004 0006 0008 00010 000

2030 2050Other renewables

Bioenergy with CCUS

Wind

Solar PV

Nuclear

Hydrogen and ammonia

Fossil fuels with CCUS

Oil

Natural gas unabated

Coal unabatedTWh

IEA. CC BY 4.0.

Chapter 2 | A renewed pathway to net zero emissions 85

2 Figure 2.19 ⊳ Total final energy consumption by fuel and region in the

NZE Scenario, 2020-2050

IEA. CC BY 4.0.

Use of u nabated fossil fuels and traditional use of biomass plummet s as more end -uses

switch to progressively decarbonised electricity and other low -emissions fuels

Note s: EMDE = emerging market and developing economies. Other fossil fuels include fossil fuels equipped

with CCUS and those used for non -combustion purposes, such as feedstock for chemicals production.

Floorspace in the buildings sector and the total road vehicl e fleet both increase more than

15% globally by 2030 , driven by emerging market and developing economies. The transitions

that take place in end -use sectors are somewhat slower in emerging market and developing

economies, with the share of unabated fossil fuels falling by 6 percentage points by 2030,

compared with a more than 15 percentage point drop in advanced economies . Universal

access to clean cooking and electricity is achieved by 2030, and 24 EJ of inefficient and

polluting traditional biomass is replaced by electricity, liquefied petroleum gases and

efficient cookstoves.

After 2030, unabated fossil fuels are rapidly replaced in all countries by electricity, the direct

use of renewable s – e.g. modern bioenergy, solar thermal and geothermal – and low-

emission s hydrogen and hydrogen -based fuels . By 2050, global total final consumption

reaches around 340 EJ, of which electricity provides 53% . Electrification occurs in every

sector to provide, heating , cooling and mobility , to power motors and appliances, and to

produc e onsite electrolytic hydrogen for heavy industries. Most of the small remaining

quantities of unabated fossil fuels used for combustion applications , around 15 EJ globally in

2050, are consumed in long-distance transport, especially aviation and shipping, and in heavy

industries.

What changed compared to 2021 NZE Scenario ?

In the industry sector, the 2023 NZE Scenario envisages a smaller role for CCUS than the 2021

version (Figure 2.20 ). Despite multiple CCUS project announcements for specific industrial 50 100 150

2020 2050

Unabated fossil fuels Other fossil fuels Electricity

Hydrogen and H₂ -based Modern renewables Traditional use of biomassAdvanced economiesEJ

2020 2050EMDE

2020 2050International bunkers

IEA. CC BY 4.0.

86 International Energy Agency | Net Zero Roadmap

applications like cement, the plants involved collectively only account for a small share of

total production (see Chapter 3). Moreover, t here has been little progress in CCUS in the iron

and steel industries . In contrast, the number of project announcements for hydrogen -based

direct reduced iron ( DRI) steel production increased significantly since 2021, which is

reflected in the four percentage point increase in th e share of iron production in 2035

between the two versions of the NZE S cenario .

Figure 2.20 ⊳ Fuel mix changes in final energy consumption by sector

in the 2023 NZE Scenario relative to the 2021version,

2030 and 2050

IEA. CC BY 4.0.

Better prospects for heat pumps, EVs and hydrogen- based steel production drive

stronger electricity demand, while synthetic fuels, liquid biofuels and CCUS are reduced

Note: Where low -emissions hydrogen is produced and consumed onsite at an industrial facility , the fuel input,

such as electricity or natural gas, is reported as final energy consumption, rather than the hydrogen output.

In the transport sector, the key change compared to the 2021 NZE Scenario version is faster

growth in EV sales . It reflects the very strong advances in terms of annual sales, announced

manufacturing capacity for batteries, strategy announcements from car and truck makers,

and technology improvements. Biofuel use in transport , however , has not advanced in a

similar way, reflecting that food and fertiliser prices remain a concern. EV technologies and

manufacturer strategies have advanced in trucks, a segment of the market that is particularly

conducive to the use of biofuels, particularly in the short term . As a result, th e 2023 NZE

Scenario sees a diminished role for biofuels in transport in both the near and long er term.

A similar downward revision also applies for hydrogen and hydrogen- based fuels. In the near -8%-4%0%4%8%

2030 2050 2030 2050 2030 2050

Coal: unabated Coal: with CCUS Oil: unabated

Oil: with CCUS Natural gas: unabated Natural gas: with CCUS

Fossil fuels: non-energy use Electricity District heat

Hydrogen and H₂ -based fuels Traditional use of biomass Modern bioenergy

Other renewables Non-renewable wasteIndustry Buildings Transport

IEA. CC BY 4.0.

Chapter 2 | A renewed pathway to net zero emissions 87

2 term this result s in a slightl y higher share of oil in transport energy demand , in the longer

term it leads to even higher levels of EV sales share and to a substantially higher share of

electricity in transport energy demand by 2050.

In the buildings sector , the main change is a fast er switch from natural gas to electricity which

primarily reflects advances in heat pump technology and concerns about natural gas supply

in the wake of Russia’s invasion of Ukraine.

Industry

Energy and material s efficiency measures are important levers to reduce industrial CO 2

emissions in the short term. Examples include the deployment of best available technolog ies

to reduce energy consumption, waste heat recovery and process integration, building and

product lifetime extension s, recy cling , and product designs that are less material -intensive

and that facilitate component repair and reuse . These measures are generally incremental

in impact , and there are practical limits to what they can do to mitigate emissions . Step

changes in the emissions intensity of production – particularly of emissions -intensive bulk

materials like steel, cement and primary chemicals – are still required , and these are achieved

in large part by the use of hydrogen, CCUS and direct electrification technologies .

Figure 2.21 ⊳ Final energy consumption by fuel in selected industry

sub-sectors, 2022-2050

IEA. CC BY 4.0.

Net zero emissions in industry relies heavily on electricity, hydrogen and CCUS. Unabated

fossil fuel use plummets while petrochemical feedstock demand decreases more slowly .

Notes: Where low -emission s hydrogen is produced and consumed onsite at an industrial facility, the fuel input ,

such as electricity or natural gas , is reported as final energy consumption, not the hydrogen output. Other

industry category includes light industries and non -sp

ecified industry. CO 2 emissions from chemicals do not

include CO 2 removal from onsite direct air capture. 123

204060

2022 2030 2050 2022 2030 2050 2022 2030 2050 2022 2030 2050

Gt CO2

Coal: unabated Coal: with CCUS Oil: unabated

Oil: with CCUS Natural gas: unabated Natural gas: with CCUS

Fossil fuel: feedstock Electricity Heat

Hydrogen Modern solid bioenergy Other renewables

Non-renewable waste Emissions (right axis)Steel Other industry Cement ChemicalsEJ

IEA. CC BY 4.0.

88 International Energy Agency | Net Zero Roadmap

Most of the remaining industry sector energy -related emissions are addressed by using

alternatives to fossil fuels to provide heat. Chief among these alternatives is electricity, which

is used primarily to provide l ow-temperature heat, which increases its share of industrial

energy consumption from 23% in 2022 to 49% i n 2050 (Figure 2.21 ). Hydrogen and bioenergy

are used in the NZE Scenario to provide high- temperature heat.

Transport

Electrification is the main lever for emissions reductions in road transport in the NZE Scenario

(Figure 2.22 ). EV sales account for around 65% of the new car market by 2030, and no new

internal combustion engine ( ICE) cars are sold after 2035. Electric and hydrogen -fuelled

trucks displace ICE medium and heavy trucks : new fossil -fuelled ICE truck sales end in 2040

in advanced economies and China, and in 2045 in the rest of the world. Battery electric trucks

make significant advances , particularly in medium -duty trucks and other trucks with

relatively short and regular routes; fuel cell electric powertrains are most successful in long -

haul, heavy -duty trucks where fast charging of battery electric versions may prove difficult.

These changes mean that oil demand for road transport – the single largest oil consuming

sector today – falls at an average 1.4 mb/d per year to 2050.

Figure 2.22 ⊳ Final energy consumption in transport by fuel for

selected modes, 2022-2050

IEA. CC BY 4.0.

Road transport relies strongly on electrification to substitute its oil thirst, whereas aviation

and shipping oil substitutes are mainly liquid biofuels, hydrogen and synthetic fuels

Note s: Only direct CO 2 emissions are included. Hydrogen includes hydroge n-based fuels.

Aviation sees strong growth in emerging market and developing economies, but traffic

optimisation measures , energy efficiency gains , behavioural changes and rapid development

of bio -based SAF mean that aviation oil demand peak s in the mid -2020s in the NZE Scenario . 1.5 3.0 4.5

20 40 60

2022

2030

2050

2022

2030

2050

2022

2030

2050

2022

2030

2050

Gt CO2

Oil Natural gas Coal Electricity Bioenergy Hydrogen Emissions (right axis)EJLight duty vehicles Heavy trucks Aviation Shipping

IEA. CC BY 4.0.

Chapter 2 | A renewed pathway to net zer o emissions 89

2 After 2030, oil use decreases rapidly – by more than 0.2 mb/d per year on average – with the

development of synthetic SAF and the deployment of the first hydrogen aircraft in the

second -half of the 2030s. In shipping, efficiency improvement s including the use of wind

assistance and fuel switching cut oil use . Ammonia is the primary low- emission s fuel used to

decarbonise shipping , with the contributions from biofuels and hydrogen limited in large part

by their relativel y high costs .

Buildings

Making buildings zero -carbon- ready10 means that existing buildings need to undergo deep

retrofits and that new buildings need to meet very stringent standards and be equipped with technologies that will be fully decarbonised by 2050 . In the NZE Scenario, t he global average

retrofit rate reaches 2.5% per year by 2030 and remains at around that level through to 2050.

This leads to around half of existing buildings being retrofitted and becoming zero -carbon-

ready by 2040. This in turn more than halves demand for space heating and cooling between

today and 2050 , despite a 55% increase in the amount of floorspace in the buildings sector.

Figure 2.23 ⊳ Final energy consumption in the buildings sector by

selected end-use, 2022-2050

IEA. CC BY 4.0.

Deep retrofit s and efficient devices lower energy intensity in buildings by 60% compared

to today; electricity, district heat and direct renewables displace fossil fuels by 2050

Note: Only direct CO 2 emissions are included.

The use of fossil fuels for heating and co oking is rapidly reduced in the NZE Scenario in favour

of electricity and clean energy alternatives (Figure 2.23 ). In emerging market and developing

10 Zero- carbon -ready buildings become zero- carbon without any further renovation once the power and

natural gas grids that they rely on are fully decarbonised . 123

153045

2022

2030

2050

2022

2030

2050

2022

2030

2050

2022

2030

2050

Gt CO2

Coal Natural gas Oil

Traditional Electricity Hydrogen

District heat Renewables Emissions (right axis)EJSpace heating Cooking Water heating Space cooling

use of biomass

IEA. CC BY 4.0.

90 International Energy Agency | Net Zero Roadmap

economies, traditional use of biomass is replaced by modern energy use as universal access

to clean cooking is achieved by 2030. From 2025 onwards, sales o f new coal and oil boilers

come to an end (g as boilers continue to be used in a minority of cases, fuelled by biomethane

and hydrogen ). They are largely replaced by heat pumps with 290 million dwellings equipped

with heat pumps by 2030 and 875 million by 2 050. Solar water heaters are also deployed

extensively with 350 million dwellings equipped with solar thermal for water heating by 2030

and around a billion by 2050. The use of biomethane in buildings reaches 7 5 bcm of natural

gas equivalent by 2050 , and district heating is virtually fully decarbonised by 2050.

2.3 Net zero emissions g uide

Our 2021 Net Zero by 2050 report included numerous tables presenting more than 400 key

milestones for different sectors and technologies on the pathway to reach net zero emissions

from the global energy sector by 2050. These proved to be highly useful for numerous stakeholders, in cluding actors from industry, finance, and policymaking. In this year’s edition,

we have brought together these milestones in one place as a set of fifteen technology and sector -specific dashboards. These are presented in the pages that follow. Clarificato ry notes

to the dashboards are given on page 106.

IEA. CC BY 4.0.

Chap ter 2| A renewed pathway to net zero emiss ions 91Total electricity generation from low-emissions sources (TWh)

Solar PV and wind 3 416 15 247 27 362 54 67911 281 27 061 43 117 76 603

Other renewables 5 183 7 284 9 377 13 752

2 682 6 015

39% 99.7%

12% 71%

30% 89% Nuclear 3 936 4 952

Share of low-emissions sources in total generation 71% 91%

Share of solar PV and wind in total generation 40% 58%

59% 77% Share of renewables in total generation

Annual capacity additions of low-emissions sources (GW) 344 1 301 1 382 1 268

Solar PV 220 823 878 815

Wind 75 318 350 352

Nuclear 8 35 37 21

Average annual investment (USD billion 2022, MER) 2017/hyphen.uc22 2023/hyphen.uc30 2031/hyphen.uc35 2036/hyphen.uc50

Low-emissions 507 1 202 1 321 973

Renewables 466 1 080 1 185 875

Nuclear 41 114 121 93Milestones 2022 2030 2035 20502010Thousand GW

10203040

2050

Scaling up investment in electricity infrastructure

is critical to unlock clean energy transitionsSolar PV and wind account for 65% of the global

power sector CO2 emissions reductions by 2050

-72025 2030 2035

2010/hyphen.uc16 2017/hyphen.uc23 2024/hyphen.uc302040 2045 2050

-14200400Gt CO2

Billion USD (2022, MER)

Solar PV Wind Other renewables Nuclear

Fossil fuels with CCUS, hydrogen and ammoniaSolar PV Wind Other renewables Nuclear Fossil fuels with CCUS, hydrogen and ammonia203040% of electricity from wind and solar PV

2035Over 65% increase in nuclear power capacity

Wind and solar additions reach 1 140 GWOver 70% of electricity from wind and solar PV

Nearly 90% of electricity from renewablesLow-emissions electricity generation capacity by source

Advanced economies

Transmission

Distribution

Emerging market and

developing economies

Transmission

DistributionLow-emissions sources of electricity

Renewables capacity triples by 2030 led by solar PV and wind, complemented by

growth in nuclear and other sources, raising the share of low-emissions sources in

electricity generation from 39% in 2022 to 71% in 2030 and nearly 100% in 2050. 34 %

OF CUMULATIVE

EMISSIONS

REDUCTIONS

92 Internationa l Energy Agency| Net Zero Road mapTotal electricity generation from unabated fossil fuels (TWh)

Coal 10 427 4 988 1 379 017 636 11 066 4 241 158

Natural gas 6 500 5 943 2 834 158

61% 29% 9% 0.2%

36% 13% 3% 0%

22% 16% 6% 0.2%Share of unabated fossil fuels in total generation

Coal

Natural gas

Retro/f.shortits and blending

Coal and gas plants equipped with CCUS (GW) 0.12 50 141 241

Average ammonia blending in global coal/uni2010/f.shortired generation (without CCUS) 0% 1% 11% 100%

Average hydrogen blending in global gas/uni2010/f.shortired generation (without CCUS) 0% 5% 16% 79%

Average biomethane blending in global gas/uni2010/f.shortired generation (without CCUS) 0.1% 1% 1% 7%

Average annual capacity retirements (GW) 2017/hyphen.uc22 2023/hyphen.uc30 2031/hyphen.uc35 2036/hyphen.uc50

Coal 27 110 81 43

Natural gas 8 39 43 46Milestones 2050 2035 2030 2022

2035 2030 2025 2040 2045 2050CCUS retro/f.shortits and blending low-emissions fuels

enable coal- and gas-/f.shortired power plants to

contribute to energy transitionsReducing coal-/f.shortired power in EMDE accounts for

60% of global power sector emissions reductions2010 2050Thousand TWh

515

102025

1 2502 500

-7

-14Electricity generation (TWh)2023No new unabated coal power

plants approved for development

2025Hydrogen and ammonia start to co-/f.shortire with natural gas and coal

2030sPhase out of unabated coal in advanced economies

Phase out of all large oil-/f.shortired power plants

2040Phase out of all unabated coal

Unabated natural gas below 5% of generation

Unabated coal Unabated natural gasOil

2050 2030 2023

CCUS Hydrogen Biomethane AmmoniaEmerging market and

developing economiesAdvanced economies

Coal

Natural gas

Oil

Coal

Natural gas

OilGt CO2Electricity output from unabated fossil fuels falls by 40% to 2030 and virtually

disappears by 2050, as plants are run less, retired, retro/f.shortitted with CCUS or repurposed

to use low-emissions fuels.Unabated fossil fuels in electricity generation

Unabated fossil fuels electricity generation

Nearly all remaining plants retro/f.shortitted with CCUS

or fully converted to use low-emissions fuels95 %

REDUCTION

BY 2040

Chap ter 2| A renewed pathway to net zero emiss ions 93Sales share of plug-in hybrid, battery and fuel cell electric vehicles

Two/three-wheelers 16% 78% 100% 100%13% 70% 98% 100%

Cars and vans 13% 67% 100% 100%

Buses 56% 90%

Heavy trucks 37% 65%

Alternative fuel shares 20% 36%

Biofuels

Electricity 0% 8% 22% 74%5% 11% 12% 3%5% 93%1% 100%4% 100%

Hydrogen 0% 1% 2% 16%

Electric vehicle public charging points (million) 3 17 18 31

Hydrogen refuelling stations (thousand) 1 12 15 46Fuelling infrastructureMilestones 2022 2030 2035 2050

Investments in public chargers scales up, /f.shortirst for

cars and vans, then for heavy trucks and busesRoad transport emissions drop dramatically

to 2030, particularly in advanced economies

Cars and vans Heavy trucks and buses Advanced economies Emerging market and developing economies20222010 2022 2030 2050 2010 2022 2030 2050 2010 2022 2030 205050%100%

30

2030 2035 2050 2010 2022 205060

1.0

0.52.5

2.0

1.5Billion USD (2022, MER)

Gt CO2Oil Natural gas Biofuels Electricity Hydrogen Synthetic fuelsCars and vans Buses Heavy trucksFuel shares of road energy consumptionRoad transport

Ramping up electri/f.shortication and biofuels plays a major role to decarbonise road transport

to 2030. Thereafter, electri/f.shortication is the prominent lever, with electricity representing

three-quarters of energy consumption in road transport in 2050.16 %

OF CUMULATIVE

EMISSIONS

REDUCTIONS

94 Internationa l Energy Agency| Net Zero Road mapShipping

International shipping activity (trillion tonne-kilometres) 125 145 165 265

Share in /f.shortinal energy consumption

0%

0%

0%

0% 1% 1%19%

19%

44%

3% Biofuels 8% 13%

Hydrogen 4% 7%

Ammonia 6% 15%

Methanol

Aviation

International and domestic aviation activity (trillion passenger-kilometres) 6.0 10.9 11.4 16.5

Avoided demand from behavioural measures 0% 9% 14% 20%

Share in /f.shortinal energy consumption

Biofuels 0% 10% 22% 33%

Synthetic hydrogen-based fuels 0% 1% 4% 37%Milestones 2022 2030 2035 2050

2020 2030 2040 2045

NZEShipping and aviation

Bioenergy, hydrogen and hydrogen-based fuels ramp up from less than 1% of energy

consumed today in shipping and aviation to almost 15% in 2030 and 80% by 2050.

Also important to decarbonise these transport modes are energy e/f_f.shorticiency improvements

in shipping to 2030 and behaviour-driven demand reduction in aviation to 2050.

CO2 emissions from shipping and aviation decrease

more rapidly in advanced economiesTechnologies are being developed to enable the use

of low-emissions fuels in shipping and aviation

Advanced economiesEmerging market and developing economiesAviation

Shipping2015 2020 2022 2030 2040EJ

61218

8%16%24%

2050 2015 2020 2022 2030 2040 2050

2022 2050300600Mt CO2Fossil fuels Biofuels Hydrogen Ammonia Methanol

Synthetic kerosene Electricity Avoided consumption from behavioural measures (right axis)Shipping energy consumption Aviation energy consumption

Ammonia engines

for vessels

Hydrogen bunkering

for vessels

Battery

electric aircraft

Synthetic

aviation fuels

Small prototype or concept Large prototype Market uptake5%

OF CUMULATIVE

EMISSIONS

REDUCTIONS

Chap ter 2| A renewed pathway to net zero emiss ions 95Steel

Crude steel production (Mt) 1 880 1 970 1 970 1 960

Share of scrap in metallic inputs 33% 38% 40% 48%

0% 8% 27% 95%

0% 3% 10% 37%

0% 5% 15% 44%

0% 0% 2% 14%

1 27 131 399

0 6 17 41Share of near zero emission iron production

CCUS-equipped

Electrolytic hydrogen-based

Iron ore electrolysis

CO2 captured (Mt CO2)

Low-emissions hydrogen demand (Mt)

Aluminium

Aluminium production (Mt)

Share of secondary production

Share of near zero emission primary aluminium production

Share of low-emissions thermal energy in alumina production108 120 128 146

36% 42% 44% 56%

0% 7% 19% 96%

0% 16% 39% 99%Milestones 2022 2030 2035 2050

Announced projects meet 12% of 2030 near zero

emission iron production needs; ‘capable’ capacity

needs clear decarbonisation plansEmissions intensities drastically improve and scrap

metal use increasesActivity increase Mitigation measures: Avoided demand Energy e/f_f.shorticiency Hydrogen-based

Electri/f.shortication Other processes shifts Other fuel shifts CCUSSteel Aluminium

2022 2030Gt CO23

2

10.3

0.2

0.1

2050 2022 2030 2050

Near zero

emission50

Near zero

emission capableGap with

NZE Scenario2022 2030 2040 2050100

North America Total Europe Asia Rest of world+11%

-27%+13%

-90%+12%

-27%+16%

-97%Emissions reductions by mitigation measure

Iron production (Mt)Direct t CO2

per t material

Scrap share of

metallic inputs

Advanced economies: Steel Aluminium

Emerging market and developing economies: Steel Aluminium3

75%Steel and aluminium

Emissions reductions from steel and aluminium production are challenging due to

a heavy reliance on fossil fuels today, process emissions from incumbent routes

and high trade exposure. Increased scrap recycling and mass deployment of

innovative technologies are key levers for reducing emissions.6% Steel

1% Aluminium

OF CUMULATIVE

EMISSIONS

REDUCTIONS

96 Internationa l Energy Agency| Net Zero Road mapCement production (Mt)

Clinker-to-cement ratio (tonne per tonne) 0.71 0.65 0.61 0.57

Kiln thermal energy intensity (GJ per tonne of clinker)

0%

0

5%

5% 15% 17%93%

1 310

86%

19%Share of near zero emission clinker production 8% 27%3.6 2.9 3.4 3.34 160 3 930 4 260 4 140

CO2 captured (Mt CO2) 170 480

Share of low-emissions fuel in thermal energy use 30% 49%

Bioenergy without CCUS

Bioenergy with CCUS

Fossil fuels and non-renewable waste with CCUS 0% 10% 22% 31%0% 2% 8% 19%

0% 0% 0% 8% Hydrogen 0% 1% 3% 9%

ElectricityMilestones 2022 2030 2035 2050Cutting emissions from cement production is di/f_f.shorticult due to the present reliance on

carbon-containing raw materials and high-temperature heating requirements. Energy

and material e/f_f.shorticiency, and low-emissions fuels are key measures in the near term.

Deep reductions require a massive roll out of innovative technologies such as cements

made with alternative raw materials and CCUS.

Advanced economies move /f.shortirst, but most of the

challenge lies in emerging market and developing

economiesActivity increase Material e/f_f.shorticiencyMitigation measures

Energy e/f_f.shorticiency Hydrogen Bioenergy Electri/f.shortication Other fuel shifts CCUS2022 2030Gt CO2

123

2050

Emerging market and developing economiesAdvanced economies+7%

+7%

-26%

-96%

Announced CCUS projects fall short of 2030 target

Announced NZE100

50150200Mt CO2 captured

t CO2 per t clinker

2010 2022 2030 2040 20500.51.0Cement

Emissions reductions by mitigation measure

Emerging market and

developing economies

Advanced economies6%

OF CUMULATIVE

EMISSIONS

REDUCTIONS

Chap ter 2| A renewed pathway to net zero emiss ions 97Primary chemicals production (Mt)

Share of near zero emission primary chemicals production 2% 17% 39% 93%719 861 905 878

CCUS-equipped 0.5% 8% 22% 56%

Electrolytic hydrogen-based

Other

CO2 captured (Mt)

Hydrogen demand (Mt)

Plastics recycling48 53 55 604 52 143 3441% 2% 4% 9%0% 7% 13% 28%

Share of plastics waste collected 16% 24% 31% 51%

Share of secondary production 8% 13% 18% 35%

Primary chemicals savings (Mt) 9 25 42 116Milestones 2022 2030 2035 2050

Announced projects for net zero emission

production are increasing, but more efforts are

needed to close the gap with the NZE in 2030Higher use of coal in emerging market and

developing economies makes the path to net zero

more challengingActivity increase Avoided demandMitigation measures

Energy e/f_f.shorticiency Hydrogen Electri/f.shortication Other fuel shifts CCUS2022 2030Gt CO2

0.51.0

2050

3570Primary chemicals

production (Mt)

Gap with NZE 2030 Announced Existing

Electrolytic hydrogen-based CCUS-equipped

t CO2 / t primary chemicals

2010 2022 20502

1+8%

-21%+7%Emissions reductions by mitigation measure

-96%

Emerging market and

developing economies

Advanced economiesPrimary chemicals

Increases in plastics recycling and more e/f_f.shorticient fertiliser use dampen rising demand for

primary chemicals and energy consumption for their production. Electrolytic hydrogen,

CCUS and direct electri/f.shortication technologies are key to deliver the step changes in

emissions intensities needed for primary chemical production.3%

OF CUMULATIVE

EMISSIONS

REDUCTIONS

98 Internationa l Energy Agency| Net Zero Road mapHeat pumps installed in buildings (GW)

Share of space heating service demand met by heat pumps 12% 25% 40% 55%1 000 3 000 4 400 6 500

<5% 20% 35% 80%

<2% 2.5% 2.5% 2.5%

157 170 180 200Share of buildings that are zero-carbon-ready

<1% 100% 100% 100% In new buildings and deep renovations

In existing building stock

Retro/f.shortit rate in advanced economies

Heated /f.shortloor area (billion square metres)Milestones 2022 2030 2035 2050

Share of zero-carbon-ready buildings expands

rapidly and by 2030 those standards are met in all

new buildingsGlobal heat pump stock nears 3 000 GW in 2030,

almost tripling today’s capacity60

40

20EJ

2050 2030 2022 2015 2010

Avoided consumption: Behavioural change Energy e/f_f.shorticiencyEnergy consumption: Fossil fuels District heat Electricity Modern bioenergy Solar thermal Other

2010150

2015 2022 2030300

0.51Billion square metres

Index (1 = 2010)

20101 500

2030 20223 000GW

Heating energy intensity (right axis)Non-compliant Non-ZCRB Compliant: ZCRBEmerging market and

developing economies

Advanced economiesSpace heating energy consumptionSpace heating

Space heating energy consumption in buildings decreases by almost 70% by 2050 even

with a 30% increase in heated /f.shortloor area thanks to zero-carbon-ready buildings energy

codes and increasingly e/f_f.shorticient equipment. 4%

OF CUMULATIVE

EMISSIONS

REDUCTIONS

Chap ter 2| A renewed pathway to net zero emiss ions 99Cooled /f.shortloor area in buildings (billion square metres)

Share of households with air conditioners 36% 45% 50% 60%105 140 170 250

Installed capacity of space cooling equipment (GW) 850 1 400 1 750 2 700

9% 5%

<1% 100%

<5% 80%Share of space cooling in /f.shortinal electricity consumption 7% 6%

Share of buildings that are zero-carbon-ready

In new buildings and deep renovations 100% 100%

20% 35% In existing building stock

Average e/f_f.shorticiency of new space cooling equipment (Watt-hour/Watt-hour) 3.5/hyphen.uc4.5 5.0/hyphen.uc6.5 6.5/hyphen.uc8.0 7.5/hyphen.uc9.0Milestones 2022 2030 2035 2050

Cooled /f.shortloor area more than doubles by 2050, with

additions principally occurring in EMDESpace cooling energy intensity from 2022 to 2050

decreases twice as fast as the last decade1020EJ

2050 2030 2022 2015 2010

Avoided consumption: Behavioural change Energy e/f_f.shorticiencyEnergy consumption: Emerging market and developing economies Advanced economies

Index (2010 = 1)Emerging market and

developing economies

Emerging market and

developing economiesAdvanced economies

Advanced economies

2010 20501.0

0.5Billion square metres

2010 2050300

150

2022 2022Space cooling energy consumption

New ExistingSpace cooling

Space cooling energy consumption is set to more than double by 2050 with no action

taken. Passive designs, behavioural change and more e/f_f.shorticient equipment are vital to

temper demand growth and reduce the strain on electricity systems.4%

OF CUMULATIVE

ENERGY SAVINGS

100 Internationa l Energy Agency| Net Zero Road mapAnnual energy intensity improvement 2.0% 4.9% 3.6% 1.8%

100 70 59 52 Unit electricity consumption of new air conditioners (index 2022 = 100)

100

100

3.641

2.9Unit electricity consumption of refrigerators (index 2022 = 100) 60 53

Fuel consumption of new internal combustion engine trucks (index 2022 = 100) 84 79

Energy intensity of clinker production (GJ/t) 3.4 3.3

Key behavioural changes in buildings and transport

•Space heating temperatures moderated to 19/hyphen.uc20 °C and space cooling temperatures to 24/hyphen.uc25 °C on average by 2030•Use of internal combustion engine cars phased out in large cities by 2030•Eco-driving and motorway speed limits of 100 km/h introduced by 2030

•One-out-of-two long-haul business /f.shortlights are avoided by 2040Milestones 2022 2030 2035 2050

2010 2023Advanced economiesEmerging market and

developing economiesE/f_f.shorticiency standards cover 90% of energy use for

key appliances but other uses lagReductions of energy demand from behavioural

changes are nearly /f.shortive times higher per capita in

2030 in advanced economies

50%100%

-10-5GJ/capita

Refrigeration Space cooling

Industrial motors Road transport Road Aviation Industry BuildingsEnergy use covered by e/f_f.shorticiency standardsIndustryTransportBuildingsPower

2022Electri/f.shortication

and renewablesFuel switching

Clean cooking

Technical e/f_f.shorticiencyAvoided demand

1%2%3%4%5%

2030Average annual rate of total energy intensity reduction by contributor

Scaling up energy e/f_f.shorticiency, behavioural change and fuel switching are key to

double the rate of energy intensity improvements by 2030, as current measures lead

to only marginal progress. Energy e/f_f.shorticiency and behavioural change 11%

OF CUMULATIVE

EMISSIONS

REDUCTIONS

Chap ter 2| A renewed pathway to net zero emiss ions 101Total hydrogen demand

Re/f.shortining (Mt H2) 42 35 26 1095 150 215 430

Industry (Mt H2) 53 71 92 139

0 193

0 74

0 14 Transport (Mt H2-eq, including hydrogen-based fuels) 16 40

Power generation (Mt H2-eq, inlcluding hydrogen-based fuels) 22 48

Other (Mt H2) 6 10

0% 1% 1% 1% Share of total electricity generation

Low-emissions hydrogen production (Mt H2) 1 70 150 420

From low-emissions electricity 0 51 116 327

From fossil fuels with CCUS 1 18 34 89

Cumulative installed electrolysis capacity (GW electric input) 1 590 1 340 3 300

Cumulative CO2 storage for hydrogen production (Mt CO2) 11 215 410 1 050

Hydrogen pipelines (km) 5 000 19 000 44 000 209 000

Underground hydrogen storage capacity (TWh) 0.5 70 240 1 200Milestones 2022 2030 2035 2050

Announced cumulative electrolyser manufacturing

capacity output, if fully realised, would be 80% of

the NZE level in 2030Demand for low-emissions hydrogen grows quickly

in the NZE, particularly in heavy industry, transport

and the production of hydrogen-based fuels

2022 2022 2024 2026 2028 2030 2024 2026 2028600

Electrolyser

manufacturing outputIncluding possible expansionsNZE installed capacity2015 2020 2025 2030Fossil fuels

with CCUSAnnounced projects

28 4 1.5 10 51 18GW

30080Mt

40

United States Europe China India Advanced economies

Rest of world Emerging market and developing economiesRe/f.shortining Industry Transport Power generation

Hydrogen-based fuels Other2030ElectrolysisLow-emissions hydrogen production

NZE

Mt hydrogenHydrogen

Announced low-emissions hydrogen production projects, if realised, represent 55% of

the level in the NZE Scenario in 2030. Bold policy action is needed to create demand for

low-emissions hydrogen in order to stimulate investment in production projects. 4%

OF CUMULATIVE

EMISSIONS

REDUCTIONS

102 Internationa l Energy Agency| Net Zero Road mapTotal CO2 captured (Mt CO2)

CO2 capture from fossil fuels and industrial processes 44 759 1 712 3 73645 1 024 2 421 6 040

Power

4

0

38

1 185 5062 152

756

17

1 263 Industry 247 7691 811 188 568

Merchant hydrogen 161 285

Other fuel transformation 163 90

CO2 capture from bioenergy

Power

Industry 0 23 77 2320 44 204 438

Biofuels production 1 114 213 474

Other fuel transformation

Direct air capture 0 80 203 1 0410 5 13 121

Total CO2 removed (Mt CO2) 1 234 632 1 710Milestones 2022 2030 2035 2050

If all announced CO2 capture capacity is realised and the current growth trend continues,

global capacity could reach NZE levels by 2030. Reducing project lead times, particularly

related to the development of CO2 storage, will be critical to achieve those levels.

Planned storage capacity is catching up with

planned captureTwo-thirds of total CO2 capture is in the emerging

market and developing economiesAnnounced captured capacity Operational captured capacityCO2 captured

in the NZE

2017 2018 2019 2020 2021 2022 2030Mt CO21 200

1 000

800

600

400

200

2017 2018 2019 2020 2021 2022250500Mt CO2

Operational Announced capture Announced storage2020 2030 2040 20503 0006 000Mt CO2Capture capacityCarbon capture, utilisation and storage

Advanced economies

Emerging market and

developing economies8%

OF CUMULATIVE

EMISSIONS

REDUCTIONS

Chap ter 2| A renewed pathway to net zero emiss ions 103Total bioenergy supply (EJ)

Share of advanced feedstock 45% 80% 85% 90%

Modern gaseous bioenergy (EJ) 1 7 9 1567 74 89 99

0 5 6 10

4 11 13 11

12% 40% 55% 75%

35 55 65 73

9 15 21 30 Biomethane

Modern liquid bioenergy (EJ)

Share of advanced biofuels

Modern solid bioenergy (EJ)

Electricity and heat

Industry

Buildings and agriculture

Traditional use of solid biomass (EJ)

Million people using traditional biomass for cooking5 9 8 611 15 18 22

24 0 0 0

2 049 0 0 0Milestones 2022 2030 2035 2050

Advanced biofuels are being developed

to enable net zeroLiquid biofuel production must expand 150% to

reach levels required by 2030 in the NZETraditional use of biomassShort-rotation woody cropsOrganic waste streams

Forestry plantingsForest and wood residuesConventional bioenergy cropsBioenergy demand Bioenergy supply

Liquid biofuels Biogases

Conversion lossesTraditional use of biomassElectricity and heat

Industry

Buildings and agricultureModern solid bioenergy

2015 2022 2030612EJ

Emerging market and

developing economies

Advanced economies

Small prototype or concept Large prototype

Demonstration Market uptake2020

NZE Historical2025 2030

HVO and HEFA

Alcohol-to-jet

Bio-FT without CCUS

Bio-FT with CCUSEJ100

50

2010 2022 2030 2040 2050 2010 2022 2030 2040 2050Bioenergy

While traditional use of biomass is phased out in the NZE Scenario, modern bioenergy use

more than doubles to 2050, due to its ability to be used as a direct drop-in substitute for

fossil fuels. Advanced feedstock supply grows considerably, supported by investments and

commercialisation of advanced conversion technologies. 7%

OF CUMULATIVE

EMISSIONS

REDUCTIONS

104 Internationa l Energy Agency| Net Zero Road mapShare of population with modern energy access

Electricity 90% 93% 100% 100%

Clean cooking 72% 80% 100% 100%

Net change in greenhouse gas emissions from universal access (Mt CO2-eq) -450 -1 500

Investment needed to achieve universal energy access (billion USD) 30 58

Share of total global energy investment 0.9% 1.3%

Premature deaths related to air pollution (million)

Ambient air pollution 4.4 4.3 2.7 2.9

Household air pollution 3.2 2.5 0.7 0.8

Share of population exposed to high levels of air pollution (>35 µg/m3) 33% 29% 7% 7%Milestones 2022 2025 2030 2050Achieving universal modern energy access by 2030, in line with SDG 7, delivers

socioeconomic bene/f.shortits and reduces greenhouse gas emissions. In addition, major air

pollutant emissions are halved by 2030 which reduces premature deaths by 3.6 million,

predominately in emerging market and developing economies.

A mix of technologies is needed to provide modern

energy access to all by 2030People in developing economies are more likely to

be exposed to higher concentrations of PM2.5

ElectricityBy grid type

By fuelClean cooking

2.4 billion people 880 million peopleOtherImproved

cookstovesLPG

Electricity BiogasMini-

gridOff-

gridOn-gridBy fuel

Other

clean

Fossil fuelsSolar PVAdvanced economies

2022

2050

Emerging market and developing economies

2022

2050

<5 /uni03BCg/m /three.num 5/hyphen.uc35 /uni03BCg/m /three.num >35 /uni03BCg/m /three.num0% 100%NOXSO

2PM

2.5Population without modern energy access Air pollution emissions

ElectricityClean cooking

2015 2022Billion people

Mt

123

2030 2015 202250100150200250

2050Energy access and air pollution

SAVED VIA

ENERGY ACCESS

IN 2030Gt CO2-eq1.5

Chapter 2 | A renewed pathway to net zero emissions 105Fossil fuel supply (EJ)

Oil 189 148 110 42511 362 237 88

Natural gas 144 118 77 32

CoalScope 1 and 2 emissions (Gt CO

2-eq)

Oil

Natural gas179 95 50 15

Scope 3 emissions (Gt CO2-eq)

Oil 9.9 7.4 5.0 0.8

Natural gas 6.0 5.1 2.9 0.33.4 1.3 0.7 0.1

1.7 0.6 0.3 0.03

Coal 15.3 8.2 3.5 0.2Milestones 2022 2030 2035 2050

The emissions intensity of global oil and gas

operations falls by more than 50% to 2030Fossil fuel GHG emissions fall by 97% to 2050; nearly 80% of fossil fuel demand in 2050 is for non-combustion applications or used with CCUS1990 2022 2050100

50150200EJOil

Coal Natural gas

2050 2020 2030 20402050 2010 202250100 50

25kg CO2-eq/boe

Gt CO2-eq

Transport Hydrogen CCUSElectri/f.shortication and energy e/f_f.shorticiency Flaring Methane Emerging market and developing economies

Coal Natural gas OilAdvanced economies

Coal Natural gas OilTotal fossil fuel supply97 %

REDUCTION IN

FOSSIL FUEL

GHG EMISSIONSFossil fuel supply

Declines in fossil fuel demand are su/f_f.shorticiently steep that there is no need for new long lead time upstream oil and gas conventional projects, nor from new coal mines or mine extensions.

Chapter 2 | A renewed pathway to net zero emissions 106

Dashboard notes

Steel and aluminium

Other process es shifts include process emissions reductions from increased scrap -based and

inert anode production.

Aluminium production and s hare of secondary production excludes production based on

internally generated scrap.

Near zero emission = projects that, once operational, are near zero emission from the start ,

according to the definitions in IEA (2022c ) Achieving Net Zero Heavy Industry Sectors in G7

Members . Near zero emission capable = projects that achieve substantial emissions

reductions from the start – but fall short of near zero emissions initially – with plans to

continue reducing emissions over time such that they could later achieve near zero emission

production without additional capital investment . Production from announced projects

shown in the dashboard excludes near zero emission steel from scrap.

Cement

Announced CCUS projects include all facilities with a capacity larger than 0.1 Mt CO 2 per year

as of June 2023, and projects with an announced operation date by 2030.

Primary chemicals

Near zero emission primary chemicals production is calculated excluding CCU for urea in

ammonia production and high value chemicals produced in refineries .

CCUS -equipped near zero emission production excludes CCU for urea in ammonia

production .

Energy efficiency and behavioural change

Avoided demand includes behavioural change. The 2030 value shown in the top graph of the

dashboard refers to the average annual rate of energy intensity improvement between 2022 and 2030 in the NZE Scenario.

No new internal combustion engine trucks are sold after 2040 in advanced economies and

after 2045 in the emerging market and developing economies .

Carbon capture, utilisation and storage

Announced capture and storage capacity include all facilities with a capacity larger than

0.1 Mt CO 2 per year as of June 2023, and projects with an announced operation date by 2030.

Planned capture capacity shown in the bottom graph excludes capacity for utilisation.

Bioenergy

HVO = hydrotreated vegetable oil . HEFA = hydrotreated esters and fatty acids.

Bio-FT = biomass -based Fischer -Tropsch synthesis. Modern gaseous bioenergy refers to

biogases, which comprise biogas and biomethane.

IEA. CC BY 4.0.

Chapter 3 | Making the NZE Scenario a rea lity 107

Chapter 3

Making the NZE Scenario a reality

What will it take?

• Increasing renewables capacity threefold is the single largest driver of emissions

reductions to 2030 in the Net Zero Emissions by 2050 Scenario (NZE Scenario ).

Advanced economies and China are projected to reach around 8 5% of the required

renewables capac ity by 2030 with current policies; more robust policies and

international support are needed in other developing countries .

• Doubling the rate of energy intensity improvement s makes a critical contribution to

emissions reductions to 2030 and also bolster s energy affordability and security. This

is achieved in the NZE Scenario by efficiency gains from fuel switching to electricity ,

improv ements in technical efficiency , and the more efficient use of materials and

energy including through behavioural change .

• Further electrification of end -uses makes the third largest contribution to emissions

reductions by 2030. T he current growth rate of electric cars sales would be sufficient

to meet the 2030 level of deployment envisaged in the NZE Scenario, although faster

uptake is needed in trucks. Installations of heat pumps need to expand by almost 20%

per year to 2030, compared with 11% in 2022 .

• Cutting energy sector methane emissions also brings huge climate benefits. In the NZE

Scenario, around USD 75 billion in cum ulative spending is required to 2030 to deploy

all methane abatement measures in the oil and gas sector. This is equivalent to just

2% of the net income received by the oil and gas industry in 2022 .

• Emerging technologies such as hydrogen and carbon capture , utilisation and storage

(CCUS ) cut emissions mainly after 2030. If all announced projects for hydrogen

electrolysis capacity are realised, they w ould provide around 70% of what is required

in the NZE Scenario by 2030. A nnounced CCUS projects , currently mostly in advanced

economies, would provide nearly 40% of what is needed by 2030 globally . A stronger

policy focus on creating demand for low-emissions products and fuels is needed .

• A net zero emissions energy system requires more and varied infrastructure.

Transmission and distribution grids expand by around 2 million km each year to 2030 ,

and around 30 000 to 50 000 km of CO 2 pipelines need to be installed in the NZE

Scenario . New hydrogen infrastructure is also ne cessary . Delivering the need ed

infrastructure depends in part on expediting planning and permitting processes.

• If policy ambition is not increased before 2030, limiting the increase in global average

temperature to 1.5 ° C by 2100 will become much harder. Much more CO 2 would need

to be removed from the atmosphere after 2050. The Delayed Action Case indicates

that po stponing stronger action would cost the world an additional USD 1.3 trillion

per year, 50 % more than was invested in fossil fuel supply in 2022. SUMMARY

IEA. CC BY 4.0.

108 International Energy Agency | Net Zero Roadmap

3.1 Achieving deep emissions reductions by 2030

Getting to net zero emissions by 2050 requires rapid and deep cuts in emissions of both

carbon dioxide ( CO 2) and other greenhouse gases (GHG), particularly methane, by 2030.

Delaying these cuts will make it all but impossible to achieve th e net zero emissions goal .

Emissions reductions can be delivered using technologies and mitigation options that are

readily available . In the NZE Scenario, they are achieved in particular with a threefold

increase in the capacity of renewables -based electricity generation, doubling the rate of

energy intensity improvement s, sharp increase s in electrification, and a drop of

three ‑quarters in energy sector methane emissions ( Figure 3.1). This section analyses how

these milestones can be achieved.

Figure 3.1 ⊳ Global renewables power capacity, primary energy intensity

improvements, and energy sector methane emissions in the

NZE Scenario, 2022 and 2030

IEA. CC BY 4.0.

Renewables, energy efficiency and methane emissions reduction options

are available today and crucial to reducing near -term emissions

Note s: GW = gigawatts ; Mt = million tonnes . For energy intensity improvement s, the 2030 value reflects the

annual improvement between 2022 and 2030 in the NZE Scenario.

3.1.1 Tripl e renewables capacity

Technology options

Installed capacity of renewables -based electricity generation triples by 2030 to make the

single biggest contribution to reducing global CO 2 emissions by 2030 in the NZE Scenario.

Global installed capacity jumps from 3 630 gigawatts ( GW) in 2022 to 11 000 GW in 2030, led

by solar photovoltaics ( PV) and wind ( Figure 3.2). 4 0008 00012 000

2022 2030RenewablesGWIntensity improvements Methane emissionsMt

x 3

50 100 150

2022 2030-75%

2% 4% 6%

2022 2030x 2

IEA. CC BY 4.0.

Chapter 3 | Making the NZE Scenario a reality 109

3 Increasing renewables capacity threefold requires the annual pace of capacity additions to

rise from 336 GW in 2022 to over 1 250 GW by 2030 – an annual average increase of 18 %.

Over the last decade, capacity additions more than quadrupled . Maintaining the recent pac e

of growth to 2030 would put the power sector on course to achieve what is needed in the

NZE Scenario.

The share of e lectricity generation that comes from renewables rises from 30 % in 2022 to

almo st 60% in 2030 in the NZE Scenario , with the combined share of solar PV and wind

increasing from 12% in 2022 to 40% in 2030. The increase in renewables generation outpaces

electricity demand growth, which cuts back unabated coal -fired generation and reduce s its

related emissions by half. In total, electricity sector emissions fall by about 6 gigatonnes of

carbon dioxide ( Gt CO 2) between 2022 and 2030, more than the current emissions of the

electricity sector in China .

Figure 3.2 ⊳ Global renewables installed capacity by technology, 2010-2030,

and solar PV and wind manufacturing and capacity additions in

the NZE Scenario, 2022 and 2030

IEA. CC BY 4.0.

Global renewables capacity triples by 2030 led by solar PV and wind,

underpinned by rapid expansion of manufacturing capacity

Solar PV and wind lead the way in the NZE Scenario , together accounting for over 90% of the

overall increase in renewables capacity to 2030 and 85% of the increase in renewable

electricity generation . Solar PV and wind are the cheapest new sources of electricity in most

markets today, are widely available, rapidly scalable and have policy support in over

140 countries. Global solar PV capacity additions increase from 220 GW in 2022 to 820 GW

in 2030 , of which about 60% is utility -scale proj ects and around 40% is distributed solar PV

such as rooftop arrays on houses and businesses. W ind capacity additions rise from 75 GW

in 2022 to 320 GW in 2030 , with offshore wind accounting for around one -third of the total.

The rapid expansion of solar PV and wind to 2030 would increase the amount of land 4 0008 00012 000

2010 2030

Hydro Wind Solar PV Bioenergy OtherRenewables installed capacityGW

400 8001 200

Solar PV Wind Solar PV Wind

2022 Planned 2030 NZECapacity additions Manufacturing capacity

IEA. CC BY 4.0.

110 International Energy Agency | Net Zero Roadmap

occupied by these technologies by up to fourfold from today (Box 3.1). O ther renewable

energy technologies, including hydropower, bioenergy, geothermal, concentrating solar and

marine power, boost annual capacity additions which together increase from 42 GW in 2022

to about 125 GW in 2030 .

The global clean energy manufacturing industry is already gearing up to provide a huge increase in renewables capacity (see Chapter 1). If all the projects for manufacturing solar PV

modules that have been announced go ahead, the capacity would be sufficient to meet the

needs of the NZE Scenario in 2030. This is cause for optimism , but it cannot be taken for

granted that th ey all will progress as planned . The out look for global manufacturing capacity

additions for wind is much less encouraging. If renewable power capacity is to triple by 2030,

as envisaged in the NZE Scenario, s tronger policies are needed in all jurisdictions to facilitate

more rapid deployment of renewables , including through support for wind manufacturing

capacity . In established markets, action to streamlin e permitting and land acquisition

processes will be an essential element of stronger policy packages. In less developed

markets, particularly in the emerging market and developing economies other than China,

action to boost incentives to invest and reduce the costs of financing will be particularly

important (IEA, 2023a) . In all markets, boosting the flexibility of power systems, grids in

parti cular, will be critical to successfully integrate rising shares of solar PV and wind (IEA,

forthcoming) . This points to the need for significant investment to expand and strengthen

electricity grids (see section 3.2.4 ).

Permitting and grid connections

Increasing global renewables capacity threefold by 2030 in the NZE Scenario depends on

expediting permitting and grid connections , and overcoming other challenges including

social acceptance and limitations on available sites . Generation costs of wind and solar PV

projects are already competitive in many countries, but permitting processes are slowing the pace of their deployment, a s are delays in obtaining grid connections.

The size and importance of the issue underline the case for action. In Europe, today around

60 GW of onshore wind capacity – four -times the capacity commissioned in 2022 – is held up

by various permitting procedures. Globally, around 3 000 GW of wind and solar PV projects

in large renewable energy markets have applied for grid connections , which is slightly less

than half the additional renewables capacity projected in the NZE Scenario by 2030

(Figure 3.3). Not all these projects are expected to come to fruition, but they give an

indication of the scale of the issue.

The time required to obtain permits range s from one to five years for ground -mounted solar

projects , three to nine years for onshore wind , and nine years for offshore wind. The time

required to obtain grid connections can also take several years and appears to be increasing

rather than shrinking. These timescales are hindering current projects and risk choking off

new ones.

IEA. CC BY 4.0.

Chapter 3 | Making the NZE Scenario a reality 111

3 Figure 3.3 ⊳ Global grid connection queues for wind and solar PV

by project status, 2022

IEA. CC BY 4.0.

Achieving the net zero emissions pathway requires streamlining of permitting processes

Policy e fforts to improve permitting procedures should be focus sed on three areas:

simplifying permitting procedures and/or setting clear permitting timelines; identifying

preferential areas for renewa ble energy projects to fast track permitting; and removing

certain permitting requirements for small renewable power projects and/ or increasing the

minimum capacity requirement for environmental impact assessments. These changes aim

to reduce permit lead times and increase project bankability. Efforts to speed up grid

connections for new renewables capacity should be focus sed on ensuring that the relevant

authorities view the provision of such connections as a high priority and are resourced to deliver what is required.

Boosting capacity in the emerging market and developing economies

China alone accounted for three -quarters of renewables -based power generation capacity

additions in emerging market and developing economies over the last decade . Capacity

additions in China during the last decade included three -times more solar PV and wind

capacity than all other emerging market and developing economies combined. Clear and ambitious targets, strong policy support, mature local supply chains and low- cost financing

were all key factors in this rapid expansion of renewable s. This strong foundation has enabled

China to reduce unit costs very rapidly, and it is now set to achieve its current N ationally

Determined Contribution’ s target for installed wind and solar PV capacity by 2025 , five years

ahead of schedule. 1 0002 0003 000

Interconnection

queuesTotal installed

capacityGrid connection queues

Wind

Solar PVGW

Advanced

18%

Under

review

32%Early stage

50%Project status

IEA. CC BY 4.0.

112 International Energy Agency | Net Zero Roadmap

Figure 3.4 ⊳ Installed renewables capacity by technology and economic

grouping in the STEPS and NZE Scenario, 2022 and 2030

IEA. CC BY 4.0.

Emerging market and developing economies other than China require

the largest boost in the growth of renewables beyond the current pathway

Note: EMDE = emerging market and developing economies; STEPS = Stated Policies Scenario.

Other emerging market and developing economies also have significant potential to expand

renewables cost effectively. They quadruple their total renewable capacity by 2030 in the

NZE Scenario , with solar PV and wind providing over 80% of the increase (Figure 3.4). This is

over twice the increase projected in the Stated Policies Scenario (S TEPS ). One of t he main

barriers to this faster growth of renewables capacity is the high cost of financing projects,

which reflects project risk assessments that take account of i ssues such as policy

uncertainties, weak financial health of off -takers, limited grid infrastructure and

macroeconomic factors, including currency risks . The weighted average cost of capital

(WACC) for renewables in emerging market and developing economies remain at least

double those in advanced economies (see Chapter 4). Since every 1 percentage point

increase in the WACC increases wind and solar PV gener ation costs by at least 7% , this makes

an enormous difference to the prospects for renewables .

Appropriate policies are needed to address causes of the high cost of capital in these

economies. Clear national targets with an annual implementation plan, for instance through

competitive auctions, would be likely to increase investor confidence. In India, for example,

an ambitious government target set for renewable s capacity has been followed by central

and provincial auction schedules with a transparent procurement process. The risks

associated with the financial health of off -takers could be addressed through standardised

power purchase contracts backed by government guarantees, especially for publicly owned

utilities. India provides an example of policy act ion here too: its centralised large -scale

auctions conducted by the Solar Energy Corporation of India (SECI) helped reduce project 2 0004 0006 0008 00010 000

2022 2030 STEPS 2030 NZE

Solar PV Wind Hydro Bioenergy OtherGWAdvanced economies and China

x 1.2

1 0002 0003 0004 0005 000

2022 2030 STEPS 2030 NZEGWOther EMDE

x 1.8

IEA. CC BY 4.0.

Chapter 3 | Making the NZE Scenario a reality 113

3 risks and lower the cost of capital for utility -scale solar PV and wind plants. P olicies along

these lines c ould also facilitate the availability of concessional financing from international

and regional development banks, and this would further reduc e the cost of capital.

Integration of variable renewables

While power systems have always had to accommodate the vari ability of electricity demand,

the rapid expansion of solar PV and wind – both variable sources whose output depends on

weather conditions – means that power system flexibility needs will increase . Since solar PV

and wind do not contribute to grid stabilit y in the same way as the fossil fuels which they

increasingly displace in the NZE Scenario, new ways to ensur e grid stability will also be

needed.

Figure 3.5 ⊳ Share of total electricity generation from wind and solar PV by

selected country/region in 2022 and in the NZE Scenario in 2030

IEA. CC BY 4.0.

Integration of solar PV and wind is critical to the NZE Scenario, as their share in total

generation in most regions reaches levels in 2030 seen only in a few countries today

Note: C & S America = Central and South America. 20% 40% 60% 80%European Union

United States

China

C & S America

World

India

Japan

Southeast Asia

Africa

Denmark

Ireland

Germany

Spain

European Union

United States

China

C & S America

World

India

Japan

Southeast Asia

AfricaWind

Solar PV2030 2022

IEA. CC BY 4.0.

114 International Energy Agency | Net Zero Roadmap

The rapid deployment of solar PV and wind in the NZE Scenario lifts their share of electricity

generation in 2030 t o over one -third in most regions of the world. Without effective action

to ensure system flexibility, this could result in rising amounts of surplus solar PV and wind

at times when output exceeds demand. Countrie s including Denmark, Ireland and Spain

alrea dy produce one -third or more of their electricity from renewables and have managed

the challenges of integration: other countries may be able to draw on the lessons they have

learned (Figure 3.5).

Rising shares of variable renewables make electricity supply more weather dependent and

lead s to higher need s for flexibility across all timescales, ranging from hours to seasons and

year s. Varying wind patterns observed over weeks and seasons , for example, can contribute

significantly to the increase of seasonal flexibility needs, while solar PV variability has the

biggest impact on timescales ranging from hours to days.

Successfully inte grating these rising shares of solar PV and wind in electricity generation

requires making the best use of existing and new sources of flexibility , and market and

regulatory frameworks have a crucial part to facilitat e this. Existing power plants, includin g

natural gas- and coal -fired stations , can contribute while they remain in operation by

focus sing on flexib ility rather than bulk electricity production . New sources of flexibility

include energy storage technologies such as batteries and demand response help in

particular to balance daily peaks and troughs, and between them they meet much of the

short -term flexibility need in the NZE Scenario. Low -emission s dispatchable thermal power

plants, including nuclear plants, reservoir and pumped storage hydro, grid -connected

electrolysers and long -duration hydrogen storage all play a part in the delivery of longer term

and seasonal flexibility .

Transmission and distribution grids need to be modernised and expanded t o facilitate the

integration of rising shares of solar PV and wind and the deployment of all sources of

flexibility . This should be done in a way that facilitates demand response m anagement , for

example by providing incentives to use energ y at times of high supply of renewable

electricity , including through time -of-use tariffs (see section 3.2.4 ). Interconnections

between regions are another option to provide flexibility : they allow for the pooling of

flexibility resources and reduce the need for additional power system flexibility b y balancing

load, wind and solar production over large geographical areas . Measures to ensure system

stability also need to be integrated into work to modernise and expand grids: they include

the deployment of synchronous condensers, flexible alternati ng current transmission

systems (FACTS), grid -forming inverters and fast frequency response (FFR) capabilities.

IEA. CC BY 4.0.

Chapter 3 | Making the NZE Scenario a reality 115

3 Box 3.1 ⊳ Does the world have enough space for all the solar and wind in the

NZE Scenario?

Based on a review of over 100 completed projects worldwide, we estimate that all the

utility -scale solar PV and onshore wind projects in operation in the world in 2022 cover

less than 0.2 million km2 of lan d area. Solar PV installations in or on buildings are not

included in this assessment as they rarely require additional land. We found that a utility -

scale solar PV project of 100 MW generally occupies from 1 km2 to 3 km2. This is in line

with other published estimates (NREL, 2021; A. Arvesen, 2018; Smil, 2010; UNECE, 2022) .

We also found that a 100 MW onshore wind turbine project generally covers from 5 km2

to 30 km2: here too our findings are consistent with other published estimates (NREL,

2021; Enevoldsen and Jacobson, 2021; Lovering et al. , 2022) . Wind projects require more

land than solar projects per unit of capacity in part because the vast majority of

utility ‑scale PV takes the form of solar panel arrays, where panels can be put close to one

another, whereas wind turbines need a certain amount of space around them to optimise

their performance. Variations in project size reflect a number of factors, including turbine

design and the shape and geography of the site.

Figure 3.6 ⊳ Total and annual land requirements for solar PV utility and

onshore wind in the NZE Scenario, 2022, 2030 and 2050

IEA. CC BY 4.0.

The rapid expansion of solar PV and wind requires up to 2.0 million km2 of land area

by 2050 in the NZE Scenario, equivalent to up to 2.5% of global suitable land

Note: km2 = square kilometres.

In the NZE Scenario, the tripling of renewables capacity by 2030 increases the global land

area requirements for onshore wind and solar PV to up to 0.8 million km2, which is more

than four times the amount of land they use today. Wind power accounts for the majority

of the land that is needed, though project requir ements for a given output vary widely 20 40 60 80

2022 2030Thousand km²Annual land required

Solar PV and wind0.5%1.0%1.5%2.0%

0.40.81.21.6

2022 2030 2050 2022 2030 2050

Share of suitable landTotal land requiredMillion km²

Solar PV Wind

IEA. CC BY 4.0.

116 International Energy Agency | Net Zero Roadmap

depending on the type of turbine used and on the nature of the project site. By 2050,

total land requirements for onshore wind and utility -scale solar PV rise to up to 2.0 million

km2, or more than ten times the amount of land used today ( Figure 3.6 ). O n an annual

basis, the land needed each year for new solar PV and onshore wind projects rises from

5-20 thousand km2 in 2022 to 20 -75 thousand km2 in 2030. Achieving this scaling up

requires action to overcome challenges related to land acquisition, permitting, local

acceptance and grid development.

The requirement for land totalling up to 2.0 million km2 for solar PV and wind in the NZE

Scenario needs to be put into context. It is much less than the global requirement for

land for crops in 2020 (12.2 million km2) or for built -up areas in the same year (about

4.3 million km2). But it is more useful to look at solar PV and wind requirements as a

proportion of the land that is suitable for such projects, and we have attempted to do

this. Suitable land in this analysis includes grasslands, shrub -covered areas, sparsely

naturally vegetated areas, terrestrial ba rren land. It also includes most agricultural land

on the basis that many projects have already demonstrated that farming activities can

co-exist with onshore wind projects. However, it excludes artificial surfaces (including

urban and associated areas), t ree-covered areas, woody crops, mangroves, aquatic or

regularly flooded areas, and permanent snow and glaciers.

This analysis results in about one -third of global land being ruled out as unsuitable for

solar PV and wind, leaving just over 80 million km2 as suitable, based on available land

area data (FAO, n.d.). In the NZE Scenario, the global share of suitable land occupied by

onshore wind and solar PV rises from about 0.2% in 2022 to up to 0.9% in 2030 and up

to 2.5% in 2050, though the share varies widely by region. The increase in the land

required for solar PV and wind in the NZE Scenario is certainly significant, but it is hard to

argue that the world does not have the necessary space.

3.1.2 Doubl e the rate of energy intensity improvement s

The annual rate o f improvement s in energy intensity – the amount of primary energy needed

to produce a dollar of economic output – average s 4.1% through to 2030 in the N ZE Scenario .

This is double the rate achieved in 20 22, which itself was nearly double the average rate

achieved over the previous five years . One result of th e rate of improvement achieved in

the NZE Scenario is that energy demand in 2030 is nearly 10% lower than in 2022 , even as

the economy continues to grow . Reduced consumption means reduced emissions . It also

bring s energy security benefits and help s to make energy more affordable.

There are three main levers that double the rate of improvement s in primary energy intensity

in the NZE Scenario, each of which contributes roug hly a third of the gains (Figure 3.7):

 A shift to more efficient fuels through electrification, renewables and universal access

to clean cooking fuels .

 Technical efficiency measures in all sectors .

IEA. CC BY 4.0.

Chapter 3 | Making the NZE Scenario a reality 117

3  Avoided energy demand through material and resource efficiency gains, including

through behavioural change .

Figure 3.7 ⊳ Rate of annual primary energy intensity improvements by lever

in the NZE Scenario

IEA. CC BY 4.0.

More rigorous policies to boost fuel switching, energy and resource efficiency, and

behavioural change are essential to double the rate of improvement in energy intensity

Notes: Avoided demand includes behavioural change. 2030 NZE refers to the average annual rate of energy

intensity improvement s between 2022 and 2030 in the NZE Scenario.

Switch to more efficient fuels : Role of electrification

Electrification is a major dri ver of the sharp fall in energy intensity in the NZE Scenario

because electricity can be converted into energy services much more efficiently than

incumbent fossil fuel -based technologies. Electric vehicles (EVs) are two - to four -times more

efficient than current internal combustion engine (ICE) vehicles; heat pumps are three - to

five-times more efficient than fossil fuel boilers, and induction stoves are about twice as

efficient as gas stoves. In the NZE Scenario, a rapid shift to electricity across the en ergy

system results in energy savings, reaching nearly 20 exajoules ( EJ) by 2030, close to the

combined current final consumption of Japan and Korea.

The majority of these savings are realised through the rapid uptake of EVs in transport and

heat pumps in the residential sector (Figure 3.8). Both these technologies are already in use

and are gaining ground, but the NZE Scenario speeds up their adoption and doubles the

energy savings that they bring in the STEPS outlook (see section 3.1.3). 1% 2% 3% 4% 5%

2022 Clean

cookingTechnical

efficiencyAvoided

demand2030

NZEPower

Buildings

Transport

Industry

Electrification

and renewablesFuel switching

IEA. CC BY 4.0.

118 International Energy Agency | Net Zero Roadmap

Figure 3.8 ⊳ Annual energy savings from electrification in the NZE Scenario

IEA. CC BY 4.0.

Electrification results in annual energy savings of nearly 20 EJ by 2030,

equivalent to the combined current final consumption of Japan and Korea

Technical efficiency measures: I mproving the efficien cy of appliances in buildings

Improvements in the unit energy consumption of appliances in recent decades have been

impressive. Refrigerators purchased today consume less than half as much electricity as

models sold 20 years ago; air conditioners have become over 40% more efficient in the same

timeframe. These gains have been driven by a combination of technology improvements and policy measures designed to diffuse those improvements , notably through the widespread

adoption of standards and labelling. Together they have reduced annual electricity

consumption by around 15% in regions with long -standing policies . At the same time,

appliances subject to standards and labelling programmes have become significantly less

expensive (IEA, 2021a) . Appliance standards are now in place in more than 110 countries

and, for example, cover 90% of the energy consumption by refrigerators worldwide .

The NZE Scenario builds on the progress of such programmes but requires an increasing focus

on best available technologies in all regions .

1 This is particularly important in emerging

market and developing economies , where most appliance sales through to 2030 will be

concentrated, and where efficiency policies are generally less stringent today than in

advanced economies .

Air conditioners are particularly important in this context. The stock of air conditioners in

emerging market and developing economies is set to double by the end of the decade

1 The Super -Efficient Equipment and Appliance Deployment Initiative, a collaboration of the IEA with more

than 20 governments and other partners, supports standards and labelling efforts by helping policy makers

simplify regulation setting and compliance. - 20- 15- 10- 5

2025 2030EJTransport

Residential

Services

Industry

Other

Achieved under STEPS

-20-15-10-5

2025 2030EJ

IEA. CC BY 4.0.

Chapter 3 | Making the NZE Scenario a reality 119

3 reflecting rising i ncomes and cooling needs . This presents enormous scope to increase the

average efficiency of air conditioners . Highly efficient models are already available, but those

sold today are on average just half as efficient as the best available technology in man y

markets. Thanks to standard s and labelling programmes, average air conditioners sold in the

emerging market and developing economies in 2030 in the NZ E Scenario are at least 5 0%

more efficient than today (Figure 3.9). More efficient models sometimes cost slightly more

than the alternatives, but this is not always the case, and they save consumers money over

their lifetime due to lower operating costs. Energy efficiency improvements of building

envelopes (Box 3.2 ) as well as passive cooling strategies and behavioural changes such as

higher air conditioner temperatures can also bring down energy bills and curb growth in

electricity demand .

Figure 3.9 ⊳ Average efficiency and purchase price of new air conditioners

in emerging market and developing economies

IEA. CC BY 4.0.

Efficiency improvements are vital in the NZE Scenario, and efficient air conditioners

today are not significantly more expensive than those with lower efficiency

Notes: W/W = Watt of cooling output per Watt of electricity input ; BAT = best available technology;

PPP = purchasing power parity. Based on data for wall air conditioners collected from Argentina, Brazil,

Colombia, Ghana, Kenya, Panama and Vietnam in late 2022 and early 2023. Purchase prices are normalised to

a cooling capacity of 12 000 British thermal units per hour. Low efficiency = below 4 W/W; medium

efficiency = 4-5 W/W; high efficiency = above 5 W/W.

Box 3.2 ⊳ A (retro) fitting solution to decarbonise buildings

Retrofitting is one of the main levers for decarbonising the buildings sector . Buildings in

advanced economies have relatively long lifetimes , about 80 years on average . Over 90%

of the buildings that will be in use in these countries in 2030 have already been built . In

the NZE Scenario, 2.5% of buildings in advanced economies are retrofitted each year from 2 4 6 8

2022 2022

BAT2030

NZEAverage efficiencyW/W

1 0002 0003 0004 000

Low

efficiencyMedium

efficiencyHigh

efficiencyUSD (2022, PPP)Purchase price 2022/2023

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120 International Energy Agency | Net Zero Roadmap

2030 onwards and all new buildings are zero -carbon -ready . Building energy codes and

strong retrofit policies drive these developments , which together account for 40% of the

emissions savings from efficiency measures in residential buildings.

In the past decade, between 2-14 % of buildings a year in at least some advanced

economies have undergone some kind of a retrofit , but fewer than 1.5% of buildings have

been retrofitted sufficiently each year to lower energy demand by 30% or more

(Figu re 3.10 ). Ach iev ing bigger energy savings from each retrofit will require consistent

and robust policy support from governments.

Figure 3.10 ⊳ Annual retrofit rates and space heating energy intensity

of residential buildings in advanced economies

IEA. CC BY 4.0.

Annual residential building r etrofit rates in advanced economies average

less than 1.5% today ; a step up to 2.5% by 2030 is needed in the NZE Scenario

*European Union here excludes Denmark, Finland and Sweden. These are included under Nordic

countries.

Notes: kWh/m2/year = kilowatt -hour per square metre per year. Retrofit rates included here yield energy

savings of 30% or more. The NZE Scenario 2030 target shows an average that varies depending on regional

climate conditions and heating needs.

Sources: European Commission (2019) , Olgyay ( 2010) , US EIA (2018) , and ZEBRA (2020) .

Cost and convenience are the primary barriers to stepping up the rate and depth of

retrofits. T he cost of insulation materials ha s increased in recent years amidst supply

chain disruptions and inflation. Retrofitting the average size home in advanced

economies can cost thousands of USD , which can pose a significant financial barrier for

lower income households (see Chapter 4). Deeper retrofits also often require additional

time and cause extra disrupt ion to occupants . 1% 2% 3%United KingdomEuropean Union*Nordic countriesUnited States and CanadaAdvanced economies

Average in the past decade 2030 NZERetrofit rates

50 100 150

kWh/m2/yearHeating energy intensity

IEA. CC BY 4.0.

Chapter 3 | Making the NZE Scenario a reality 121

3 In recent years, numerous governments have offered grants, subsidies and tax credits to

incentivise retrofits through programmes such as the US Inflation Reduction Act, the UK

Greener Homes Grant, and the Superbonus in Italy . The y have boosted retrofit rates

substantially, but many incentives have expired or are due to expire soon . A number of

governments have put strategies in pla ce to standardise renovations , speed up retrofits

and lower costs , and these could be replicated or adapted for use in other countries. For

example, t he Dutch Energiesprong programme relies on digital planning and

prefabricated facades to deliver projects more quickly , while the Irish National

Retrofitting Scheme emphasises one -stop shops so that homeowners can access

complete renovation management and financing services via one counterpart. Legislative

measures may also have a part to play. For example, the E uropean Union is considering

legislation to require retrofits of the least energy -efficient buildings in member states

(European Parliament, 2023) .

Avoided energy demand: Impact of behavioural change

Although technical options to reduce energy intensity are maximi sed in the NZE Scenario,

the pace of turnover of the global stock of energy -related assets imposes constraints on what

can be achieved by 2030. Consequently, behavioural changes – actions that consumers can

take to reduce energy consump tion – are needed to accelerate improvements in energy

intensity. In the buildings sector, they include adjusting space heating and cooling

temperatures. In the transport sector, they include more public transport and reduced car

use in cities, eco -driving on highways and switching from planes to trains or

videoconferencing. To bring about these changes, issues such as the high cost of train travel

need to be addressed , and new financial incentives need to be introduced such as congestion

charges in cities and levies on frequent flyer s (IEA, 2023b) .

Behavioural change in the NZE Scenario happens more quickly and to a larger extent in

advanced economies than elsewhere. For example, d emand for space cooling on a per capita

basis is more than three -times higher in advanced economies even though emerging market

and developing economies have around three -times more cooling degree days in a typical

year. This means that raising space cooling temperatures generat es far greater savings per

capita in advanced economies than in emerging market and developing economies. In 2030,

on a per capita basis, the energy savings in the NZE Scenario from behavioural changes in

road transport and the buildings sector are about f ive-times higher in advanced economies

than in emerging market and developing economies; in aviation they are about eight -times

higher (Figure 3.11 ).

The reduction in energy demand from sustained behavioural changes in the NZE Scenario is

significant, but it builds on the reductions achieved as a result of recent policy interventions

related to the Covid -19 pandemic and energy crisis. For example, telewo rking was still

three ‑times more prevalent in 2022 than in 2019 (Parker, Horowitz and Minkin, 2022). The

energy crisis of 2022 led to a number of measures designed to change behaviour, including

IEA. CC BY 4.0.

122 International Energy Agency | Net Zero Roadmap

national energy savings campaigns such as in Denmark, Germany, Ireland and Sweden.

Among the Group of 20 (G20) nations, the number of policies supporting behavioural

changes has more than doubled since 2021, and the G20 forum has recognised the importance of behavioural change with adoption of the High -Level Principles for Lifestyles

for Sustainable Development.

Figure 3.11 ⊳ Changes in energy consumption from behavioural measures

in the NZE Scenario, 2030

IEA. CC BY 4.0.

Behavioural changes save five -times more energy per capita in advanced economies

Notes: Low car cities represent an urban model where planning and infrastructure reduce the dependence on

cars to substantially improve public health, well -being and liveability, including a host of measures such as the

phase -out of internal combustion engine cars from city centres, shared mobility or moderating urban speed

limits . Other fuel efficiency includes reducing air conditioning temperatures in cars and eco- driving practices .

Space heating /cooling includes limit ing heating temperatures to 19 -20 °C and cooling temperatures to

24-25 °C. E co-household includes line drying clothes instead of machine drying , reducing laundry

temperatures, switching off lights in unoccupied rooms, unplugging appliances not in use and reducing water

heating temperatures . Aviation measures include a shift from short- haul flights to high- speed rail, reduction

of business flights and imposition of a levy for frequent flyers.

Behavioural change in the advanced economies reduce s electricity demand in the buildings

sector in 2030 by more than 6% and natural gas demand by around 15% in the NZE Scenario .

Recent experience suggests that this is feasible: in Germany, households and small

businesses cut natural gas consumption by up to 42% in 2022 in response to the energy crisis

and public exhortations to save energy (Hirt h, 2022). Similarly, driving in ICE cars drops by up

to 14% from 2022 to 2030 with more use of public transport, cycling and walking. There are

encouraging precedents here too: f or example, London’s congestion charge brought about

an 18% drop in car traffic 20 years after its first adoption (Transport for London, 2023) . -4-3-2-1Low car cities

Carpooling

Working from home

Speed limits

Other fuel-efficiency

Fewer SUVs

Space heating

Space cooling

Eco-household

Aviation measuresAdvanced

economiesEmerging market and

developing economiesGJper capitaRoad transport

Buildings

Aviation

IEA. CC BY 4.0.

Chapter 3 | Makin g the NZE Scenario a reality 123

3 Switching to more efficient fuels: R ole of access to modern energy

Accelerating access to modern energy helps drive down energy intensity more quickly in the

NZE Scenario. Nearly 2.3 billion people in around 130 countries, mainly in Asia and

sub-Saharan Africa, lack access to clean cooking today, while nearly 780 million people

remain without access to electricity. In addition to its other benefits, access to modern

energy improves energy efficiency. Despite considerable population growth, universal access

to clean cooking cuts residential fuel demand for cooking in emerging market and developing

econo mies by nearly 60% by 2030 in the NZE Scenario compared with today.

This is mainly due to switching from extremely inefficient traditional use of biomass to

improved cookstoves (ICS). These stoves are more efficient, burn less wood and emit less

smoke tha n traditional cook stoves. They allow poor households in rural areas to make a first

step toward clean cooking without changing the fuel they use . For this to happen, i nvestment

in clean cooking stoves, equipment and infrastructure over this decade need s to reach about

USD 8 billion annually – less than 1% of what governments spent in 2022 on measures to

keep energy affordable for their citizens amidst the global energy crisis.

Figure 3.12 ⊳ Energy use for residential cooking and gains in access to

modern fuels in emerging market and developing economies

in the NZE Scenario

IEA. CC BY 4.0.

Universal access to clean cooking cuts residential fuel demand for cooking

in emerging and developing economies by nearly 60% by 2030 relative to today

Notes: EJ = exajoules. ICS = improved cook stoves that use solid biomass as a fuel. Modern = modern fuels

such as liquefied petroleum gas, electricity, biogas and ethanol. Traditional = traditional use of biomass, coal

and kerosene. Best ten -year improvement bars reflect the single best historic year of providing clean cooking

access for each country between 2000 and 2022, and assumes this is repeated for ten years as a representative

point of comparison for the level of effort required to reach Sustainable Development Goal 7.

Achieving universal access to modern energy would involve an accelerated deployment of all

available technologies, and an unprecedented reversal of current trends in sub -Saharan 10 20 30 40

2022 2030EJChange in residential

cooking demand by fuelPeople gaining access

by region and period

Modern

Traditional

ICS 400 8001 2001 600Sub-Saharan Africa

Other EMDE

Other developing Asia

Indonesia

China

IndiaMillion people

Best 10 year

improvement2020 -2030

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124 International Energy Agency | Net Zero Roadmap

Africa, where the population without access has climbed continuously in most countries.

However, progress in other regions has demonstrated that it is possible to quickly provide

access to clean cooking solutions ( Figure 3.12 ). For example, in India, nearly half a billion

people gained access within ten years thanks to a combination of subsidised refills of

liquefied petroleum (LPG) cylinders, deposit- free LPG connections and a scheme allowing

wealthier households to voluntarily renounce their access to LPG subsidies. Similar success

stories from China and Indonesia showcase how strong national efforts can make an impact,

with each country providing 2 -3% of its population with clean cooking technologies every

year (IEA, 2023c) .

3.1.3 Accelerat e electrification

From 2023 to 2030, around one -fifth of the emissions reductions in the NZE Scenario result

from electrification of end -uses that would otherwise have used fossil fuels. In transport,

most of the gains come from the deployment of EVs. In the buildings sector , emissions

reductions mostly come from the installation of heat pumps. In industry, there is potential

for the electrification of low -temperature and some medium -temperature heat applications

using highly efficient industrial h eat pump s, with other electric heat ing technologies and

thermal energy storage further extending electricity’s reach. The e lectrification of heavy

industries – steel, cement and chemicals – i s critical to the achievement of the NZE Scenario ,

but these industrial branches reach lower levels of electrification to 2030. This is mainly due

to th e time needed to develop market -ready direct electrification technologies for c ertain

applications, such as providing high -temperature heat in cement and chemi cal

manufacturing , and the chemical reduc tion of iron ore in the steel making.

Electrification in transport

Electrification ramps up mo re quickly in transport than in other end- use sectors in the

NZE Scenario. The share of transport energy consumption accounted for by oil falls from

about 90% today to 80% in 2030; the share of electricity increases from 1% to almost 8%

over th e same period (Figure 3.13 ). More than 90% of this increase in electricity demand is

attributable to the switch from ICE vehicles to EVs , and 50 % of that in turn is attributable

solely to electric cars . Electrification progresses in the STEPS too, reflecting rapid cost

declines in recent years and strong policy support in major markets , but its pace is

significantly faster in the NZE Scenario .

China and the advanced economies are expected to lead the way in the electrification of

vehicle fleets , in which EV sales account for 80% of light -duty vehicles, 85% of buses and 55%

of heavy trucks in 2030 in the NZE Scenario. As sales increase and costs decline, electrification

follows in the other emerging and developing economies, where EV sales account for 40% of

light -duty vehicles, 40% of buses and 7% of heavy trucks in 2030 in the NZE Scenario. This is

supported by a rapid roll -out of charging infrastructure and associated investment in

electricity grid s.

IEA. CC BY 4.0.

Chapter 3 | Making the NZE Scenario a reality 125

3 Figure 3.13 ⊳ Global electricity demand in road transport by scenario,

2022-2030, and EV sales shares in the NZE Scenario, 2010-2030

IEA. CC BY 4.0.

Electricity meets over 1 0% of energy demand in passenger road transport

and electric cars are about 65% of all cars sales in 2030 in the NZE Scenario

Note: TWh = terawatt -hour.

Over the decade prior to 2022, global electric car sales increased at an average annual rate

of over 50 %; in the NZE Scenario, they increase on average by around 25% annually between

2023 and 2030, although from a higher base. Their share of total car sales reaches about 65%

(compared with 14% in 2022). This suggest s that electric car sales could meet or exceed what

is called for in the NZE Scenario by 2030 . There are currently about 500 electric car models

available worldwide, and this is set to increase. For example, Volvo plans to sell only electric

cars by 2030 and BYD, an automaker in China, has already stopped selling ICE vehicles.

Investments in electric vehicle battery manufacturing are also picking up, with capacity

increasing by almost 60% in 2022 ; announced expansions , if they proceed as planned, would

deliver a throughput sufficient to meet the demand in 2030 in the NZE Scenario (see

Chapter 1).

Electrification of heavier vehicle segments, such as trucks and buses, needs to accelerate

faster to deliver what is required in the NZE Scenario. E lectric buses increase their share of

sales from 4% in 2022 to over 50% in 2030 in the NZE Scenario, and electric heavy trucks

increase from 1% to 33% share . There are some encouraging signs that the pace of progress

may increase . Truck and bus manufacturers are increasingly offering zero emission s vehicles .

Electric buses and trucks are becoming increasingly competitive on a total cost- of-ownership

basis . However, additional electricity demand by 2030 in the STEPS for heavy trucks and

buses is only one -third of the level in the NZE Scenario , indicating that more needs to be

done to accelerate up take. 2%4%6%8%10%12%14%

200 400 600 8001 0001 2001 400

Passenger Freight

2022 2030 STEPS 2030 NZERoad transport electricity demandTWh

Share of electricity in road transport (right axis) 10% 20% 30% 40% 50% 60% 70%

2010 2022 2030EV sales share

Cars

Heavy

trucks

IEA. CC BY 4.0.

126 International Energy Agency | Net Zero Roadmap

Currently, the most common policy measures to support EV deployment are fuel -economy

and CO 2 emission standards , both for light - and heavy- duty vehicles , as well as financial

incentives such as purchase subsidies and tax credits that make EVs more cost competitive

with conventional ICE vehicles . Governments are also support ing the development of EV

charging infrastructure , for example by offering financial incentives for public as well as

private chargers and by stipulating infrastructure requirements in building codes .

Electrification in buildings

The share of electricity in energy use in the buildings sector worldwide rises from 35% today

to nearly 50 % in 2030 in the NZE Scenario, compared with 40% in the STEPS . The share of

electricity in space and water heating increases by around 7 percentage points by 2030,

mainly as a result of increased deployment of heat pumps , which are three - to four -times

more efficient than electric resistance heaters . Heat pumps met around 10% of global

heating needs in buildings in 2022, with more than 1 000 GW of capacity in operation for

space (and/or water) heating. Sales of h eat pump s are increasing rapidly : they ros e by 11%

in 2022 , marking a second year of double -digit growth (IEA, 2023d) . Growth is even faster in

the NZE Scenario, with the stock almost tripling by 2030, by which time it meets over

one ‑fifth of building sector heating needs. This implies average ann ual sales growth of almost

20% between 2023 and 2030 ( Figure 3.14 ). In the European Union, the annual increase of

heat pump sales has been over 35% since 2021 , implying that the growth rates required in

the NZE Scenario are feasible.

Figure 3.14 ⊳ Global heat pump sales growth rate and share of electricity in

buildings end-uses in the NZE Scenario, 2010-2030

IEA. CC BY 4.0.

Sales of heat pumps have surged since 2020, but need further growth to reach 2030 targets

5%10%15%20%

2010-

20152015-

20202020-

20222022-

2030Average annual growth in heat pump sales

15%30%45%60%

2010 2020 2030Share of electricity in buildings end -uses

Buildings

Water heating

Space heating

IEA. CC BY 4.0.

Chapter 3 | Making the NZE Scenario a reality 127

3 In most markets, the upfront cost of a residential heat pump (including installation) is

generally much higher than that of a fossil fuel boiler, though the extent of the cost gap varies

widely w ithin and across countries, even for the same technology. Nonetheless, in some

mature markets, such as Norway, Denmark and Japan, the least expensive ductless air -t

o-a

ir

heat pump models have become cheaper than natural gas boilers for new installations in

small houses, thanks primarily to reduced piping work and installation costs.

F

inancial incentives are currently available in over 30 countries around the world, covering

more than 70% of today’s heating demand (IEA, 2022). Many of these grants, tax rebates and

low-interest loans for heat pumps in new buildings or as part of broader buildings

renovations have been introduced or strengthened since the beginning of the energy crisis.

Other measures to support a more rapid uptake of heat pumps, as envisaged in the NZE Scenario, are new heat -as-a-service business models as well as revised building energy

performance and clean heat standards. In addition, energy tariffs and taxes can be structured

to favour cleaner and more efficient consumer choices. Addressing barriers such as a

shortage of workforce for technology installation and restrictions or practical constraints for new installations becomes even more pressing as upfront costs come down.

Electrification in industry

The industry sector currently accoun ts for more than 40% of global electricity demand.

Electricity is versatile and provides a diverse array of energy services in industry, e.g. heating,

cooling, lighting, electrochemical processes and motor drive s. The production of steel

recycled scrap and primary aluminium production all use electricity as the principal energy

input today. In the STEPS, industrial electricity demand rises by around 15 % by 2030 as

demand for industrial outputs exceeds the rate of efficie ncy improvements . In the NZE

Scenario, a concerted push to electrify processes across all sub -sectors leads to a much bigger

increase in industrial electricity demand of 4 000 TWh, or 38% by 2030, 40% of which is in

heavy industries (Figure 3.15) .

Heating applications offer the largest scope for increasing electrification in the industry sector. Many of the technologies needed to substitute electricity for fossil fuels are already

commercially available for low (<100 °C) and medium (100 -400 °C) temperature heat . In light

industries, more than 90% of total heat demand falls within these ranges. Heat pumps,

electric boilers and resistance heaters – or comb inations of all three – offer an efficient

means of providing a wide range of temperatures for both direct heating and indirect heating using steam. In the NZE Scenario, electrification of heating applications accounts for 45% of the increase in electricity consumption in light industries to 2030.

Cost is the key potential barrier to achieving this. Fuel accounts for the majority of the total life cycle cost of heating equipment, and industrial end -user prices for fossil fuels tend to be

substanti ally lower than electricity prices in most countries today. Industrial heat pumps,

which are more efficient than fossil fuel heating units, are able to bridge the cost gap in some cases, especially when complemented with captive solar PV electricity genera tion. Thermal

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128 International Energy Agency | Net Zero Roadmap

storage technologies that can deliver heat directly to industrial processes at high

temperatures may be able to extend the reach of low-cost variable renewable electricity in

the industry sector, by -passing the grid. Nevertheless, cost remain s an obstacle.

Figure 3.15 ⊳ Global electricity demand in industry by scenario, 2022-2030,

and share of electricity in total energy demand by sub-sector in

the NZE Scenario, 2010-2030

IEA. CC BY 4.0.

Electrification in industry must go far beyond what is projected under

currently planned policies to be in line with the NZE Scenario

Electrifying the provision of high- temperature heat (>400 °C) in industry is more difficult .

Electro -magnetic heating technologies , resistance heaters and electric arc furnaces are

commercially available options for specific applications. For many key industri al processes,

however, direct electrification technologies today generally are still at early stages of

development. Examples include direct electrification of heating in cement kilns, electric

steam crackers and electric iron ore electrolysis, the technologies for which are all at the

prototyp e stage (IEA, 2023e) . In the NZE Scenario, innovation efforts related to these

technologies acc elerate over the coming five years, with installation of the first commercial-

scale plants projected in the early 2030s.

Energy performance standards and CO 2 pricing are the most common policy mechanisms

currently employed to reduce industry sector emissi ons. These a nd similar measures can be

instrumental to adjust the operational cost balance in favour of commercially available

electrified equipment , notably industrial heat pumps. Various forms of policy support are

needed to commercialise earlier stage t echnologies to electrify processes in heavy industries ,

such as grants for demonstration projects and concessional finance for initial deployment . 20%40%60%

2 0004 0006 000

Light industry Heavy industry

2022 2030 STEPS 2030 NZEIndustrial electricity demandTWh

Electricity share (right axis)20%40%60%

2010 2030

Light industry Iron and steel

Cement ChemicalsShare of electricity in total consumption

IEA. CC BY 4.0.

Chapter 3 | Making the NZE Scenario a reality 129

3 3.1.4 Reduce m ethane emissions

Rapid and sustained reductions in methane emissions are key to limit near- term global

warming and to improv e air quality. Methane emissions have an outsized impact on global

temperatures in the short term, as methane is a short -li

ved climate forcer with powerful

warming potential , albeit with a short atmospheric lifetime. Therefore , cutting methane

emissions quickly would make a significant contribution to limiting the duration and

magnitude of the temperature overshoot above 1.5 °C.

Met

hane is responsible for around 30% of the increase in global temperatures since the

Industrial Revolution . After CO 2, cutting methane emissions has the single largest impact on

limiting the temperature rise to 2050 in the NZE Scenario (IEA, 2023f) . Around 1 50 countries

have j oined the Global Methane Pledge, which was launched at the Conference of the

Parties 26 in 2021 and aims to reduce methane emissions from human activity by at least

30% from 2020 levels by 2030. The energy sector accounts for around 40% of total methane

emissions attributable to human activity, second only to agriculture, and it has the largest

potential for abatement in the near term.

Figure 3.16 ⊳ Methane emissions from fossil fuel operations by region

in the STEPS and by fuel in the NZE Scenario

IEA. CC BY 4.0.

The gap in methane emissions between the STEPS

and NZE Scenario reaches more than 60 Mt by 2030

Note: C & S America = Central and South America.

We estimate that fossil fuels were responsible for around 125 million tonnes (Mt) of

methane emissions in 2022, a slight increase over 2021 (Figure 3.16 ). Coal, oil and natural

gas were each responsible for around 40 Mt of emissions during production, processing,

50 100 150

2010 2030

Asia Pacific Eurasia North America Middle East Africa C & S America EuropeSTEPSMtNZE

50 100 150

2022 2030Oil and gasCoal

IEA. CC BY 4.0.

130 International Energy Agency | Net Zero Roadmap

storage and transportation operations, and nearly 5 Mt of methane also leaked from

end ‑use equipment. China accounts for over 50% of global coal supply and a similar share of

coal mine methane emissions. The United States and Russia each emit nearly 14 Mt of

methane emissions from oil and gas operations, or around 35% of the total from oil and gas

operations between them . Many major emitters , such as China and Russia , have not yet

pledged to act on methane.

Methane emissions from fossil fuel operations fall by around 20% between 2022 and 2030

in the STEPS, mostly as a result of increasing political momentum to tackle these emissions

and voluntary industry action. Efforts to curtail emissions are already leading to a reduction

in the amount of methane that is emitted per unit of energy produced globally. Emissions from very large leaks detected by satellite fell by almost 10% in 2022 from the levels detected in 2021 and there was a near ly 5% reduction in nat ural gas flaring globally. We estimate that

the global average methane intensity of oil and gas production has fallen by around 5% since 2019. But there is scope for much more to be done.

Several countries have released or are working on national methane action plans to support reductions. Many of them have recently published landmark policies on methane, including

Colombia, Nigeria and the United States. Canada and the European Union are expected to

issue new methane regulations in 2023. A number of oil and gas companies have set targets to limit emissions or reduce their emissions intensity. In 2022, the Oil and Gas Climate Initiative launched the Aiming for Zero Methane Emissions Initiative, a call for the industry

to treat methane emissions as seriousl y as it already treats safety and to reach near zero

methane emissions by 2030 .

Methane emissions from fossil fuel operations fall by more than 75% by 2030 in the NZE

Scenario, mainly as a result of the rapid deployment of emission s reduction measures and

technologies (Figure 3.17 ). These include measures that put a stop to all non -emergency

flaring and venting , and universal adoption of monthly or continuous leak detection and

repair programmes. A fall in demand for fossil fuels also plays an important role, particularly

in driving down coal mine methane emissions, though leaks from closed mines also need to

be addressed . By 2030, all producers have an e missions intensity profile similar to that of the

world’s best operators today. By 2050, the drop in methane emissions from fossil fuels

reaches 98% as a result of further technology development and demand reductions.

Methane abatement is very cost effecti ve in the oil and gas sector . Based on average natural

gas prices from 2017 to 2021, we estimate that around 40% of methane emissions from oil and gas operations could be avoided at no net cost because the outlays for the abatement measures are less than t he market value of the additional gas that is captured. If the record

natural gas prices seen around the world in 2022 are used for the calculations instead , we

estimate that about 80% of the options to reduce emissions from oil and gas operations worldwide could be implemented at no net cost. In the NZE Scenario, around USD 75 billion

in cumulative spending is required to 2030 to deploy all methane abatement measures in the

oil and gas sector (IEA, 2023g) . This is equivalent to just 2% of the net income received by

IEA. CC BY 4.0.

Chapter 3 | Making the NZE Scenario a reality 131

3 the oil and gas industry in 2022. Even if there was no value to the captured gas, an emissions

price of about USD 20/tonne CO 2-equivalent would make almost all available abatement

measures cost effective.

Figure 3.17 ⊳ Methane emissions from fossil fuel operations and reductions

in the NZE Scenario, 2022-2030

IEA. CC BY 4.0.

By 2030, all fossil fuel producers have an emissions intensity profile

similar to that of the world’s best operators today

In the coal sector, wholesale methane reductions are generally more challenging than for oil

and gas operations . Around two -thirds of the reductions in coal mine methane emissions in

the NZE Scenario to 2030 come from a drop in coal consumption. Nonetheless, widespread

deployment of abatement measures should still be a priority. More than half of methane

emissions could be abated by making the most of coal mine methane utilisation, or by flaring

or oxidation technologies when en ergy recovery is not viable. Mitigation action is particularly

important for coking coal, mainly used in steel making, which tends to come from

underground mines where abatement is more feasible.

Tackling emissions from fossil fuels is not the only opportunity to cut methane emissions

from the energy sector. Achieving universal access to clean cooking and modern heating

would cut the methane emissions that arise from the incomplete combustion of bioenergy

as well as deliver numerous benefits for human health and well -being. 25 50 75 100 125

2022 Intensity Production 2030Mt Coal

Natural gas

Oil

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132 International Energy Agency | Net Zero Roadmap

3.2 Accelerat e long lead time options

3.2.1 Carbon capture, utilisation and storage

After years of underperformance, CCUS must now show it can deliver

CCUS is an important technology because it can reduce or eliminate emissions in areas where

other options are limited, for example in the production of cement or synthetic kerosene and

in the removal of CO 2 from the atmosphere. However, so far, t he history of CCUS has largely

been one of unmet expectations. Progress has been slow and deployment rela tively flat for

years. The current level of annual CO 2 capture of 45 Mt represents only 0.1% of total annual

energy sector emissions. This lack of progress has led to progressive downward revisions in

the role of CCUS in climate mitigation scenarios, including the 2023 NZE Scenario .

Figure 3.18 ⊳ Global annual CO 2 capture capacity by status and sector

in the NZE Scenario, 2015-2030

IEA. CC BY 4.0.

Planned CCUS projects, if brought to fruition, would increase capacity over eightfold,

about one -third of needed requirements by 2030

Notes: Mt CO 2 = million tonnes of carbon dioxide; DAC = direct air capture. Includes all facilities with a capacity

larger than 0.1 Mt CO 2 per year. Planned capacity for 2030 only includes projects with an announced operation

date by 2030. Hydrogen includes low -emissions hydrogen production at dedicated facilities, including for use

in ammonia manufacture. Captive low -emissions hydrogen production onsite at refineries and industrial

plants are included in other fuel and industry categories.

Source: IEA CCUS Projects Database, (IEA, 2023h) .

Since 2018, momentum on CCUS has increased on the back of stronger policies and improved

market conditions . Today over 45 countries have CCUS projects in development . If all

announced capture projects are built, around 400 Mt CO 2 could be captured every year

globally by 2030 – more than eight -times current capacity. A number of capture projects are

being developed for novel applications that are particularly important for reaching net zero 250 500 7501 000

2015

2016

2017

2018

2019

2020

2021

2022

2030

Operational capture capacity

Announced capture capacity

CO₂ captured in the NZEMt CO₂

Operational Planned

2030NZE

2030

Power Industry Hydrogen

Other fuel DAC

IEA. CC BY 4.0.

Chapter 3 | Making the NZE Scenario a reality 133

3 emissions. Based on the current project pipeline, around 20% of capture capacity in 2030

would be for direct air capture ( DAC ), 20% for hydrogen production and 8% for industry

(Figure 3.18 ). Planned capacities for CO 2 transport and storage have also increased. B ased on

the current project pipeline, CO 2 storage capacity could reach over 420 Mt CO 2 per year by

2030. However, only around 20 commercial capture projects under development had

reached the stage of a final investment decision (FID) by June 2023; and even if all announced

projects proceed, they would provide around 40% of the annual CO 2 capture of 1 Gt/year

needed by 203 0 in the NZE Scenario .

Learning from the past, planning for the future

CCUS appeared poised for a major expansion following the 2008 -2009 global financial crisis,

when more than USD 8.5 billion of public support was made available. U ltimately less than

30% of the funding was spent , and many CCUS projects could not advance fast enough to hit

the near -term spending milestones required by the support programmes. Limited one -off

capital grants, the absence of measures to address long -term liability for stored CO 2, high

operating costs , limited social acceptability and vulnerability of funding programmes to

external budget pressures all contributed to project cancel lations . If CCUS is to make

progress in line with the NZE Scenario, the industry needs to prove CCUS that can operate at

scale . For their part, governments should develop effective support packages to help with

operating as well as capital costs and find realistic ways of managing the long- term liabilities

associated with CO 2 storage .

Achieving the 2030 level of global deployment of CCUS in the NZE Scenario also hinges on

cutting project lead times, which currently average a bout six years.2 Adoption of best

practi ces could compress lead times to around three to four years , if CO 2 transport and

storage infrastructure are already in place . Developing CCUS hubs c ould also help reduce

lead times (Box 3. 3). A lead time of four years for both capture and storage would mean that

reaching 1 Gt CO 2/year of global capture capacity by 2030 in line with the NZE Scenario would

require on average 160 Mt CO 2/year of capture capacity and 140 Mt CO 2/year of storage

capacity to start the planning stage each year between 2023 and 2026. Project

announcements in 2022 were just over this level for capture capacity and well above it for

storage, which indicates that the level of global CO 2 capture and storage capacity required in

the NZE Scenario by 203 0 is not out of reach, provided that the necessary steps are taken to

support it.

Unlocking CCUS deployment in emerging market and developing economies

There are few CCUS projects in development in emerging market and developing economies

(Figure 3.19 ). This represents an important hurdle to achieve the NZE Scenario , given that

emerging economies have large stocks of young emissions -intensive power plants and

factories .

2 Project lead time is defined here as the total time required between conception and commissioning of a

facility.

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134 International Energy Agency | Net Zero Roadmap

Figure 3.19 ⊳ CO 2 capture and storage capacity by economic grouping

in the NZE Scenario, 2022 and 2030

IEA. CC BY 4.0.

Gap between the level s of planned CCUS deployment

and what is needed by 2030 is the largest in emerging economies

Note: Planned capture and storage capacity include all facilities with a capacity larger than 0.1 Mt CO 2 per year

as of June 2023, and projects with an announced operation date by 2030.

Source: IEA CCUS Pr oject s Database (IEA, 2023h) .

Some progress in CCUS has been made in emerging market and developing economies , e.g.

around 20 new capture, transport or storage projects were announced in 2022 in Asia and

the Middle East. China produces more than half the world’s coal -fired power generation,

steel and cement, but has less than 5% of the world’s CCUS projects currently under

development. China commissioned three projects in 2023 and has a project pipeline

equivalent to a capture capacity potential of around 10 Mt CO 2/year . Indonesia finalised a

legal and regulatory framework for CCUS in March 2023 – the first of its kind in Asia. The

Middle East, the location of over 15% of global natural gas production, has unique

opportunity to deploy CCUS for low- emission s fuel production, but currently accounts for

less than 5% of global planned capture and storage capacity by 2030. Taken together, the

announced projects wou ld only meet a small fraction of what is needed by 2030 in the NZE

Scenario.

Meeting NZE levels of CCUS deployment in emerging market and developing economies requires around 130 Mt CO

2/year of additional capture and storage capacity to start the

planning stage annually from 2023 to 2026. Such a rate of deployment is ambitious given the

current low number of projects in operation in those regions , but not unprecedented when

compared to other sectors such as unabated cement production, coal power or oil and gas

supply. Essential requirem ents for further progress include the develop ment of legal and

regulatory frameworks and the provision of incentives for the development of CCUS . 200 400 600 8001 000

Capture Storage Capture Storage Capture StorageUnknown

Emerging market and

developing economies

Advanced economiesMt CO₂Operational 2022 Planned 2030 NZE 2030

IEA. CC BY 4.0.

Chapter 3 | Making the NZE Scenario a reality 135

3 Box 3.3 ⊳ Role of CCUS hubs to achieve net zero emissions

Most CCUS projects commissioned to date have been managed by a single operator to

transport CO 2 from one capture facility to one injection site, which concentrates risks and

costs on one developer. But CCUS projects are increasingly being developed as part of

CCUS hubs, which consist of shared transport and storage infrastructure connecting

multi ple emitters, often as part of an industrial cluster. Today t here are over 110 storage

hubs in development , mainly in Europe and North America, with plans to sequester

around 280 Mt CO 2 per year by 2030 .

Figure 3.20 ⊳ CO 2 emissions clusters and planned CCUS hubs in planning in

North America, Europe, Middle East, and East Asia, 2022

North America

Europe

Middle East

East Asia

IEA. CC BY 4.0.

Around 80% of global emissions from power plants, industrial facilities

and refineries could benefit from shared infrastructure

Notes: Point sources and CO 2 emissions clusters include steel, cement, chemical, power generation and

refining in fac ilities with total emissions larger than 0.1 Mt CO 2 per year. Sedimentary thickness (km) is

used to indicate theoretical potential of CO 2 storage sites.

Sources: Analysis based on US EPA Office of Atmospheric Protection (2021); European Commission (202 1);

Kearns et al., (2017); S&P Global (2022); Global Energy Monitor, (2022); Global Cement, (2022).

IEA. CC BY 4.0.

136 International Energy Agency | Net Zero Roadmap

The CCUS hub model spreads infrastructure costs between emitters and generates

economies of scale, allowing smaller emitters and those located far from identified CO 2

storage sites to connect to shared infrastructure. Mainstreaming this model could help

to reduce lead times, as new capture facilities could connect to an existing CCUS hub. In

China, around 90% of emissions from steel, cement, power, chemic als facilities and

refineries are within 30 km of large industrial clusters3 which could benefit from shared

infrastructure. In the United States the equivalent figure is around 70%, and around 60%

in the Middle East and Europe.

3.2.2 Hydrogen and hydrogen- based fuels

Today hy drogen production is more of a climate problem than a climate solution. Demand

for hydrogen is rising , reaching 95 Mt in 2022, but most of it is met by emissions- intensive

supply , resulting in more than 0.9 G t of direct CO 2 emissions in 2022 . Production of low-

emission s hydrogen from water electrolysis or from fossil fuels with high levels of CO 2

capture and storage amounted to less than 1 Mt in 2022 (IEA, 2023i).

There has been significant progress on policy and investment in low-emission s hydrogen

since the 2021 version of the NZE Scenario (IEA, 2021b) . Billions of dollars of support for

project developers have been budgeted by governments in a wide range of countries , and

the world’s largest installed electrolyser facility is more than ten- times bigger than the largest

one at the start of 2021. T here is now enough confidence in the market to support s everal

investment decisions of more than USD 0.5 billion for low-emis sions hydrogen production

projects . Included are three projects that together will produce ammonia from 0.2 Mt of

hydrogen from electrolysis from 2026 (91 % in Saudia Arabia , 8% in Oman and 1% in the

United States) . Despite the high expectations that have developed around hydrogen

recently, more action is urgently needed from policy makers and industry to deliver the

requirements of the NZE Scenario.

Creating demand for low -emission s hydrogen

In the absence of robust demand for low-emission s hydrogen, the current race to secure

market share for equipment such as electrolysers will have no winners. The NZE Scenario

sees demand scaled up first in existing applications where large quantities of low -emission s

hydrogen can be integrated with minimal plant modifications and little need for new

infrastructure. This builds on recent experience: to date, most of the world’s largest financed

projects for hydrogen production from electrolysis or with CCUS have been designed to serve

existing demand , such as for fertiliser plants. But the level of demand for low -emissions

hydrogen in existing applications is insufficient to reach the level called for by 2030 in the

NZE Scenario (Figure 3.21 ). New sources of demand are needed. Recently, some developers

have secur ed provisional agreements with prospective buyers, but announced plans for

3 Emitting at least 5 Mt CO 2 per year .

IEA. CC BY 4.0.

Chapter 3 | Making the NZE S cenario a reality 137

3 production of low -emission s hydrogen indicate that there is a risk of supply capacity

outstripping demand.

Figure 3.21 ⊳ Global hydrogen demand in the NZE Scenario, 2022- 2050

IEA. CC BY 4.0.

Use of l ow-emission s hydrogen rises significantly to 70 Mt by 2030

and extends to new applications such as in aviation and shipping

Note s: Mt H 2 = million tonnes of hydrogen. Unabated fossil fuels include hydrogen produced with CO 2 capture

for utilisation without storage, such as in urea synthesis. Demand for aviation and marine fuel and power

generation includes hydrogen that is converted to make low-emission s hydrogen -based fuels.

New applications represent m ore t han four -fifths of low-emission s global hydrogen demand

in 2030 in the NZE Scenario . These are at early stages of development or deployment today

yet are targeted by the expanding pipeline of announced projects. The largest source s of

demand, ranked by size, are power generation (including storage ), low -emission s hydrogen -

based transport fuels , and iron and steel production . While hydrogen and ammonia are used

in just 1% of power generation in 2030 , the sector represents a significant source of demand

due to its sheer size and the high value of clean, storable and flexible fuel to occasionally

balance the grid . In the longer term, increasing use of low -emission s hydrogen in aviation,

shipping and to a lesser extent heavy truck s means that transport become s the largest source

of hydrogen demand, and industry overtake s power generation as the second -large st source

of demand.

In the industry sector, iron and steel production represents one of the important sources of

low-emission s hydrogen demand despite there being no such plan ts in operation today . In

the NZE Scenario, hydrogen -based direct reduction of iron ( DRI) – a means of processing iron

ore without fossil fuels – leads to just over 4 Mt of low -emission s hydrogen demand b y 2030 .

The attainability of this scale -up is supported by a n increase in new project announcements

for hydrogen- based DRI since 2021, when only one was in development . Some of these have 100 200 300 400 500

2022 2030 2040 2050 2022 2030 2040 2050Other

Road transport

Power generation

Aviation and marine fuel

Other industry

Iron and steel

Chemicals

Iron and steel

Chemicals

Oil refiningMt H₂From unabated fossil fuels Low -emissions hydrogen

New uses

Existing uses

IEA. CC BY 4.0.

138 International Energy Agency | Net Zero Roadmap

been successful in securing provisional agreements with prospective buyers . None theless,

the 2030 level in the NZE Scenario is more than six times the implied demand of the current

project pipeline (Figure 3.22 ).

Figure 3.22 ⊳ Global low-emissions hydrogen demand from announced fuel

and iron and steel projects in the NZE Scenario, 2022-2030

IEA. CC BY 4.0.

Announced projects that stimulate demand for low -emission s hydrogen

are expanding rapidly , though they fall short of 2030 needs in the NZE Scenario

Note s: DRI = direct reduced iron . NZE gap = the difference between the sum of announced projects and

deployment needs in 2030 of the NZE Scenario. Synthetic hydrocarbons include low-emissions hydrogen -

based fuels that are drop -in replacements for oil products .

In aviation, s ynthetic kerosene derived from hydrogen and CO 2 has considerable potential as

a drop -in fuel. From negligible quantities of production in 2022, this new application

increases in the NZE Scenario to more than 2 billion litres per year in 2030 (still less than 1%

of aviation demand ). This creates 1 Mt of hydrogen demand. Announced demand

commitments from the aviation industry to purchase volumes of this fuel fall far short of the

levels projected in the scenario, in part due to the lack of installed capacity . Trial operation

of the first synthetic kerosene plant is expected in 2023 , with first commercial -scale plants

due in 2025 . The lead time to build a synthetic kerosene plant is two to four years .

Nevertheless , it will be challenging to build up capacity, secure supplies of carbon neutral

CO 2 and low- emission s hydrogen, and establish off-take commitments in line with the

NZE Scenario.

In shipping , the use of ammonia or methanol as fuel for maritime vessels requires engine

modifications and fuel supply system develop ment . While today there are no commercial

ships operating on ammonia, engine manufacturers have successfully teste d the technology ,

and around 150 ammonia -ready vessels were on order at the end of 2022. These ships

present an opportunity to rapidly develop the associated sa fety protocols. In the 1 2 3 4 5

2022 Announced 2030Mt H₂H₂ for DRI

NZE gap

NZE gap

2022 Announced 2030H₂ for synthetic hydrocarbons

IEA. CC BY 4.0.

Chapter 3 | Making the NZE Scenario a reality 139

3 NZE S cenario, orders of ammonia -ready vessels increase from the 2022 level on average by

about 20% per year to 2030, representing about 15% of typical annual vessel orders.

Agreements between shipping operators and ammonia and methanol producers will be

necessary to bring supply and demand into line and to enable the use of low -emission s

hydrogen in shipping to rise as rapidly as envisaged in the NZE Scenario.

Scaling up production

Meeting projected demand for low-emission s hydrogen in the NZE Scenario entails a rapid

change in how hydrogen is produced and a massive scaling up of production from the less

than 1 Mt of low -emission hydrogen produced in 2022 (Figure 3.23 ). The current shortage of

equipment manufacturing capacity, production capacity, infrastructure, end -user systems

and market standards represent a series of obstacle s to progress, as does the challenge of

matching supply to demand during a period of rapid growth in production. There ha ve been

some notable steps forward since 2021, especially in relation to water electrolysis , but much

remains to be done .

Figure 3.23 ⊳ Global hydrogen supply by source in the NZE Scenario,

2022-2050

IEA. CC BY 4.0.

Low-emission s hydrogen production rises rapidly to reach 45%

of total hydrogen supply by 2030

Note: Other sources of low -emission s hydrogen, including from biomass, amount to less than 1% of the total

and are not shown here.

The pipeline of projects for the deployment of electrolysis capacity looks encouraging, though there is still a long way to go. If all announced projects come to fruition, more than

400 GW of electrolysis could be operational by 2030, which is around 70% of what is required

in the NZE Scenario. However, more than half of the announced capacity correspond s to 100 200 300 400

2022 2030 2040 2050Unabated fossil

fuels

By-product

Low-emissions:

fossil fuel with CCUS

Low-emissions:

electrolysisMt H₂

IEA. CC BY 4.0.

140 International Energy Agency | Net Zero Roadmap

projects that are at very early stages of development and less than 4% are under construction

or have reached FID. The availability of renewable electricity is one potential constraint that

could hinder the rate at which projects start construction.

There have also been some encouraging signs in the outlook for manufacturing of the

electrolysers on which the increase in electrolysis capacity depends (Figure 3.24 ). If all

announcements from the private sector are realised on time, manufacturing capacity could reach 155 GW per year by 2030 , with cumulative production by this date of more than

450 GW of electrolysers . However, only 8% of the se announcements of electrolyser

manufacturing capacity expansions have reached a FID and started construction. If

permitting processes run smooth ly, as assumed in the NZE Scenario, it takes two to three

years to build a gigawatt -scale plant for manufacturing electrolysers and a further year or

two to install the electrolysers , so a rapid increase in manufacturing capacity is not out of

reach . Supportive government policies have been broadened to boost manufacturing

capacity as well as low -emission s hydrogen demand and deployment , including t he US

Inflation Reduction Act, Europe’s Important Projects of Common European Interest and the

European Hydrogen Bank, and the UK Low- Carbon Hydrogen Business Model .

Figure 3.24 ⊳ Potential low-emissions hydrogen supply capacity from

electrolyser and CCUS projects and investments in the

NZE Scenario, 2022 and 2030

IEA. CC BY 4.0.

Announced projects for electrolysis deployment account for around 70% of the 2030 needs

in the NZE Scenario, but less than 4 % of them have reached a final investment decision

Notes: Projects in this figure represent the capacity of electrolysis and CCUS that could be installed by 2030 if

all the announced projects to produce low -emissions hydrogen are realised on time. Manuf. Capacity

represents the maximum capacity of electrolysis that could be installed by 2030 if all announcements to expand manufacturing capacity of electrolysers are realised on time. To facilitate comparison between electrolysis and CCUS -equipped capacity, values are shown in GW of installed capacity of hydr ogen output,

which for electrolysis is 31% lower in 2030 than the equivalent value based on electricity input. 100 200 300 400

2022 Projects Manuf.

capacityNZE

Operational and under construction Advanced stages Early stages NZEGW H₂ outputElectrolysis

2022 Projects NZECCUS

40 80 120 160

2022 NZEBillion USD (2022)Investment

IEA. CC BY 4.0.

Chapter 3 | Making the NZE Scenario a reality 141

3 There has also been some progress with low-emission s hydrogen production from natural

gas with CCUS , but here again there is much further to go. T he five plants that have started

construction in North America since 2021 between them represent production capacity of

0.5 Mt each year, 70% from just two projects that are both incorporating over 90% CO 2

capture and are equivalent to more than all the electrolyser capacity currently in operation.

However, s lower progress in Europe, China and the Asia Pacific has led to a downward

revision of the contribution of low -emission s hydrogen from fossil fuels with CCUS in the

2023 version of the NZE Sc enario. It still calls for CCUS -equipped hydrogen projects

representing an annual production capacity of 1 7 Mt to reach FID by around 2026 for

operation by 2030 , which requires an inc rease in the size of the current pipeline as well as

faster progress of p rojects through to FID .

The use of hydrogen envisaged in the NZE Scenario depends on investment in the production,

transmission and distribution of low- emission s hydrogen and hydrogen- based fuels. This

currently stands at around USD 1 billion per year and needs to increase to USD 150 billion by

2030 to meet NZE levels , plus at least USD 100 billion in dedicated renewable electricity

capacity . Delivering this incre ase depends on getting the regulatory framework right and on

creating as much certainty as possible about future demand growth. S timulating investment

in low -emission s hydrogen in emerging market and developing economies is likely to be

especially challeng ing. This group account s for around one -quarter of announced projects ,

but the majority of their projects are at very early stages of development and are struggling

to access finance. Multilateral development banks have started to provide funding for hydro gen projects, with programmes worth around USD 4 billion announced in 2023, but this

still accounts for just 3 % of the investment needed by 2030 in the NZE Scenario (IEA, 2023j) .

More will need to be done if emerging market and developing economies (exclud ing China)

are to account for around 4 0% of cumulative investment in low -emission s hydrogen between

now and 2050, as envisaged in the NZE Scenario .

3.2.3 Bioenergy

Role of modern bioenergy

Modern bioenergy is one of the pillars of the clean energy transition, growing from 6% of

total energy supply today to 13% in 2030 and 18% in 2050 in the NZE Scenario. All of the

increase comes from sustainable sources , which minimises impacts on biodivers ity, water

resources and soil health, and helps to safeguard energy access and affordable prices for agricultural outputs. One of the main advantages is that bioenergy is compatible with existing

infrastructure. Biomethane for instance is compatible with natural gas infrastructure, while solid bioenergy can be used in industries such as cement and power generation with

relatively few modifications. In addition, the raw materials used to make bioenergy, such as

agricultural and forestry residues, are broadly distributed across the world.

Most of the growth in modern bioenergy use in the NZE Scenario comes from the emerging

market and developing economies, where it almost doubles by 2030, growing at a rate that

is around one -third faster than in advanced econo mies ( Figure 3.25 ). The main driver is the

IEA. CC BY 4.0.

142 International Energy Agency | Net Zero Roadmap

growth in liquid biofuel production, mostly consumed by the transport sector in developing

economies but also exported to advanced economies. Another key driver is the phas e-out of

the traditional use of biomass in inefficient open cookstoves, which are replaced with

modern energy alternatives, including bioenergy used in more efficient cookstoves . The rich

biomass resource potential in emerging economies also helps drive growth in modern

bioenergy uses in industry and the electricity sector . While bioenergy is used in a number of

sectors , it plays a particularly important role in the transport sector , where its share of

demand for liquid fuel transport increases from almost 4% today to over 10% by 2030. This

is driven primarily by demand in passenger cars, heavy -duty trucking, long -haul aviation and

international shipping.

Figure 3.25 ⊳ Primary bioenergy use by sector and economic grouping

in the NZE Scenario, 2010-2050

IEA. CC BY 4.0.

Modern bioenergy use in emerging market and developing economies

almost doubles to 2030, rising 30% faster than in advanced economies

Note: TES = total energy supply.

Ensuring a sustainable supply of bioenergy

The expansion of modern bioenergy involves trade -offs between bioenergy supply ,

sustainable development goals and other land uses, notably food and feed production. The

maximum level of bioenergy used in the NZE Scenario (100 EJ) takes these trade -offs into

consideration and is based on assessments of the global sustainable bioenergy potential

(Creutzig, 2015 ; Frank, 2021 ; IPCC, 2014; IPCC, 2019 ; Wu, 2019) . 4%8%12%16%20%

20 40 60 80 100

2010 2022 2030 2040 2050

Liquid biofuels

Biogases

Conversion losses

Traditional use of biomass

Share in TES (right axis)Bioenergy use by sectorEJ

Modern solid bioenergy

Power and heat

Industry

Buildings and agriculture 20 40 60 80 100

2010 2022 2030 2040 2050

Traditional use of biomass

EMDE

Advanced economiesBioenergy use by economy type

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Chapter 3 | Making the NZE Scenario a reality 143

3 There is a shift in the NZE Scenario from conventional feedstocks towards advanced

bioenergy feedstocks to avoid land -use conflict s. Advanced feedstocks from waste and

residues such as agricultural residues, forest and wood residues and the organic fraction of

municipal solid waste do not require dedicated land use. From 2030 onwards , a growing

reliance on advanced feedstocks means that over half of the total biomass feedstock supply

comes from sources with no dedicated land use .

The remaining feedstocks – for both conventional and advanced bioenergy – do require

dedicated land use, but can still be produced in a sustainable way. Modelling done in

collaborat ion with the International Institute for Applied Systems Analysis4 indicates that the

requirement for bioenergy crops in the NZE Scenario could be met without encroaching on

forested land, and that by 2050 th ere is no overall increase in cropland5 use for bioenergy

production from current level s. Total land use for bioenergy in the NZE Scenario is well below

estimated ranges of potential land availab ility that take full account of sustainability

constraints, including the need to protect biodiversity hotspots and to meet the UN

Sustainable Development Goal 15 on biodiversity and land use . The certification of bioenergy

products and strict control of what land can be converted to expand forestry plantations and

woody energy crops nevertheless is critical to avoid land -us

e conflict issues .

Sh

ort-rotation woody energy crops provide a steadily growing share of bioenergy supply in

the NZE Scenario , providing just under 40 EJ of bioenergy in 2050: t hese crops are cultivated

on cropland previously used for conventional biofuels, pastureland and marginal lands and

can produce twice as much bioenergy per hectare as many conventional bioenergy crops .

The remaining modern bioenergy comes from sustainably managed forest plantations and sustainable tree planting integrated with agricultural production via agroforestry systems :

these do not conflict with food production or biodiversity.

How quickly can the use of biofuels expand?

The prospects for demand for liquid biofuels depend largely on policy mandates. Most

biofuels can be blended at high rates with relatively few modifications . In the case of

renewable s diesel , no blending is required as it can be used interchangeably with

conventional, oil -based diesel. However, in most countries, blending rates are low, due to

the high cost of liquid biofuels and limited policy support . More than 80% of biofuel s are

currently used in the United States, Brazil, Europe and Indonesia, where a mix of regulations,

financial incentives and technical standards have supported their expansion. However, the

supportive policy frameworks in these regions need to be strengthened to help expand

demand, which more nearly triples by 2030 in the NZE Scenario. They also need to be

replicated elsewhere, especially in emerging market and developing economies where

4 IEA model results have been coupled with the International Institute for Applied Systems Analysis ( IIASA)

Global Biospher e Management Model (GLOBIOM) to provide data on land use and the greenhouse gas

emissions from bioenergy production.

5 Cropland here refers to agricultural land used for food, animal feed and bioenergy production but excludes

short -rotation woody crops not established on existing ag ricultural cropland .

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144 International Energy Agency | Net Zero Roadmap

biofuel demand rapidly increases in the NZE Scenario . The volumetric share of ethanol in

gasoline jumped in India from 4% in 2019 to more than 10 % in 2022 , which provides an

example of what can be done .

Global liquid biofuel production is not currently on track to deliver what is required by 2030

in the NZE Scenario , based on current market trends and policies. Output has increased on

average by 4% per year over the last five years, but it need s to increase by an average of 13%

per year to reach the 11 EJ projected for 2030 in the NZE Scenario (Figure 3.26 ). Biomass -

based diesel , for instance , has expanded at an average of 9 % worldwide for the past five

years . Existing and announced projects would cover half of the increase in demand, assuming

they all go ahead, but new facilities take only around two to three years to build, which

means that there is still time for additional projects to fill th e gap.

Figure 3.26 ⊳ Liquid biofuel production by economic grouping in the

NZE Scenario, 2018-2030

IEA. CC BY 4.0.

Liquid biofuel output in both economic groupings more than doubles by 2030

of which the existing project pipeline could cover 50%

A key barrier to raising liquid biofuel output is the limited availability of sustainable

feedstocks. The total potential resource base of all kinds of sustainable bioenergy (solid, liquid and gaseous) is estimated at around 100 EJ, of which only 10 EJ (including conversion

losses) is currently used to make biofuels. However, the pace and scale of expansion in the

NZE Scenario is contingent on producing biofuels from a broader set of feedstocks than those

used today . In 2030, 40% of production is based on what are known as advanced feedstocks ,

i.e. materials that do not compete with food and feed production . These advanced

feedstocks include crops grown on marginal land, agricultural and forestry residues and

residu e oils, fats and grease. By 2050, the ir share of total production reaches 75%. Advanced

feedstocks today support 12% of biofuel production and come primarily from residue oils, 2 4 6 8 10 12

2018 2019 2020 2021 2022 2028 2030Emerging market

and developing

economies

Advanced

economiesEJAnnounced NZE

IEA. CC BY 4.0.

Chapter 3 | Making the NZE Scenario a reality 145

3 fats and grease such as used cooking oil. But the existing project pipeline would use more

than 90% of the estimated supply of these residues. Achieving the increases in supply

projected in the NZE Scenario therefore require s higher reliance on other kinds of advanced

feedstocks, in particular agricu ltural and forestry residues.

Box 3.4 ⊳ Expanding access to feedstocks is key to increasing biofuels

Biofuel producers and governments have an opportunity to expand the feedstock base

used to make liquid biofuels. This requires a focus on five broad areas:

 Enhanc e land productivity : Intercropping, cover crops, growing crops on marginal

land and improving crop yields all hold potential to expand supply of feedstock . For

instance, woody short -rotation coppice can produce twice as much bioenergy per

hectare as conventional bioenergy crops. Over the past two years, seven major

energy companies, including ExxonMobil, Eni, Chevron Corporation and BP ha ve

announced projects and partnerships to develop these feedstocks.

 Improv e waste and residue collection: An estimated 20 Mt of residue oils, fats and

grease are generated each year that are compatible with commercial biodiesel and

renewable diesel product ion technologies , and which could be directed towards

biofuel production. Companies are already working to gather these waste s.

Additional efforts are also needed to access woody residues from agriculture and

forestry. Collection can be facilitated by building facilities close to sources of supply,

as companies are doing at some sugar mills in Brazil and India , and at some forestry

plantations in the United States . Improved data, co- ordination and business models

can help with efforts to collect dispersed residue feedstocks .

 Deploy technologies that can process various feedstocks : Global efforts are needed

to commercialise and expand technologies that can convert the feedstocks to

biofuels at scale . Some efforts are underway . For example, Brazil and India are

building seven cellulosic ethanol projects that use agricultural residues to create

ethanol, while a plant that converts forestry residues into biojet kerosene is being

built in the United States .

 Reduc e the life cycle emissions intensity of biofuels : CCUS, facility improvements,

and taking account of the life cycle carbon intensities of various feedstocks (including

carbon sequestered in soil) all offer pathways to reduce greenhouse gas emissions

from every litre of biofuels produced. For instance, i n the United States CO 2

transport pipelines are planned that would connect around 30 ethanol facilities with

CO 2 storage.

 Develop and implement performance -based sustainability frameworks : Efforts to

expand feedstock supplies need to be accompanied by performance -based

sustainability frameworks which include carbon assessment methodologies. The

development of such frameworks will play a critical role to ensure that efforts to

expand biofuels are both effective and sustainable.

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146 International Energy Agency | Net Zero Roadmap

3.2.4 Infrastructure

Rapid expansion of existing infrastructure plus development of new infrastructure for

emerging technologies are both required

Electricity networks – the backbone of power systems – are central to clean energy

transitions . Increasing population, rising incomes and electrification of more and more end-

uses that previously used fossil fuels combine to considerabl y push up demand for electricity .

Rapid growth in the share of electricity generated by va riable renewables, in particular solar

PV and wind, bring new challenges to ensure power system flexibility and stability. S ignificant

electricity grid changes are needed , particularly as storing electricity is challenging and costly.

New transmission and distribution lines will have to be built . In 2022, the length of electric

transmission and distribution lines worldwide totalled around 80 million km. This needs to

expand 20% by 2030 in t he NZE Scenario (Figure 3.27 ). Digitalization , smart systems and

advanced semiconductor technologies each play a crucial role to ensure and improv e control

and stability of power flows, and will have to be factored into plans for new lines a s well as

to be integrated into existing grids . Grids also play a pivotal role in enhancing the flexibility

of the power system, enabling the integration of variable renewable and distributed energy

resources (see section 3.1.1 ). Energy transitions could be stifled if the current pace of grid

development does not accelerate, slowing the uptake of renewables , raising fossil fuel use

and associated CO 2 emissions (IEA, forthcoming) .

Figure 3.27 ⊳ Global infrastructure needs for electricity, hydrogen and

CO 2 storage in the NZE Scenario, 2022 and 2030

IEA. CC BY 4.0.

Infrastructure to transport and store electricity, hydrogen and CO 2

is an often overlooked but critical enabler of clean energy transitions

Notes: LNG = liquefied natural gas; LH2 = liquefied hydrogen; NH 3 = ammonia. The hatched area for CO 2

pipelines represent s the NZE Scenario range of 30 000-50 000 km. 25 50 75 100

2022 2030

Transmission Distribution LNG today LH₂ NH₃ CO₂Electricity gridsMillion km

150 300 450 600

2022 2030Hydrogen tankersNumber of tankers

15 30 45 60

2022 2030Thousand kmCO₂ pipelines

IEA. CC BY 4.0.

Chapter 3 | Making the NZE Scenario a reality 147

3 Today hydrogen is mostly produced close to where it is used . As demand increases in the NZE

Scenario , it is likely to become cheaper to produce some low-emission s hydrogen in areas

with good renewable energy resources and transport it to demand centres. Pipelines can

transport large volumes of hydrogen efficiently over hundre ds of kilometres , and these could

include repurpose d natural gas pipelines . For longer distance s, hydrogen may need to be

converted into a denser form, either through liquefaction (LH 2) or conversion into a chemical

carrier that can be easily shipped , e.g., ammonia , methanol , synthetic fuels or a liquid organic

hydrogen carrier . Increasing demand for low- emission s hydrogen means that more than

20 000 km of pipelines are needed by 20 30 in the NZE Scenario , compared with 5 000 km

today , together with around 25 LH2 tankers (160 000 m3), up from zero today , and around

70 new ammonia tankers , up from the current 40 tankers that carry ammonia year round.

CCUS deployment is hindered by a lack of available CO 2 storage sites . Assessing and

developing potential sites , including saline aquifers and depleted oil and gas fields, is often a

time -intensive and expensive process , but it is vital: without appropriate storage sites it will

be much harder to develop other parts of the value chain, including CO 2 pipelines. CO 2

storage capacity expands in the NZE Scenario from less than 50 Mt today to around 1 Gt by

2030 – a more than a 20-fold increase – while CO 2 pipeline infrastructure expands from

around 9 500 km today to between 30 000-50 000 km by 2030.

How feasible is the ramp- up of infrastructure to 2030 in the NZE Scenario?

The rapid ramping up of infrastructure requirements envisioned in the NZE Scenario is

technically feasible, but nonetheless represents an enormous undertaking.

Electricity grids are a lready accelerating. Over the past five years, the transmission and

distribution grid s worldwide expanded by 1.9 million km each year – a rate of increase about

9% higher than experienced in the 2013 -2017 period. The pace picks up in the NZE Scenario

as grids expand by around 2 million km each year to 2030 (Figure 3.28 ).

The deployment of transport and storage infrastructure for hydrogen and CCUS depend s on

a number of factors, including how quickly technologies that are still at the demonstration

stage can achieve commercialisation , e.g. LH2 shipping, ammonia cracking , as well as

development of regulat ory frameworks, permitting rul es and public acceptance. If lead times

for hydrogen and CCUS infrastructure projects are roughly on a par with those for previous

natural gas infrastructure projects, infrastructure development may hinder the production

and demand proj ects to which they are linked . Repurposing existing oil and gas assets ,

including natural gas networks, shipping terminals and offshore platforms, could help to fast

track the deployment of hydrogen and CO 2 infrastructure, reduce lead times and investment

costs.

In the case of hydrogen, the fertiliser industry already ships ammonia in tankers designed to

carry liquefied petroleum gas (LPG) , but dedicated LH 2 tankers are not yet commercially

available, and some innovation will be required to overcome the additional chall enges of the

lower boiling point of hydrogen compared with natural gas , and the use of hydrogen boil -off

as fuel . The projected pace of global expansion in LH 2 and ammonia shipping in the

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148 International Energy Agency | Net Zero Roadmap

NZE Scenario is similar (in energy terms) to the speed of LNG expansion during its first decade

of development. How quickly LH2 tankers can be deployed is uncertain , as the technology is

not mature , but the NZE Scenario only calls for around 4 LH2 tankers by 2 030, around a tenth

the number of LNG tanker deliveries in a given year with a similar size in volumetric terms .

In the case of CCUS, there are ample potential global CO 2 storage resources, but further

resource assessment is required to develop sites. Base d on current project pipeline s,

CO 2 storage capacity could reach more than 420 Mt CO 2 per year by 2030 , around 40% of

what is required in the NZE Scenario . CO 2 pipelines currently under development would

provide around 30-50% of what is needed in the NZE Scenario , with around 1 5 000 km under

development worldwide . This could increase as projects move forward since not all

announced projects have specified pipeline lengths yet .

Figure 3.28 ⊳ Annual global deployment of additional electricity lines,

hydrogen tankers and CO 2 storage in the NZE Scenario

compared with historic trends

IEA. CC BY 4.0.

Grid additions to 2030 are close to historic rates; roll -out of liquefied hydrogen tankers

and CO 2 storage relies on emerging technologies and available resources

Notes: LNG = liquefied natural gas; LPG = liquefied petroleum gas; LH 2 = liquefied hydrogen; NH 3 = ammonia;

NZE = Net Zero Scenario. CO 2 storage project capacity in 2030 includes projects currently in operation plus

those in development.

The planning and permitting processes for major new clean energy infrastructure typically

take three to eight year s to complete before construction can start and could be long er for

first-of-a-kind projects (Figure 3.29 ). In the case of electricity lines and pipelines, line route

plans may need to be assessed by a multitude of regulatory authorities, jurisdictions and

other stakeholders. When involving new types of infrastructure , such as storage sites for CO 2,

it is not always clear which regulator should be in charge of the permitting process. As large 250 500 7501 000

Projects NZE

In development

OperationalCO₂ storage , 2030Mt CO₂

20 40 60 80

LNG LPG LH₂ NH₃Annual tanker deliveriesNumber of tankers

2015 -19 2026 -300.61.21.82.4

2018-22 2026-30

Distribution

TransmissionAnnual grid net additionsMillion km

IEA. CC BY 4.0.

Chapter 3 | Making the NZE Scenario a reality 149

3 infrastructure projects often cross or impact multiple landowners, early and frequent

stakeholder engagement and an appropriate communication strategy are required to

mini mise potential increases in lead times due to public opposition. As highlighted in the IEA

Special Report on Grids (forthcoming) , there is evidence of permitting bottleneck s forcing

the delay of some large electric transmission line projects. However, ther e are some signs of

recognition of the urgent need to expedite permitting of clean energy infrastructure.

Figure 3.29 ⊳ Typical lead times for selected infrastructure projects

IEA. CC BY 4.0.

On average , construction takes between one to four years, while planning and permitting

may take three to eight years and can create bottlenecks and cause delays

Notes: Electricity grid lead times are based on average lead times in Europe and United States. Transmission

refers to extra -high voltage, ranging from 200 -765 kV. Hydrogen terminal lead times are based on average

lead times for LNG terminals in Europe and Asia. Hydrogen tanker lead times are based on lead times for an

LNG tanker.

3.3 Consequences of further delay s for the clean energy

transition

Failure to accelerate the clean energy transition along the lines of the pathway depicted in

the NZE Scenario would virtually guarantee a high overshoot of the 1.5 °C limit,6 with serious

consequences for humans, ecosystems and climate tipping points. In such circumstances,

returning the global average temperature rise to below 1.5 °C by 2100 would require a large

and costly deployment of CO 2 removal technologies and would not avoid the need to reduce

fossil demand substantially in this decade . Raising climate ambition s and ensuring effective

implementation must remain critical priorities.

6 High overshoot refers to an increase in global average temperature above 1.6 °C but below 1.8 °C above pre -

industrial levels and a subsequent fall to below 1.5 °C. (IPCC, 2023). 2 4 6 8 10 12CO₂ storageTankerTerminalOnshore pipelineOverhead distribution lineUnderground distribution lineSubsea transmission cableOverhead transmission lineUnderground transmission line

Years

Planning and permitting ConstructionElectricity

gridsHydrogen CO₂

IEA. CC BY 4.0.

150 International Energy Agency | Net Zero Roadmap

3.3.1 The w orld has already delayed too long to avoid hard choices

The NZE Scenario can only be achieved with substantial changes to operating patterns and

the early closure of some existing fossil fuel -based infrastructure. If current energy sector

assets were to be operated until the end of their normal technical and economic lifetimes, and in the same manner in which they have been operated, they would generate further cumulative emissions of around 6 00 Gt CO

2 over the period 2023 to 2050 ( Figure 3.30 ). This

is far more than the estimated remaining CO 2 budget to remain below 1.5 °C. This has

implications for China given that it accounts for 4 5% (2 70 Gt CO 2) of the emissions from

existing assets over this period, primarily owing to its large fleet of relatively young coal -fired

power plants and the size of its industrial base, which has the capacity to produce more than half the global demand for crude steel and ceme nt. It also has implications for those

countries , including India among others, that have significant additional emissions -intensive

capacity under construction or planned to come online in the next few years . But it is also an

issue that all countries wor ldwide will need to confront if they intend collectively to get to

global net zero emissions by 2050. On the supply side, the rate o f reduction in oil and gas

demand necessary to reach net zero emissions by 2050 is now so fast that it may imply the

early c losure of some existing oil and gas fields.

Figure 3.30 ⊳ Global energy sector CO 2 emissions from existing assets

by sub- sector and region assuming no early retirements or

modifications

IEA. CC BY 4.0.

Absent early retirement or modifications in operations, existing assets would emit

600 Gt CO 2 in the 2023 -2050 period , dashing any hope of staying below 1.5 °C

Note: AE = advanced economies.

Further delaying the hard choices necessary to reach global net zero emissions by 2050

would make the problems substantially worse , and much harder to solve . Between 2023 and 10 20 30 40

2010 2050Gt CO2

Coal power Other power Steel Cement Chemicals Other industry OtherEmissions

2022 80 160 240 320

Advanced

economiesChina India Rest of

worldCumulative emissions, 2023 -2050

IEA. CC BY 4.0.

Chapter 3 | Making the NZE Scenario a r eality 151

3 2035, cumulative investment s in fossil fuel supply, fossil- based power generation and end -

uses are currently planned to be USD 3.6 trillion higher than in the NZE Scenario, despite

current net zero emissions pledges . Much of this investment would be for assets with long

lives in which operations would need to be curtailed or lifetimes shortened if the goal of

returning the temperature increase to below 1.5 °C is to be achieved .

3.3.2 Implications of not raising climate ambition s to 2030

The net zero emissions pledges that have been announced by countries around the world –

even if they are all implemented in full and on time – would make it impossible to limit global

warming to 1.5 °C without high overshoot (see Chapter 1). This raises the question o f

whether global warming could be brought back to below 1.5 °C after a high overshoot, and

if so, at what cost . In order to explore this question, the IEA developed the Delayed Action

Case. It assumes that all countries that have announced net zero emissions pledges

implement policies in the period to 2030 that enable achievement of their pledges . This is in

line with the IEA Announced Pledges Scenario (APS). In fact, the policies that have been put

in place are not sufficient to achieve the APS , and moreover we cannot be sure that all the

policies that have been put in place will be maintained and fully implemented. Therefore,

the starting point of the Delayed Action Case is more optimistic than current policy settings

and Nationally Determined Contr ibutions. The findings discussed in this section in terms of

the challenge s of bringing global warming back below 1.5 °C need to be seen in that context.

In the Delayed Action Case, countries are assumed to undertake actions that go beyond what

is currently factored into the APS and accelerate their implementation of more ambitious climate policies after 2030, particularly where they have significant technological and

financial capacities . This reduces global energy sector CO

2 emissions by just over one -third

by 2035, relative to the 2022 level . This compares with the nearly two -thirds reduction

projected in the NZE Scenario over the same period. Although policies become increasingly

stringent over time, t he delayed and uneven action s across sectors a nd regions mean that

energy sector CO 2 emissions reach net zero only by the middle of the 2060s. As a result, the

global temperature rise climbs to a peak close to 1.7 °C around 2050. After this time , the

temperature fall s by about 0.05 °C per decade due t o net CO 2 removals from BECCS and

DACS , cuts to methane emissions in the previous decades , and a reduction in atmospheric

CO 2 due to natural processes (see Chapter 2). This brings warming to below 1.5 °C by 2100

(Figur e 3.31 ).

The rise in temperature in the Delayed Action Case exceeds 1.6 ° C for about 25 years and

1.5 °C for almost 50 years, which has a number of potentially serious consequences for

vulnerable populations, ecosystems and climate tipping points. According to the

Intergovernmental Panel on Climate Change (IPCC), if a temporary overshoot of the 1.5 °C

threshold occurs, then there is high confidence7 that “… many human and natural systems

will face additional severe risks, compared to remaining below 1.5 °C”. These risks are mainly

7 High confidence = 80% chance.

IEA. CC BY 4.0.

152 International Energy Agency | Net Zero Roadmap

associated with irreversible changes to ecosystems and with the release of additional

greenhouse gases (IPCC, 2023) .

Figure 3.31 ⊳ Median global temperature rise in the Delayed Action Case

and the NZE Scenario

IEA. CC BY 4.0.

Even a small d elay in stronger action to cut emissions beyond current pledges

would cause global temperature to exceed 1.5 °C for almost 50 years

Source: IEA analysis based on outputs of MAGICC 7.5.3.

Threats to ecosystems and biodiversity are likely to persist for many decades after

temperatures start to decline. In more than one-quarter of global locations the chances that

animal and plant species can return to pre -overshoot “normal ” are either uncertain or

non-existent (Meyer et al., 2022).

Additional global warming comes with heightened risks of triggering tipping points in the

earth system , i.e., large scale, irreversible events such as the melting of ice sheets or the

abrupt dieback of the Amazon rainforest (Wunderling et al, 2022) . The risks of positive

feedback loops in the climate system, combined with inherent uncertainties in the earth’s

response to future greenhouse gas emissions and net CO 2 removals , mean that there is a

one-third chance of the temperature rise exceeding 1.8 °C in the Delayed Action Case .

3.3.3 What would it take to bring temperatures back below 1.5 °C?

In the Delayed Action Case, bringing the global increase in average temperatures back down to below 1.5 °C would require scaling up CO

2 removal from the atmosphere through

bioenergy equipped with CCUS ( BECCS ) and direct air capture and storage ( DACS ) to over

5 Gt CO 2 every year during the second -half of this century (Figure 3.32 ). This is equivalent to

the annual energy sector emissions of the United States today and compares with projected 1.2 1.3 1.4 1.5 1.6 1.7

2020 2040 2060 2080 2100°C

NZEDelayed Action Case

IEA. CC BY 4.0.

Chapter 3 | Making the NZE Scenario a reality 153

3 removal s which reach 1.7 Gt in 2050 in the NZE Scenario. The Delayed Action Case assumes

that this requirement is split between BECCS, which delivers 2 Gt a year in 2100 , and DACS,

which delivers 3.3 Gt a year in 2100 .

Figure 3.32 ⊳ Global gross and net energy sector CO 2 emissions

in the Delayed Action Case

IEA. CC BY 4.0.

Delaying the achievement of net zero emissions to after 2060 would mean that up to 5 Gt

per year of CO 2 removal s would be needed to bring temperatures to below 1.5 °C

The 2 Gt CO 2 removal each year through BECCS required in the Delayed Action Case is twi ce

the amount required in the NZE Scenario. The extent to which BECCS can be increased is

constrained by limits on sustainable bioenergy supply as well as by the economic and

logistical challenges of deploying infrastructure to connect bioenergy facilities , often very

dispersed, with large -scale CO 2 storage sites. Capturing 2 Gt CO 2 per year from bioenergy

facilities would require gathering, processing, combusting, capturing, transporting and

storing the emissions from bioenergy produced on roughly 135 million hectares (Mha )8 of

land – slightly less than the total land area of Peru , the 20th largest country in the world

(Figure 3.33 ). As sustainable bioenergy feedstock is spread thinly and widely, so are

bioenergy facilities, and connecting them with CO 2 transport infrastructure and suitable

storage sites would be a huge challenge in logistical terms.

While the deployment of DACS is not restricted by the availability of feedstock or suitable sites, it is much more energy intensive and costly than BECCS. This is mostly due to the low concentration of CO

2 in the atmosphere, which requires huge volumes of air to be treated

8 Estimated by applying the share of bioenergy feedstock used in facilities equipped with CCS to total bioenergy

land use. Land use for bioenergy includes cropland for first - and second- generation energy cr ops, and

sustainably managed forest land for bioenergy estimated on a pro rata basis (i.e., the proportion of feedstocks

used for bioenergy production out of total forest harvest) . -10010203040

2020 2040 2060 2080 2100Gt CO₂Net emissions

Gross emissions

BECCS and DACS

IEA. CC BY 4.0.

154 International Energy Agency | Net Zero Roadmap

for CO 2 separation. Capturing around 3.3 Gt CO 2 directly from the atmosphere as required in

the Delayed Action Case by 2100 would require filtering 0.1% of the earth’s atmosphere

every year. At this scale, DACS would consume around 30 EJ of energy annually, just below

than current total energy consumption in the industry sector in the European Union, Japan

and United States combined. If the energy required for the deployment of DACS was

provided by solar PV, this would require around 4.5 Mha of land for solar PV and DACS

facilities, which is roughly equivalent to the land area of Denmark. While this is orders of magnitude lower than the land and water footprints typically associated with bioenergy

production , it would put further strains on an already resource -constrained energy system.

Figure 3.33 ⊳ Global annual energy use, annual carbon removal costs

and land requirements for carbon removal technologies

in the Delayed Action Case, 2100

IEA. CC BY 4.0.

Heavier reliance on Carbon Dioxide Removal in the Delayed Action Case would

have huge implications for energy use, economic costs and resource use

Notes: EJ = exajoules; Mha = million hectares; EU = European Union; US = United States; BECCS = bioenergy

equipped with CCUS; DAC S = direct air capture and storage . Energy and cost s for BECCS are for the carbon

capture unit only. Cost corresponds to the l evelized cost of carbon capture. BECCS feedstock area refers to the

land area from which BECCS feedstock must be collected. The Delayed Action Case assumes that total

sustainable bioenergy limit does not increase from the NZE Scenario (100 EJ), but the share of bioenergy

combined with CCUS increases.

There is also the question of cost to consider. Removing 2 Gt with BECCS and 3.3 Gt with

DACS each year by the end of the century would cost around USD 1.3 trillion per year ( in

2022 dollars ), 50% more than was invested in fossil fuel supply in 2022 . Organising th is scale

of resource mobilisation would be a major challenge requiring close international co-

operation. 10 20 30 40

NZE

ScenarioDelayed

Action Case

BECCS DACS2022 industry

energy demand in

EU, US and JapanEnergy use (EJ)

40 80 120 160

NZE

ScenarioDelayed

Action CaseBECCS feedstock area (Mha)

0.40.81.21.6

NZE

ScenarioDelayed

Action CaseCost (Trillion USD)

2022 fossil fuel

investmentPeru land area

IEA. CC BY 4.0.

Chapter 3 | Making the NZE Scenario a reality 155

3

Status of direct air capture and storage technology

Direct air capture and storage i s a promising technology for net zero emissions pathways ,

but it cannot substitute for deep reductions in emissions or delay s in developing and

deploying the technologies that can reduce or avoid emissions in the first place . The

industrial, infrastructure and cost challenges of scaling up direct air capture and storage

to the degree in the Delayed Action Case highlight the need to minimise its use as much

as possible by prioritising direct reductions of emissions from fossil fuel combustion and

non-combustion applications alike , as in the NZE Scenario .

Even with the very rapid emissions reductions built into the NZE Scenario, DAC S plays an

important role in balancing the last remaining residual emissions . It also plays an

important role in capturing CO 2 directly from the atmosphere that provides the necessary

and irreplaceable climate neutral carbon feedstock for low -emission s fuels such as

synthetic aviation kerosene (given constrained sustainable bioenergy resources) , which

play a vital part in the aviation sector . Policy makers should support faste r innovation in

and deployment of DAC technologies, even as they prioritise the deploy ment of clean

technologies across the energy system.

Two technological approaches are currently being used to capture CO 2 from the air: solid

DAC (S-DAC) and liquid DAC (L-DAC). Solid DAC operates at ambient to low pressure and

medium temperature (80 -120 °C), while liquid DAC operates at high temperature

(300-900 °C). These technologies are currently at the prototype (L -DAC) and

demonstration (S -DAC) stage s and need to be scaled up dramatically to play the role

envisaged in the NZE Scenario (see section 3.2.1) .

Other interesting DAC technologies are emerging such as electro -swing adsorption,

zeolites and passive DAC. While these DAC technologies are now at earl y stages of

development , they offer the possibility of low er costs (passive DAC could cost less than

USD 100/t CO 2 compared with USD 1000/t CO 2 for the DAC technologies at a more

developed stage today), low er energy intensit ies (electro -swing DAC needs only around

one-third of the energy per tonne of CO 2 compared with more developed technologies)

and abundant sorbent availability (global zeolites production in 2022 was equivalent to

around 1 Mt).

Growing commercial interest in the L -DAC and S -DAC technologies, as well as the

innovation potential of emerging DAC technologies, suggests that DAC technologies

could be scale d up to the levels seen in the NZE Scenario, provided that appropriate

policies are in place. At the same time, policy makers and industry need to be realistic

about the role that D ACS and other carbon dioxide removal technologies can play in

robust net zero emissions strategies , and about the risks involved in making assumptions

about their future development . Time is not on our side. Even with substantial innovation

and deployment, these technologies must be seen as a way of complement ing, not

replac ing, a focus on reducing emissions . SPOTLIGHT

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156 International Energy Agency | Net Zero Roadmap

3.3.4 Implications for the oil and natural gas industry

With continuing investment in existing and approved sources of supply, but without any new

conventional oil and gas project approvals, oil and gas production would decline by around

2% each year on average to 2030 and by 4 -5% each year on average from 2030 to 2050.

In the NZE Scenario, a rapid and sustained surge in clean energy investment and a variety of other measures lead to reductions in demand for oil and gas that broadly match the

projected fall in production from existing sources of supply. As a result, there is no need for the approval of any new long lead time upstream conventional oil and gas projects.

In the Delayed Action Case, clean energy investment takes place less rapidly and measures

designed to reduce emissions progress more slowly. As a result , oil and natural gas demand

fall by around 0.5% on average each year to 2030. After 2030, oil and gas demand declines

at a rate closer to 4% per year on average through to 2050. To ensure a smooth match

between supply and demand there would need to be continued investment in existing

sources of oil and gas supply, and some new sources of supply would need to be approved for development over the next few yea rs. However, accelerating the decline in demand for

oil and gas after 2030 in the Delayed Action Case means that no new long lead time oil projects would need to be approved for development from the late 2020s onwards , and this

in turn means that there is no need to explore for new oil and gas fields from now on. The

projects that are developed over this period would have to prioritise low- emissions

technologies across the full supply chain. This means minimising methane leaks and flaring,

electrifying facilities using low -emissions electricity and integrating the use of CCUS where

feasible. After the late 2020s, oil and gas investment globally would shift entirely to

maintaining production at existing fields and minimising the emissions intensity of operati ons.

IEA. CC BY 4.0.

Chapter 4 | Secure, equitable and co -operative transitions 157

Chapter 4

Secure, equitable and co-operative transit ions

Faster together

• The clean energy transition brings new energy security risks. Although c apital

spending on critical minerals saw a 30% increase in 2022 and exploration spending

rose by 20 %, announced critical mineral mining projects are not sufficient to meet the

needs of the Net Zero by 2050 Scenario (NZE Scenario ) in 2030. Bridging this gap

requires a focus on investment, recycling, technology innovation and behavioural

change.

• More traditional energy security risks do not disappear . Global oil and gas markets

reduce in volume terms in the NZE Scenario, but production becomes concentrated

in a small number of producers, with the share of the Middle East rising from 25%

today to 40% in 2050.

• The NZE Scenario sees a huge increase in clean energy investment and a rapid

decrease in fossil fuel investment. Ensuring a smooth transition requires the two to

be carefully synchronised. In the NZE Scenario, the key requirement is a massive and

rapid increase in clean energy investment.

• Today more than 80% of clean energy investment is taking place in advanced

economies and China ; more is needed in emerging and developing economies. The

NZE Scenario sees clean energy investmen t increasing nearly t hreefold from the

current level by 2030, but fivefold in emerging market and developing economies

other than China . Around USD 80-100 billion in annual concessional funding is needed

by the early 2030s to lower the cost of finance and mobilise private capi tal in lower

income countries .

• Affordability of energy is a key concern . A people -centred transition requires

measures to ensure that the least well -off in all societies are able to benefit from the

lower operating costs of clean and energy -efficient techn ologies. In overall terms,

clean energy investment in the NZE Scenario is outweighed by declines in spending

on fossil fuels, with worldwide net energy spending savings equalling USD 12 trillion

to 2050.

• The Global Stocktake needs to provide a clear signal about the ambition and urgency

with which countries are preparing their new Nationally Determined Contributions –

the key vehicle for collective action under the Paris Agreement.

• International co -operation is central to develop agreed s tandards, to diversify clean

energy supply chains in a way that avoids undermining the benefits of global supply

chains , to ensure that rapid scale up can be achieved, and to shar e lessons learned

from clean energy demonstratio n projects to accelerat e innovation . SUMMARY

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158 International Energy Agency | Net Zero Roadmap

4.1 Introduction

The IEA Net Zero by 2050 : A Roadmap for the Global Energy Sector in 2021 concluded that

without fair and effective international co -operation the transition to net zero emissions

would be delayed by decades (IEA, 2021 a). Today, the world faces sharper geopolitical

fractures, heightened concerns a bout energy security, more intense competition for clean

energy supply chains and technologies, and tighter financial and fiscal conditions particularly

in many emerging market and developing economies. These conditions may make

international co -operation more difficult, but it is just as important now as in 2021.

Achieving the outcomes set out in the NZE Scenario requires international co- operation in

several areas. Energy security is an important concern for all countries and need s to be

actively managed both within and between governments , whether it is a question of a

traditional issue such as the security of oil and gas supplies or an emerging issue such as the

adequacy and security of critical minerals supplies (section 4.2). Today, emerging market and

developing economies , other than China , are lagging significantly behind in the deployment

of clean energy technologies . Reversing this imbalance and ensuring that the benefits and

costs of the clean energy transition are distributed fairly must be a critical focus (section 4.3).

Among other issues , this entails addressing the investment gap in clean energy technologies

across emerging market and developing economies , including through the provision of more

concessional finance to mobilise private capital (section 4.4). The Global Stocktake unde r the

Paris Agreement needs to provide a clear signal about the ambition and urgency with which

all countries are preparing their next round of Nationally Determined Contributions – the key

vehicle for collective action under the Paris Agreement. Innovation in novel clean energy

technologies needs to accelerate to support progress towards the goals of the Paris

Agreement , and international co -operation has a role to play here in respect of issues such

as cross- border infrastructure and the development of international standards (section 4.4).

4.2 Energy security

Managing traditional security risks related to f ossil fuel supply will remain important during

the transition to clean energy systems . However, a s the transition advances, new risks arise ,

including some related to the supply of critical minerals needed for clean energy

technologies, a nd others that relat e to the adequacy and reliability of electricity systems that

will form the backbone of the new energy economy . This section looks at bot h new and

traditional risks and considers what approaches can reduce or mitigate them .

4.2.1 Bridging the gap between critical mineral supply and demand

The rapid deployment of clean energy technologies puts strains on supply chains, notably for

critical mineral s. The development of clean energy technology supply chains ha s made

impressive progress since 2015. However, the expected pace of growth in critical mineral

supplies does not yet match that of manufacturing capacity additions for clean energy

IEA. CC BY 4.0.

Chapter 4 | Secure, equitable and co -operative transitions 159

4 technologies , posing challenges for scaling up clean energy deployment at the required pace

to support net zero emissions transitions.

Demand for critical minerals for clean energy applications quadruples between 2022 and

2030 in the NZE Scenario. Electric vehicles (E Vs) and battery storage are the main drivers of

demand growth, but demand from low- emissions power generation and electricity networks

also increases. As demand for clean energy applications rises faster than it does for other uses, the share of clean ener gy in total demand for key minerals increases considerably. For

example, the clean energy sector represents nearly 90% of total lithium demand by 2030 in the NZE Scenario, up from 60% today, and clean energy technologies overtake stainless steel

as the lar gest consumer of nickel around 2030.

Figure 4.1 ⊳ Anticipated supply and projected demand for selected minerals

in the NZE Scenario, 2030

IEA. CC BY 4.0.

While investment s in new projects are increasing, meeting requirements of the NZE Scenario

requires further efforts to boost investment, recycling and technology innovation

Note s: Mt = million tonnes; NZE = Net Zero Scenario. A nticipated supply is expected future production based

on assessment of announced projects. Secondary supply refers to supply from recycled materials .

Despite increases in recent years, the anticipated supply from the current project pipeline

still falls short of the requirements in the NZE Scenario ( Figure 4.1). Expanding i nvestment in

new mining and refining facilities is crucial to avoid the risk of supply shortages slowing

energy transitions or raising their cost . Encouragingly, many countries have recently

introduced new policies to boost investment in new supplies. Our latest assessment indicates

that c apital spending for critical minerals development rose 20% in 2021 and by a further

30% in 2022 (IEA, 2023a) . Exploration spending also rose by 20% in 2022, driven by record

growth in lithium exploration. But more needs to be done, and t he lack of progress on

diversifying supply sources remains a concern . The share of the top- three producers of some

critical minerals in global supply remains very high and has not ch anged from 2019 levels , 2 4 6 8Nickel (Mt)

200 400 600 800Lithium (kt)

100 200 300 400Cobalt (kt)

10 20 30 40

2022 supply Anticipated primary supply in 2030

Secondary supply in 2030 Total NZE demand in 2030Copper (Mt)

IEA. CC BY 4.0.

160 International Energy Agency | Net Zero Roadmap

notably for nickel and cobalt . For refining and processing operations in particular, most

planned projects are being developed in incumbent producers, with China holding half of

planned lithium refining projects and Indonesia repres enting nearly 90% of planned nickel

smelting facilities.

An increase in recycling rates would help to re duce the pressure on primary supply and would

also bring energy security benefits , especially to regions with higher deployment of clean

energy technologies and limited resource endowments. For bulk materials such as steel and

aluminium, recycling practices are relatively well established, but this is not yet the case for

many energy transition minerals such as lithium a nd nickel . Waste regulations should be

updated to ensure that they cover emerging waste streams from new clean energy

technologies , backed by support for the construction of new recycling facilities . In the

NZE Scenario, secondary supply from recycling meets 10-20% of total demand for key energy

transition minerals in 2030, and there is scope for this share to increase significantly as the

amount of equipment reaching its end of life expands in the longer term .

Technology advances also have a major role to alleviat e potential supply strains . For

example, significant reductions in the use of silver and silicon in solar cells over the past

decade have contributed to a spectacular rise in deployment of solar photovoltaics ( PV).

Embracing a higher share of high -voltage direct current transmission lines in electricity

networks has the potential to curtail their material demand by 3% in 2030 and 10 % in 2050 ,

and a wider adoption of lithium -iron phosphate chemistries and sodium -ion batteries could

reduce mineral demand for EV batteries by 7% in 2030 and almost 20 % in 2050.

Figure 4.2 ⊳ Impacts of technology and behavioural changes on material

demand in the NZE Scenario, 2030 and 2050

IEA. CC BY 4.0.

Technolog y innovation and consumer behaviour provide scope to

alleviate potential supply strains by reducing demand

Note: DC = direct current; LFP = Lithium -iron phosphate. -25%-20%-15%-10%-5%0%5%

Wider adoption of

DC systems in grid

networksSmaller EV

battery sizeHigher share of LFP

and sodium-ion in

batteriesNickel

Aluminium

Graphite

Manganese

Lithium

Cobalt

Copper

Impacts in 2050Impacts in 2030

IEA. CC BY 4.0.

Chapter 4 | Secure, equitable and co -operative transitions 161

4 Changes in consumer behaviour also play a part. The NZE Scenario assumes, for example,

that targeted measures reduce the appetite for sport utility and other large vehicles, cutting

mineral demand for EV batteries by 18% in 2030 and around 20 % in 2050 ( Figure 4.2).

Addressing the potential gaps between supply and demand is a significant challenge , but

recent trends such as increased capital investment in new supplies, increased recycling

facilities and the emergence of new technology options provide grounds for cautious

optimism. To sustain this momentum, it is imperative to bolster international co -operation

in order to stimulate investment, foster technology innovation and promote recycling

practices . This should be accompanied by increased international co-operation on the social

and environmental impacts of mining to improve performance, for example by harmonising

standards and strengthening data collection and reporting mechanisms .

While the demand for critical minerals increases significantly in the NZE Scenario, clean

energy transitions require significantly fewer extractive resources in aggregate than today’s

ener gy system. Decarbonisation means a major reduction in the overall materials intensity

of the energy system , given that increased demand for critical minerals is accompanied by a

massive decrease in extraction of fossil fuels . The net result is that for eve ry unit of energy

delivered in 2050, the energy system consume s two-thirds less in materials (fossil fuels and

critical minerals combined) than it does today ( Figure 4.3).

Figure 4.3 ⊳ Material intensity of the global energy system in the

NZE Scenario, 2010-2050

IEA. CC BY 4.0.

Overall intensity of materials to support the global energy system

drops by more than two-thirds by 2050

Note s: Kt/PJ = thousand tonnes per petajoule. C ritical minerals do not include steel and aluminium. The

intensity for critical minerals does not include the amount of waste rock that occurs during mining activities . 10 20 30

2010 2022 2030 2040 2050

Fossil fuels Critial mineralsMaterial intensityKt/PJ

-68%

200 400 600

2010 2022 2030 2040 2050Intensity by categoryIndex (2022 = 100)

IEA. CC BY 4.0.

162 International Energy Agency | Net Zero Roadmap

4.2.2 Scaling up clean energy technologies and scal ing back fossil fuels

need to be well synchronised

Efforts to ensure energy security have so far focus sed on adding new infrastructure to ensure

uninterrupted access to energy supplies. However, net zero emissions transitions require a

winding down of high carbon energy systems alongside major investment in new clean

energy infrastructure . Ensuring a smooth transition requires these two movements to be

carefully synchronised.

Figure 4.4 ⊳ Global investment in clean energy and fossil fuels in the

NZE Scenario, 2023-2030

IEA. CC BY 4.0.

A massive scale up in clean energy investment is key to ensure smooth transitions ,

but the shift in energy investment needs to be carefully synchronised

Note s: MER = market exchange rate. Power and fuels also includes investment to reduce emissions from fossil

fuel supply.

Global investment in clean energy is set to outstrip investment in fossil energy by a factor of

1.8 to 1 in 202 3. This ratio rises to 10 to 1 in 2030 in the NZE Scenario , when around

USD 2.5 trillion is invested in clean electricity and low -emissions fuels and around

USD 1.8 trillion in energy efficiency and end -uses , while investment in fossil fuel supply falls

to around USD 0.4 trillion (Figure 4.4). The sequenc ing of the shift in energy investment is

important. Running ahead on scaling back fossil fuel investment before clean energy

investment ramps up w ould push up prices and risk pri ce spikes, and this would not

necessarily advance secure transitions. The key requirement for the achievement of the

NZE Scenario is a massive and sustained increase in clean energy investment. T he faster clean

energy investment and deployment takes place, the faster the transition away from fossil

fuels will be . 4812

2 4 6

Efficiency and end-use

Power and fuels

Oil

Natural gas

Coal

Ratio of clean energyTrillion USD (2022, MER)

2023e 2030Fossil fuelsClean energy

to fossil fuels

(right axis)

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Chapter 4 | Secure, equitable and co -operative transitions 163

4 Even with the ambitious and rapid clean energy transition in the NZE Scenario, s ome

elements of fossil fuel infrastructure continue to contribute to the secure operation of the

overall energy system for many years to come. The role of gas -fired power plants in power

system reliability, or of refineries in providing for the residual fuel needs of the internal

combustion engine (ICE) fleet, are cases in point. Unplanned or premature retirement of this

infrastructure could have negative consequences for energy security . There is also scope to

reuse or repurpose some existing infrastructure. For example, some parts of natural gas

networks could be used to transport low-emissions fuels such as biometh ane and hydrogen ,

refineries could be converted to produce biofuels, and natural gas storage facilities could be

repurposed to store hydrogen.

4.2.3 Fossil fuel markets shrink, but vigilance is still needed

Achieving net zero emissions goals brings energy securi ty benefits as reliance on fossil fuels

decreases , but concerns about the security of oil and gas supplies do not disappear in the

NZE Scenari o. Given the demand trajectory , the risks in this scenario do not relate to the

adequacy of investment: global demand falls sufficiently fast that no new oil or gas field

developments are needed, al though continued investment in existing fields is still required.

But a s energy transitions progress and demand falls, oil and gas supplies become increasingly

concentrated in a small number of low cost producers , and the Organization of the

Petroleum Exporting Countries ( OPEC ) share of world oil production ris es from 36% in 2022

to 52% in 2050 – a level higher than at any point in the history of oil markets since the first

oil shock .1 Oil import dependency also remains high for many countries, notably in emerging

Asian economies. The Middle East plays an outsized role in serving these import needs, with

its share in total crude oil exports rising from 45% in 2022 to 65% in 2050 ( Figure 4.5). Import

dependency in Asia also rises for natural gas from 27% in 2022 to 4 5% in 2050. In the

NZE Scenario, i mporters therefore remain exposed to risks arising from geopolitical events

and physical disruptions in the Middle East or accidents near trade chokepoints, even as the total volume of imports and the size of the oil and gas market falls.

The major hydrocarbon producers, notably i n the Middle East, are also set to face economic

challenges as revenues from oil and gas sales decline with the shift towards clean energy. In

the NZE Scenario, governments in net exporting regions collect USD 380 billion from the

production of oil and gas in 2030, around 50% below the average between 2017 -2021, and

this falls further to less than USD 90 billion by 2050. While producer economies have taken

steps to diversify their economic structure, progress has been limited in most cases. Producer

economi es have also made limited progress in diversifying their energy sector away from

fossil fuels and the share of low- emissions sources in their energy systems is among the

lowest in the world.

1 Supply trajectories and sensitivities for the NZE Scenario are examined in more detail in a forthcoming WEO

special report on the Oil and Gas Industry in Net Zero Transitions, which will be released in November 2023.

IEA. CC BY 4.0.

164 International Energy Agency | Net Zero Roadmap Figure 4.5 ⊳ Middle East share of global oil and gas production, and oil

and gas net imports in Asia in the NZE Scenario, 2022-2050

IEA. CC BY 4.0.

Oil and gas supplies are increasingly concentrated in a small number

of low cost producers ; Asia’s import dependency continues to rise

Note: EJ = exajoules.

The NZE Scenario charts an orderly process of change, but this is far from guaranteed in

practice. Some importing countries m ight look to conclude new supply arrangements in the

interest of energy security , even while seeking to reduce domestic fossil fuel use. E xporters

or potential exporters might also be keen to exploit untapped oil and gas resources and some

large , low cost producers might choose to expand production to capture a bigger market

share , even if that pushes prices down; others might seek to restrict production to keep

prices high. All these options would come with risks. New pr ojects would risk locking in

emissions that push the world over the 1.5 °C threshold . They would also face major

economic and financial risks if the world is successful at scaling up clean energy in line with

the NZE Scenario. A higher degree of supply concentration among a small number of

countries would mean increased import dependency risks for importing regions , and

restrictions on production by exporting countries to keep prices high could pose financial

strains on importers .

Net zero transitions are more likely to proceed smoothly if countries work together

constructively to minimise these risks. That is easier said than done, of course, but there are various ways in which exporting and importing countries could build up shared interests to avoid pitfalls . For example, t hey could work together on technology demonstration and joint

R&D projects to harness the potential for low- emissions energy in producer economies;

co-operat e to facilitate investment in low- emission s fuel trade; and strengthen bilateral and

multilateral engagement on a variety of energy -related issues . It is ultimately in everyone’s

interests that the transition to clean energy systems should be a smooth one. 20 40 60 80

25%50%75%100%

2022 2030 2040 2050

China India

Japan and Korea Southeast Asia

Other AsiaNet imports

Dependency

(right axis)EJ

25%50%75%100%

100 200 300 400

2022 2030 2040 2050

Middle East

Rest of world

Share of Middle East (right axis)ProductionEJ

IEA. CC BY 4.0.

Chapter 4 | Secure, equitable and co -operative transitions 165

4 4.3 Equity

Achieving net zero emissions by 2050 requires every country, every organisation and every

individual around the world to contribute to the clean energy transition. Yet today , the pace

of deployment of clean technologies remains highly uneven , with advanced economies and

China pulling far ahead while other emerging market and developing economies lag behind.

Within societies, there is a risk that the less well -off will see fewer benefits from the

transition unless supportive policies are put in place for a people -centred transition. This

section explor es the drivers of disparities in clean energy deployment and ways forward for

bringing clean energy to all (section 4.3.1) , the affordability of energy in the N ZE Scenario

(section 4.3.2) , and the best ways to manage the impact of a rapid transition on energy sector

employment (section 4.3.3) .

4.3.1 Accelerating clean energy deployment in emerging market and

developing economies

Energy consumption per capita is highly unequal across countries, and cl ean energy

consumption even more so. Among the countries for which IEA has comprehensive energy

statistics, the current Gini coefficient2 of energy inequality is 0.39 for all sources of energy

consumption and 0.46 for clean energy. Half of all the clean energy supplied is used by 15% of the global population , the majority of whom live in advanced economies ( Figure 4.6).

Figure 4.6 ⊳ Distribution of total final and clean energy consumption across

the global population, 2022

IEA. CC BY 4.0.

Energy use per capita is highly unequal across countries, and clean energy

consumption even more so, reflecting differences in income and wealth

Notes: The figure shows Lorenz curves; the closer the curve is to the 45 -degree line, the more equal values are

among countries. Clean energy excludes the traditional use of biomass.

2 The Gini coefficient is a measure of inequality typically used to measure income inequality, which has been

adopted in this section to evaluate inequality in energy consumption. 1 indicates perfect inequality (where

one group or one individual consumes or receives all the resources) while 0 indicates perfect equality. 25%50%75%100%

0% 25% 50% 75% 100%

Cumulative populationTotal final consumption

Clean energyCumulative energyPerfect

equality

IEA. CC BY 4.0.

166 International Energy Agency | Net Zero Roadmap

Figure 4.7 ⊳ Clean energy technology deployment normalised for population

and households by region, 2022

IEA. CC BY 4.0.

Clean energy technologies are deployed at a higher rate in advanced economies

and China than in other emerging market and developing economies

Note: BAT = best available technologies; AE = A dvanced economies; C & S America = Central and South

America; MENA = Middle East and North Africa.

Differences in access to clean energy vary markedly across technologies. Today, advanced

economies and China combined have nearly 2.5 -times more solar PV and wind capacity in

operation per person than the global average ( Figure 4.7). Wind and solar deployment p er 0.250.500.751.00

PopulationSolar PV and wind capacity (GW per million people)

European Union

United States

ChinaOther AE

C& S America

Other developing AsiaMENA

Sub-Saharan

AfricaEurasia

10 20 30 40

HouseholdsElectric car ownership (Units per thousand households)

European

Union United

States China

Other AE

Other developing AsiaMENA

Sub-Saharan

AfricaEurasia

C& S America

150 300 450 600

HouseholdsBAT appliances ownership (Units per thousand households)

European

UnionUnited States

ChinaOther AE

Other developing

AsiaMENA

Sub-Saharan

AfricaEurasia

C& S America

IEA. CC BY 4.0.

Chapter 4 | Secure, equitable and co -operative transitions 167

4 capita are particularly low in Africa. In 2022, the Netherlands had more solar PV capacity

installed than the whole of Africa, for example. More capital -intensive and less mature

technologies such as battery storage are the most unevenly deployed across regions. Less

capital -intensive technologies such as best -in-class efficient appliances and light -emitting

diode (LED) lighting systems are more evenly deployed. The disparities are not only a legacy

of the earlier start in the deployment of clean energy technologies by advanced economies :

similarly strong disparities are seen in recent capacity additions and new sales.

Concerted action at international and national level s is needed to address these disparities .

The main barriers include:

 Access to finance : Capital costs for renewables -based projects in emerging market and

developing economies remain at least double those in advanced economies ( Figure 4.8).

This reflects the relative lack of experience with clean energy technology in those

economies and their constrained policy and regulatory capacity in comparison with

advanced economies. It also reflects wider real or perceived macroeconomic risk s. The

higher financing costs that these economies face perpetuate s a lack of experience with

clean energy technologies, which creates a vicious circle of under deployment. Financial

support, for example through Just Energy Transition Partnerships, will be necessary , but

is not sufficient to help overcome these barriers . (Concessional finance, de -risking

instruments and other solutions are discussed in section 4.4.1.)

Figure 4.8 ⊳ Weighted average cost of capital for renewables and

renewables capacity per capita versus GDP per capita, 2022

IEA. CC BY 4.0.

The c ost of financing for renewables is more than two -times higher in the lowest income

countries than in high income countries, correlating with lower deployment per capita

Note: WACC = weighted average cost of capital; MER = market exchange rates.

Source: IEA analysis based on IRENA (2023) . 300600900

3%6%9%

<10 10-19 20-29 30-39 40-49 >50

MW per million people

GDP per capita (Thousand USD, [2015 MER])

WACC for renewables Normalised renewables capacity (right axis)

IEA. CC BY 4.0.

168 International Energy Agency | Net Zero Roadmap

 Policy environment: Supportive policies are vital to expand clean energy. Economic and

regulatory instruments such as standards and codes have been shown to boost the

adoption and utilisation of clean energy solutions (Nepal et al ., 2018; Pfeiffer and

Mulder, 2013) , and well -designed government policies play a central role in altering

incentive structures for private actors and encourag ing the uptake of new technologies.

Many emerging market and developing economi es have been less able to move forward

in these areas than advanced economies , often because of c ompeting political priorities

including economic development and poverty alleviation , and this gap is visible in the

different ambition levels set out in their Nationally Determined Contributions

(section 4.4.2).

 Innovation ecosystems : So far, f ew clean energy innovations have originated in

developing economies. Emerging market and developing economies o ther than China

accounted for only 5% of global public energy R&D funding, 3% of corporate energy R&D funding and 5% of energy venture capital funding in 2022 (IEA, 2023b) , while 90% of

patents for low- emissions energy between 2000 and 2020 were from advanced

econo mies and another 8% from China (IEA, 2021b) . Althoug h energy technologies

diffuse across country borders over time , there can be delays of over a decade between

early and late adopters , and much longer in some cases (Figure 4.9). Lowering barriers

to trade and foreign direct investment can help to foster technology diffusion , as can

increased engagement between countries in early -stage technologies (sect ion 4.4.3).

Figure 4.9 ⊳ Share of countries adopting selected technologies,

1970-2022

IEA. CC BY 4.0.

First adoption of energy technologies in emerging market and developing economies

in some cases has lagged over a decade behind advanced economies

Note: Power technologies are counted as adopted when at least 10 MW of capacity ha ve been installed. 25%50%75%100%

1970 1980 1990 2000 2010 2020

Steel: blast oxygen furnace Steel: electric arc furnace Nuclear

Wind Solar PVAdvanced economies

25%50%75%100%

1970 1980 1990 2000 2010 2020Emerging market and developing economies

IEA. CC BY 4.0.

Chapter 4 | Secure, equitable and co -operative transitions 169

4  Market size and conditions : In countries where market size is limited, economies of

scale are difficult to achieve and technology costs may remain high. In countries where

societal awareness and demand from consumers for clean energy is less pronounced, companies have fewer incentives t o invest in or switch to cleaner technologies (Suzuki ,

2015; Zeng et al ., 2022).

4.3.2 Enhancing clean energy affordability

Domestic trends mirror disparities at the international level. Even in countries that have achieved relatively high rates of clean technology deployment, there remain large groups of people who cannot afford the upfront premium of some clean energy technologies. Although

technology purchase costs decline over time as their scale of deployment increases – as has

been the case in China, where EVs are now often cheaper than ICE cars – there often remains

a significant “green premium” even for relatively mature technologies, and that can be

prohibitive for lower income or even median income households (Figure 4.10 ). As an

example, for Chinese or US households in the 25th percentile, a deep building retrofit – an

integrated set of energy conservation m easures to significantly improve overall building

performance – of an average size home can cost four to nine months of income, compared

with one to two months for households in the 75th percentile. In advanced economies, the

cost premium of buying a heat pump as opposed to a fossil fuel boiler is up to four months

of income for households in the 25th percentile .

Figure 4.10 ⊳ Purchase cost premium for clean energy technologies in

months of household income in selected countries, 2022

IEA. CC BY 4.0.

While often affordable for the rich, the cost premium of low -emissions efficient technologies

can be equivalent to several months of income for lower income households

Notes: Subsidies are not accounted for here. Costs are shown for average size cars, residential dwellings and

heat pumps. In China , electric cars on average are cost -competitive with ICE cars.

Sources: IEA analysis based on World Inequality, (2022) for income; JATO, (2021) for vehicle costs. 3 6 9

United

StatesFrance United

KingdomJapan China

Electric car vs ICE car Building retrofit vs none Heat pump vs fossil fuel boilerMonths of income25th percentile

3 6 9

United

StatesFrance United

KingdomJapan China75th percentile

IEA. CC BY 4.0.

170 International Energy Agency | Net Zero Roadmap

This green premium can prevent low income households from benefiting from the lower

operating costs that come with clean and energy -efficient technology options . For example,

heat pumps are three - to five -times more efficient than fossil fuel boilers, while induction

stoves are two - to three -times more efficient than gas stoves, and a household retrofit which

is deep enough to reduce energy consumption for space heating and cooling by 50% can

lower annual energy bills by more than 25% for a n average family in the United States . The

poorest households would benefit most from these savings on operating costs because they

spend more of their income on energy than richer households , even though their emissions

footprints are much smaller: the poorest 10% of the global population are responsible for a

mere 0.2% of energy sector CO 2 emissions, while the richest 10% are responsible for nearly

half (IEA, 2022a).

Poorer households need to be given careful consideration as clean technologies are rolled

out if countries are to achieve just transitions, and if national decarbonisation targets are not

to be at risk from lack of broad societal support. To help the poorest households afford

efficient low -emissions technologies, governments can build measures to address

inequalities in to the design of climate policies. For example, g rants and fiscal support for

clean technologies can be means -tested by income ( Table 4.1).

Table 4.1 ⊳ Means-tested clean technology household grant programmes

Country Programme Technology target Means testing criteria

Canada Oil t o Heat Pumps

Affordability Program Residential heat pumps Post -tax household income must be at

or below national median .

Ireland Fully funded energy

upgrades Residential efficiency

improvements including

improved insulation Households receiving welfare payments

are eligible .

France Vehicle conversion

premium Lower carbon, more

efficient vehicles For households with income below

EUR 22 983.

MaPrimeRénov Residential efficiency

improvements The a mount of the grant is scaled based

on income.

United

Kingdom Home Upgrade Grant Energy efficiency upgrades for off -gas-grid homes Funding is only available for low income

households.

United

States Inflation Reduction Act Clean Vehicle Credit New electric vehicles Household income must be below USD 300 000 for couples or

USD 150 000 for individuals .

Weatherization Assistance Program Residential energy efficiency improvements Households must be at or below 200% of the US poverty income guideline.

The costs of the clean energy transition are understandably a concern for all countries. I n

advanced economies, technology upgrades and energy efficiency retrofits translate into

substantial sav ings on energy bills. In emerging market and developing econom ies,

households also benefit from the more efficient use of energy, though modern energy

consumption increase s as rising incomes allow for larger residences and more appli ances.

New appliances need to meet ambitious energy efficiency standards in emerging market and

IEA. CC BY 4.0.

Chapter 4 | Secure, equitable and co -operative transitions 171

4 developing economies, where the coverage and stringency of these policies is lower today

than in advanced economies. In the NZE Scenario, over a billion people gain access to modern

energy by 2030, particularly in sub -Saharan Africa. While this results in new expenditure on

electricity and other modern fuels , it saves time previously spent on fuel wood collecti on in

rural areas and money previously spent on expensive charcoal in cities .

Carbon pricing policies and the phase -out of fossil fuel subsid ies raise fuel costs . These policy

changes need to be carefully designed and implemented to limit impacts on household

budgets and to sustain support for the clean energy transition . Fossil fuel subsidies reached

record levels in 2022 but are lar gely removed by 2030 in the NZE Scenario (Figure 4.11 ). This

has the benefit of lower ing the burden on government budgets compared with the Stated

Policies Scenario (S TEPS ), and does not prevent the provision of targeted support for the

energy costs of low income households through direct payment schemes or other means .

Targeted measures cos t much less than across -the-board subsidies , not least because

wealthier households consume more energy than poorer ones and therefore benefit

disproportionately from subsidy schemes . New and expanded carbon tax and emissions

trading systems provide important additional sources of revenue as the clean energy

transition progresses : these could be used in part to help low income households to afford

clean and more energy -efficient technolo gy options and reduce their energy bills.

Figure 4.11 ⊳ Annual cost of residential energy per household in emerging

market and developing economies in the STEPS and NZE

Scenario, 2022 and 2030

IEA. CC BY 4.0.

Phasing out energy subsidies and carbon pricing policies in emerging economies need to

be carefully designed and implemented to avoid negative impacts on consumers

Note: Energy spending includes other taxes and levies on fuels in addition to carbon pricing and excludes

transport fuel spending . 200 400 600 800

2022 2030 STEPS 2030 NZESubsidies

Carbon pricing

Energy spendingUSD (2022, MER)

IEA. CC BY 4.0.

172 International Energy Agency | Net Zero Roadmap

4.3.3 Managing the employment transition

The changes between now and 2030 in the NZE Scenario imply a rapid transformation in

energy emp loyment, with the demand for workers in clean sectors rising much faster than

the fall in fossil fuel- related jobs. Today, around 65 million people work in energy or key

energy -related sectors such as energy efficiency and vehicle manufacturing, and half o f these

jobs are already focus sed on clean energy .3 In the NZE Scenario, 30 million new clean energy

jobs are added by 2030 while close to 13 million jobs in fossil fuel -related industries are lost ,

meaning that around two clean energy jobs are created for every fossil fuel -related job lost

(Figure 4.12 ).

Figure 4.12 ⊳ Energy employment changes by sector in the NZE Scenario,

2022-2030

IEA. CC BY 4.0.

Approximately two clean energy jobs are created

for every fossil fuel -related job lost between today and 2030

Note: ICE = internal combustion engine; EVs = electric vehicles.

Employment in low -emissions electricity sees substantial growth in the NZE Scenario, with

solar PV and wind power adding around 3 million jobs each and employing a co mbined

11.5 million workers by 2030. The better -established end -use efficiency and electricity grid

labour forces also continue to expand throughout the decade, employing around 14 million

and 11.5 million people respectively in 2030, whereas emerging technologies such as

low ‑emission s hydrogen production or concentrating solar power see job opportunities

increase sharply by 2030.

3 See IEA World Energy Employment Report 2023 , (forthcoming) for more detailed information on energy

employment by sector and region. 20 40 60 80 100

2022 Gains Losses 2030Critical minerals

Low-emissions fuels

Grids and storage

Low-emissions power

End-use efficiency

EVs and batteries

ICE vehicles

Oil and gas supply

Coal supply

Unabated fossil fuel powerMillion workers

IEA. CC BY 4.0.

Chapter 4 | Secure, equitable and co -operative transitions 173

4 The sectors likely to see larger job losses, including fossil fuel supply and ICE vehicle

manufacturing , need to carefully plan for the changes ahead. This magnitude of job losses is

not unprecedented – i n China, the number of coal mining workers has nearly halved over the

last two decades due to labour productivity improvements (IEA, 2022 b). In some cases,

workers in activities that stand to lose jobs already possess skills and know -how that overlap

with growing energy sectors . Coal miners have many of the skills needed for the extraction

and processing of critical minerals, for example, whil e people working in conventional vehicle

manufacturing can apply their experience to EV manufacturing and battery assembly .

Workers leaving the oil and gas workforce are already highly sought -after by the chemical

industry and others . In many cases , howeve r, the jobs created by the energy transition will

not be in the same place, require the same skills, or pay the same wages as the jobs lost , such

that policies could play a role to support the workers and communities whose livelihoods

may be affected.

4.4 International c o-operation

The IEA’s 2021 Net Zero by 2050 report concluded that a lack of fair and effective

international co -operation would push back the date by which global net zero emissions are

achieved by decades (IEA, 2021 a). The report included the Low International Co- operation

Case which explored the implications of failing to co -operate on finance, trade and supply

chains, technology innovation and CO 2 removal. This section builds on this c ase and explores

several areas in which international co -operation needs to be strengthened .

4.4.1 Addressing financing barriers in emerging economies

Investment needs for net zero emissions

Recent trends in clean energy spending provide some encouraging signs at the global level .

Investment in clean energy outpac es investment in fossil fuels : for each USD 1 invested in

fossil fuels in 2023, we estimate that USD 1.8 will be invested in clean energy . Clean energy

investment today is dominated by the advanced economies and China . Some large

economies such as India and Brazil have recently seen strong growth in clean energy

investment , but it continues to lag investment in fossil fuels in other emerging market and

developing economies , with an estimated USD 250 billion set to be invested in clean energy

in 2023 compared to nearly USD 450 billion invested in fossil fuels.

While the recent global shift in investment towards clean energy shows that the transition is

well and truly underway, a much faster shift is needed to get on track for net zero emissions

by 2050, with an average of USD 10 needing to be invested in clean energy for each

USD 1 invested in fossil fuels by 2030. In total, annual clean energy investment reaches

USD 4.5 trillion by the early 2030s and USD 4.7 trillion by 2050 in the NZE Scenario, compared

with USD 1.6 trillion in 2022 ( Figure 4.13 ). Most of the increase in clean investment is in the

emerging market and developing e conomies ( other than China), where it rises fivefold in

the second half of the current decade compared wit h 2022, and more than sevenfold in the

second half of the 2040s.

IEA. CC BY 4.0.

174 International Energy Agency | Net Zero Roadmap

Figure 4.13 ⊳ Clean energy investment needs by region/country in the

NZE Scenario, 2022-2050

IEA. CC BY 4.0.

The b ulk of increased investment in clean energy is needed in emerging economies, other

than China; it rises more than sevenfold in the second half of the 2040s relative to 2022

In China and advanced economies, investment in low- emissions power has been rising

strongly because of supportive government policies and rapid cost declines in solar PV and

wind which have made those technologies attractive to investors. Investment in ele ctricity

networks and storage has not risen as quickly, and now needs to accelerate in order to meet

rising demand, modernise systems and ensure reliable service. Raising the level of

investment is a tougher undertaking in many developing economies , where state -owned

utilities are struggling to raise affordable capital as a result of rising interest rates, high levels

of existing debt and cash flow pressures related to electricity subsidies . Risks associated with

timely grid connections and curtailment are often cited by investors as barriers to developing

new renewables projects in these countries . The introduction of cost- reflective tariffs would

be particularly helpful in this context .

Global investment spending on clean energy peak s in the NZE Scenario at USD 4.8 trillion per

year between 2036 and 20 40. This very high level of investment lead s to significant savings

in fuel purchases, which fall from an average of about USD 8.2 trillion per year in 2018 -2022

to USD 7.5 trillion in 205 0 (a third lower than in the STEPS) ( Figure 4.14 ). Total fuel and

investment spending as a share of GDP peaks during the 2026-2030 period at 11. 2% before

falling to 6. 4% in 2050. Cumulative savings on fuel spending exceed additional capital

investment by 40% from 2031 through 2050, with net undiscounted savings equalling

USD 12 trillion. The benefits of clean energy transitions would be even higher if the benefits

associated with improved air quality and lower frequency of extreme climate events were

also taken into consideration. 0.51.01.52.0

2022

2026-30

2046-50

2022

2026-30

2046-50

2022

2026-30

2046-50Low-emissions fuels

Grid and storage

Low-emissions

power

Energy efficiency

and end-useOther EMDETrillion USD (2022, MER)Advanced economies China

IEA. CC BY 4.0.

Chapter 4 | Secure, equitable and co -operative transitions 175

4 Figure 4.14 ⊳ Global energy investment and spending on fuels in the STEPS and

the NZE Scenario, 2018-2050

IEA. CC BY 4.0.

Higher capital investment in clean energy in the NZE Scenario more than pays off in

reduced fuel spending with net undiscounted savings equalling USD 12 trillion

International co -operation to scale finance for clean energy

Many emerging market and developing economies struggle to finance new projects due to

rising debt levels and tightening fiscal conditions . Some have seen access to external

financing closed off. L arge emerging economies such as Brazil, India, Indonesia, Mexico and

South Africa can raise capital, but it cost s two- to three -times more than in advanced

economies ( Figure 4.15 ).

Closing the financing gap will require increased international co -operation between

countries and more active engagement with financial stakeholders to better understand the

barriers faced by emerging market and developing economies and the impact on the cost of

capital of the risks that investors are most concerned by. This would help to better target

policy interventions and inform the design and prioritisation of blended finance – the

strategic use of development finance and philanthropic funds to mobilise private capital

flows to emerging market and developing e conomies . The knowledge and experience gained

from successful projects could also be shared more widely with the aim of helping other

countries , while more standardisation in project structuring and preparation would facilitate

the development of new projects and ease due diligence processes . Stronger efforts will also

be needed to improve the availability and quality of data necessary for financial investors to better assess and hence manage risks. The provision of capacity building support by the international community would help .

Closing the gap wi ll also re quire the appropriate package of support. There are two important

points here. First, there is no single instrument on which to rely ; a mix of concessional

finance (below market rate loans), grants for project structuring and project preparation , 5%10%15%

5 10 15

STEPS NZE STEPS NZEFuel spending

Other energy

investment spending

Clean energy investment

spending

Total investment as a

share of GDP (right axis)Trillion USD (2022, MER)2018 -22 2026 -30 2046 -50

IEA. CC BY 4.0.

176 International Energy Agency | Net Zero Roadmap guarantees and other de -risking instruments (including to lower the cost of currency

hedging) is needed.4 Second , reaching scale will require a shift from direct financing of

projects towards more project de -risking with the aim of leveraging much higher multiples

of private finance and maximising the use of limited public funds. I nternational co -operation

and engagement with investors will be vital in this context.

Figure 4.15 ⊳ Cost of capital for various solar PV projects in selected countries,

2019 and 2021

IEA. CC BY 4.0.

Cost of capital for large emerging e conomies is two- to three -times higher than in

advanced economies, undermining the financial viability of new projects

Notes: WACC = weighted average cost of capital. Each dot corresponds to individual utility- scale projects .

Of course, t here is also the question of how much support is needed. A nalysis undertaken by

the IEA with the International Finance Corporation estimates that the NZE Scenario would

require USD 80 to 100 billion in annual concessional funding by the early 2030s to improve

risk adjusted returns to mobilise private capital at scale for clean energy investment (IEA and

IFC, 2023) . This is less than a fifth of what was spent in 2022 by governments in advanced

economies on measures to lower energy bills during the energy crisi s (IEA, 2023c). Africa

would require the largest share of support, accounting for 45% of estimated concessional

funding needs, followed by India and Latin America and the Caribbean , which would each

account for about 15% (Figure 4.16 ). Half of all concessional funds would support investment

in low -emissions power , and a third would support investment in e nd-use energy efficiency

and electrification. Low-emissions hydrogen, bioenergy and carbon capture and storage

(CCUS) together account for 14% , or almost twice their share in overall investment , reflecting

4 Not all investment will require concessional finance, nor will blended finance structures be appropriate in all

cases. Clean energy technologies such as solar PV and onshore wind already can be financed commercially in

several emerging economies. 4%8%12%16%20%

2018 2019 2020 2021 2022

Brazil India Indonesia Mexico South AfricaWACC

2019 2021

MedianRange for the

European Union

United States

and China

IEA. CC BY 4.0.

Chapter 4 | Secure, equitable and co -operative transitions 177

4 difficulties in obtaining commercial financing for such large -scale immature technologies.

Electricity networks and storage account for just 4%, which is less than their share in overall

investment, reflecting the fact that some state -owned utilities with high debt levels and/or

low credit ratings face significant difficulties to access private capital.

Figure 4.16 ⊳ Concessional funding needs for clean energy in selected

emerging market and developing economies and by sector

in the NZE Scenario

IEA. CC BY 4.0.

Africa requires the largest share of concessional funding;

low-emission s power accounts for half of all concessional funding needs

Note: Low -emission s fuels include bioenergy, low -emission s hydrogen and CCUS.

At the Conference of the Parties ( COP ) 15 in 2009, developed countries committed to a

collective goal of mobilising USD 100 billion per year by 2020 (extended to 2025 at COP 21)

to support climate action in developing countries . In 2020, public climate finance for energy,

transport and industry reached USD 31 billion and mobilised USD 9 billion in private capital

(OECD , 2022). In 2020, each USD 1 of public climate finance in the sector leveraged just

USD 0.3 of private finance. Average leverage ratios for private capital mobilisation need to

reach USD 6-7 by the early 2030s in the NZE Scenario.

Therefore , much more is needed to deliver on the commi tment made at COP 15 and to

provide what is needed in the NZE Scenario to put the world on course to global net zero

emissions by 2050. Moreover, considerable additional funding will be needed so that state -

owned enterprises that cannot at present access commercial capital are able to fund projects such as electricity network upgrades or energy efficiency improvements in public buildings.

A new collective quantified goal on climate finance ( NCQG ), is intended to be agreed by 2024

and to supersede the USD 100 billion target agreed at COP 15. Whatever is agreed will have 40 80 120

2026-30 2031-35Billion USD (2022, MER)Europe and Eurasia

Latin America and

the Caribbean

Other Asia

Southeast Asia

India

Africa

Middle EastBy region

Low -emissions

power 50%

Grids and storage 4%Efficiency

and end -use

32%Low -emissions

fuels 14%Bysector, 2026 -30

IEA. CC BY 4.0.

178 International Energy Agency | Net Zero Roadmap

major implications for the journey towards global net zero emissions by 2050 . Negotiations

on the NCQG should take account of the need to rapi dly scale up the amount of public climate

finance provided to emerging market and developing economies and the need to increase

the amount of private capital mobilised. C arbon credit financing could complement other

sources (Box 4.1). It will also be impor tant for providers to carefully consider how best to

allocate and target their contributions .

Box 4.1 ⊳ How can carbon markets contribute to scaling up nascent clean

energy technologies?

Nascent technologies and fuels such as direct air capture and storage (DACS), sustainable

aviation fuels and low -emissions hydrogen play an important role in the NZE Scenario.

However, s ecuring financing for demonstration and first -of-a-kind projects is hindered by

their high initial costs. I nitial projects may not offer the prospect of a short -term

commercial return, but they are needed to bring down costs through learning and

economies of scale, and thus to accelerate deployment.

Policy support for these technologies in the form of tax credits, advanced market

commitments, concessional loans and loan guarantees is gaining momentum. That

support is essential, but it may be insufficient to guarantee that planned projects are

implemented and new projects come forward . Private capital is also needed . Carbon

credit markets offer a potential means of providing it.

An example is DACS for which the current price of removing one tonne of CO 2 is in the

range USD 600-2 500, but it is clearly an important technology for the future and its costs

will come down as lessons are learned from initial projects. Today voluntary carbon

markets are underpinning most DACS projects, with growing purchases of D ACS credits

by firms and advance purchase commitments by demand aggregators such as Frontier.5

Sustainable aviation fuels (S AF) offer a second example. Producers of SAF today rely

mainly on off -take agreements for their revenues, but demand has been low because SAF

prices are three - to four -times higher than those of conventional jet fuel. SAF credits

could help to bridge the price gap premium , and a start on this is being made . For

instance, a pilot project was launched in July 2022 by GenZero , an in vestment company,

Singapore Airlines and the Civil Aviation Authority of Singapore to advance the use of

SAF. A total of 1 000 SAF credits w ere made available for sale, generated from the

1 000 tonnes of SAF to be used at Singapore Changi Airport. Each credit purchased will

reduce CO 2 emissions by 2.5 tonnes. In the European Union , there are plans to make

available 20 million allowances under the EU Emission Trading System , with a market

5 Frontier, a demand aggregator, is an advance market commitmen t to accelerate the development of carbon

removal technologies set up in early 2023 by a consortium comprising Stripe, Alphabet, Shopify, Meta and

McKinsey Sustainability. In June 2023, it announced its first purchases from six projects on behalf of Stripe

worth up to USD 7.8 million (Frontier, 2022).

IEA. CC BY 4.0.

Chapter 4 | Secure, equitable and co -operative transitions 179

4 value around EUR 2 billion, to cover some or all of the price gap betw een fossil kerosene

and SAF for the period 2024 -2030. A clear framework to account for the overlap of direct

GHG emissions from fuel combustion of airlines (or S cope 1 emissions ) with indirect GHG

emissions from private and business travel (or S cope 3 emissions ) would be important

for ensuring that SAF credits are used credibly to effectively reduce emissions from air

travel .

Carbon credit s could complement other sources of financing of low-emission s hydrogen

projects . The complexity of the supply chains involved means that it has not yet prove n

possible to establish such credits, but the Hydrogen for Net Zero (H2NZ) Initiative is

currently seeking to develop new crediting methodologies for the voluntary carbon

market aimed at unlocking carbon finance fo r hydrogen projects (South Pole, 2023) .

The credibility of carbon credits has suffered in recent years as a result of market design

imperfections and some cases of abuse . It is essential to ensure that carbon credits are

generated from real, verified, add itional and permanent emissions reductions or

removals . Applying industry guidelines such as those of the Integrity Council for the

Voluntary Carbon Markets Core Carbon Principles6 and following guidance under

Article 6 of the Paris Agreement should help in this respect. There also needs to be more

transparency on the action s taken by corporations in pursuit of their net zero emissions

strategies and other pledges, including their use of carbon credits, and more guidanc e on

how to formulate a CO 2 removal strategy . The Voluntary Carbon Markets Integrity

Initiative7 could be helpful here: among other things, its Claims Code of Practice should

help reduce instances of greenwashing.

4.4.2 Enhancing ambitions through the United Nations Framework

Convention on Climate Change and Global Stocktake

Under the 2015 Paris Agreement, countries agreed to co -operate to collectively limit the

global increase in temperature to well below 2 °C and to pursue efforts to limit it to 1.5 ° C

above pre-industrial levels. P rogressive strengthening of national climate goals and collective

action is central to the Paris Agreement. Its ratchet mechanism requires Parties to

communicate new or updated Nationally Determined Contributions (N DCs) of increasing

ambition every five years from 2020, based on the capability and capacity of each country ,

and informed by the Global Stocktake of progress between cycles ( Figure 4.17 ).

The five -year cycle between each round of NDC submissions is intended to strike a balance

between the need to give time to countries to formulate, implement and learn from their

NDCs, and the need for the level of ambition to be increased in the light of the urgent

requirement to tackle climate change. This urgency is reflected in the decisions taken at

6 https://icvcm.org/the- core- carbon -principles

7 https://vcmintegrity.org/

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180 International Energy Agency | Net Zero Roadmap

COP 26 in 2021 and COP 27 in 2022, which invited countries to strengthen their current

NDCs, rather than wait for the firs t Global Stocktake in 2023 before doing so, as requested

in the Paris Agreement. The response to these calls to strengthen ambitions of existing NDCs

was underwhelming (see Chapter 1). It is therefore critical that the next round of NDCs

should represent a true step -change in ambition and that a key outcome of the Global

Stocktake should be a requirement for all countries to submit more ambitious NDCs for the next cycle.

Figure 4.17 ⊳ Timeline of Nationally Determined Contribution submissions,

2015-2026

IEA. CC BY 4.0.

168 NDCs, representing 195 countries, had been submitted

to the UNFCCC by September 2023 , of which nearly 90% had been revised

Note: INDCs = Intended Nationally Determined Contributions ; NDCs = Nationally Determined Contributions;

COP = Conference of the Parties.

Transparency is also an important component of the co- operative framework of the Paris

Agreement. Befor e COP21, fewer than 80% of draft NDCs contained a quantified mitigation

target. As of September 2023, this share had increased to 9 1% in revised NDCs, significantly

facilitating the assessment of collective progress .

The Paris Agreement requests developed countries to adopt absolute emission s reduction

targets, while developing countries are only encouraged to do so in recognition of the fact

that for many of them , the NDC process was the first time they may have set mitigation

targets. To date, most NDCs from developing countr ies use either baseline scenario targets,

which mitigate emissions against a forward -looking counterfactual business -as-usual

baseline, or emission s intensity targets, which are relative to an economic or operationa l

variable such as GDP. As of September 2023, countries with low to medium income per capita

have mostly set baseline scenario targets, whereas countries with higher income per capita 20 40 60 80

2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025Number of submissionsCOP21

INDCs

First NDCsParis Agreement entry

into forceCOP26 COP28

First

Global

StocktakeCOP30

Second NDCs

Revised NDCs

2026

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Chapter 4 | Secure, equitable a nd co -operative transitions 181

4 have mostly adopted absolute emissions reductions targets (Figure 4.18 ). However, a

number of higher income countries have either not elaborated NDCs at all or have adopted

intensity or baseline NDCs that are not commensur ate with their level of development. In

the next round of NDCs, it is hard to see a good reason why any high -emitting , higher income

country should fail to adopt an absolute reduction target .

Figure 4.18 ⊳ Mitigation target types of current NDCs by country development

level

IEA. CC BY 4.0.

Most high income countries have set absolute emissions reductions targets;

for the second -round of NDCs, all high- emitting, high income countries should do so

4.4.3 Accelerati ng clean energy technology deployment

International co -operation will need to play a major role in a ccelerating the development

and diffusion of clean energy technologies around the world . We highlight the importance

of co -operation in three key areas: set standards for near zero and low-emissions materials

and fuels ; diversify clean energy technology supply chains ; and step up clean energy

demonstration projects.

Definitions and standards for clean products and fuels

Definitions and standards embody ing measurement protocols and environmental

performance thresholds can help to establish a common view of the way forward for various

technologies and sectors. For heavy industry and long -distance transport , they are needed

in particular to underpin polic ies designed to tackle hard- to-abate emissions . A package of

policy measures may include “demand pull” measures, for example to establish

differentiated markets for products and fuels produced with substantially fewer emissions 25 50 75 100

25%50%75%100%

1 2 3 4 5 6 7 8 9 10

Thousands USD (2022, PPP)Not defined

Intensity

Baseline scenario

Absolute emissions

reductions

Average GDP per

capita (right axis)

IEA. CC BY 4.0.

182 International Energy Agency | Net Zero Roadmap

than those produced with incumbe nt technologies, to develop clean public procurement8

protocols, and to define clean technology mandates. All of these depend on the existence of

agreed standards. It m ay also include “supply push” measures , for example to make it

possible to evaluate thr ough the use of agreed standards whether a given technology or

measure to reduce emissions deserves financial support, and if so to what extent .

Once emissions have been measured, thresholds can be used to differentiate production,

products and fuels accor ding to their environmental footprint. Such thresholds should be

designed to be stable, absolute and sufficiently ambitious to be compatible with a trajectory

for the global energy system that reaches net zero emissions by mid -century . They also need

to ta ke account of the specific characteristics of each sector, material and fuel, such as the

limited availability of certain inputs like scrap metal for recycling . Interim measures that

substantially lower emissions intensity but fall short of desired higher performance

thresholds should be recognised , but only in the context of longer term plans to reach those

higher thresholds. The IEA has recently put forward , as inputs to ministerial discussions

among the Group of 7 ( G7) members, common definitions for near zero emissions steel and

cement production as well as frameworks for measuring and collecting data on low-

emissions hydrogen (IEA, 2022c; IEA, 2023 d).

Severa l regulatory frameworks and certification systems defining the environmental

performance of fuels and materials are currently being developed in parallel (Figure 4.19 );

between which there are inconsistencies of approach. There is a significant risk that a lack of co-ordination may lead to a proliferation of varying standards, resulting in market

fragmentation, excessive administrative burden for companies, and a confusing landscape for customers and suppliers. The IEA has proposed net zero principles for emissions measurement methodologies for materials production that aim to guide revisions to existing methodologies and promote convergence and interoperability in the medium term (IEA,

2023e) . These principles stipulate that an emissions measurement methodology should

allow for comparison between production from all facilities. Emissions boundaries and scope should cover all major contributions to production and product emissions. Accounting rules for emissions credits and co -products should be compatible with a net zero emissions energy

system. In addition, methodologies should incentivise, wherever possible, the use of site -

and product -specific auditab le, measured data, as opposed to generic emissions estimates

or factors.

Stronger international co- operation is vital to limit the proliferation of multiple, competing

standards that risk slowing the clean energy transition. By aligning standards, countries can help create larger, shared markets for lower emissions fuels and materials , thus accelerating

cost red uctions. The newly established IEA Working Party on Industrial Decarbonisation, the

International Partnership for Hydrogen and Fuel Cells in the Economy, and the Clean Energy

Ministerial Hydrogen Initiative are relevant fora in which governments can collab orate on

this topic.

8 Clean procurement entails the procurement of goods and commodities that are produced and delivered in

ways that are compatible with clean energy transitions. The term green procurement is often used.

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Chapter 4 | Secure, equitable and co -operative transitions 183

4 Figure 4.19 ⊳ Emissions intensity thresholds for near zero and low -emissions

steel production as a function of the proportion of scrap used

IEA. CC BY 4.0.

While there are significant differences between the emissions intensity thresholds

proposed by various institutions, their long -term ambitions are very similar

Note s: kg CO 2 -eq/t = kilogramme of carbon dioxide equivalent per tonne. GSCC 2050 refers to the 2050 value

of the Steel Climate Standard produced by the Global Steel Climate Council, an association of steel producers.

The other thresholds are static over time and thus are not associated to a particular year. They correspond to

the SSAB f ossil -free standard developed by the steel producer SSAB, the ResponsibleSteel International

Standard developed by the non- profit multistakeholder certification initiative ResponsibleSteel (the threshold

is equivalent to and constitutes a public endorsement of the threshold put forwa rd by the IEA to the G7

Ministers in 2022), and the procurement requirements outlined by the First Movers Coalition, an initiative that

promotes private procurement in support of clean energy technologies.

Sources: ResponsibleSteel (2022) ; First Movers Coalition (2022) ; SSAB (2023); GSCC (2023) .

Recommended policy actions to advance international co -operation in setting standards and

definitions include (IEA, 2022c; IEA, 2023c; IEA, 2023d):

 Avoid the creation of new emissions measurement methodologies for materials and

fuels emissions intensity and focus efforts to tailor existing international protocols .

 Engage in the amendment and revision processes for existing emissions measurement

methodologies wherever possible .

 Engage in inclusive technical dialogues and co -ordination activities for measurement

methodologies and data collection for the emissions from mat erials and fuels

production .

 Engage in constructive dialogue about definitions that differentiate according to

emissions performance to identify areas of common understanding and establish ways

to make definitions interoperable, as well as to share knowledge on their potential use

in policy instruments. 100 200 300 400

0% 20% 40% 60% 80% 100%

Scrap share of metallics inputFirst Movers Coalition

ResponsibleSteel

SSAB

GSCC 2050kg CO₂ -eq/t of crude steel

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184 International Energy Agency | Net Zero Roadmap

Diversif y clean technology supply chains

Many supply chains for clean energy technologies are characterised by a high degree of

concentration , and t his entails major risks for security of supply. Concentration at any point

along a supply chain makes the entire chain vulnerable to disruption arising from individual

country policy choices , company decisions, natural disasters or technical failures. Disruption

of this kind is very likely to drive up prices of intermediate and final products and hamper

clean energy transitions .

Cle

an energy technology supply chains today are generally more geographically

concentrated than those of fossil fuels . Today just three countries account for about 90% of

global lithium mining output ; the equivalent figure s for cobalt, nickel and copper are 75%,

65% and 45% respectively. When it comes to production of key clean energy mass ‑

ma

nufactured technologies – solar PV modules, wind turbine nacelles , EV batteries and

electrolysers – just three countries account for 80 -90% of global capacity ( Fi

gure 4.20 ) (IEA,

2023f) . In the case of solar PV, some individual manufacturing plants in China can produce

more modules than entire countries . For instance, the LONGi plant in Taizhou – the largest

operating plant in China – could have supplied half of the capacity additions of solar PV

modules in the European Union in 2022 (38 GW).

Figure 4.20 ⊳ Current and projected geographic al concentration of

manufacturing operations for selected clean energy technologies

IEA. CC BY 4.0.

Announced projects – if all realised – will alter the global distribution

of manufacturing capacity for batteries, electrolysers and heat pumps

Notes: Wind refers to onshore wind nacelles in this figure . For electrolysers, it only includes projects for which

location data w ere available. Shares are based on manufacturing capacity. Current refers to installed capacity

data for 2022 and first quarte r 2023 where available. Pipeline refers to the sum of current installed capacity

and all announced manufacturing capacity additions (as of end of first quarter 2023) through to 2030. Other

refers to the aggregate of all capacity besides that of the top -three countries/regions for each technology and

timeframe. See The State of Clean Technology Manufacturing (IEA, 2023f ) for more details. 25%50%75%100%

Current

Pipeline

Current

Pipeline

Current

Pipeline

Current

Pipeline

Current

PipelineOther

United States

European Union

India

Viet Nam

ChinaSolar PV Heat pumps Wind Batteries Electrolysers

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Chapter 4 | Secure, equitable and co -operative transitions 185

4 The pipeline of announced projects for mass manufacturing of clean energy technologies

points to a limited fall in geogr aphic al concentration of some but not all clean technologies

in the coming years. I f all solar PV and wind projects that have been announced come to

fruition, concentration among the top -three producers would remain similar to current levels

by 2030 (85-90%), with China’s share remaining virtually unchanged (80% for solar, 65% for

wind). By contrast, if all announced manufacturing projects for batteries, electrolysers and

heat pumps come to fruition, the shares of the top -three producers would change , thoug h

China would still maintain a strong position . For example, the share of global battery

manufacturing capacity in China would fall to around two -thirds, while that of the United

States would jump to 15% and the European Union to 11% .

Policy makers need to balance the need to address overdependence on a limited range of

sources of materials and technologies on the one hand with the benefits of an open international trading system on the other. Dominance of clean energy technology supply

chains by a handful of countries presents obvious security concerns and will inevitably invite policy reactions from other countries. At the same time, overzealous moves to de -risk or

localise supply chains risk undermines the benefits of global supply chains, rais es costs and

hinder s the clean energy transition.

At their summit in May 2023, G7 countries expressed the importance of building resilient,

secure and sustainable supply chains to accelerate the clean energy transition and to reduce

vulnerabilities associated with undue dependencies (G7 Ministers of Climate, 2023) .

Countries can address risks at the domestic level by developing dedicated industrial strategies and making the most of their competitive advantages. International co -operation

will remain crucial to share lessons learned and to build partnerships as well as efforts to

ensure the smooth operation of regional and global supply chains.

Recomm ended policy actions to enhance supply chain diversity include:

 Identify the major clean energy technology supply chain risks that could delay or

disrupt deployment and hinder resilience in case of disruption. While much attention currently focuses on the security of supply of critical minerals, other elements could be problematic as well.

 Build strategic partnerships where it is not realistic or efficient to compete in a supply chain or supply chain segment. Identifying relative strengths and seeking

compl ementary partnerships should be central to industrial strategies for clean

technology manufacturing.

 Facilitate investment in emerging market and developing economies through pooled

investments, knowledge -sharing and other strategies designed to reduce ris ks for

capital -intensive components of supply chains and spread the benefits of the new clean

energy economy. Funding provisions for specific projects in appropriate cases should be

dependent on adequate environmental, social and governance regulations being in

place.

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186 International Energy Agency | Net Zero Roadmap

 Promote technologies and strategies to enhance resource efficiency , thereby

increasing the resilience of clean technology supply chains. Among other s,

manufacturing processes that minimise material use, technology designs that allow for

the use of substitute materials when security of supply is in question, and product

designs that facilitate re use, repairability and recyclability should be promoted through

innovation policy.

Step up clean energy technology demonstration projects

Accelerating innovation cycles for early stage clean energy technologies is vital to meet net

zero emissions goals. Bringing clean energy technologies under development today to

market by 2030 requires advancing from prototype to market significantly faster on average

than some of the quickest energy technology developments in the past. Such an acceleration

would require demonstrating technologies not yet available on the market quickly, at scale,

in multiple technical configurations and in various locations and situations. In most cases in

the NZE Scenario , these demonstrations run in parallel, in contrast with u sual practice

whereby learning is transferred across consecutive projects in different contexts to build

confidence before widespread deployment begins.

G

overnment support for clean energy demonstration s is crucial, particularly in sectors where

economies of scale favour large installations . Private financing is often hard to put in place

when large installations are necessary because of the very significant sums of money

involved (sometimes over USD 1 billion). This is much less of an issue with mass ‑

m

anuf actured equipment or digital consumer goods, where experimentation at commercial

scale can usually be carried out at much lower cost. In 2022, 16 governments together

committed USD 94 billion by 2026 for clean energy demonstration projects (US Department

of Energy, 2022) . The size of this commitment is broadly in line with the amount that the IEA

calculated was needed two years ago (IEA, 2021 a). If all this funding is forthcoming, it will

give a tremendous boost to the commercialisation of emerging technologies.

W

hile it is too early to match recent government pledges with new projects, IEA tracking

suggests that progress is underway in several c ritical areas (IEA, 2023g) . These include large -

scale solid oxide electrolysers for hydrogen production , industrial -scale hydrogen -based

steelmaking through direct reduced iron, carbon capture demonstrations in cement

production , first-of-a-kind direct air capture , small electric planes , low-emission s jet fuels

production , novel foundations for floating offshore wind turbines and small modular nuclear

reactors. Nearly 80% of around 200 recent demonstration programmes are in advanced

economies, primarily in Europe (5 5%) and North America (15%), with about 10% in China and

10% in other emerging market and developing economies.

When assessing the need for clean energy demonstrat ions, we assume a high level of

international co -operation . The s haring of knowledge and learning among stakeholders and

projects is critical to the process of making technological advances, and that remains true

even when projects fail . Information sharing among governments promotes more informed

policy making and helps ensure that new projects complement others taking place

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Chapter 4 | Secure, equitable and co -operative transitions 187

4 elsewhere. Without such co -operation , the number of projects would certainly be

unnecessarily larger and the portfolio more costly. International co -operation also increases

the chances that demonstration projects will take place in the best locations for those

projects , and that supply chains will operate smoothly to the benefit of those demonstration

projects.

Recommended policy actions to boost clean energy demonstration include:

 Incre ase engagement with emerging market and developing economies on clean

energy demonstrations. Technologies will generally be more commercially successful in

emerging market and developing economies if they are tested in the relevant climatic,

regulatory and market conditions.

 Set up international tracking mechanisms to measure progress and adjust priorities

over time . Such mechanisms can help to ensure that investments are focus sed in critical

areas, to share learnings with international partners and to build evidence- based

support for clean energy projects.

 Tap into existing multilateral initiatives . Existing fora such as the IEA Technology

Collaboration Programmes and Mission Innovation can help share technology and policy

best practice across borders, whil e multilateral financial institutions and development

banks have expert knowledge of how to share investment risks for large -scale projects.

 Share financ ing risks during the early stages of new technology deployment and send

clear demand signals thereafter. Even after they have been demonstrated successfully,

new technologies often face more risks than incumbent technologies. Instruments like

grants, public debt guarantees and concessional finance can help to mitigate these risks,

thereby increasing the likelihood of these technologies being able to secu re private

sector investment. Early signals that there will be a broader market in which to

participate can also increase the incentives to invest in demonstration projects and

initial deployment .

IEA. CC BY 4.0.

ANNEXES

IEA. CC BY 4.0.

Annex A | Tables for scenario projections 191 Annex A

Tables for scenario projections

General note to the tables

This annex includes global historical and projected data for the Net Zero Emissions by 2050

(NZE) Scenario for the following datasets :

A.1: Energy supply

A.2: Total final energy consumption

A.3: Electricity sector: gross electricity generation and electrical capacity

A.4: CO₂ emissions : carbon dioxide (CO 2) emissions from fossil fuel combustion and

industrial processes

A.5: Indicators and activity: selected economic and activity indicators

Definitions for regions, fuels and sectors are outlined in Annex B.

Abbreviations/acronyms used in the tables include: CAAGR = compound average annu al

growth rate; CCUS = carbon capture, utilisation and storage; EJ = exajoule; GJ = gigajoule;

GW = gigawatt; Mt CO₂ = million tonnes of carbon dioxide; TWh = terawatt -hour. Use of fossil

fuels in facilities without CCUS is classified as “unabated”.

Both i n the text of this report and in the se annex tables, rounding may lead to minor

differences between totals and the sum of their individual components. Growth rates are calculated on a compound average annual basis and are marked “n.a.” when the base year is zero or the value exceeds 200%. Nil values are marked “ -”.

The tables for scenario projections will be available for download as part of the World Energy

Outlook 2023 free dataset to be released at the end of October 2023 : https://iea.li/weo -data

Data sources

The Global Energy and Climate (GEC) Model is a very data -intensive model covering the

whole global energy system. Detailed references on databases and publications used in the

modelling and analysis may be found in Annex E of the World Energy Outlook 20231.

The formal base year for this year’s projections is 202 1, as this is the last year for which a

complete picture of energy demand and production is in place. However, we have used more

recent data wherever available, and we include our 202 2 estimates for energy production

and demand in this annex (Tables A.1 to A.3). Estimates for the year 202 2 are based on the

IEA CO 2 Emissions in 2022 report which are derived from a number of sources, including the

latest monthly data submissions to the IEA Energy Data Centre, other statistical releases from national administrations, and recent market data from the IEA Market Report Series that

cover coal, oil, natural gas, renewables an d power. Investment estimates include the year

2022 , based on the IEA World Energy Investment 202 3 report.

1 The World Energy Outlook 2023 will be released at the end of October 2023.

IEA. CC BY 4.0.

192 International Energy Agency | Net Zero Roadmap Historical data for gross power generation capacity (Table A.3) are drawn from the S&P

Global Market Intelligence World Electric Power Plants Databas e (March 202 3 version) and

the International Atomic Energy Agency PRIS database.

Definitional note: A.1 Table: Energy supply and transformation

Total energy supply (TES) is equivalent to electricity and heat generation plus the other

energy sector , excludi ng electricity, heat and hydrogen, plus total final consumption ,

excluding electricity, heat and hydrogen. TES does not include ambient heat from heat pumps or electricity trade. Solar in TES includes solar photovoltaic ( PV) generation,

concentrating solar power (CSP) and final consumption of solar thermal. Biofuels conversion

losses are the conversion losses to produce biofuels (mainly from modern solid bioenergy)

used in the energy sector. Low‐emissions hydrogen production is merchant low

-e

missions

hydrogen production (excluding onsite production at industrial facilities and refiner ies), with

inputs referring to total fuel inputs and outputs to produced hydrogen. While not itemised

separately, geothermal and marine (tidal and wave) energy are included in the renewables

item of TES and electricity and heat sectors . While not itemised separately, non‐re

newable

waste and other sources are included in TES.

Definitional note: A.2 Table: Energy demand

Sectors comprising total final consumption (TFC) include industry (energy use and

feedstock), transport and buildings (residential, servic es and non -specified other). While not

itemised separately, agriculture and other non ‐ene

rgy use are included in TFC. While not

itemised separately, non-renewable waste, solar thermal and g eothermal energy are

included in buildings , industry and TFC. Aviation and navigation include both domestic and

international energy demand . Energy demand from international marine and aviation

bunkers are included in global transport totals, and TFC .

Definitional note: A.3 Table: Electricity

Electricity generation expressed in terawatt -hours (TWh) and installed electrical capacity

data expressed in gigawatts (GW) are both provided on a gross basis , i.e. includes own use

by the generator. Projected gross electrical capacity is the sum of existing capacity and additions, less retirements. While not itemised separately, other sources are included in total

electricity generation. Installed capacity for hydrogen and ammonia refers to full conversion

only, not including co-firing with natural gas or coal.

Definitional note: A.4 Tabl e: CO 2 emissions

Total CO 2 includes carbon dioxide emissions : from the combustion of fossil fuels and

non-renewable wastes ; from industrial and fuel transformation processes (process

emissions); and CO 2 emissions from flaring and CO 2 removal. CO 2 removal includes : captured

and stored emissions from the combustion of bioenergy and renewable wastes ; from

biofuels production ; and from direct air capture (DAC).

IEA. CC BY 4.0.

Annex A | Tables for scenario projections 193 The first two entries are often reported as bioenergy with carbon capture and storage

(BECCS). Note that some of the CO 2 captured from biofuels production and direct air capture

is used to produce synthetic fuels , which is not included as CO 2 removal.

Total CO 2 captured includes the carbon dioxide captured from CCUS f acilities, such as

electricity generation or industry, and atmospheric CO 2 captured through direct air capture,

but excludes that captured and used for urea production. Aviation and navigation include

both domestic and international emissions.

Definitional note: A.5 Table: Economic and activity indicators

The emission intensity expressed in kilogrammes of carbon dioxide per kilowatt -hour ( kg CO 2

per kWh) is calculated based on electricity -only p

lants and the electricity component of

combined heat and power (CHP) plants2. Primary chemicals include ethylene, propylene,

aromatics, methanol and ammonia. Industrial production data for aluminium excludes

production based on internally generated scrap. Heavy -duty trucks activity includes freight

activity of medium freight trucks and heavy freight trucks . Aviation activity includes both

domestic and international flight activity . Shipping activity refers to international shipping

activity.

Abbre

viations used include: GDP = gross domestic product; GJ = gigajoul es; m2 = square

metres Mt = million tonnes; pkm = passenger -kilo

metres; PPP = purchasing power parity;

tkm = t onnes -kilom

etres .

Annex A licencing

Subject to the IEA’s Notice for CC -licenced Content, this Annex A to Net Zero Emissions by

2050: A Roadmap for the Global Energy Sector – 2023 Update is licensed under a Creative

Commons Attribution -NonCommercial -ShareAlike 4.0 International Licence.

2 To derive the associated electricity -only emission s from CHP plants, we assume that the heat production of

a CHP p

lant is 90% efficient and the remainder of the fuel input is allocated to electricity generation.

A

IEA. CC BY 4.0.

194 International Energy Agency | Net Zero Roadmap Table A.1: World energy supply

2010 2021 2022 2030 2035 2040 2050 2022 2030 2050 2030 2050

Total energy supply 541 624 632 573 535 528 541 100 100 100 -1.2 -0.6

Renewables 43 71 75 166 241 306 385 12 29 71 10 6.0

1 5 7 35 66 97 138 1 6 26 23 11

1 7 8 25 43 61 84 1 4 16 16 9.0

12 15 16 20 24 27 30 2 3 5 2.9 2.3 23 33 35 55 65 71 73 6 10 13 5.8 2.6

2 4 4 11 13 13 11 1 2 2 13 3.3 Solar Wind Hydro Modern solid bioenergy Modern liquid bioenergy Modern gaseous bioenergy 1 1 1 7 9 11 15 0 1 3 22 9.0

25 24 24 - - - - 4

30 31 29 43 55 63 67 5 - - n.a. n.a.

8 12 5.0 3.0

115 146 144 112 68 40 14 23 20 3 -3.0 -8.1

0 1 1 6 9 13 18 0 3 35 13 Traditional use of biomass

Nuclear

Unabated natural gasNatural gas with CCUSOil 173 182 187 148 110 79 42 30 8 -2.8 -5.2

Non-energy use 25 31 32 35 34 33 30 5 6 1.3 -0.1

Unabated coal 153 167 170 93 43 16 3 27 1 -7.3

Coal with CCUS - 0 0 2 7 10 12 0 1

26

6

16

0 2 87 -14

27

Electricity and heat sectors 200 244 247 256 277 319 393 100 100 100 0.4 1.7

Renewables 20 39 41 103 167 228 306 17 40 78 12 7.4

Solar PV 0 4 5 29 56 80 112 2 11 29 26 12

Wind 1 7 8 25 43 61 84 3 10 21 16 9.0

Hydro 12 15 16 20 24 27 30 6 8 8 2.9 2.3

Bioenergy 4 9 9 17 24 30 36 4 6 9 7.3 4.9

Hydrogen - - - 2 4 5 6 2 n.a. n.a.

Ammonia - - - 1 2 2 2 - 1

- 0 1

Nuclear 30 31 29 43 55 63 67 12 17 17 n.a. n.a.

5.0 3.0

Unabated natural gas 47 57 57 49 25 11 1 23 19 0 -1.7 -13

Natural gas with CCUS - - - 0 2 2 3 - 0 1 n.a. n.a.

Oil 11 8 8 2 1 0 0 3 1 0 -17 -23

Unabated coal 91 108 110 53 16 0 21 - -8.9

Coal with CCUS - 0 0 2 5 6 - 45

7 0 1 2 102 n.a.

29

Other energy sector 50 64 65 64 64 70 78 100 100 100 -0.2 0.7

Biofuels conversion losses - 5 6 14 16 16 12 100 100 100 11 2.6

Low-emissions hydrogen (offsite)

0 9 20 33 54 100 100 100 n.a. n.a. Production inputsProduction outputs- 0- 0 0 6 14 23 39 100 100 100 144 38

For hydrogen-based fuels - - - 2 5 10 17 - 31 43 n.a. n.a.Shares (%)CAAGR (%)

2022 to:Net Zero Emissions by 2050 Scenario (EJ)

IEA. CC BY 4.0.

Annex A | Tables for scenario projections 195 Table A.2: World final energy consumption

2010 2021 2022 2030 2035 2040 2050 2022 2030 2050 2030 2050

Total final consumption 383 436 442 406 379 360 343 100 100 100 -1.1 -0.9

Electricity 64 87 89 113 133 154 183 20 28 53 3.0 2.6

Liquid fuels 154 168 172 150 120 94 62 39 37 18 -1.7 -3.6

Biofuels 2 4 4 11 13 13 11 1 3 3 13 3.3

Ammonia - - - 1 2 2 4 1 n.a. n.a.

Synthetic oil - - - 0 1 2 6 - 0- 0 2 n.a. n.a.

Oil 151 164 168 138 104 76 41 38 34 12 -2.4 -4.9

Gaseous fuels 58 72 71 61 52 45 41 15 12 -1.8 -2.0

Biomethane 0 0 0 4 6 6 8 1 2 42 13

Hydrogen - 0 0 2 5 8 16 16

0 0 1 5 113 33

Synthetic methane - - - - - - - - - - n.a. n.a.

Natural gas 57 72 70 54 41 29 15 16 13 4 -3.2 -5.3

Solid fuels 92 93 63 45 35 21 10 -4.8 -3.4

Solid bioenergy 39 40 24 26 28 9 8 -6.1 -1.2

Coal 52 52 38 18 7 12 2 -3.9 -6.9

Heat 95

38 56

12 15 15 12 54

26 27

11 9 6 3 15

6 9

3 2 -2.1 -3.2

Industry 143 167 167 175 173 169 159 100 100 100 0.6 -0.2

27 37 38 52 62 70 79 23 30 49 4.2 2.7 ElectricityLiquid fuels 29 33 32 34 32 29 24 19 19 15 0.7 -1.0

29 33 32 34 31 28 23 19 19 14 0.5 -1.2 Oil

Gaseous fuels 24 31 30 30 28 25 21 18 17 13 -0.1 -1.3

0 0 0 1 2 3 4 0 1 3 43 15 Biomethane Hydrogen 0 1 2 4 5 0 1 3 137 36

30 27 21 16 6 18 15 4 -1.5 -5.3 Unabated natural gas Natural gas with CCUS- 0

24 31

- 0 0 1 2 3 5 0 1 3 46 18

Solid fuels 58 58 59 52 45 38 29 35 30 18 -1.5 -2.5

10 11 15 18 20 22 7 9 14 4.2 2.5 8

49 47 47 36 24 15 2 28 20 1 -3.5 Modern solid bioenergy Unabated coal Coal with CCUS 0 1 2 4 5 0 0 3 71 -10

25

Heat- 0

5 7 7 5 4 3 1 4 3 1 -3.9 -6.1

Chemicals 38 48 48 54 55 55 51 29 31 32 1.6 0.2

Iron and steel 31 37 35 34 32 30 26 21 19 17 -0.6 -1.0

Cement 9 12 12 12 11 11 10 7 7 6 -0.4 -0.7

Aluminium 5 7 7 7 6 6 5 4 4 3 -0.4 -1.1Share

s (%)CAAGR (%)

2022 to:Net Zero Emissions by 2050 Scenario (EJ)

A

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196 International Energy Agency | Net Zero Roadmap Table A.2: World final energy consumption (continued)

2010 2021 2022 2030 2035 2040 2050 2022 2030 2050 2030 2050

Transport 102 112 116 105 89 79 76 100 100 100 -1.3 -1.5

Electricity 1 1 2 8 15 25 38 1 8 51 23 12

Liquid fuels 97 106 110 92 69 49 26 94 88 35 -2.2 -5.0

Biofuels 2 4 4 10 12 11 8 4 10 11 12 2.6

Oil 95 102 105 81 55 33 8 91 77 10 -3.3 -8.9

Gaseous fuels 4 5 5 5 4 5 11 5 4 15 -1.9 2.7

Biomethane 0 0 0 0 0 0 0 0 0 0 18 5.1

Hydrogen 0 1 2 4 10 0 1 14 98 32

Natural gas- 0

4 5 5 3 2 1 0 4 3 0 -5.6 -11

Road 76 87 89 74 60 52 47 76 71 62 -2.2 -2.2

Passenger cars 38 44 45 32 22 17 15 38 30 20 -4.1 -3.7

Heavy-duty trucks 21 26 27 27 26 24 22 23 26 29 0.2 -0.8

Aviation 11 9 11 15 14 14 15 10 14 20 3.5 1.2

Shipping 10 11 11 11 10 10 10 10 11 13 0.1 -0.4

Buildings 117 131 133 100 92 89 89 100 100 100 -3.4 -1.4

35 45 46 48 51 55 62 35 48 70 0.5 1.1 Electricity

Liquid fuels 13 13 13 9 5 3 1 10 9 1 -5.1 -8.5

Biofuels - - - 0 0 0 0 - 0 0 n.a. n.a.

13 13 13 9 5 3 1 10 9 1 -5.2 -9.5 Oil

Gaseous fuels 31 31 22 15 10 5 22 5 -4.1 -6.5 27

0 0 0 2 3 3 3 23

0 2 3 53 14

- - - 0 0 0 0 - 0 0 n.a. n.a. Biomethane Hydrogen Natural gas 26 31 30 19 11 5 0 23 19 0 -5.8 -22

Solid fuels 35 32 32 9 8 6 6 9 6

Modern solid bioenergy 4 4 4 8 8 6 6 24

3 8 6 -14 -6.0

8.4 1.0

Traditional use of biomass 25 24 24 - - - - 18 - - n.a. n.a. Coal 6 4 4 1 0 0 0 1 0 -14 -26

Heat 6 7 7 7 6 6 5 3

5 7 5 -0.5 -1.7

Residential 83 93 93 65 59 57 58 71 65 65 -4.4 -1.7

Services 34 38 39 35 33 31 31 29 35 35 -1.3 -0.8Shares (%)CAAGR (%)

2022 to:Net Zero Emissions by 2050 Scenario (EJ)

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Annex A | Tables for scenario projections 197 Table A.3: World electricity sector

2010 2021 2022 2030 2035 2040 2050 2022 2030 2050 2030 2050

Total generation 21 21 533 8 346 28 2 29 29 033 38 38 207 7 427 47 4 9 111 59 5 76 76 838 100 100 100 3.5 3.5

Renewables 4 209 7 964 8 599 532 22 36 36 739 50 50 459 8 430 68 6 30 59 89 13 7.7

32 1 023 1 291 4 21 41 26 12

342 1 865 2 125 8 177 15 439 22 241 31 237

7 070 11 923 16 826 23 442 7 19 31 16 9.0

3 456 4 299 4 378 5 507 6 530 7 435 8 225 15 14 11 2.9 2.3 Solar PV Wind Hydro Bioenergy 309 666 687 1 885 2 396 3 056 2 3 4 8.4 5.5

- - - 300 471 644 - 0 1 n.a. n.a. of which BECCS CSP 2 15 16 414 831 1 486 0 0 2 31 18

Geothermal 96 101 508 662 862 1 1 7.9 68

1 1 1 39 67 123 0 0 19 Marine

Nuclear 2 756 2 810 2 682 4 952 5 583 6 015 0 0 9 10 8 15 44

4.9 2.9

- - 745 1 028 1 161 - 1 2 n.a. n.a. Hydrogen and ammoniaFossil fuels with CCUS 681 847 996 0 1 1 105 30 - 1- 1-

1 1 455 547 644 0 0 1 97 28 Coal with CCUS Natural gas with CCUS - - -1 313

65

139 306

19

3 936

373

220 156

64 226 301 353 - 0 0 n.a. n.a.

Unabated fossil fuels 14 14 479 17 17 456 17 636 11 066 4 241 1 121 158 61 29 0 -5.7 -15

669 8 8 0 247 10 1 0 427 10 1 4 988 1 379 - - 36 13 - -8.8 n.a.

4 847 6 526 6 500 5 943 2 834 1 119 158 22 16 0 -1.1 -12 Coal Natural gas Oil 963 683 709 135 28 2 1 2 0 0 -19 -23

2010 2021 2022 2030 2035 2040 2050 2022 2030 2050 2030 2050

Total capacity 5 5 187 8 8 230 8 8 643 6 180 16 1 23 23 067 29 29 354 36 36 956 100 100 100 8.2 5.3

Renewables 1 333 3 292 3 629 11 008 17 17 460 23 23 331 30 30 275 42 68 82 15 7.9

39 925 1 145 6 101 10 430 14 303 18 753 13 38 51 23 11

181 827 902 2 742 4 322 5 797 7 616 10 17 21 15 7.9

1 027 1 360 1 392 2 054 2 313 2 612 16 11 7 3.0 2.3 Solar PV Wind Hydro Bioenergy 74 159 168 426 541 688 2 2 2 7.3 5.2

- - - 59 87 114 - 0 0 n.a. n.a. of which BECCS CSP 1 6 7 134 251 427 0 0 1 27 16

Geothermal 15 15 78 99 129 0 0 8.0

1 1 16 27 48 0 0 16 Marine

Nuclear 10

0

403 413 417 688 813 916 0 0 5 3 2 16 34

3.3 2.9

- - 367 447 427 - 1 1 n.a. n.a. Hydrogen and ammoniaFossil fuels with CCUS 141 203 241 0 0 1 113 31 - 0- 0-

0 0 95 131 153 0 0 0 104 29 Coal

with CCUS

Natural gas with CCUS - - - 46 72 89 - 0 0 n.a. n.a.

Unabated fossil fuels 3 439 4 480 4 535 2 453 1 710 892 52 21 2 -3.5 -5.6

1 614 2 236 910 548 242 9 1 -5.2 -7.6

1 389 1 875 1 402 1 088 611 11 2 -0.9 -3.9 Coal Natural gas Oil 436 2 200 1 854

426 423 141 75 39 1 0 -7.8 -8.2

Battery storage 1 27 45 1 765

296

15 48 48

8

541

129

50 36 14

3 423

1 457 1 746

220

1 018 1 949 2 841 4 199 26 22

5

1 6 11 48 18 Shares (%)CAAGR (%)

2022 to:

Shares (%)CAAGR (%)

2022 to:Net Zero Emissions by 2050 Scenario (TWh)

Net Zero Emissions by 2050 Scenario (GW)

A

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198 International Energy Agency | Net Zero Roadmap Table A.4: World CO 2 emissions

2010 2021 2022 2030 2035 2040 2050 2030 2050

Total CO2* 32 877 36 589 36 930 24 030 13 375 6 471 - -5.2 n.a.

Combustion activities (+) 30 624 33 634 34 042 21 958 12 017 5 820 655 -5.3 -13

13 846 15 104 15 330 8 173 3 541 1 200 171 -7.6 -15

10 545 10 683 10 963 7 910 5 325 3 219 824 -4.0 -8.8

6 052 7 577 7 499 5 795 3 327 1 780 358 -3.2 -10Coal

OilNatural gas

Bioenergy and waste 181 269 251 80

Other removals** (-) 2 167

Biofuels production 2 98 -13

78

67n.a.

25

21

Direct air capture- 1

- 1

- - - 69 - 176

348

186

162- 379

523

227

295- 698

933

312

621 n.a. n.a.

Electricity and heat sectors 12 511 14 598 14 822 8 113 2 854 411 -7.3 n.a.

Coal 8 946 10 646 10 876 5 156 1 545 42 - 275

21 -8.9 -20

Oil 828 574 596 135 45 23 0 -17 -23

Natural gas 2 623 3 227 3 201 2 781 1 401 604 78 -1.7 -12

Bioenergy and waste 114 151 149 41 - 138 - 257 - 374 -15 n.a.

Other energy sector** 1 438 1 530 1 554 782 322 108 - 198 -8.2 n.a.

Final consumption** 18 668 20 191 20 293 15 187 10 350 6 241 1 088 -3.6 -9.9

Coal 4 699 4 355 4 352 2 983 1 971 1 142 138 -4.6 -12

Oil 9 087 9 552 9 815 7 398 4 993 2 989 711 -3.5 -9.0

Natural gas 2 842 3 566 3 500 2 543 1 718 1 036 173 -3.9 -10

Bioenergy and waste 66 118 102 43 - 26 - 93 - 205 -10 n.a.

Industry** 8 324 9 185 8 998 7 158 5 111 3 222 440 -2.8 -10

1 201 1 329 1 330 1 150 850 521 45 -1.8 -11

2 083 2 733 2 623 2 118 1 584 1 032 233 -2.6 -8.3

1 916 2 514 2 418 1 911 1 343 875 79 -2.9 -12Chemicals**Iron and steel**Cement**Aluminium** 185 261 265 218 172 107 8 -2.4 -12

Transport 7 014 7 599 7 874 5 992 4 062 2 430 578 -3.4 -8.9

Road 5 216 5 847 5 964 4 213 2 718 1 491 236 -4.2 -11

Passenger cars 2 609 2 930 2 975 1 752 916 403 37 -6.4 -14

1 489 1 766 1 812 1 610 1 284 856 178 -8.0 Heavy-duty trucks

Aviation 754 661 792 932 744 554 208 -1.5

2.0 -4.7

797 827 855 695 495 313 112 -2.6 -7.0 Shipping

Buildings 2 891 2 973 2 979 1 741 971 463 54 -6.5 -13

1 961 2 013 1 997 1 189 675 326 48 -6.3 -12 ResidentialServices 929 959 983 552 296 137 6 -7.0 -16

Total CO

2 removals** - 2 2 234 632 995 1 710 85 28

Total CO2 captured** 15 41 42 1 024 2 421 3 724 6 040 49 19

*Includes industrial process and flaring emissions.

**Includes industrial process emissions.CAAGR (%)

2022 to:Net Zero Emissions by 2050 Scenario (Mt CO2)

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Annex A | Tables for scenario projections 199 A Table A.5: Economic and activity indicators

2010 2021 2022 2030 2035 2040 2050 2030 2050

Indicators

6 967 7 884 7 950 8 520 8 853 9 161 9 681 0.9 0.7

463 114 505 158 163 734 207 282 066 238 270 050 339 273 3.0 2.6

16 429 20 104 20 596 24 329 26 892 29 479 35 044 2.1 1.9

4.7 3.9 3.9 2.8 2.3 2.0 1.6 -4.1 -3.1

3.2 2.6 2.6 1.9 1.5 1.3 1.0 -3.9 -3.3Population (mi llion)

GDP (USD 2022 billion, P PP)

GDP per cap ita (U SD 2022, PPP)

TES/GDP (GJ per U SD 1 000, P PP)

TFC/GDP (GJ per U SD 1 000, PPP)

CO₂ intensity of electricity

generation (g CO₂ per kWh) 528 464 460 186 48 3 - 4 -11 n.a.

Industrial production (Mt)

Primary chemicals 515 713 719 861 905 916 878 2.3 0.7

Steel 1 435 1 960 1 878 1 973 1 966 1 958 1 957 0.6 0.1

Cement 3 280 4 374 4 158 4 264 4 140 4 022 3 934 0.3

Aluminium 62 105 108 120 128 136 146 1.4 -0.2

1.1

Transport

18 984 25 679 26 535 28 608 30 355 33 841 41 638 0.9 1.6

23 364 29 482 30 479 38 037 43 341 49 036 60 335 2.8 2.5

3 673 6 025 10 969 11 417 12 843 16 545 7.8 3.7 Passenger cars (billion pkm)Heavy-duty trucks (billion tkm)Aviation (billion pkm)Shipping (billion tkm) 77 101 115 830 124 272 145 087 165 073 188 756 265 253 2.0 2.7

BuildingsHouseholds (million) 1 798 2 175 2 208 2 439 2 579 2 715 2 963 1.2 1.1

153 219 194 691 198 090 227 039 247 262 268 130 310 109 1.7 1.6 Residential floor area (million m²)Services floor area (million m²) 39 262 53 415 54 624

63 891 69 197 74 143 82 764 2.0 1.5Net Zero Emissions by 2050 ScenarioCAAGR (%)

2022 to:

4 923

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Annex B | Definitions 201 Annex B

Definitions

This annex provides general information on terminology used throughout this report

includi ng: units and general conversion factors; definitions of fuels, processes and sectors;

regional and country groupings; and abbreviations and acronyms.

Units

Area km2 square kilometre

Mha million hectares

Batteries Wh/kg watt hours per kilogramme

Coal Mtce million tonnes of coal equivalent (equals 0.7 Mtoe)

Distance km kilometre

Emissions ppm parts per million (by volume)

t CO 2 tonnes of carbon dioxide

Gt CO 2-eq gigatonnes of carbon -dioxide equivalent (using 100 -year

global warming potentials for different greenhouse gases)

kg CO 2-eq kilogrammes of carbon -dioxide equivalent

g CO 2/km

g CO 2/kWh grammes of carbon dioxide per kilometre

grammes of carbon dioxide per kilowatt -hour

kg CO 2/kWh kilogrammes of carbon dioxide per kilowatt -hour

Energy EJ exajoule (1 joule x 1018)

PJ petajoule (1 joule x 1015)

TJ terajoule (1 joule x 1012)

GJ gigajoule (1 joule x 109)

MJ megajoule (1 joule x 106)

boe barrel of oil equivalent

toe tonne of oil equivalent

ktoe thousand tonnes of oil equivalent

Mtoe million tonnes of oil equivalent

bcme billion cubic metres of natural gas equivalent

MBtu million British thermal units

kWh kilowatt -hour

MWh megawatt -hour

GWh gigawatt -hour

TWh terawatt -hour

Gcal gigacalorie

Gas bcm billion cubic metres

tcm trillion cubic metres

Mass kg kilogramme

t tonne (1 tonne = 1 000 k g)

kt kilotonnes (1 tonne x 103)

Mt million tonnes (1 tonne x 106)

Gt gigatonnes (1 tonne x 109)

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202 International Energy Agency | Net Zero Roadmap Monetary USD million 1 US dollar x 106

USD billion 1 US dollar x 109

USD trillion 1 US dollar x 1012

USD/t CO 2 US dollars per tonne of carbon dioxide

Oil kb/d thousand barrels per day

mb/d million barrels per day

mboe/d million barrels of oil equivalent per day

Power W watt (1 joule per second)

kW kilowatt (1 watt x 103)

MW megawatt (1 watt x 106)

GW gigawatt (1 watt x 109)

TW terawatt (1 watt x 1012)

General conversion factors for energy

Multiplier to convert to:

EJ Gcal Mtoe MBtu bcm e GWh Convert from: EJ 1 2. 388 x 108 23.88 9.478 x 108 27.78 2.778 x 105

Gcal 4.1868 x 10-9 1 10-73.968 1 .163 x 10-7 1.163 x 10-3

Mtoe 4.1868 x 10-2 107 1 3.968 x 107 1.163 11 630

MBtu 1.0551 x 10-9 0.252 2.52 x 10-8 1 2.932 x 10-8 2.931 x 10-4

bcm e 0.036 8. 60 x 106 0.86 3.41 x 107 1 9 999

GWh 3.6 x 10-6 860 8.6 x 10-5 3 412 1 x 10-4 1

Note: There is no generally accepted definition of boe; typically, the conversion factors used vary from 7.15 to

7.40 boe per toe. Natural gas is attributed a low heating value of 1 MJ per 44.1 kg. Conversions to and from

billion cubic metres of natural gas equivalent (bcme) are given as representative multipliers but may differ

from the average values obtained by converting natural gas volumes between IEA balances due to the use of

country- specific energy densities. Lower heating values (LHV) are used throughout.

Definitions

Advanced bioe nergy: Sustainable fuels produced from non -foo d crop feedstocks, which are

capable of delivering significant life cycle greenhouse gas emissions savings compared with

fossil fuel alternatives, and which do not directly compete with food and feed crops for

agricultural land or cause adverse sustainability impacts. This definition differs from the one used for “advanced biofuels” in US legislation, which is based on a minimum 50% life cycle

greenhouse gas reduction and, therefore, includes sugar cane ethanol.

Agr

iculture: Includes all energy used on farms, in forestry and for fishing.

Agriculture, forestry and other land use (AFOLU) emissions: Includes greenhouse gas

emissions from agriculture, forestry and other land use.

IEA. CC BY 4.0.

Annex B | Definitions 203 B Ammonia (NH 3): Is a compound of nitrogen and hydrogen. It can be used as a feedstock in

the chemical sector, as a fuel in direct combustion processes or in fuel cells, and as a

hydrogen carrier. To be considered a low -em

issions fuel, ammonia must be produced from

low-emissions hydrogen. Produced in such a way, ammonia is considered a low -em

issions

hydrogen -ba

sed liquid fuel.

Avi

ation: This transport mode includes both domestic and international flights and their use

of aviation fuels. Domestic aviation covers flights that depart and land in the same country;

flights for military purposes are included. International aviation includes flights that land in

a country other than the departure location.

Bac

k-up generation capacity: Households and businesses connected to a main power grid

may also have a source of back -up

power generation capacity that, in the event of disruption,

can provide electricity. Back -up

generators are typically fuelled with diesel or gasoline or

based on solar PV and battery technologies . Capacity can be as little as a few kilowatts. Such

capacity is distinct from mini -gr

id and off - gr

id systems that are not connected to a main

power grid.

Ba

ttery storage: Energy storage technology that uses reversible chemical reactions to absorb

and release electricity on demand.

Bi

odiesel: Diesel -eq

uivalent fuel made from the transesterification (a chemical process that

converts triglycerides in oils) of vegetable oils and animal fats.

Bi

oenergy: Energy content in solid, liquid and gaseous products derived from biomass

feedstocks and biogas. It includes solid bioenergy, liquid biofuels and biogases.

Bio

gas: A mixture of methane, CO 2 and small quantities of other gases produced by

anaerobic digestion of organic matter in an oxygen -fr

ee environment.

Bi

ogases: Include s biogas and biomethane.

Bi

omethane: Biomethane is a near -pu

re source of methane produced either by “upgrading”

biogas (a process that removes any carbon dioxide and other contaminants present in the biogas) or through the gasification of solid biomass followed by methanation. It is also known

as renewable natural gas.

Bl

ended finance: A broad category of development finance arrangements that blend

relatively small amounts of concessional donor funds into investments in order to mitigate specific investment risks. This can catalyse important investment that would otherwise be

unable to proceed under conventional commercial terms. These arrangements can be

structured as debt, equity, risk -sharing or guarantee products. Specific terms of these

arrangements, such as interest rates, tenor, security or rank, can vary across scenarios.

Bui

ldings: The buildings sector includes energy used in residential and services buildings.

Services buildings include commercial and institutional buildings and other non -sp

ecified

buildings. Building energy use includes space heating and cooling, water heating, lighting,

appliances and cooking equipment.

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204 International Energy Agency | Net Zero Roadmap

Bunkers: Includes both international marine bunker fuels and international aviation bunker

fuels .

Capacity credit: Proportion o f the installed capacity that can be reliably expected to generate

electricity during times of peak demand in the grid to which it is connected.

Capital costs: Costs to develop and construct a fixed asset such as a power plant and grid

infrastructure or execute a project, excluding financing costs. For power generation assets,

capital costs include refurbishment and decommissioning costs.

Carbon capture, utilisation and storage (CCUS) : The process of capturing carbon dioxide

emissions from fuel combustion, industrial processes or directly from the atmosphere. Captured CO

2 emissions can be stored in underground geological formations, onshore or

offshore, or used as an input or feedstock in manufacturing.

Cars: Include passenger cars, sport utility vehicles and light trucks.

C

lean cooking systems, fuels, stoves and technologies: Cooking solutions that release less

harmful pollutants, are more efficient and environmentally sustainable than traditional cooking options that make use of solid biomass (such as a three

-s

tone fire), coal or kerosene.

This refers to improved biomass cook stoves, biogas/biodigester systems, electric cooking

devices and liquefied petroleum gas, natural gas or ethanol fuelled stoves.

C

lean energy: In power , clean energy includes generation from renewable sources, nuclear ,

fossil fuels fitted with CCUS , battery stora ge, and electricity grids. In efficiency , clean energy

includes energy efficiency in buildings, industry , and transport excluding aviation bunkers

and domestic navigation. In end‐use applications , clean energy includes direct use of

renewables; electric vehicles; electrification in buildings, industry and international marine

transport; CCUS in industry and direct air capture. In fuel supply , clean energy includes low -

e

missions fuels.

C

oal: Includes both primary coal (including lignite, coking and steam coal) and derived fuels

(including patent fuel, brown -coal briquettes, coke -oven coke, gas coke, gas -works gas, coke -

oven gas, blast furnace gas and oxygen steel furnace gas). Peat is also included.

Coalbed methane: Category of unconventional natural gas that refers to methane found in

coal seams.

Concentrating solar power (CSP) : Thermal power generation technology that collects and

concentrates sunlight to produce high temperature heat to generate electricity.

Concessional financing: Resources extended at t erms more favourable than those available

on the market. This can be achieved through one or a combination of the following factors:

interest rates below those available on the market; maturity, grace period, security, rank or back -weighted repayment profile that would not be accepted/extended by a commercial

financial institution; and/or by providing financing to the recipient otherwise not served by

commercial financing.

IEA. CC BY 4.0.

Annex B | Definitions 205

B Conventional liquid biofuels: Fuels produced from food crop feedstocks. Commonly refe rred

to as first generation biofuels and include sugar cane ethanol, starch -b

ased ethanol, fatty

acid methyl ester (FAME), straight vegetable oil (SVO) and hydrotreated vegetable oil (HVO)

produced from palm, rapeseed or soybean oil.

C

ritical minerals: A wide range of minerals and metals that are essential in clean energy

technologies and other modern technologies and have supply chains that are vulnerable to disruption. Although the exact definition and criteria differ among countries, critical minerals

for clean energy technologies typically include chromium, cobalt, copper, graphite, lithium,

manganese, molybdenum, nickel, platinum group metals, zinc, rare earth elements and other

commodities, as listed in the Annex of the I EA special report on the Role of Critical Minerals

in Clean Energy Transitions available at: https://www.iea.org/reports/the

-

role-

of-

critical -

mi

nerals -

in-

clean -e

nergy -

transitions.

D

ebt: Bonds or loans issued or taken out by a company to finance its growth and operations.

D

ecomposition analysis: Statistical approach that decomposes an aggregate indicator to

quantify the relative contribution of a set of pre -d

efined factors leading to a change in the

aggregate indicator. The World Energy Outlook uses an additive index decomposition of the

type Logarithmic Mean Divisia Index (LMDI).

Dem

and-side integration (DSI) : Consists of two types of measures: actions that influence

load shape such as energy efficiency and electrification; and actions that manage load such

as demand -s

ide response measures.

Dem

and-side response (DSR): Describes actions which can influence the load profile such as

shifting the load curve in time without affecting total electricity demand, or load shedding

such as interrupting demand for a short duration or adjusting the intensity of demand for a

certain amount of time.

Direct air capture (DAC) : Technology to capture CO 2 directly from the atmosphere using

liquid solvents or solid sorbents. It is generally coupled with permanent storage of the CO 2 in

deep geological formations or its use in the production of fuels, chemicals, building materials or other products. When coupled with permanent geological CO

2 storage, DAC is a carbon

removal technology.

Direct air capture and storage (DACS) : The process of capturing carbon dioxide emissions

directly from the atmosphere. Emissions are then stored in underground geological

formations, onshore or offshore, or used as an input or feedstock in manufacturing.

Dispatchable generation: Refers to technolo gies whose power output can be readily

controlled , i.e. increased to maximum rated capacity or decreased to zero in order to match

supply with demand at any time except in cases of technical malfunctio n.

Electricity demand: Defined as total gross electrici ty generation less own use generation,

plus net trade (imports less exports), less transmissions and distribution losses.

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206 International Energy Agency | Net Zero Roadmap

Energy efficiency investment: Incremental spending on new energy -efficient equipment or

the full cost of refurbishment that reduce s energy use. The intention is to capture spending

that leads to reduced energy consumption. Under conventional accounting, part of this is

categorised as consumption rather than investment.

Electricity generation: Defined as the total amount of electricity ge nerated by power only or

combined heat and power plants including generation required for own use. This is also

referred to as gross generation.

Electric vehicles: Includes battery electric vehicles and plug -in hybrid electric vehicles.

End- use investment: Includes investment in three categories on the demand side: energy

efficiency, end -use renewables and other end -uses.

End- use sectors: Include industry, transport, buildings and others, i.e. agriculture and other

non-energy use.

Energy sector CO 2 emissions: CO 2 emissions from fossil fuel combustion, industrial

processes, and fugitive and flaring CO 2 from fossil fuel extraction.

E

nergy sector greenhouse gas emissions: Energy -r

elated and industrial process CO 2

emissions plus fugitive and vented methane (CH 4) and nitrous oxide (N 2O) emissions from

the energy and industry sectors.

E

nergy services: See useful energy.

E

thanol: Refers to bioethanol only. Ethanol is produced from fermenting any biomass high

in carbohydrates. Currently, ethanol is made from starches and sugars, but second -

g

eneration technologies will allow it to be made from cellulose and hemicell ulose, the fibrous

material that makes up the bulk of most plant matter.

F

ossil fuels: Include coal, natural gas and oil.

Gaseous fuels: Include natural gas, biogases, synthetic methane and hydrogen.

G

eothermal: Geothermal energy is heat from the sub -s

urface of the earth. Water and/or

steam carry the geothermal energy to the surface. Depending on its characteristics, geothermal energy can be used for heating and cooling purposes or be harnessed to generate clean electricity if the temperature is adequate.

H

eat (end -use) : Can be obtained from the combustion of fossil or renewable fuels, direct

geothermal or solar heat systems, exothermic chemical processes and electricity (through resistance heating or heat pumps which can extract it from ambient air and li quids). This

category refers to the wide range of end -uses, including space and water heating, and

cooking in buildings, desalination and process applications in industry. It does not include cooling applications.

Heat (supply) : Obtained from the combustion of fuels, nuclear reactors, geothermal

resources or the capture of sunlight. It may be used for heating , cooling, or converted into

IEA. CC BY 4.0.

Annex B | Definitions 207

B mechanical energy for transport or electricity generation. Commercial heat sold is reported

under total final consumption with the fuel inputs allocated under power generation.

Heavy trucks: Include commercial vehicles: medium freight trucks (gross vehicle weight

between 3.5 and 15 tonnes); and heavy freight trucks (>15 tonnes).

H

ydrogen: Hydrogen is used as a raw material in industry and refining , in the energy system

as an energy carrier or is combined with other inputs to produce hydrogen -b

ased fuels.

Unless otherwise stated, hydrogen in this report refers to low

-e

missions hydrogen.

H

ydrogen- based fuels: See low -em

issions h ydrogen -b

ased fuels .

H

ydropower: Energy content of the electricity produced in hydropower plants, assuming

100% efficiency. It excludes output from pumped storage and marine (tidal and wave) plants.

Improved cook stoves: Intermediate and advanced improved biomass cook stoves (ISO

tier >2). It excludes basic improved cook stoves (ISO tier 0 -2).

I

ndustry: The sector includes fuel used within the manufacturing and construction industries.

Key industry branches include iron and steel, chemical and petrochemical , cement,

aluminium, and pulp and paper. Use by industries for the transformation of energy into

another form or for the production of fuels is excluded and reported separately under other

energy sector. There is an exception for fuel transformation in bla st furnaces and coke ovens,

which are reported within iron and steel. Consumption of fuels for the transport of goods is

reported as part of the transport sector, while consumption by off -r

oad vehicles is reported

under industry.

I

nternational aviation bunkers: Includes the deliveries of aviation fuels to aircraft for

international aviation. Fuels used by airlines for their road vehicles are excluded. The

domestic/international split is determined on the basis of departure and landing locations

and not by the nationality of the airline. For many countries this incorrectly excludes fuels used by domestically owned carriers for their international departures.

International marine bunkers: Includes the quantities delivered to ships of all flags that are

engaged in international navigation. The international navigation may take place at sea, on inland lakes and waterways, and in coastal waters. Consumption by ships engaged in

domestic navigation is excluded. The domestic/international split is determined on the basis

of port of departure and port of arrival, and not by the flag or nationality of the ship. Consumption by fishing vessels and by military forces is excluded and instead included in the

residential, services and agriculture category.

I

nvestment: Investment is the capital expenditure in energy supply, infrastructure, end -u

se

and efficiency. Fuel supply investment includes the production, transformation and transport

of oil, gas, coal and low -

emissions fuels. Power sector investment includes new construction

and refurbishment of generation, electricity grids (transmission, distribution and public

electric vehicle chargers) and battery storage. Energy efficiency investment includes

efficiency improvements in buildings, industry and transport. Oth er end‐use investment

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208 International Energy Agency | Net Zero Roadmap

includes the purchase of equipment for the direct use of renewables, electric vehicles,

electrification in buildings, industry and international marine transport, equipment for the

use of low

-e

missions fuels, and CCUS in industry and direct air capture. Data and projections

reflect spending over the lifetime of projects and are presented in real terms in year -2

022

US dollars converted at market exchange rates unless otherwise stated. Total investment reported for a year reflects the am ount spent in that year.

Li

ght-duty vehicles (LDVs): Include passenger cars and light commercial vehicles (gross

vehicle weight <3.5 tonnes).

Li

quid biofuels: Include liquid fuels derived from biomass or waste feedstock, e.g. ethanol,

biodiesel and biojet fuels. They can be classified as conventional and advanced biofuels

according to the combination of feedstock and technologies used to produce them and their respective maturity. Unless otherwise stated, biofuels are expressed in energy

-e

quivalent

volumes of gasoline, diesel and kerosene.

Li

quid fuels: Include oil, liquid biofuels (expressed in energy -e

quivalent volumes of gasoline

and diesel), synthetic oil and ammonia .

Lo

w-emissions electricity: I

ncludes renewable energy technologies, low

-e

missions

hydro gen-b

ased generation, low

-e

missions hydrogen -b

ased fuel generation, nuclear power

and fossil fuel power plants equipped with carbon capture, utili sation and storage.

Lo

w-emissions fuels: Include modern bioenergy, low

-e

missions hydrogen and low -

emissions

hydrogen -b

ased fuels.

Lo

w-emissions hydrogen: Hydrogen which is produced through water electrolysis with

electricity generated from a low -emission s source such as r enewables or nuclear, or biomass

or from fossil fuels equipped with CCUS techn ology. Production from fossil fuels with CCUS

is included only if upstream emissions are sufficiently low, if capture , at high rates , is applied

to all CO 2 streams associated with the production route, and if all CO 2 is permanently stored

to prevent its re lease to the atmospher e.

Low -emissions hydrogen- based fuels: Include ammonia and synthetic hydrocarbons

produced from low- emissions hydrogen . In the case of synthetic hydrocarbons, they are

produced from low- emissions hydrogen and a sustainable carbon sou rce (of biogenic origin

or directly captured from the atmosphere ).

Low -emissions material production: Production that achieves substantial emissions

reductions but falls short of achieving near zero emissions . The IEA has proposed greenhouse

gas emissions intensity thresholds and a continuous scale of evaluation for low -emission s

production, with the quantity being proportional to the reduction in emissions intensity

achieved for steel and cement in the Achieving Net Zero Heavy Industry Sectors in G7

Member s (IEA, 2022) . The thresholds depend on the scrap share of metallics input for steel

and the clinker- to-cement ratio for cement. For other energy -intensive commodities such as

aluminium, fertilisers and plastics, reductions in emissions intensity and the continuous scale evaluation would be equivalent to the considerations for low- emission s steel and cement.

IEA. CC BY 4.0.

Annex B | Definitions 209

B Marine energy: Represents the mechanical energy derived from tidal movement, wave

motion or ocean current and exploited for electricity generation.

Mini- grids: Small grid systems linking a number of households or other consumers.

Modern bioenergy and renewable waste: Refers to bioenergy excluding traditional use of

biomass and renewable waste.

Modern energy access: Includes household access to a minimum level of electricity;

household access to safer and more sustainable cooking and heating fuels , and clean cooking

stov es; access that enables productive economic activity; and access for public services.

Modern liquid bioenergy: Includes biogasoline, biodiesel, biojet kerosene and other liquid

biofuels.

Modern renewables: Includes all uses of renewable energy with the exception of traditional

use of solid biomass.

Modern solid bioenergy: Includes all solid bioenergy products (see solid bioenergy

definition) except the traditional use of biomass. It also includes the use of solid bioenergy in intermediate and advanced impro ved biomass cook stoves (ISO tier ≥ 3) requiring fuel to

be cut in small pieces or often using processed biomass such as pellets.

N

atural gas: Includes gas occurring in deposits, whether liquefied or gaseous, consisting

mainly of methane. It includes both non-a

ssociated gases originating from fields producing

hydrocarbons only in gaseous form, and associated gas produced in association with crude

oil production as well as methane recovered from coal mines (colliery gas). Natural gas

liquids, manufactured gas (produced from municipal or industrial waste , or sewage) and

quantities vented or flared are not included. Gas data in cubic metres are expressed on a

gross calorific value basis and are measured at 15 °C and at 760 mm Hg (Standard

Conditions). Gas data expressed in tonnes of oil equivalent, mainly for comparison reasons

with other fuels, are on a net calorific basis. The difference between the net and the gross calorific value is the latent heat of vaporisation of the water vapour produced during

combus tion of the fuel (for gas the net calorific value is 10% lower than the gross calorific

value) .

N

ear zero emission capable material production capacity: capacity that will achieve

substantial emissions reductions from the start – but fall short of near zer o emission material

production (see following definition) initially – with plans to continue reducing emissions

over time such that they could later achieve near zero emission production without additional capital investment.

Near zero emission material pr oduction: for steel and cement, production that achieves the

near zero emission GHG emissions intensity thresholds defined in the IEA’s ‘Achieving Net Zero Heavy Industry Sectors in G7 Members’ (2022); the thresholds depend on the scrap share of metallics input for steel and the clinker -to-cement ratio for cement. For other

energy -intensive commodities like aluminium, fertilisers and plastics, production that

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210 International Energy Agency | Net Zero Roadmap

achieves reductions in emissions intensity equivalent to the considerations for near zero

emission steel and cement.

Near zero emission material production capacity: capacity that, once operational, will

achieve near zero emission material production (see preceding definition) from the start.

Network gases: Includes natural gas, biomethane, synthetic methane and hydrogen blended

in a gas network.

Non- energy use: The use of fuels as feedstocks for chemical products that are not used in

energy applications. Examples of resulting products are lubricants, paraffin waxes, asphalt,

bitumen, coal tars and timber preservative oils.

Nuclear: Refers to the primary energy equivalent of the electricity produced by a nuclear

power plant, assuming an average conversion efficiency of 33%.

Of

f-grid systems: Mini -g

rids and stand -a

lone systems for individual households or groups of

consumers not connected to a main grid.

Of

fshore wind: Refers to electricity produced by wind turbines that are installed in open

water, usually in the ocean.

Oil: Oil production includes both conventional and unconventional oil. Petroleum products

include refinery gas, ethane, liquid petroleum gas, aviation gasoline, motor gasoline, jet fuels, kerosene, gas/diesel oil, heavy fuel oil, naphtha, white spirit, lubricants, bitumen,

paraffin, waxes and petroleum coke.

Othe

r energy sector: Covers the use of energy by transformation industries and the energy

losses in converting primary energy into a form that can be used in the final consuming

sectors. It includes losses in low

-e

missions hydrogen and hydrogen -b

ased fuels production,

bioenergy processing, gas works, petroleum refineries, coal and gas transformation and liquefaction. It also includes energy own use in coal mines, in oil and gas extraction and in electricity and heat production. Transfers and statistical differences are also included in this

category. Fuel transformation in blast furnaces and coke ovens are not accounted for in the other energy sector category.

P

ower generation: Refers to fuel use in electricity generation plants, heat plants, and

combined heat and power plants. Both main activity producer plants and small plants that

produce fuel for their own use (auto -p

roducers) are included.

P

roductive uses: Energy used towards an economic purpose: agriculture, industry, services

and non -e

nergy use. Some energy demand from the transport sector, for example freight,

could be considered as productive, but is treated separately.

R

enewables: Includes bioenergy, renewable waste, geothermal, hydropower, solar

phot ovoltaic s (PV), concentrating solar power (CSP), wind and marine (tide and wave) energy

for electricity and heat generation.

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Annex B | Definitions 211

B Residential: Energy used by households including space heating and cooling, water heating,

lighting, appliances, electronic device s and cooking.

Road transport: Includes all road vehicle types (passenger cars, two/three -wheelers. Light

commercial vehicles, buses and medium and heavy trucks).

Services: Energy used in commercial facilities such as offices, shops, hotels, and restaurants,

and in institutional buildings such as schools, hospitals and public offices. Energy use in

services includes space heating and cooling, water heating, lighting, appliances, cooking and

desalination.

Shipping/navigation: This transport sub -sector includes both domestic and international

navigation and their use of marine fuels. Domestic navigation covers the transport of goods

or persons on inland waterways and for national sea voyages (starts and ends in the same country without any intermediate foreign port). International navigation includes quantities

of fuels delivered to merchant ships (including passenger ships) of any nationality for

consumption during international voyages transporting goods or passengers .

Solar photovoltaics (PV) : Electricity produced from solar photovoltaic cells.

Solid bioenergy: Includes charcoal, fuelwood, dung, agricultural residues, wood waste and

other solid biogenic wastes.

Ste

am coal: A type of coal that is mainly used for heat production or steam -r

aising in power

plants and, to a lesser extent, in industry. Typically, steam coal is not of sufficient quality for steel making. Coal of this quality is also commonly known as thermal coal.

Sy

nthetic fuel: Includes synthetic hydrocarbon fuels such as methane and oil products , e.g.

diesel or kerosene.

Sy

nthetic methane: Methane from sources other than natural gas, including coal -t

o-g

as and

low-

emissions synthetic methane.

T

otal energy supply (TES) : Represents domestic demand only and is broken down into

electricity and heat generation, other energy sector and total final consumption.

T

otal final consumption (TFC) : Is the sum of consumption by the various end -u

se sectors.

TFC is broken down into energy demand in the following sectors: indu stry (including

manufacturing, mining, chemicals production, blast furnaces and coke ovens), transport,

buildings (including residential and services) and other (including agriculture and other non -

e

nergy use). It excludes international marine and aviation bunkers, except at world level

where it is included in the transport sector.

T

otal final energy consumption (TFEC) : Is a variable defined primarily for tracking progress

towards target 7.2 of the United Nations Sustainable Development Goals (SDG). It

incorporates total final consumption by end -u

se sectors, but excludes non -e

nergy use. It

excludes international marine and aviation bunkers, except at world level. Typically, this is

used in the context of calculating the renewable energy share in total final energy

consumption (indicator SDG 7.2.1), where TFEC is the denominator.

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212 International Energy Agency | Net Zero Roadmap

Total primary energy demand (TPED) : See total energy supply.

T

raditional use of biomass: Refers to the use of solid biomass with basic technologies, such

as a three -s

tone fire or bas ic cook stoves (ISO tier 0 -2)

, often with no or poorly operating

chimneys. Forms of biomass used include wood, wood waste, charcoal agricultural residues

and other bio -s

ourced fuels such as animal dung.

T

ransport: Fuels and electricity used in the transport of goods or people within the national

territory irrespective of the economic sector within which the activity occurs. This includes fuel and electricity delivered to vehicles using public roads or for use in rail vehicles; fuel

delivered to vessels for domestic navigation; fuel delivered to aircraft for domestic aviation; and energy consumed in the delivery of fuels through pipelines. Fuel delivered to

international marine and aviation bunkers is presented only at the world level and is

excluded from the transport sector at a domestic level.

Tru

cks: Includes all size categories of commercial vehicles: light trucks (gross vehicle weight

less than 3.5 tonnes); medium freight trucks (gross vehicle weight 3.5 -1

5 tonnes); and heavy

freight trucks (>15 tonnes).

U

nabated fossil fuel use: Combustion of fossil fuels in facilities without CCUS.

U

seful energy: Refers to the energy that is available to end -u

sers to satisfy their needs. This

is also referred to as energy services demand. As result of transformation losses at the point of use, the amount of useful energy is lower than the corresponding final energy demand for

most technologies. Equipment using electricity often has higher conversion efficiency than

equipment using other fuels, meaning that for a unit of energy consumed, electricity can provide more energy services.

W

ind: Electricity produced by wind turbines from the kinetic energy of wind .

Woody energy crops: Short -rotation plantings of woody biomass for bioenergy production,

such as c oppiced willow and miscanthus.

Vans: Includes commercial vehicles and light trucks (gross vehicle weight > 3.5 tonnes).

Variable renewable energy (VRE): Refers to power generating technologies in which

maximum output at any time depends on the availability of fluctuating renewable energy

resources. VRE includes a broad array of technologies such as wind power, solar PV, run -of-

river hydro, concentrating solar power (where no thermal storage is included) and marine

(tidal and wave).

Zero -carbon -ready buildings: A zero -carbon- ready building is highly energy efficient and

either uses renewable energy directly, or an energy supply that can be fully decarbonised, such as electricity or district heat.

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Annex B | Definitions 213

B Regional and country groupings

Advance d economies: OECD regional grouping and Bulgaria, Croatia, Cyprus1,2, Malta and

Romania.

Africa: North Africa and sub- Saharan Africa regional groupings.

Asia Pacific: Southeast Asia regional grouping and Australia, Bangladesh, China, India, Japan,

Korea, Democratic People’s Republic of Korea, Mongolia, Nepal, New Zealand, Pakistan, Sri

Lanka , Chinese Taipei, and other Asia Pacific countries and territories.3

Caspian: Armenia, Azerbaijan, Georgia, Kazakhstan, Kyrgyzstan, Tajikistan, Turkmenistan and

Uzbekistan.

Central and South America: Argentina, Plurinational State of Bolivia (Bolivia) , Brazil, Chile,

Colombia, Costa Rica, Cuba, Curaçao, Dominican Republic, Ecuador, El Salvador, Guatemala,

Guyana, Haiti, Honduras, Jamaica, Nicaragua, Panama, Paragu ay, Peru, Suriname, Trinidad

and Tobago, Uruguay, Bolivarian Republic of Venezuela (Venezuela), and other Central and

South American countries and territories.4

China: Includes (the People's Republic of ) China and Hong Kong , China .

Developing Asia: Asia Pacific regional grouping excluding Australia, Japan, Korea and

New Zealand.

Emerging market and developing economies: All other countries not included in the

advanced economies regional grouping.

Figure C.1 ⊳ Main country groupings

Note: This map is without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries

and to the name of any territory, city or area.

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214 International Energy Agency | Net Zero Roadmap

Eurasia: Caspian regional grouping and the Russian Federation (Russia).

Europe: Eu ropean Union regional grouping and Albania, Belarus, Bosnia and Herzegovina,

North Macedonia, Gibraltar, Iceland, Israel5, Kosovo, Montenegro, Norway, Republic of

Moldova, Serbi a, Switzerland, Türkiye, Ukraine and United Kingdom .

European Union: A ustria, Belgium, Bulgaria, Croatia, Cyprus1,2, Czech Republic, Denmark,

Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovak Republic, Slovenia,

Spain and Sweden .

IEA (International Energy Agency) : OECD regional grouping excluding Chile, Colombia, Costa

Rica, Iceland, Israel, Latvia, and Slovenia.

Latin America and the Caribbean: Central and South America regional grouping and Mexico.

Middle East: Bah rain, Islamic Republic of Iran (Iran) , Iraq, Jordan, Kuwait, Lebanon, Oman,

Qatar, Saudi Arabia, Syrian Arab Republic (Syria), United Arab Emirates and Yemen.

Non- OECD: All other countries not included in the OECD regional grouping.

Non- OPEC: All other cou ntries not included in the O PEC regional grouping.

North Africa: Algeria, Egypt, Libya, Morocco and Tunisia.

North America: Canada, Mexico and United States.

OECD (

Organisation for Economic Co -operation and Development) : Australia, Austria,

Belgium, Canada, Chile, Colombia, Costa Rica, Czech Republic, Denmark, Estonia, Finland,

France, Germany, Greece, Hungary, Iceland, Ireland, Israel, Italy, Japan, Korea, Latvia, Lithuania , Luxembourg, Mexico, Netherlands, New Zealand, Norway, Poland, Po rtugal,

Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Türkiye , United Kingdom and United

States .

OPEC ( Organisation of the Petroleum Exporting Countries) : Algeria, Angola, Republic of the

Congo (Congo) , Equatorial Guinea, Gabon, the Islamic Republic of Iran (Iran), Iraq, Kuwait,

Libya, Nigeria, Saudi Arabia, United Arab Emirates and Bolivarian Republic of Venezuela

(Venezuela ).

Southeast Asia: Brunei Darussalam, Cambodia, Indonesia, Lao People’s Democratic Republic

(Lao PDR), Malaysia, Myanmar, Philippines, Singapore, Thailand and Viet Nam. Thes e

countries are all members of the Association of Southeast Asian Nations (ASEAN).

Sub-Saharan Africa: Angola, Benin, Botswana, Cameroon, Republic of the Congo (Congo),

Côte d’Ivoire, Democratic Republic of the Congo , Equatorial Guinea , Eritrea, Ethiopia, Gabon,

Ghana, Kenya, Kingdom of Eswatini , Madagascar, Mauritius, Mozambique, Namibia, Niger,

Nigeria, Rwanda, Senegal, South Africa, South Sudan, Sudan, United Republic of Tanzania

(Tanzania) , Togo, Uganda, Zambia, Zimbabwe and other African countries and territories.6

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Annex B | Definitions 215

B Country notes

1 Note by Republic of Türkiye: The information in this document with reference to “Cyprus” relates to the

southern part of the island. There is no single authority representing both Turkish and Greek Cypriot people

on the island. Türkiye recognises the Turkish Republic of Northern Cyprus (TRNC). Until a lasting and equitable

solution is found within the context of the United Nations, Turkey shall preserve its position concerning t he

“Cyprus issue”.

2 Note by all the European Union Member States of the OECD and the European Union: The Republic of Cyprus

is recognised by all members of the United Nations with the exception of Türkiye. The information in this

document relates to the area under the effective control of the Government of the Republic of Cyprus.

3 Individual data are not available and are estimated in aggregate for: Afghanistan, Bhutan, Cook Islands, Fiji,

French Polynesia, Kiribati, Macau (China), Maldives, New Caledonia , Palau, Papua New Guinea, Samoa,

Solomon Islands, Timor -Leste and Tonga and Vanuatu.

4 Individual data are not available and are estimated in aggregate for: Anguilla, Antigua and Barbuda, Aruba,

Bahamas, Barbados, Belize, Bermuda, Bonaire, Sint Eustatius and Saba, British Virgin Islands, Cayman Islands,

Dominica, Falkland Islands (Malvinas), Grenada, Montserrat, Saint Kitts and Nevis, Saint Lucia, Saint Pierre and

Miquelon, Saint Vincent and the Grenadines, Sint Maarten (Dutch part), Turks and Caicos Islands.

5 The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities.

The use of such data by the OECD and/or the IEA is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law.

6 Individual data are not available and are estimated in aggregate for: Burkina Faso, Burundi, Cabo Verde,

Central African Republic, Chad, Comoros, Djibouti, Gambia, Guinea, Gui nea-Bissau, Lesotho, Liberia, Malawi,

Mali, Mauritania, Sao Tome and Principe, Seychelles, Sierra Leone and Somalia .

Abbreviations and a cronyms

AC alternating current

AFOLU agriculture, forestry and other land use

APS Announced Pledges Scenario

BECCS bioenergy equipped with CCUS

CCUS carbon capture, utilisation and storage

CDR carbon dioxide removal

CH 4 methane

CO 2 carbon dioxide

CO 2-eq carbon -dioxide equivalent

COP Conference of Parties (UNFCCC)

CSP concentrating solar power

DAC direct air capture

DC direct current

DER distributed energy resources

DSI demand -side integration

DSR demand -side response

EAF electric arc furnaces

EMDE emerging market and developing economies

EU European Union

EV electric vehicle

FID final investment decision

GDP gross domestic product

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216 International Energy Agency | Net Zero Roadmap

GHG greenhouse gases

ICE internal combustion engine

IEA International Energy Agency

IIASA International Institute for Applied Systems Analysis

IMF International Monetary Fund

IPCC Intergovernmental Panel on Climate Change

LDVs light -duty vehicles

LED light -emitting diode

LNG liquefied natural gas

LPG liquefied petroleum gas

MER market exchange rate

NDCs Nationally Determined Contributions

NO X nitrogen oxides

N2O nitrous oxide

NZE Net Zero Emissions by 2050 Scenario

OECD Organisation for Economic Co -operation and Development

OPEC Organization of the Petroleum Exporting Countries

PPP purchasing power parity

PV photovoltaic s

R&D research and development

RD&D research, development and demonstration

SAF sustainable aviation fuel

SDG Sustainable Development Goals (United Nations)

SR1.5 IPCC Special Report on the impacts of global warming of 1.5 °C

above pre-industrial levels

STEPS Stated Policies Scenario

T&D transmission and distribution

TES total energy supply

TFC total final consumption

TFEC total final energy consumption

TPED total primary energy demand

UN United Nations

UNDP UN Development Program me

UNEP UN Environment Program me

UNFCCC UN Framework Convention on Climate Change

UK United Kingdom

US United States

VRE variable renewable energy

WACC weighted average cost of capital

WEO World Energy Outlook

WHO World Health Organization

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Annex C | References 217

Annex C

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Net Zero Roadmap: A Global Pathway

to Keep the 1.5 °C Goal in Reach

2023 Update

In May 2021, the IEA published its landmark report

Net Zero Emissions by 2050: A Roadmap for the Global Energy Sector. The report set out a narrow but feasible pathway for the global energy sector to contribute to the Paris Agreement’s goal of limiting the rise in global temperatures to 1.5 °C above pre-

industrial levels. The Net Zero Roadmap quickly became an important benchmark for policy makers, industry, the financial sector and civil society.

Since the r

eport was released, many changes have

taken place, notably amid the global energy crisis triggered by Russia’s invasion of Ukraine in February 2022. And energy sector carbon dioxide emissions have continued to rise, reaching a new record in 2022. Yet there are also increasing grounds for optimism: the last two years have also seen remarkable progress in developing and deploying some key clean energy technologies.

This 2

023 update to our Net Zero Roadmap surveys

this complex and dynamic landscape and sets out an updated pathway to net zero by 2050, taking account of the key developments that have occurred since 2021.