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IEA report triggers scepticism from member countries and fossil fuel industry

Big fossil fuel importers and global energy producers have disputed the findings of the International Energy Agency’s report on reaching net zero emissions by 2050, indicating that they will continue fossil fuel investment despite the watchdog’s advice.

The push back highlights the controversy surrounding the IEA’s recommendations which include halting fossil fuel exploration and spending on new projects.

While the IEA has said there is a need to continue investing in already discovered deposits and existing projects, critics say the body does not adequately acknowledge the risks to future energy security. They say it fails to provide a backstop should the world not manage to create adequate low-carbon alternatives to replace robust demand for fossil fuels.

Japan, a founding member of the IEA, has always paid close attention to the Paris-based energy watchdog’s advice, but last week’s report prompted scepticism from the ministry of economy, trade and industry.

“It’s a fact that there are sections the Japanese government does not agree with,” said minister Hiroshi Kajiyama, pointing to the recommendations on halting new fossil fuel investment and phasing out coal.

Japan has adopted a target of net zero emissions by 2050 but is struggling to formulate a plan on how to get there. Nuclear fuel is unpopular in the wake of the Fukushima disaster and the country’s mountainous islands make renewables relatively expensive. Many Japanese experts want to keep burning at least some coal and gas and to rely on emissions offsets in other countries.

Last week, Japan joined a pledge by G7 environment ministers to halt all government investment in international coal-fired power stations by the end of this year.

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Australian resources minister Keith Pitt pointed out that previous IEA reports outlined a bigger role for coal, and said the latest scenario failed to sufficiently account for carbon capture technology.

“Coal, oil and gas will continue to be a big part of Australia’s energy mix, and our export success, for decades into the future,” said Pitt.

Australia is using public funds to pursue a “gas-fired recovery” policy in response to the Covid-19 pandemic, and is resisting international pressure to set a net zero emissions target.

Norway’s centre-right government and main centre-left opposition party, both traditionally strong supporters of the IEA, have also expressed some scepticism over the report ahead of September elections where the future of oil is likely to play a large part.

Oil minister Tina Bru said that it would not “make a difference from a global perspective” if Norway stopped its oil activities and argued that the biggest petroleum producer in Europe could produce oil and gas with lower emissions than many other countries due to renewable energy that could be used to power offshore installations.

IEA scenarios often form the basis of government energy policies, and the latest bombshell report on net zero emissions was praised by climate groups as a significant milestone.

The report outlines a route to net zero emissions by 2050 in which coal demand falls 90 per cent, gas demand falls 55 per cent, and oil demand falls by 75 per cent.

IEA chief Fatih Birol addressed some of the criticism in a LinkedIn post at the weekend, saying the net zero report was not the first time the agency had been accused of losing its bearings.

“This misses what the IEA is about,” he wrote, referring to the criticism. “For many years, we have been focused on shaping a secure and sustainable energy future for all, which requires transitioning to clean energy. A secure energy future demands this — a world ravaged by climate change from fossil fuel emissions won’t be secure.”

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Several energy associations criticised the report, including the World Nuclear Association, which called it “highly impractical”, and the World Coal Association, which said it was not realistic.

The International Gas Union, which represents the gas industry, warned if the IEA’s net zero road map was implemented, it would present a “serious risk” to energy security.

“We would see significant disruption in power supplies, transportation systems, in land and marine supply chains, in energy suppliers to cities and factories, and significant rise in energy taxes,” said Andy Calitz, secretary- general of the International Gas Union.

Meanwhile, large oil and gas companies expressed scepticism over whether the steps outlined in the net zero report would be implemented.

“It is a scenario on a piece of paper,” said Bernard Looney, BP chief executive, at an industry conference last week. He said he respected the IEA and the report’s significance, but added that the world needed fewer scenarios and “more action”.

Reporting by Leslie Hook, Anjli Raval, Robin Harding, Jamie Smyth, Richard Milne and Neil Hume.

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