DNV Energy Transition Outlook 2021: Paris target to be missed in 2029

Forecasts the energy transition globally and in 10 world regions

DnV’s annual Energy Transition Outlook (ETO) was published in September, providing an updated projection of trends around global energy consumption in the run up to 2050 and the associated climate impact. Compared with two years ago (pre-pandemic), DNV’s latest prognosis shows that it will take one additional year before the 1.5°C goal is missed (2029 vs 2028) and four additional years before the 2°C goal is missed (2053 vs 2049). Globally, DnV estimates that the consumption of fossil fuel-based energy in 2050 will be on a par with levels in 1990, with a somewhat altered composition. 6% of emissions from the use of fossil fuel-based energy are expected to be removed through the use of CCS, which is a far lower figure than was set out in last year’s ETO where the estimate was 11%. The reduction in the proportion of CCS is, according to DNV, due to improved data and increased accuracy in associated models in use.

Net Zero in 2050 will not be achieved

The analysis for Europe concludes that Net Zero in 2050 will not be achieved, but that there will be a 74% reduction in CO₂ emissions vs 1990. Hydrogen production will quadruple, but new volumes will be used directly (and eventually also converted into synthetic fuels) in new industries and sectors of society. Hydrogen use will be slowed by associated costs. Almost all new hydrogen volumes will come from electrolysis. According to DNV, green hydrogen costs will become competitive against those related to blue hydrogen by around 2030. This development will be driven by falling costs for renewable power and economies of scale achieved by electrolysers. Hydrogen produced from natural gas will be more than halved, and it will be primarily produced in combination with CCS. Sharper falls in gas prices may make blue hydrogen even more competitive and thus slow interest in green hydrogen. In the run up to 2030, DNV anticipates that CCS in Europe will develop rapidly in the chemical and petrochemical industries, as well as in relation to various process-related emissions, rising to as much as 65 million tonnes in 2030.

The Environmental Analysis is prepared by Gassnova’s analysis team.