International Energy Agency tells oil companies: stop oil faster

The International Energy Agency (IEA), an important think tank of Western countries, is concerned about energy companies that are not making enough efforts to switch to sustainable energy sources. Director Fatih Birol is “cautiously optimistic” about achieving the climate goals, but he believes that oil companies are still doing too little.

“There is a big gap between what they say, what image they want to create and how much investment they actually put on the table,” Birol told Nieuwsuur. Striking, because previously the IEA – once founded to ensure enough oil in times of emergency – was itself accused of delaying the energy transition.

Green growth

There is plenty of reason for Birol’s cautious optimism. The rise of solar and wind energy worldwide is happening very quickly. In rich Western countries, for the first time in 2023, more electricity was generated with clean energy than with polluting fossil fuels.

Green is therefore catching up with fossil fuels, and the peak of CO2 emissions worldwide is imminent. That doesn’t come out of the blue. Wind farms and especially solar capacity have been added at a rapid pace for a number of years now.

The IEA underestimated the rise of solar energy year after year, each time the growth exceeded expectations.

Just look at the dark blue line:

That underestimation was not without consequences, say critics. Countries and companies listen carefully to the advice of the IEA, and due to its very conservative view, they wrongly assumed that it would be lucrative to invest money in fossil fuels for a long time to come. In doing so, the IEA would have delayed the energy transition.

But according to the IEA, the critics misinterpreted the scenarios; they are not predictions of the future, but expectations based on existing policy. In 2020, the IEA also added proposed policies to its main model, but that scenario is still intended as a “mirror for all existing plans and to illustrate their consequences.” In other words: not as a prediction.

China

Birol provides an additional explanation for the differences between the IEA scenarios and reality: China. The country is the most polluting in the world and the major driver of the global growth of solar energy. However, it publishes few reliable figures. Birol: “China makes green technologies affordable for the rest of the world. But of course predicting Chinese policy decisions is not the easiest thing.”

In this video we explain how China became a climate champion, but also that there are still major obstacles to a green future:

The IEA can no longer be said to ignore the potential of sun and wind. Today, the consultancy organization’s stated goal is “to ensure reliable, affordable and clean energy”.

Birol: “Clean energy is developing faster than many people realize. Last year, 80 percent of all new power plants were renewable. But it has to go even faster if we want to sufficiently tackle climate change.”

He mainly points to the role of energy companies. “The leaders of these companies talk a lot about climate change in their speeches, but then do little. Last year, only 2.5 percent of all investments in the oil and gas sector went to clean energy.”

His concern is shared by other energy experts. “The phasing out of fossil fuels is going slower than I expected,” says Jan Rotmans, professor of energy transition and sustainability at Erasmus University. “There are still persistent oil companies, the ExxonMobils, BPs and Shells of this world, that continue to drill for new oil. I did not expect that. Because you actually no longer have a revenue model.”