Global carbon dioxide emissions from the energy sector climbed to an unprecedented 40.8 gigatonnes of CO₂ equivalent in 2024, marking the fourth consecutive year of record highs. Despite a historic surge in renewable energy capacity, the world’s appetite for power outstripped decarbonisation efforts as fossil fuels continued to underpin nearly nine-tenths of the energy mix. A combination of rebounding industrial activity, extreme weather, regional conflicts and underinvestment in clean infrastructure all contributed to the uptick, underscoring the immense challenge of steering the global economy toward net-zero.

Demand Boom Outpaces Clean Energy Growth

Last year saw an extraordinary 2 percent rise in total primary energy supply—the first multi-source increase of this magnitude since 2006—driven by recoveries in manufacturing, transport and cooling needs in some of the world’s fastest-growing economies. Asia, led by China and India, accounted for the lion’s share of new demand: China alone added more than half of the global increase in coal-fired power generation, while India’s power consumption surged nearly 8 percent, far outpacing its economic growth.

At the same time, record-breaking heatwaves fueled a spike in air-conditioning use across Europe, the Middle East and North America. In southern Europe, for example, peak electricity load climbed by over 10 percent compared with the previous five-year average. In Latin America, prolonged droughts constrained hydropower output, forcing grid operators to turn to gas and diesel generators to maintain supply. The combined effects of industrial rebound and climate-driven cooling demands meant that even a 16 percent jump in wind and solar output could not prevent overall emissions from rising.

Fossil Fuels Fill the Gap Amid Geopolitical Shifts

While renewables added more than 600 terawatt-hours of new electricity generation, fossil fuels remained the workhorses of the energy system. Coal consumption grew by 1.2 percent, cementing its status as the single largest CO₂ contributor; natural gas saw the fastest expansion among fossil fuels, up 2.5 percent, as Europe scrambled for alternatives to Russian pipeline supplies. Following Russia’s war in Ukraine, European utilities burned an additional 50 billion cubic meters of LNG, reversing years of gas-to-gasoline substitution in power plants.

Oil demand barely budged—less than a 1 percent increase—but its sheer scale meant oil products still accounted for nearly a third of energy-sector emissions. Transportation trends added to the strain: global air travel rebounded to 85 percent of pre-pandemic levels, while road freight activity in North America reached an all-time high, propelling diesel use upward. Shipping emissions ticked up by 7.8 percent as maritime trade soared, although they remained below the 2019 baseline.

Underpinning many of these shifts were geopolitical tensions and supply-security concerns. Conflict in the Middle East led to temporary oil-field shutdowns and shipping-route disruptions, prompting oil-importing nations to tap strategic reserves and burn more carbon-intensive fuel blends. In parallel, sanctions on Russian fuel exports forced India and China to redirect purchases from alternative suppliers, stretching supply chains and increasing transportation-related emissions.

Renewables Rise but Fall Short in Offset

On the bright side, solar power output surged by nearly 28 percent, outpacing wind growth—especially in China, which accounted for over 60 percent of the world’s new photovoltaic installations. Offshore wind also made strides, with European projects coming online in the North Sea and US coastal waters. Yet despite this progress, renewable penetration remains uneven: Europe’s solar capacity grew a modest 7 percent due to permitting delays and high financing costs, while grid integration bottlenecks in the United States curtailed the full deployment of clean energy.

Moreover, investments in carbon capture and storage (CCS) and low-carbon hydrogen fell short of targets, with only two commercial-scale CCS facilities reaching full operation last year. Without large-scale deployment of emissions-mitigation technologies in industrial sectors—such as steel, cement and chemicals—the potential carbon savings from renewables were diluted by unabated emissions from heavy industry.

Financial flows also lagged. Although global renewable financing hit a new peak of \$500 billion, this was only half the level needed to triple capacity by 2030, a goal set at COP28. Simultaneously, fossil fuel companies continued to pour more than \$600 billion into oil and gas exploration and development, locking in future emissions.

Policy Gaps and the Road Ahead

Analysts warn that current policies are insufficient to bend the emissions curve. Under business-as-usual scenarios, energy-sector CO₂ is projected to reach 42 gigatonnes by 2030, far above the pathway consistent with limiting warming to 1.5 °C. Key obstacles include regulatory inertia, conflicting national priorities on energy security versus climate action, and the social and economic costs of retiring coal-fired power in regions dependent on mining.

Emerging economies face particular dilemmas: while non-OECD nations now drive more than 70 percent of global energy demand growth, many lack the fiscal space to subsidise clean energy transitions at scale. Low-income countries saw primary energy consumption drop by 0.5 percent last year, with limited renewables penetration and continued reliance on biomass and diesel for off-grid power.

To reverse course, experts advocate a suite of measures: accelerated permitting for renewables, carbon pricing mechanisms that internalise climate costs, targeted support for carbon-intensive industries to adopt cleaner processes, and a sharp redirection of financial flows away from new fossil-fuel infrastructure. In parallel, enhancing grid flexibility through storage, demand-response programs and cross-border interconnections can better accommodate variable renewables.

The race to decarbonise is now a sprint against time. With 2024 cementing the trend of record CO₂ releases and the planet experiencing its hottest year on record, the imperative for coordinated, ambitious climate action has never been clearer. Unless clean-energy deployment surges and fossil-fuel consumption contracts simultaneously, each percentage point of global growth risks locking in emissions for decades to come—threatening any chance of meeting long-term climate goals.

(Adapted from worldenergynews.com)

Categories: Economy & Finance, Geopolitics, Regulations & Legal, Strategy, Sustainability